This time on Cleaning Up, Michael welcomes Kirsty Gogan back to the show to update us on developments across the world of nuclear energy. Kirsty is co-CEO and founder of TerraPraxis, an NGO and climate solution accelerator, and a leading expert on nuclear power.
It’s been three years since Kirsty’s last appearance on the show in August 2020, during which we’ve seen new reactors come online across the globe, as well as supply dropouts and wholesale nuclear phase-outs. Kirsty walked Michael through the headlines, as well the rise of SMR (Small Modular Reactor) technology and its potential applications.
Michael and Kirsty end discussing whether nuclear is offering too little, too late on the path to net-zero in the coming decades, as renewables continue to rise to meet global energy demand. As a one-stop update on all things nuclear, today's Cleaning Up is not to be missed.
Short on time? Read the Edited Highlights here: CLICK HERE
Relevant Guest & Topic Links
Read the European Commission JRC’s Technical assessment of nuclear energy: CLICK HERE
Watch Kirsty’s first appearance on Cleaning Up Episode 5: CLICK HERE
Watch Julia Pyke, Financing Director of Sizewell C on Episode 94 of Cleaning Up: CLICK HERE
Watch Tom Samson, former CEO of Rolls-Royce SMR on Episode 116 of Cleaning Up: CLICK HERE
Learn more about the work of TerraPraxis: CLICK HERE
Learn more about the work of LucidCatalyst: CLICK HERE
Kirsty has more than 15 years’ experience as a senior advisor to Government on climate and energy policy, including 10 Downing St and the Office of the Deputy Prime Minister. Kirsty is managing partner of LucidCatalyst, a highly specialized international consultancy focused on large-scale, affordable, market-based decarbonization of the global economy. LucidCatalyst was recently commissioned to produce the widely cited Energy Technologies Institute Nuclear Cost Drivers Study, and by ARPA-E to conduct a study on Cost and Performance Requirements for Flexible Advanced Nuclear Plants in Future U.S. Power Markets.
Kirsty sits on the UK’s Nuclear Innovation Research and Advisory Board and the board of the Nuclear Innovation Alliance. In addition to being an authority on nuclear, Kirsty is an award-winning expert on science communication, climate change, and competitiveness. Kirsty is also co-founder and Global Director of Energy for Humanity (EFH), an environmental NGO focused on large-scale deep decarbonisation and energy access.
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Michael Liebreich00:34 Kirsty, welcome back.
Kirsty Gogan01:23 Thank you.
ML01:24 So, you were one of our first guests on Cleaning Up: Episode 5 in August 2020.
KG01:30 Very honoured, I was. Thank you.
ML01:32 It was one of our most popular episodes, probably because we got in a bit of a fight about nuclear project costs.
KG01:40 A robust discussion.
ML01:43 Exactly, we had a frank and robust discussion, I believe the diplomats call it. What I'd like to do today is look back over the two and a half years since you were last on the show. There's been a lot of water under the bridge, a lot of things have happened. Some of them are helpful for nuclear power, and some of them less helpful, so we'll look at both. And then we'll finish by looking forwards and seeing, can we put down some markers for what might happen between now and, who knows, two and a half years, or maybe we might have you back next year if we don't get in too much of an argument?
KG02:17 Sounds perfect.
ML02:18 Okay, excellent. So, the big news story that has affected all branches of the energy sector is, of course, the Russian invasion of Ukraine. And that has really, that's reset the board in so many different ways. How do you interpret what its implications are for nuclear?
KG02:38 Yeah, I mean, we were already seeing even at COP26, in Glasgow, a changing climate around the discussion for nuclear energy. But then, of course, the Russian invasion of Ukraine really just exacerbated that. It was already... I think many governments around the world, in light of the energy crisis that was already happening - remember that summer, and that year after the pandemic, there was a resurgence in the global economy. Then the Russian invasion of Ukraine really sort of put the spotlight on energy security and price volatility, around dependence on gas. And that led to many countries around the world - Japan, Belgium, and others - reversing their phase-out plans for nuclear energy, but it also led to countries becoming much more proactive, much more clear about their commitment to new nuclear builds. So, in Europe now, since then, we've seen Finland and Sweden and the Czech Republic and Romania, and the UK as well, and the Netherlands, committing to nuclear new builds. And that's not just in response to the question of the Russian invasion of Ukraine, obviously, but it is really a wake-up call around for the importance of energy security, and affordability. And then, of course, decarbonisation.
ML04:02 So, a lot has happened because of the Russian invasion, invasion of Ukraine, but it's important to remember that it's not just that. Because we last met at Glasgow COP26, and we were both pushing for, for instance, the EU to add nuclear to its clean taxonomy. But it was hard work, wasn't it? It has become a lot easier to make that argument since.
KG04:33 Since the invasion? I mean, it took more than two years for the European Commission to finally conclude that nuclear energy should be included in the sustainable finance taxonomy. And in some ways, the opposition to nuclear being included sort of had massively backfired, because what that led to was a very deep investigation by the European Commission's Joint Research Committee - which is the independent, very authoritative scientific advisory body to the European Commission - that produced a 500 page report pointing to how nuclear energy is green on every single metric that you care to mention, leading to a kind of irrefutable, solid evidence base - which was really needed - around the fact that nuclear energy is in fact, green and therefore should be included in the taxonomy.
ML05:19 That's right. There's that report, which... I think we should put a link in the notes; it is an extraordinary report. If any group was going to find evidence that nuclear was more dangerous, less stable, than any other energy source, it's going to be that group.
KG05:37 You name it. On water use, on land use, on carbon emissions, on spent fuel management - every single metric that you care about from an environmental, social, sustainability perspective, the JRC concluded it's greener than any other technology.
ML05:52 The wording is quite marvellous. I can't remember exactly what it was, but it essentially says that there is no reason to conclude that it has a worse environmental impact than renewables or other energy sources. It's conclusive.
KG06:10 It really is. And it's linked also to the fact that the Finns have also now established a geological disposal facility; they haven't used it yet, but it's received its regulatory approval. So the safety case is established, and now they're building it, and that's a major milestone. In fact, DG Grossi, Director General of the IAEA, he went and stood in the facility with his hard hat on and said, we have a solution for the waste. That's a major, major milestone as well.
ML06:39 Just sticking with the EU for a second. So, the JRC says there is no reason to believe that it is worse for the environment or for safety in any way than other energy sources. But, the EU is still not fully on board. Now let's move on to the discussion about clean hydrogen; and all the same people are saying, oh, no, it mustn't be nuclear. Why not?
KG07:02 I mean, I have to say, we are actually being - and you know this, Michael - we're being very generous in saying that the European Commission concluded that nuclear energy is a green technology. Because it was so heavily caveated, the inclusion of nuclear, even in the taxonomy for electricity generation, that it's really unclear whether or not the requirements that were set in the taxonomy conditions are even.... whether it's even possible to meet them. But now we're having the discussion about whether or not hydrogen produced from nuclear energy should be classified as clean and green. And we're facing exactly the same kind of opposition from the prominent anti-nuclear countries: Austria and Germany.
