The Exchanges

Q Um, and so maybe say a little bit more just about some of the advantages, advantages of nuclear sort of generally as a technology, because I think one of the things, you mentioned firm power, um, it's also really concentrated. A gigawatt solar farm takes up a lot more space, Then a gigawatt of nuclear. Are you finding that that's a reason that people are excited about nuclear right now?

A Yeah, it's, it's fine. funny. Every power source has its attributes that people get excited about. Nuclear is this really unique power generation technology, because it, it checks all the boxes, and it has some extremely unique attributes that make it really appealing. So it's, it's, it's firm capacity. Firm capacity, for those who don't know what it means, it means, it means that Not only is it dispatchable, so it turns on when you need it, not when the weather tells you it'll turn on, ah, like renewables. But in addition to that, it's firm, which means that it'll produce that power almost regardless of how extreme the weather conditions are. So even if it's so cold that coal piles are frozen and you can't, you have, you have to break out the jackhammers to get the conveyor belts to push coal into the furnace, or it's so cold that natural gas pipes are freezing, or You can't actually, so much natural gas is going to home heating, you can't get natural gas to the, to the power generators. Nuclear operates even in those conditions, so it's, it's extremely firm, it's extremely resilient. That's one attribute. The second attribute, as you said, it's extremely power dense. It's, it's almost comically more power dense than any other power generation source we have, uh, on the, you know, orders of magnitude. I think it's on the order of, I don't know, per unit Gram of fuel basis comp…

AI assessment note: “Nuclear is this really unique power generation technology, because it, it checks all the boxes”

Q you know, the world's first project, financeable nuclear plant, and then as your subtext, more like Duplo's than a complex Lego set, and so all the parents out there are going to be fully tracking with us. Okay, wait, so real question for you. Why hasn't this been done before? Why aren't other nuclear reactor designers all designing for constructability and thinking about how to modularize their systems this way?

A Yeah, it's fine. I, I will start with, uh, I have two ways to answer this question, because I get this question a lot. Uh, One is that this is not a wholly new idea. There is actually a fun history to this idea of building a nuclear plant in a shipyard. Uh, and not a lot of people know this history, but to go back in time to the history we started with, uh, in this discussion, nuclear light water reactors were originally invented for submarines. They were built in a maritime environment in a shipyard. Uh, that actually That concept didn't just, uh, go into the U.S. Navy for nuclear subs. The Army Corps of Engineers actually built the, it's called the MH-I-A or MH-I-A if I'm getting the name right, that they built a nuclear plant on a barge that powered the Panama Canal for many years in the 19 sixties. There was a joint venture between Westinghouse and Newport News Shipbuilding, uh, called, uh, Offshore Power Systems during the 19 seventies to build eight, uh, Four loop PWRs in a shipyard down in Jacksonville, Florida, and float them up to New Jersey for PSAG, and they actually licensed this. This was the only manufacturing license the NRC has ever issued in 1982. They did all the environmental reporting on this, and basically they were going to prefab an entire nuclear plant on a barge and float it off the east coast. And the only reason that got killed was because of the stag…

AI assessment note: “this is not a wholly new idea. There is actually a fun history to this”

Q to make this stuff happen. So, again, because the way climate works is you take climate challenge and multiply it times a hundred for nuclear. We're talking huge plants. We're talking huge amounts of money. We're talking, you know, really, I think, a kind of technology that raises risk aversion in a way that almost nothing else does. So, how are you going to finance and build your first plant?

A We have a uniquely, I think we're uniquely In the nuclear space right now as being the only one who has a credible path towards being able to project, commercially project finance. It would be great to get government support, DOE loan support, because it would help tremendously, particularly on the first unit, help reduce the cost of capital, but we actually have a path that we're confident on that can get us to commercial project finance. We engaged really early With a number of the big infrastructure funds and the big project financing banks we actually have retained already. We did a competitive process and retained one of the largest project financing banks in the world to advise us on this process. We, we engaged really early with the financial community that was involved in Venture Global LNG's first financing, which was in many ways a first of a kind project in the LNG space. And we really have looked closely at how can we map that risk Allocation and contracting structure and build strategy to the nuclear space such that we can unlock basically what is non-recourse project debt and project equity financing to lower the cost of capital and do this in a scalable, repeatable way. Because you can't, you can't finance a power plant, you know, as you said before, We're making a commodity at the end of the day. We're making electricity. It's gotta be cost competitive. This is,…

AI assessment note: “can get us to commercial project finance. We engaged really early With a number of”

Q I love that. So, okay, let's talk for a second about your offtaker. So you're partnered with Crusoe to power a data center, right? So how did the conversations with Crusoe go? Like, what do you think was most decisive for them around, around, you know, the pieces of the puzzle here that got them comfortable jumping in?

