Ep 213: James Walker; Unlocking the Future of Nuclear: Microreactors, Safety Myths; Salmon Fishermen

What a lovely introduction. I feel like I'm the pool hack, you know, trying to play a ball and here comes the pro in and just wipes us all out and he looks better and sounds better. Well, this I feel I don't know. I feel very embarrassed nowadays. Thank you.

Oh, 100%. So I started off, my background is as a nuclear physicist and nuclear engineer. I got my start as a nuclear engineer with the UK Ministry of Defense. I was an engineer working on the design of secondary systems for submarines, but I did that for a while until they sent me off to do more education in nuclear physics, nuclear engineering. I got qualified as a nuclear engineer that way. And after I finished that education, they sent me to Rolls-Royce, but they're the company that are in charge of designing the reactor systems and manufacturing the reactors that go into submarines. And I worked there for a while as a nuclear physicist and in the reactor physics department and in the thermal hydraulics department where I was doing the design of the next generation of reactors for the next generation of nuclear submarines.

After that, I got sent back to the Ministry of Defense where I worked on the management of reactor core manufacturing facilities as well as being one of the chief engineers at the for rebuilding the Rolls-Royce nuclear chemical plant which is a fuel reclamation plant for spent nuclear fuel. And I did that for a number of years too. But it wasn't until I moved to North America where I got more involved in public companies and capital markets and I was over here building manufacturing operations, processing operations and through that network I met JU who was the founder of Nano and I was the second person into the company and we actually started by analyzing the market and seeing where we could fit in best because it was, I said, you know, it's a very capital intensive industry, it's very well established players and but if we take a look at where we could fit into the market, I believe there's always a place and we settled on micro reactors. That was an area that was much less competitive, much less developed and we saw that with the right financing structure we could pull out into the lead of this race to produce a commercial product and since then we've obviously diversified into fuel supply chain, transportation, consultancy services but that's how we got our start and we sort of diversified out of necessity to ensure that we could produce that commercial product for market eventually.

So there's I think there's something very attractive about physics generally in the sense that it kind of gives you an understanding of how the universe works. I think there must be some part of all of us that's very curious about how things operate, why things are the way they are. Like if you and if you start from physics anyway, you get smaller and smaller eventually get down to atomic then subatomic and you know it's almost inevitable. If you want to understand how the macro work, you've got to understand the micro and there's something very fascinating about it. It's almost like trying to understand the mind of God. If you try and if you're trying to understand the nature of the laws of how the universe operates, so I yeah certainly I think just general curiosity could sort of lead you in this direction even if you don't really like maths so.

I am married, yes.

I think that's one mind that's very difficult to understand. I mean I think my own wife would very much very happily admit that sometimes she doesn't understand herself. And that the emotion will come first and then the reasoning for the emotion afterwards. So based on that it gets much harder for me to interpret what's going on.

I'm not laying any of the situation at my wife's feet. It's just my lack of ability. I think I'm tracking. I think I got the boundaries and the parameters laid out and she has outthought me, out emotion me, out something me again. But let's move on to something much easier to understand and that is nuclear physics. So you mentioned there in that, thank you by the way for that introduction. I probably would have been more intimidated to invite you on if I had known you were that smart and capable. What you said micro reactor.

Oh 100% this is a good place to start as well just to understand the industry but the big the thing that you're thinking of there. The thing with acres and acres of land are those big traditional nuclear power plants. The sort of the Homer Simpson power plants. Which are like the gigawatt gigawatt of power and they're powering cities and towns and that kind of thing. And I think the US is currently 20% nuclear. And so those are all big power stations. So the if you what what we talk about now when we talk about advanced reactors is usually small modular reactors and a small modular reactor is really anything from about 20 megawatts to well I'd say the biggest one is Rolls-Royce's small modular reactor that's 470. So that's really the range from 20 megawatts to all the way up to 470.

I think most of the big companies have sort of settled on 300 megawatts as being a good range of power for a small modular reactor that allows them to both have the ability to make a lot of modular reactors and mass manufacture them while also being not huge enough that it's going to take a huge amount of time to deploy these things. But small modular reactors are intended to power all sorts of things. So again, it's cities and towns but with many of them, but there's also chemical plants, data centers, AI centers, big industry. And the idea here is that you're making a reactor that's much more deployable, much more modular, can be mass manufactured and hopefully once you can mass manufacture these things, more inexpensive than say a larger reactor system. And so then on the smaller end you've then got the micro reactors and that's really from anything below 20 megawatt of output power and then you're targeting a very different industry. There's really not much overlap between a small modular reactor market and a micro reactor market. Micro reactors are targeting things like military bases, remote mining projects, disaster relief areas, oil and gas projects, remote habitation, island communities, those kind of areas where diesel generators kind of operate supreme and they've never really had any sort of challenge. Whereas small modulars will still have to compete with gas, coal, conventional power sources that feed into the grid. Micro reactors are really just competing against diesel generators. And those are really the three areas you can think traditional nuclear massive, small modular reactors in the middle and micro reactors the smallest.