ML07:43 So, that victory, getting nuclear into the taxonomy, it almost feels like it's a stay of execution. I think it's meaningful, but had it not been included, it would have been game over.
KG 07:56 We won the battle, but we didn't win the war, I suppose, is the thing, exactly. And it really does make you wonder what the motivations are for these countries that are opposing the inclusion of nuclear energy in these initiatives. It's a resource scarcity question; are they afraid that the resources will be diverted away from renewables? When really the thing that we should be focusing on is the end, the outcome, which is that we need a lot of clean, reliable and affordable energy.
ML 07:58 So, the day that we are recording this, filming, is the day that Germany shuts its last three – and these are magnificent - nuclear power stations; they produce a lot of clean energy, 6% of Germany's electricity, I think. They shut them today. And you're asking the question, why? Why do you think they are shutting them?
KG 08:47 They're amongst the highest performing nuclear plants in the world, they're green giants. It's an absolute tragedy. Shutting down all of Germany's nuclear fleet is equivalent to taking all of the wind and solar generation out of Denmark, for example. It's gigantic, and it's not only contributing to massive increases in carbon emissions... 1.5 billion tonnes of additional carbon emissions from shutting down the fleet? Why are they shutting it down?
ML 09:17 The statistic is that one of those plants actually generates almost as much electricity as all of Denmark's clean electricity. Just one of them. Maybe all three is including the non-clean that Denmark...
KG 09:30 Well it's even worse than I thought then. So what's driving that decision making?
ML 09:36 So I've called it a climate crime, but it's also a crime against anybody with any sort of respiratory disease, not just in German. Provably in science... shutting down these nuclear power stations early has been killing people in Germany and the surrounding countries.
KG 09:56 It's been long enough now for the evidence really to be established, and there's many peer-reviewed studies.
ML 10:02 The evidence is not controversial. What I find extraordinary, when I talk to Germans who are... There are some that are very annoyed and upset about the shutdown, but the ones that aren't, the ones that have been championing it, they say, oh, Germany has been driving for renewable energy, and coal is now coming off, and so we are doing both at the same time. What do you want to say to them?
KG10:25 Well, they restarted 14 coal plants, during the last couple of years, partly in response to the energy crisis, and partly in response to the fact that they are taking massive amounts of clean energy off their own grid. They're also, of course, doing new deals with Qatar, for example, they've just signed a 15-year contract to import liquid natural gas. So, there's no way that Germany can claim that they're moving away from fossil fuels anytime soon.
ML 10:55 But they come up with this theory that the shutdown of nuclear has had no impact on the amount of coal burned. And you hear it all over social media, we’re told this endlessly. Do you see any logic? Because it's mystifying to me, I'll be completely honest. Do you see any logic in that?
KG11:13 We know, there's enough evidence now, from the United States, from Germany, that when you shut down perfectly good, prematurely close perfectly good nuclear plants, they are replaced, that energy generation is replaced with fossil fuels. It's replaced either with coal or with gas. And we know that Germany has a very large coal mining industry, and there are industrial drivers here as well for Germany to continue burning coal. And it's just as simple as that.
ML 11:42 I do find it strange that Germany is held up as the sort of poster-child of the energiewende.
KG11:50 It's the dirty man of Europe. For the size of its economy, Germany produces more emissions than any other country. So there's no question that it's a polluting country, and its reputation as a climate leader is being tarnished. Actually, that's one of the reasons why we think - and I'm speculating here - that we're seeing a resurgence in support for nuclear energy, even in Germany. So, you see public opinion polling now that is in favour of maintaining the existing fleet - too late now, they're closing it down today - and even maintaining it and expanding it. Because I think people are feeling the pinch, they're feeling the impact of increased energy prices, they have the highest energy prices in Europe. They're also feeling the reputational harm. It's becoming sort of irrefutable the fact that...
ML 12:39 Those pictures of the Lützerath village, people protesting these massive machines that want to munch through the earth.
KG 12:48 And the historic towns, you know, really important cultural history there for Germany.
ML 12:55 So, this is great, because so far, we're furiously agreeing with eachother. But, one of the other things that's been going on in the last year and a half is the collapse of the output of the French nuclear fleet. Because the other poster child, the poster child, supposedly for all of the nuclear bros, and stans, and even the nuclear experts and advocates like yourself, has been France; that's the way to get low-carbon electricity. A collapse which was incredibly badly timed.
KG 13:27 Such bad timing, terrible. Really painful for France, obviously, because, they're then exposed to the same pain that was being felt around the rest of Europe with real questions about our energy security, particularly over the winter. And pain for the other countries as well, because France is typically one of the largest, or the largest, energy exporter in Europe.
ML 13:50 Well, that's right, and if you look at households in the UK, which suffered and are suffering, there's really... it's not just the fact that Russian gas has been shut off, so the gas price has risen, it’s also that nuclear... The fact that France is absorbing all of this electricity instead of exporting its nuclear power means that much more of what we're paying is gas at the margins; that gas price isn't just a few hours a day, it's right through the day.
KG 14:22 It's a real wakeup call, isn't it? It's a real wake up call for our exposure to dependence on imported energy, whether it's imported Russian gas, or indeed, you know, imported from France. Because of course France is going to have a preference for supplying its own electricity, and that's going to have energy security implications for us.
ML 14:42 The problem is interconnection, because it doesn't matter whether we're importing or whether we're exporting; if we're exporting, then all of our generators will have this fantastic opportunity to earn more by exporting, we would still suffer. As soon as you've got connected commodity markets, you're exposed to this.
KG 14:58 Yeah, and I think it's a real lesson, and I hope that we are going to be really paying attention to all of those implications when we're planning our very interconnected, regional energy infrastructure.
ML 15:10 But what's the lesson for the nuclear industry? What's the lesson for France? What is France doing about it? Because at the end of the day, you have this fleet of nuclear power stations, supposed to be reliable, resilient, clean, blah, blah, blah, then half of them fail.
KG 15:27 So two things, I think. Firstly, strength in diversity. One of the really key lessons here surely has to be that more and more diversity in our energy mix is a good way to insulate ourselves from these kinds of risks. And secondly, the importance of maintenance, the importance of having more of a strategic view in the way that we're investing in our energy infrastructure. It's something that governments are typically terrible at because it does require long term planning and investments in future performance and reliability.
ML 15:57 How do you diversify, or square the circle? Because it's all very well saying we should diversify in lots of different things, but out of the other side of their mouth, the nuclear industry is saying we're going to standardize, and we're going to build loads of things that are the same. And as soon as you build the same thing; you see it with cars, with trucks...
KG 16:14 How about competition? One of the things that's really lacking, and one of the things we really need in the nuclear sector, is more diversity, more competition, more competitive supply chains, more suppliers, bringing to market a range of different technologies. There's such a large market that for clean energy, not just in the electricity sector, but across heat and hydrogen and power and fuels that could be met by a much broader range of suppliers than we currently have in the market today. And that's one of the ways in which we've driven down costs in the renewables sector as well.