A Yeah, well, it's funny. Uh, there's, there's like the, the, what happened and then like the revisionist history of what happened. Uh, I, I, I had a really close relationship with the Crusoe team, uh, Personally, because I, I had helped them, uh, structure and think through their behind-the-meter strategy, uh, earlier, and so I was chatting with them, and this is honestly how it kind of came together. We ran into each other at Cereal Week, uh, and there, you know, I was like, you know, I'm getting in, I think I'm getting into the nuclear space and creating this new nuclear plant. They're like, really? We're thinking of getting into this, this AI space. We think it's going to be big. Uh, And I'm like, oh, that's a, that's a, that's a pivot. That's really interesting. So we were both kind of trying these new things and we're like, we think we'll need a lot of power and started as a small, uh, LOI for power. Like, you know, you know, we think we would buy power and I, I already, having worked with them, I already kind of knew what the terms and like what the price roughly had to be, uh, for it to make sense. And we signed our first agreement really early on. It was a very small agreement. And then, uh, You know, and then, you know, Stargate became a thing. Abilene data center campus grew up, and suddenly they were like, you know, and actually we need a lot more megawatts than we or…

AI assessment note: “I had a really close relationship with the Crusoe team... ran into each other”

Q sense for, like, whether there were certain things that decisively got them to yes? Like, was it really the fact that you were going to build a gas turbine first so there was no schedule risk? Was it something about the fact that nuclear has certain attributes that they really wanted? Like, what were, what were the things that at the end of the day got them over the line?

A Well, if you see what they do, they take a lot of bets in a diverse set of new energy technologies. They're a very energy first compute provider, so they like to try lots of different things, and I think they knew they wanted to get involved in nuclear, um, and the, the speed to power is certainly a factor. Um, we're certainly, I would say we're slower than a lot of the other Energy solutions that they pursue that are very speed oriented, but we are the fastest credible way to get to new, to get to nuclear at a scale that is relevant for these AI factories. That's, you know, a gigawatt, a gigawatt and a half plus with room to grow. So the, the speed was a factor that But the price and the cost structure, like the ability to get nuclear to a cost structure that would be competitive with gas, with new-built gas and what they were doing, I think was the bigger factor, um, than just necessarily the speed alone. Because I, I won't claim that we are the fastest way to get powered land. We're not. We're pretty fast. With the gas to nuclear You know, we can hang with any other CCGT in terms of speed. Uh, but, you know, some of these hyperscalers are, like, laser focused on, like, twenty-twenty-seven, twenty-twenty-eight, and, like, there's no world in which we're going to provide a gigawatt capacity that quickly, um, at least using this kind of technology. We are providing a hedge, a h…

AI assessment note: “the ability to get nuclear to a cost structure that would be competitive with gas”

Q get into this. So at Blue Energy, this is the problem you're seeking to solve. And so here's where I'll go ahead and point out to our wonderful listeners that I am a paid and compensated advisor to Blue Energy. There's some reasons that this is where I choose to spend my time. Um, but let's jump into this. So how are you solving the construction problem at Blue Energy?

A Yeah, so we, I always like, when you try to solve these sorts of hard problems, I always like to look at where you can learn from adjacent industries, and so we've been inspired in particular by, because when you ask this question, okay, the U.S. is bad at building these big mega projects. It's not just a nuclear problem. It's an international airport problem. Like, it's, it's a, you know, when we build big bridges and tunnels, look at the big dig in Boston. You know, this is, this is a common problem of big mega projects. So what have we been good at, and what, What do particular power plant projects have in common that we have been able to commercially project finance, like wind, solar, gas turbines? And what they have in common is that it's primarily a manufactured product that comes to the site and gets bolted to the ground. There's very little bespokeness to it. There's always some that's site specific based on civil structure, but it's, it's, it's largely, you know, when you think of solar panels, you think of wind turbines, even gas turbines. It is a manufactured thing. That comes on rail and trucks, gets bolted to the ground, and you can more or less turn it on. We've particularly been inspired by how we've seen offshore oil and gas projects and offshore wind, and even, I would say, the best case study I like to talk about is LNG. Recent LNG projects get built, and so t…

AI assessment note: “You have to prefabricate everything, and you don't, you're not just prefabricating”