Yeah, this is a huge topic in itself. But if I was to give my best estimation of why this has actually happened in this way is I would say that theoretically nuclear should be the cheapest form of energy out there. Like it should beat out everything. And that the joke in nuclear is that nuclear is cheap but the paperwork is expensive. And what's happened really I think is that when the US, the US was the first nuclear power in the world. But that also means the regulator is the oldest regulator in the world. It's had decades to build up a lot of bureaucracy and regulations and that can make that has historically made the deployment of reactors very timely and very costly. And so for instance nuclear power in the US is the most expensive nuclear power in the world. But there's no reason why it should be, you know, a fifth of the cost in China compared to the US. It's the same uranium bought on the same international markets and enriched to the same amount. But what's happened with the US is that because the licensing and the time to get a product commercialized that takes so long that capital cost at the upfront capital cost is so large and that led to essentially the deployment of a commercial nuclear plant being 70% of the costs were financing not even the power plant or the construction. And I think in small modular reactors became a sort of industry's response to this impediment.

So if you could have a system that could be mass manufactured so you just need to get one licensed and then you could deploy it and if you could do this you can get around sort of those high upfront capital costs and amortize it and then the capital costs per reactor get less and less and less and so I think it really became about because of industry's response to this sort of historic baggage. Now it is a bit different because the NRC is undergoing a lot of change now. There's been legislation put down and advanced acts being put down from government to reform it. So there's a lot spoken about now in nuclear because the NRC the regulator is being reformed at the same time as industry is coming up with these novel solutions to address how to deploy nuclear more inexpensively than before. And for micro reactors, it's not that we've not done these before, as you mentioned, like submarines, but even what people don't realize is there's been a couple dozen of these micro reactors deployed to universities in the states already, and they've been there since 50s, 60s, 70s, and a lot of them are still operating and it's not well known about. I think tens of thousands of students walk past these things on a daily basis, and no one even knows that these things are still there. I think MIT's micro reactor that they've got is like twice the size of the one we want to put out there, but it's never been done commercially. It's been done for test purposes or training or irradiating materials and experimental work. But why not make those systems commercial and power island communities, power military bases? So, it's a there's a lot of nuance. Obviously, I've skipped out, but I think that's a good overview of how it's happened.

Agreed. And like you know I saw a bit of that when we were mass manufacturing reactors for submarines is that the first one was usually the trickiest and there were a lot less learned. And really you hit your stride by about the fourth reactor but the essentially the feedback was coming in all the time as these things were deploying and being operated and this is something that's going to happen very much too is like I am sure that with a lot of these companies their small modular reactors will the first one will be expensive there's no doubt about it but they will get cheaper and cheaper and the efficiencies of these things and how they're manufactured those efficiencies of those things will get better over time too and we will reach a point effectively where we are able to deploy these things very quickly from order to manufacture them quickly and they are a lot more simple than a big reactor too. So the smaller you make it the more simple the reactor system goes and so you get all sorts of additional manufacturing benefits. When you get down to the micro reactor they're at a level of simplicity where you can almost 3D print most of the reactor system and if you can do that on an assembly line you can produce hundreds of these things a year when you're doing that. You know, you do get those economies of scale, but you're getting a lot of data that feeds in to just continuously optimize that process. And we could be in a very interesting situation in the next few years to decades time where you're seeing an increasing number of these, you know, university campuses, industrial projects, remote communities, you could see nuclear all over the place because the good part here is that it's got a concentrated amount of power. So when these things deploy, they don't need refueling for a significant amount of time. They could really be transformative across the world, but like opening up power to a lot of communities that don't have access to grid power, which is huge numbers of people. So yeah.

It I'm sure it can be. I mean, what I would say though is that I think the problem nuclear has always suffered and we're probably going to get into public perceptions about safety very quickly here, but the perception between the reality of nuclear and the public perception of it is very different. So, effectively when you're talking about a robust system, a reactor is an incredibly robust system straight away. Like they can't blow up, they can't be used, they can't be made into weapons. The fuel is not enriched to enough. And even the irony is that even if you were to fire a missile at a micro reactor, as an example, it would become less radioactive because their reactors are configured so that the fuel is critical, which means it's pushed together to excite itself. Now, if you were to actually fire a missile at it, you would blow those pieces apart. And so it would become they wouldn't excite themselves and they would actually cool down. So they're an inherently safe system. And with a micro reactor system, if the passive cooling is sort of built into this or a passive safety mechanism is built in because if everything was to break inside one of these systems, you would not get the sort of core melt that you would get with a larger reactor.