ML 16:48 It is, but the renewable sector has a machine that is working; they produce a product, sell a product, build some projects,
KG 16:57 You just said the magic word: product.
ML 17:00 But the nuclear industry has sort of done the opposite: every time they've given them a project, they've kind of screwed it up.
KG 17:06 Well, it's been a gigantic project. Really what we're talking about is moving from projects to products. And the more products that we have in the market, the more that we'll have in efficiency and productivity and in the supply chain, which drives down costs, increases rates of deployment, and then encouraging more suppliers to come into the market, which increases competition and diversity.
ML 17:30 I get that argument when it comes to SMRs, small and micro reactors, because there you have the chance of getting that kind of flywheel spinning in a positive way. I think that there's a huge problem... Where the flywheel starts is very expensive, because these things are so small, they're sub-scale - they're small, I don't want to prejudice the discussion. But let's talk about these big projects, and this is where we kind of went wrong in our last episode, because I think that they are just extremely difficult to bring in on budget and on time. And I want to talk about the work of Bent Flybvjerg, who's the leading academic in the world on project management; he's written this book called How Big Things Get Done, or actually he could have subtitled it, how big things sometimes don't get done, or not on time and on budget, how big things, big projects, fail. 16,000 projects in his database now. And as an Olympic skier, I was very excited to see that the Olympic Games is one of the worst - 157% mean project overrun. By design, by the way, because the people who bid for Olympics, the cities that bid, always want to make it sound like it's really cheap. And once they win, start piling the costs on; that may not be what's happening in nuclear. But the worst in the energy sector - the worst overruns - were: nuclear waste storage, 238%; nuclear power 120% overruns - and this is not just Western projects, this is around the world - then you've got hydroelectric, 75%; oil and gas mining is around 30%; fossil 16%; wind and solar 13% and 1% overruns. How do you come back from that? Because we were talking about this two and a half years ago, and your argument was, we are rubbish at projects, please give us more projects, we'll get better. I'm paraphrasing...
KG 19:32 That's a cheeky paraphrase, I have to say. But I'm going to let that slide. So, the so the first thing is, I think you said it very well with the Olympics, that you bid low, and then you pile on your costs. And famously, of course, the Olympics in London came in on time and on budget - because we doubled the budget, and extended the timeline, and then you say look we've done it. But they didn't, it wasn't the same as when they started. The key lesson there is in the cost estimate that gets done in the first place. And generally speaking, one of the main key drivers, one of the key features of all of these projects that run over budget and are very delayed, is that they start construction without a completed design. That's the fundamental mistake that has been made repeatedly, particularly in the recent experience in Europe and in the United States. They all did it, they all started building, they hadn't completed their design; that meant that the supply chain hadn't fully got their specifications, so they didn't know what they were making; they were either making it wrong, or they were delivering late; the regulator was getting involved and that was leading to all kinds of interventions that led to rework, and having to stop and start work. And then crucially, the actual workforce on the site, and the project leadership teams, weren't choreographing the build, so they were encountering all the time, problems that were related to constructability: they were building the plane while they're flying it. That's the best way of describing it. And guess what, that's going to lead to all of those features that you're describing.
ML 21:09 So, there's two points you're making. One is that they bid low for whatever reason, and therefore the overrun is...
KG 21:17 They hadn't finished figuring out what they were building.
ML 21:19 But if you take Hinkley C: most recently, EDF has now issued a new estimate that it will cost that £32.7 billion. I can't even remember what it was when it was... I don't have the data here. But had they said that in 2007, instead of talking about how cheap it was going to be, and the cooking of the turkeys by 2017 for Christmas dinner and so on; had they said that it will cost £32.7 billion, it's quite simple: they'd never have pulled the trigger on that project.
KG 21:54 Yeah, I mean, one of the key drivers, obviously in the cost of Hinkley in particular is, you're paying 9% on your cost of capital, right? It's a very, very expensive financing arrangement that we have for Hinkley, and that is costing all of us money, there's no doubt about it. And then you combine that with the very delayed, the extended construction period, which I mean... To be fair, it took 10 years to arrive at an agreement firstly; so, it wasn't delayed in the sense that once they started building it was delayed; I think actually the construction is going really quite well. The pandemic has contributed to some slowdown, which is the case for everybody, and it's very understandable. But it's still a long period of time, it's still more than a decade of construction, on which you're paying very high capital costs. So, it's the cost of capital and the capital cost. So, those are the two things that... It's an Olympic scale project. So, you asked me about these big projects, and the bottom line is that if you have a very intentional, very focused, programmatic approach where you genuinely are moving your very experienced teams from one project to the next, and the supply chain is in a drumbeat of delivery, as we've seen in previous programs in France, in Sweden, in Korea, in Japan, even in the United States, we've seen the majority of plants around the world being delivered in a program for $3,000 a kilowatt or less; really competitive, even with renewables and gas plants today. The question is, can we achieve that in the UK? I don't know. And the question is, will the developers, will EDF be tempted to change the design, reopen the licensing case? And will we have a timely sequencing that actually retains all of that capability? Those things remain to be seen.
ML 23:55 But isn't the very nature of these projects militating against that? Because they take so long; the idea that you're going to lock down the design...
KG 24:07 You're building really big, complicated, highly regulated, high performance machines that involve a lot of concrete pouring. And it's those things: it's the civil works, it's the pouring of the concrete, it's the welding; it's those big complicated activities that cause delays. It's not really the nuclear pieces.
ML 24:30 Well, you say that, but it's the welding and then figuring out that you haven't welded it right, and having to re-weld it. I mean, what's striking is...
KG 24:39 Oh, you want nuclear grade concrete, that will cost you 10 times more...
ML 24:43 Not one Western company is able to do this. It's not just developing, it's not just China, but South Korea, there are delays even in their projects. And we don't know where the costs are being hidden for some of those projects. So, you can name a number, and say they're doing it cheaply. They're really not; they just have non-transparent public accounting, which enables them to... Because there's enormous geostrategic value in doing this stuff. And so, you hide costs where you can...
KG 25:17 I remember in China, I met somebody who's a master welder. He studied, he made that decision at school, and trained, became an apprentice, and then has worked consistently, and repeatedly, for his whole career working on nuclear-grade welding, and he's a master welder. That's the sort of level of generational investment in skills and capability that you need to achieve those high performance...
ML 25:46 The UK has those welders, by the way. The UK has the best precision nuclear-grade submarines, in Barrow-in-Furness, I've been privileged to visit. It is astonishing, the skills and technology that we've got in this country.
KG 26:01 Well, so one thing that I'd love to do is to move away from the big complicated, 9000 guys in a muddy field construction projects, to the factory-based opportunity where you can have precision welding, where you can have parallel processes, where you can have much more automation, where you can have a much higher productivity environment. That's where we make most of the big machines that we use in the world today. And our view is that's where we should be...
ML 26:30 Let's come on to that in a second. I just do want to, before we talk about SMRs, and we did have Tom Samson from Rolls Royce SMR, now moved on from Rolls Royce, but we had him on this program. But before we do that, you know, you've got Olkiluoto has now come online, finally. But it did cost €11 billion instead of three.
KG 26:59 And took 18 years.
ML 27:01 And took 18 years. Are they going to build Olkiluoto Four? Because parliament in Finland passed that legislation; they could, but are they going to, or are they going to just do something different?
KG 27:13 I mean, it's really interesting, isn't it? It's going to contribute I think 30% of Finland's electricity; it will generate for at least 60 years, it may generate for as long as 100 years, making 90% capacity factor clean, reliable energy. So, really, really tough getting that over the line, but once it's operating and going, it will run and run, probably well into the next century. Now, big question, yeah, do they have the stomach to do another one? It's a good, good question.
ML 27:47 Now I'm not an expert, but I'm told old that with childbirth, when it's just happened you say never again, but then a few years later...
KG 27:55 Something funny happens in your brain chemistry, and you do it all again.
ML 28:03 Is Finland going to say well, that was awful and overrun, and ridiculous, but it's so wonderful that we're going to do another one?
ML 28:08 Do I detect less commitment to the gigawatt scale builds than when we spoke two and a half years ago? Because you're defending them, but you're switching to SMRs quite a lot.
KG 28:08 Coming back to your opening comment about the impact of the war in Ukraine, I think Finland is really interested in its own energy security and energy resilience, and recognizes that having big, modern nuclear plants is going to be an important feature of that. However, I know that they are looking at SMRs, and it does seem as though there is a major shift happening in Finland and Sweden, in Estonia and Czech Republic, in Romania, in many of these countries around Europe. exposed to the risk of Russian aggression, and over-dependence on Russian gas. They're looking at SMRs, partly because they're much smaller investments that; you can phase your investment, instead of a $20 or $30 billion project, you're looking more at one or $2 billion investments, and there's potential for repeatability as well.
KG 29:12 I mean, I can't help but make the case that the cost outcomes for the big gigawatt scale nuclear plants really are a choice, that you can achieve good outcomes, and I do think we need to replace our gigawatt scale fleet. But I think that the really big game is absolutely in Small Modular Reactors and micro reactors. But I would make a caveat that I want to see much more of a manufactured product based approach for the Small Modular Reactors, not just mini construction projects, which I think is a big risk.
ML 29:46 Let's talk about SMRs. Tom Samson of Rolls Royce SMR, now no longer of Rolls Royce SMR, but he was at the time. That's a 470 megawatt...
KG 29:58 It's a big small reactor.
ML 29:59 And the reason it's called modular is that it comes, it arrives in 2000 truckloads, then it gets assembled on site. The GE Hitachi BWRX 300 that you mentioned, to get geeky, is a 300-megawatt reactor. So, is that similar? Why is it modular? Or is it?
KG 30:18 Well, so Rolls Royce, obviously, they're a manufacturing company, so that's a good start; they're good at making things in factories, and there's many really good features about the Rolls Royce SMR, that suggest that a lot of the plant will be prefabricated, made in a factory, delivered to site. I think the sizing is informed by how big can they go, but still move everything by road. It still sounds like a lot of pieces that you have to assemble on site, but it's certainly not as scrappy as a full on-site construction project where you're literally pouring the concrete.
ML 30:58 I don't think there's that many welders that have to go to the site. I think there's still a few, but not...
KG 31:03 To be a bit geeky, it's the design for manufacture and assembly approach that I think is very promising. But GE isn't quite as manufactured as that; GE still has a EPC-led - so, engineering, procurement and construction to ensure we don't have too many acronyms.
KG 31:25 It's still a one off...
KG 31:27 The plant delivery is still going to be a construction project. And unfortunately, it will still change for each site. And that's one of the big challenges, I think, that prevents these projects from becoming products.
ML 31:41 Let's just touch on a couple of other players, you've got NuScale, how are they doing?
KG 31:45 So NuScale is the first SMR to actually get a license. So, they're sort of forging the path for everyone else. So, first movers, cost $500 million, and took years and millions of pages of submissions to the NRC. So, really a kind of Herculean effort, and it does raise questions about whether or not the regulator in the US is meeting its mission, not only to be safe, but also efficient. I think we're lacking in the efficiency. But they have got their license, and now they're marketing to many countries around the world that are super interested.
ML 32:23 And that's something like 100 megawatts electric?
KG 32:26 So, it's 77 megawatts. However, when they went through the licensing process, the design was 50 megawatts. They've now increased that to a more economical, 77 megawatts, and they come in 12 packs. So you kind of get a plant, but each unit is 77 megawatts, but they're going to have to be licensed to get the 77 megawatts to innovate.
ML 32:48 Now, we need to put that in perspective, because you and I megawatt for a living - not everybody listening to this does. And the big, gigawatt scale, nuclear, a big coal-fired power station would be one, one and a half gigawatts. And you might put a couple of them together like in Hinkley, it's gonna be...
KG 33:08 1.6 each, so 3.2.
ML 33:12 3.2. And so, if you're talking about 77 megawatts electric times 12, you're going to get to about a gigawatt, so it's kind of one normal power station, in a sense. But I did a calculation, based on sort of NuScale: I said, okay, let's talk about 100 megawatts electrical, and how many of those do we need to catch up with where wind and solar are today, in terms of energy, in terms of electricity generation globally, I did the global numbers.
KG 33:49 Now, are you talking about installed capacity for wind and solar? Or are you talking about their generation?
ML 33:53 Generation, not capacity. Because we know that you need...
KG 33:59 Okay, so what are you assuming for solar? 100% capacity?
ML 34:03 [inaudible] terawatt hours generated last year. I actually have a little chart that I could show you. That's the wrong chart - this one is how disastrous Flamanville has been, you can see their, every...
KG 34:23 For the audience, the curve is going up unfortunately.
ML 34:28 Yes, getting more expensive and more delayed again and again and again and again. But that wasn't the chart that I was after... For the podcast audience, we need to do these in performative dance so that they can enjoy them as well. Here if you're watching on YouTube, you might be able to see global generation from nuclear and wind and solar; so you see, nuclear essentially stalled at about 2800 terawatt hours in 2021, whilst wind and solar have obviously soared away, and in 2021 overtook nuclear in output. Not in capacity.
KG 34:28 I'll say two things quickly about the chart. One is that, what we only see there is the clean energy, clean electricity generation in the global mix; what we don't see is the gigantic share from oil and gas and coal
ML 35:24 Not so much in electricity, it would be gas. Listen, these are both technologies I support.
KG 35:31 I know... But it's not a competition.
ML 35:35 That's an interesting point, maybe we'll come back to it... I think in many people's minds, it is. But I'm trying to triangulate here. It is one where you need to triangulate: how big is it? How fast can you move? Even if it's not a competition, you still need to understand...
KG 35:50 I agree with that. And coming back to the strength in diversity piece...
ML 35:59 The number of these SMRs that you need to build. There you see wind and solar curving up, they're now 15% of global electricity generation capacity. And if you wanted to do that with a 100 megawatt SMR, you would need to build 5400 of them.
KG 36:20 Excellent.
ML 36:21 5400. So, you'll say marvellous, what a tremendous market. I'll say, really? You really think you're gonna get there?
KG 36:29 So, what we saw on the chart was a lovely hockey stick-shaped curve, which is fantastic, and an incredible achievement for wind and solar. Absolutely wonderful. The question is, is it going to continue to be a hockey stick shape? Or are we going to encounter some other realities around the deployment of wind and solar?
ML 36:56 Oh I have no question on that, no doubt whatsoever, that wind solar output continues to hockey stick, because we're getting bigger and bigger projects, offshore wind; we're getting these huge projects in the Australian desert. We're getting I mean..
KG 37:12 15% now.... So, what share do you think the hockey stick curve could go up to? Is it going to double again?
ML 37:20 Oh, yes, for sure.
KG 37:21 Is it going to triple? Are we going to get to like as much as 50% share?
ML 37:25 So, I think it'll go... There's no question in my mind that that hockey stick of wind and solar could get to 60%, 70%, 80% of global electricity. And by the way, it goes very nonlinear... I've wrote something about the solar singularity, but you can also do one for offshore wind, and you get floating offshore wind. Because don't forget that even if you got to 60%, 70%, 80% of current electricity, we've also got transportation, we've got industry, we've got heating, all going electric So, I want to come back to the 5400 small modular reactors. And by the way, if they are Rolls Royce sized, five times as big, then the double becomes 1000, 1100?
KG 38:09 Can I take that for a second? Okay, well let me zoom in a little bit here to make it a little bit more easy to imagine how we might deploy that kind of scale of nuclear. So, we have a giga factory design, for example, which is a 20 gigawatts electric facility. So, it has 36 high temperature reactors, located on a site, which is sized to be like a medium-sized refinery. So, you can kind of imagine what a medium-sized refinery looks like. One of these sites could accommodate 36 of these high-temperature reactors, or indeed a light-water SMR kind of technology.
ML 38:48 20 gigawatts on the same site? How are you cooling that?
KG 38:53 Well, it depends on the technology. We wouldn't expect necessarily to be using water-cooled reactors. We might use lead-cooled, or molten salts or... there's different cooling...
ML 39:04 You've still got to reject the heat somehow. You've still got to get that heat away.
KG 39:08 Cooling towers, for example. So, cooling towers, or if you have it next to the ocean or...
ML 39:15 Evaporative or closed loop? These are the vast challenges. I get these people saying, oh, we're going to just make liquid hydrogen at Heathrow Airport, and they don't understand the scale of heat you have to reject; it has to go somewhere...
KG 39:28 It does. It does. So, in this scenario, we're expecting to have a huge bank of cooling towers available. If we were to do that, for the UK, you would be making very large amounts of hydrogen, as you'd expect, or less than $1 a kilogram because you're making the reactors, and you've got a factory producing all of the prefabricated concrete there on site. You're relocating everything into a fully integrated manufacturing and installation and production facility. You can use the hydrogen to make synthetic fuels so you can actually move the product around. But crucially, you could also be connecting it to the grid. So, let's say we're successful and we get our 80% wind and solar generation for the electricity grid in the UK; what do you do during the dunkelflaute situation?
ML 40:16 Translation: that's the time when there's no wind and no sun for an extended period.
KG 40:20 When you've got a cloudy, windless day, that could last for weeks even at a time. But even during those cloudy, sunless moments in the system, you have a very significant dip in your electricity generation, because you have a weather dependent electricity system...
ML 40:37 That's all go software [inaudible]. The short-term stuff will go demand response.
KG 40:41 But for your longer periods of time, your 12 or 24-hour cycle, and even for your week-long or months-long cycle, you could potentially then be directing that to the grid. And then you've got really good economics throughout your hydrogen production, because you're making hydrogen 80% or more of the time, and you've got a very large scale facilities, so you've got good low costs associated with that large-scale facility. And then you don't have to invest huge amounts in energy storage to support your renewables.
ML 41:14 So I agree with the architecture. I think that's right, I think pairing nuclear with industrial processes like electrolysis, is the only way that I can see a robust role for [nuclear]. Because then, as you say, what happens then when you don't have the wind and the solar power, not only... You could use some hydrogen or whatever, long duration storage, but you've also got the nuclear; you shut off your electrolyzers, and at that point, you've got sort of double benefit, you've got the nuclear, and you're using the hydrogen.
KG 41:46 Flex generation of hydrogen heat powers is...
ML 41:49 I guarantee you, I will bet you - even adjusting for inflation, which is considerable - you're not going to get close to $1 a kilo of hydrogen using nuclear power at £70 to £90.
KG 42:02 Well, no. Well, definitely not. But then what you're not doing is a bespoke construction project; you have a factory making your products, essentially. So, you're applying all of those high-productivity manufacturing benefits that I was describing a minute ago: automation, parallelisation, a very precision environment, and you're making a product that's the same over and over and over again. So, you get into much more like a car manufacturing...
ML 42:29 [inaudible] do you need to get your electricity to?
KG 42:33 About $30 a megawatt.
ML 42:34 No no, it'll be much less, I think it'll be $10 per megawatt.
KG 42:38 Yeah, I probably... Let agree on $20,
ML 42:41 Maybe $20 if you're running it 24/7, because it's $10 if you're slightly intermittent.
KG 42:47 And don't forget, you're adding heat. So, we're assuming solid oxide electrolysis, which is increasing the efficiency of the electrolysis through the addition of heat.
ML 42:56 So, what you're postulating, though, is that it's an SMR - it's a Small Modular Reactor - but actually, it's a really big power plant, you're just going to put lots of them together. Because I can't see how you're going to build 5400 of these things in individual locations. So, the whole idea of oh, we're gonna have a data centre...
KG 43:13 Well, I mean, you might have actually MMRs, and I think there is really going to be a strong case to have these little heat boxes. Essentially, if you think about them as your little heat boxes that are delivered, sealed; they power a big facility, whether it's a data centre, or some other industrial application for a decade, or even more, and then they're taken away again. There's no refuelling, there's remote operation. These new technologies - I was joking before, point at your old telephone here...
ML 43:43 For those who are on the podcast, I have an old ring-dial telephone behind us...
KG 43:51 And I want to put my smartphone next to it to illustrate the point that there's such a big difference between the technology, your grandfather's technology, the nuclear technology that's operating in the world today, and the technologies that are being commercialized and coming to market.
ML 44:06 But still, for each of those locations, even if you say it's as simple as you've described it: you install it, and it runs for five years, and then you remove it, right? You've still got to have a supply chain to produce it; a supply chain to produce its fuel; a way of removing it and remediating afterwards; and all of the sighting and planning for 5400 of these things?
KG 44:34 Well, you would centralize a lot of the production, probably; if you're making heat and fuels, you could centralize just like we centralize production of fuels today. So, you wouldn't necessarily pepper pot them around the place...
ML 44:49 By the way, I challenge $1 a kilo hydrogen; I would challenge synthetic fuels.... maybe we might see some in use in aviation because we really, really, really want to fly places...
KG 45:03 And all the billions of people that are increasing their quality of life are going to want to fly...
ML 45:10 The EU has just fought this great battle about e-fuels and allowing them for land-based transportation, of which virtually none... Maybe if you want to have a kind of heritage Ferrari at some point, which I'm sure to do, then you might use an e-fuel... But the idea that the cost of e-fuel...
KG 45:27 Electric vehicles, surely? Electric vehicles are amazing, wonderful. And I really hope that we are able to achieve the scale of investment, and sequencing, in all of the associated infrastructure that's going to be necessary to establish the confidence for everyone to buy a new car. But I just want to come back to the quick list that you made a moment ago about the investment that's going to be needed in the supply chain capability, the fuelling production capability, the remediation, the siting; all of that capability that would be necessary to go and deploy those 5000 SMRs that we need: that's the to do list. My question is, why wouldn't we do that?
ML 46:10 Well, because it's much harder to get approval for 5400 nuclear locations than for 5400... name any other technology. That's just the reality. We talked about...
KG 46:29 Do you think that there is no risk that we wouldn't be able to get to 100% clean? Do you think there is any risk to that 100% renewables...?
ML 46:48 100% renewables is a foolish pipe-dream. Those so-called academics pushing it are basically just activists who happen to have landed Professor roles.
KG 46:59 One of the reasons I love talking to you is because you're really a climate hawk, and you really care about those outcomes. And I think that's something we agree on, and the reason I'm here saying, okay, we ought to do this, this is the sort of activities we should be investing and doing, is because I think that's a way of de-risking our path to net- zero. There's a question about what we're doing about coal. Well, I just want to say that if you start looking at the opportunity to essentially replace the steam generation; essentially stop burning coal and replace the steam with steam that's produced with an SMR, that could be a very promising way to enable those plants to continue operating without emissions globally, continuing to supply the energy. What we're looking at here is a sort of a fast track, that doesn't require the difficult transition of essentially abandoning those communities, and trying somehow to replace the scale of generation from that single footprint with 1000s of acres of wind and solar that would be needed to replace the coal.
ML 48:01 Can I ask a difficult question about this fast track? Will it arrive before 2050?
KG 48:10 That's a really good question. I think that one of the big challenges that we've had in the climate and energy discourse is an absence of real discussion around the role that nuclear energy could potentially play, and what actions would be needed to enable it to play a meaningful role? And one of the ways that we're trying to insert nuclear more into that discourse is by targeting it at really tough-to-solve parts of the decarbonisation challenge, like coal, for example.
ML 48:41 I suppose I'm less worried about coal, because I do see how it can be pushed out pretty easily. As long as you're not shutting existing nuclear, it actually gets pushed out, within the energy system conversation, reasonably easily.
KG 48:56 Let's count the ways in which it's been phased out. So, it's been phased out in Ontario. That's, I think, the only example of a modern industrialized economy that has successfully, fully shut down its coal generation.
ML 49:08 The UK is very close.
KG 49:11 It's very close, and we've maintained our nuclear fleet...
ML 49:17 Even Germany, despite the fact that they're shutting nuclear, is now finally forcing coal off... Anyway...
KG 49:23 But that's important Michael, because that's really... The evidence isn't really there, it's still a hypothesis. And it's a hypothesis that, despite 20 years of raising the alarm about climate action...
ML 49:39 The UK has 40% coal in its electricity mix in 2012; it now has 2%. That's not a hypothesis, that's delivery. I want to come back to one other Small Modular Reactors if I might. There's a company called Last Energy, and they announced with great fanfare, just very recently, $18.9 billion to build 34 reactors, but their reactors are 20 megawatts, which means that they're suggesting... That's $28 billion per gigawatt, and they want to build these things. I mean, just do the maths: $18.9 billion, 34 reactors that's...
KG 50:19 Do they mean 34 projects? I think that may be 34 projects, rather than per reactor...
ML 50:27 That's possible. But are we going to just see... Can you ever justify a 20-megawatt reactor? I mean, there's 5400 if they're 100 megawatts; you multiply it by 5 if they're 20 megawatts? Isn't this just kind of saying, oh, well, you know, ...how can I put it? Isn't this hydrogen cars, hydrogen trucks? Let's just kind of capture the zeitgeist... What is really going on?
KG 50:55 There's a lot of energy services that are needed in the world beyond electricity, and this 20-megawatt plant... I think Last Energy seems to be doing a really good job at generating a huge amount of customer demand, which, hats off to them; that's what this sector, frankly, needs. And I suspect - I don't know all the details about what they're doing - but I suspect that a lot of the customers that are raising their hands and showing some interest, that they're recording there, are district heating systems, are industrial heat users, are major industrial power consumers. These energy services that are a little bit away from the public perception, which tends to focus on households' energy use, and electricity use in particular. There's the other 80% of our energy need out there that can be met through these kinds of plants.
ML 51:54 I guess I might have a slightly more demanding definition of customer demand than somebody who puts their name on a press release.
KG 52:00 As I say, I don't know the details. But I know that a lot of big, industrial energy users in the oil and gas sector and in the chemical, steel, cement, glass industries - those big industries that build all of the infrastructure that we need in the world - are massive energy consumers; they have 2030 emissions reduction targets, and they're looking around to see how they're going to meet their need for not just power, but also for 24/7 power, and also for high temperature heat. And I think they're getting kind of interested in the role nuclear can play.
ML 52:41 I can imagine oil and gas companies wanting to eliminate their scope one, scope two emissions, by going nuclear; I can imagine that's a thing, but I'm not sure if it should be.
KG 52:50 I mean... why not?
ML 52:53 Well, whether it will really happen... Whether that is real demand or not, and whether those oil and gas companies ought to be... how can I put this? Either doing things that will be much faster than waiting for these technologies of the future to arrive, or perhaps facing up to the fact that they are actually not going to be producing as much output as they seem to think.
KG 53:17 So I guess my question is, why do you think it would be so slow? What do you think is actually the underlying reason for the pessimism - the very understandable pessimism - that you have that nuclear technologies could achieve the sort of speed and scale of deployment that would be meaningful to these companies that have 2030 targets? Why is that?
ML 53:38 So, I talked about the supply chain for the technology. These are really complex things... This is not manufacturing that you do [inaudible]. There's the supply chain to produce them, there's the fuel, there's the siting and permitting, there's the non-proliferation issues, which have to be...
KG 53:56 Do you think those are solvable? Or not?
ML 53:58 Do you know what, I think they are a lot more challenging than you think, and I'll give you an example. Where does nuclear fuel come from? A large part of it, right, comes from Russia. Why are we still buying? And the most recent data is, we're still buying it. The EU included, is buying a billion dollars a year of fuel for Russia, right? Is this a good thing?
KG 54:22 And do you know the stats on how much gas we're buying from Russia still, as well? Despite the so-called sanctions?
ML 54:28 Well, we've got a few countries that have got no alternatives who are actually in the pockets, frankly, of Russia, as a result.
KG 54:35 And that is unfortunately the case with fuel, and now there are significant moves in multiple countries to stand up new fuels production supply, the question is can they do it...
ML 54:52 But how long does it take? Because I'm saying, I look at this and say, these things take decades and decades, and you're saying we should do it quicker. Well, yeah, okay, but how?
KG 55:00 Well, a lot of this comes down to exactly the same kinds of strategic intent from governments and from industry, and the right incentives being created, as we saw with the successful renewables improvements in competition and supply chain and productivity...
ML 55:19 But they're not the same. They're not.
KG 55:22 You're talking about manufacturing capability.
ML 55:24 It's not manufacturing. What is the proliferation risk of opening a wind turbine factory? What's the security implication? We're over-dependent on China for rare earths, but we don't have to track every kilo of rare earth in minute detail, because it goes...
KG 55:44 Guess what we're really really good at? Tracking that material. And we're really good at the application of all kinds of digital capability and security oversight that has led to the really impeccable track record in terms of safety, security and safeguards [inaudible] operation of nuclear for the last 65 years.
ML 56:07 Qualifying a new mine, qualifying a new processing facility, qualifying a new reprocessing facility, educating sufficient engineers to man all these things is a job of decades.
KG 56:18 That's why it's strategic intent. The lessons from Covid...
ML 56:24 But Kirsty you call it fast track - it's not fast at all. There's nothing fast about it.
KG 56:29 I asked you what you thought the barriers were to achieving the fast track, and now we're discussing them. And this is exactly the kind of conversation that I think that we should be having, because this conversation is really about identifying the big challenges, and then we can start having a discussion about whether we can solve them, how we might solve them, what kind of investment of resources... and that kind of strategic intent might be necessary to solve them. But unfortunately, most of the conversations that are happening elsewhere, are not even at that stage. They're saying, no, it's too difficult, therefore, we won't do it.
ML 57:07 I don't think it's too difficult. I think it's difficult, and I think we should be doing it. But I think we've got to be brutally realistic about what it can deliver. How many of these SMRs can we build, in what timeframe, and where, and with fuel from what? Is it going to use Russian highly-enriched fuel, or is it not? That has to be... that's hard work....
KG 57:31 It is hard work, and, Michael, if we were having this conversation outside of the context of the climate emergency that we're in, then I think you'd be very reasonable in saying, this is too difficult, it's going to take too long, it's going to require too much investment...
ML 57:50 I'd still be supportive. Why? Because nuclear is needed in the food industry, the medical industry, the measurements.... So, I'm just pro-nuclear; I'm genuinely, through and through, pro-nuclear. But I'm also pro data, and pro-realism.
KG 58:03 Me too. And looking back at the COVID pandemic, and I'm sorry if this is too much of an overused analogy, but to bring a vaccine to market before the pandemic, you would have said, it'll take 10 years, and it took 10 months, because we were in an emergency and the scientific community changed its processes, created a lot of parallel activities, and designed a critical path that eliminated huge amounts of inefficiency and time that normally would have led to the ten-year track. I'm arguing that we should at least have a look at what the critical path could be to bring some of these technologies to market at the speed and scale that we need, and figure out where we can eliminate inefficiencies, and where we can actually speed things up. If we really think it's an emergency - 27 years to 2050, Michael.
ML 58:33 No, listen, I agree with you, and I agree with what you're saying about doing things in parallel and speeding things up. I just think that you're talking about speeding... things that take 20 years, you could speed up to 10, 12, but not to two or three; it just doesn't work that way.
KG 59:14 France built 57 reactors in 15 years. So, there are historical examples of... Sweden and France built - and the US - they built many, many, many projects.
ML 59:28 You do know we're adding more generating - not capacity - but we're adding more generation of wind and solar now there was ever added in any individual year in the past.
KG 59:38 Which is fantastic. And what I'm saying is we should be having the same level of ambition for other clean technologies as well.
ML 59:45 Let's finish by... Because we could go into a whole thing about regulatory environments back then; that was before Chernobyl, that was before Fukushima....
ML 59:53 That was before we had computers.
ML 59:57 Exactly.
KG 59:58 I mean, you know... I'm not trying to make some wild prediction here. What I'm trying to make the case for is really making good choices.
ML 1:00:09 Let's move on to just a couple of other things before we wrap up, because I think we agree on a lot. I'm not as optimistic, but there are things that I am sort of encouraged by. I love that Olkiluoto is finally working; I love that Taishan is finally connected back to the grid. I do like the progress on SMRs; I kind of like the bigger ones, because I think that the idea of thousands of little ones, I find that very unlikely...
KG 1:00:40 For a proliferation reason? Why is that?
ML 1:00:45 Proliferation is a big part of it. I'm a foreign policy hawk; I don't like the idea of too many people having this stuff lying around. But also just the regulatory processes around every single site that's got a nuclear reactor are going to be.... This is not like... We talked about why isn't this just like building an aeroplane? This is like building an aeroplane, and each time you build an aeroplane, you have to site and build a whole airport in terms of the public consultations, etc, etc. But some other things I'm optimistic about.
KG 1:01:25 Although you know that the product developers, the developers of these advanced technologies, the micro reactors and even some of the high-temperature advanced reactors, they are designing out that need to build a whole airport around their technology.
ML 1:01:40 They're not designing out the need for every single municipality to consult with the public, and get everybody comfortable; not just that municipality, they're going to have to work out where the fuel comes from... You're not gonna get around the fact...
KG 1:01:55 You know that they only just the de-commissioned the research reactor at Ascot recently? I mean, we have lots of these small reactors operating in our own towns and cities without anybody batting an eye an eyelid.
ML 1:02:11 And do you know also, we're going to spend 200 years decommissioning Windscale. So, people require scrutiny.
ML 1:02:18 I'm not saying there shouldn't your scrutiny, I'm just saying that there are already real-world examples.
ML 1:02:24 Exactly. And scrutiny takes time. Scrutiny takes... I'm afraid, scrutiny, and building robust supply chains, takes - I'm afraid - decades. It's what we've seen from every sector that's come from nothing...
KG 1:02:38 Permitting has been identified as one of the big things.
ML 1:02:42 Let's finish off with some of the things that we can agree on. We've talked about the GE Hitachi, very exciting. We've talked about... There's some things going on within some of the industries that are espousing this... Microsoft. Let's go back to public acceptance, because fundamentally, if the public wants this stuff, I think we'll get it; and if they don't, we won't.
KG 1:03:08 I think that's right. I think one of the really interesting things about... So, our Terrapraxis Repowering Coal initiative, we're partnering with Microsoft, and that's really incredible for a bunch of reasons. So, firstly, of course, Microsoft has a gigantic global energy business; they're massive energy consumers, they're going to increase their demand for 24/7 clean power; they have a very ambitious target to be carbon negative, as a company, not just carbon neutral. So, they're very interested in the role that nuclear energy could potentially play as a power supplier for their data centres, for example. They also supply energy services to global utilities. And they're very interested in supporting those customers in reaching net-zero. And they see a really important role there for, for example, repurposing coal plants with SMRs. But anyway, the interesting thing beyond all of that global presence that we now have, thanks to our partnership with Microsoft, is that the perception that people have when they encounter the idea in the context of the Microsoft Technology Centre, is this as a high-tech solution to a big, bad dirty problem. They don't see it in the nuclear, classic, old-fashioned lens; they see this as being a high-tech solution. And that's really exciting, and that changes the perception very much.
ML 1:04:38 So now, when do you think that we will see whether nuclear is doing that hockey stick? The upwards hockey stick - of not just talk, and press releases and so on - but actual output from nuclear plants? When are we going to see that hockey stick? What I'm asking is, when should I have you back on Cleaning Up? So that we can adjudicate between whether my - you would say pessimism, I would say - realism, or your - you would say realism, but I would say - optimism. Who's right? And how long do we have to wait to find out?
KG 1:05:14 Yeah, that's such a great question. You know, when do we actually start to see results? As I guess what you're asking, isn't it? When do we actually start to see boots on the ground delivering these things? I think we're going to see micro-reactors... So, we have already SMR projects, so GE Hitachi is starting projects now with OPG in Canada, TVA in the US, we're seeing.....
ML 1:05:39 When will those be producing power?
KG 1:05:42 I don't think they're going to be producing power before 2030.
ML 1:05:45 I've got to get you back on the show before 2030.
KG 1:05:48 I would love to do that. I think actually that's a really interesting question. Because the climate impacts, the sense of urgency at each COP globally each year becomes more and more. We just had the IPCC report earlier this spring, the summary for AR6. The klaxon just becomes more and more urgent each time, doesn't it? Where will we be in five years’ time on the climate perspective? And how might that change the trajectory that you're asking about now? Will there be an intensification of demand that will drive some of the really significant changes that are needed in the way that we license, in the way that we prepare the supply chain, in the way that we invest in our fuel production, that could actually accelerate that hockey stick curve? I think we will see that in the next two or three years...
ML 1:06:49 I think my answer to where we will be in five years on the climate debate is: I believe that we will have come to grips, one way or the other, with the fact that we're missing 1.5 degrees; that there are therefore bad outcomes, that there are people who are going to be suffering. But we will also have understood that we are not going to three, four, five, six degrees of warming, and therefore that, in some way, shape or form, we have to settle in for the long term; we have to keep it to two degrees, which will still be possible, and we need to settle in for the long term, and become less hysterical in our response. I'm not talking about individuals, I'm talking about as a society, we can't just jump on, hydrogen is the thing, nuclear is the thing, wind is the thing; we're going to have to settle down for a long haul to get to two degrees. Nuclear has its role to play, so do all the things I've talked about, wind and solar and hydrogen, which is the alternative. But we have to be brutally realistic about timings. And by the way, at that point, five years in, I don't think nuclear will have delivered a whole hell of a lot more than it has today.
KG 1:08:02 So, I would bet that in one year from now, we will see a very significant shift in the customer voice, the demand for heat and hydrogen and power from nuclear energy for industrial decarbonisation. I think that a lot of these large energy users that I was talking about, oil and gas, and industry, are looking at their 2030 trajectory; here we are in Spring 2023, seven years away, to their milestone, and I think that in a year from now, we're going to have seen many more of those big players put their hands up and say, we want one of those, or we want a hundred of those. Dow Chemical has already stepped up; they're commissioning X-energy.
ML 1:08:54 Which we didn't talk about, that's another good SMR, Small Modular Reactor.
KG 1:08:59 It's really interesting. And what's super interesting is that Dow had really - I hadn't realized this but I learned recently - had been very active in the NGP program; I'm mispronouncing it, but there was a big, small reactor initiative, DOE-funded, about 20 years ago, and many of the individuals who were working on it at the time, have now come all the way back around again, and said, let's reopen this and the timing is very different.
ML 1:09:28 In 2018, I wrote a piece about how there were two business cycles, two planning cycles for businesses, before 2030, because they take about five or six years. You can kind of get place some bets, spend five years executing, and then you have to see whether they work. What you're talking about is you're getting to the point where there's just one more time to place the bets, there's one more roll of the roulette wheel before 20130.
KG 1:09:54 And I think if the industry, if the nuclear sector misses that next roll of the dice, or the roulette wheel spin, which is going to be this time next year let's say, then we can forget about it... Well, we can forget about it for 2030.
ML 1:10:10 Here's how I think of it, I think that the right way to think about this is that they can roll their dice one more time, the roulette wheel one more time, but that is going to be small stuff; it's going to be one or two Small Modular Reactors in that sector that you talked about - chemicals, oil and gas, those sorts of things. They are going to roll the dice and do one or two or whatever.
KG 1:10:35 I don't think they will do one or two. They have the answer to the big supply chain capability question that you were asking a moment ago. They have massive manufacturing capability, and the oil and gas industry, the chemicals industry, they're really good at organizing their supply chain to meet their needs.
KG 1:10:56 But Microsoft doesn't make nuclear energy.
KG 1:11:00 No, they don't. But they're really good at organizing their supply chain to supply them for services. It doesn't mean that they'll do it themselves, but it does mean that they'll send a signal, which is large enough, significant enough that it will generate the investment in the supply chain that's needed.
ML 1:11:18 Send the signal and the supply chains will start responding. But, these things take a long time. And where we hopefully would be by 2030; the critical decade in all of this is 2030 to 2040.
KG 1:11:33 That's my phase, the critical decade. Now we are in the critical decade, because we're laying the foundations. And actually, what we want to see in 2030-2040 is the delivery.
ML 1:11:45 So, success looks like laying foundations in the next seven years. I think that is the most that you can ask for from the nuclear sector.
KG 1:11:53 And that's a huge amount of work, as we've been discussing. I'm not making any like claim that we're going to be like building thousands of reactors before 2030. The real question is, are we laying those big, those major foundations?
ML 1:12:06 So, now we know, you're going to come back in two years’ time, I think it's two years. And we're going to see whether the foundation's - solid, robust foundations - have been laid, or whether it's still in these cycles of talk and hype and attacking renewables and, and press releases and whatever, which is going on in parallel with a lot of very, very good and interesting things. Is that fair?
KG 1:12:30 I'm looking forward to it.
ML 1:12:32 Me too. Kirsty, thanks so much for coming on Cleaning Up today, it's always an enormous pleasure
KG 1:12:37 Likewise, thank you so much.