And this might be dovetailing into a bit more technical stuff, but with a conventional civil power plant, the big risk of these sort of things is that they all use water. And the problem with water is the boiling temperature isn't that high. So if you can't contain that mold with pressurizers or your pressurizers break, you get a boiling effect and then you can't take enough heat off the uranium. So you'll get it will overheat and it'll melt. Now no one will die. It'll be a bit like Three Mile Island, which is I think is the US's worst nuclear disaster. But in that sort of case, no one will die, but you'll have a reactor that's obsolete. It's damaged. Like Fukushima, no one is going to get killed, but you've got a reactor that's useless now. But with these more advanced reactors, you're using coolants that have a much higher boiling temperature. So if everything was to break, for instance, in these systems, the coolant can still remove that heat or it doesn't boil over and it doesn't overheat the reactor, so you don't get that core melt. So they're much more inherently safe systems. And yeah, it begs the question why we always went the route of water. And I think it's sort of a historic legacy thing that we've done this before and so we'll keep doing it. But there were always other better options. We've just not done them before. And for getting something licensed, the regulator likes to see stuff that it's familiar with that it has a lot of data on. And so the water is sort of carried over for that reason. But I think small modular reactors will fundamentally change that because they will use better coolants that are more inherently safe than a conventional water-based power system.

You're asking a really interesting question because I would say nobody in the nuclear industry knows the answer to that question because there's a variety of different designs fuel types coolants that are being put around at the moment. And of course at the moment every company thinks that it knows best and it's got the best solution. I think what will almost certainly happen in time is that some designs will almost certainly demonstrate better economics than other designs and so it'll be harder for those other designs to compete against the more optimal design things. But I think you will likely see things like solar salts, molten salts being more heavily used in reactors rather than water. I think that certainly will be an aspect to it because it allows for the removal of big pressurized systems. It makes the system more inherently safe which means you can mass manufacture and deploy them with fewer personnel at the location. I think that's a reasonable estimation.

I think with fuel there is again there's a legacy thing where very already licensed fuels, trigger fuels, uranium dioxide fuels are the preference because of that legacy. But they're not the best. They're not the highest concentration. And then when you're making say a micro reactor, power concentration, energy concentration within the fuel is going to be even more important because you've got to concentrate as much as you can. And that might push you in the direction of uranium hydride or uranium nitride, which is more dense. And I think in those sort of areas you will see companies converging on a solution and it might very well be uranium hydride as an example. It's a known about fuel. It's already been licensed before there's a lot of data on it and it's got a higher fuel concentration. But it's certainly I think time will tell and there are some it's not that none of these will work either. So like I think all of these big companies the Kairoses the X-energys the Terra Powers the NuScals all these designs will certainly work like nuclear is an old technology now we know how to do it we know how to do it effectively and what it'll be is the optimization each company makes of these technologies and as they compete against each other the market will dictate essentially who will survive but at that sort of point you cannot patent the principles of a reactor as in what the coolant is, what the fuel type is. And so a lot of companies once it's very obvious that this is the optimal way to go will be able to move into that area if they really want to. But I think you're probably going to end up with a few leading companies developing these systems that will have a commanding market share that'll be hard to compete with them against because they'll have that it be like the Westinghouses of the big nuclear world. they've that experience and they've got that pedigree and you don't want to go creating your own pressurized water reactor if Westinghouse is already there.

This is actually you've hit upon I think a bit of a problem for the industry that it's addressing now. But what historically happened is that if you look at the nuclear industry today, you've got people who are near the end of their career and people at the start of their career and the middle was almost gutted. And what happened there is that the people who had been in there for many decades when nuclear industry was on the decline, they stayed. But the people who were up and coming, the younger people who wanted a more innovative industry or more opportunities, they left. And so this sort of gap got put there. And so there is a I would say almost a shortfall of personnel to try and satisfy this enormous market drive at the moment. Now, you know, even our company, we're actually we partner with the university to train people up. So we're putting into place our own PhD programs, masters programs so we can have a stream of people that comes into our company and we just recruited 12 nuclear engineers that were graduates of our programs just very recently. But you're right, it's going to be an issue.

And when we actually as we mentioned diesel, it's a good example to use there because when we spoke to customers about potentially replacing a diesel generator set with a nuclear power plant in those remote locations, the first question they get asked, they say, 'Look, we don't want to buy it. We don't want to operate it. We just want the power.' And from our point of view that means that we would stay the operators. We would deploy the reactors there and we would sell the power. But that means that we've got to have our own personnel to run these things. Now if we're going to be deploying hundreds of these, we can't just have hundreds and hundreds of nuclear engineers deployed to all these remote locations. So what's very likely to happen is that you're going to have be able to have sort of a central location that can monitor the transient behavior of all these reactor systems and then you can concentrate your workforce in that area. If you do that, you can actually just have more sort of technicians and mechanics or security personnel deployed to the micro reactor site. And you can might even be able to get your staff numbers down at that site to two or three people. And say you're deploying to a mining site, they would have their own security too. So you maybe need somebody for maintenance, somebody who's just trained to technically carry out the instructions of engineers if they were needed, but most of the day-to-day operation of these reactors can be run from remote locations. And so then you can reduce the burden on how many nuclear personnel you need. But so that's one way we're trying to address it. But as a larger macro picture of the entire industry, we're going to need to train a lot more nuclear engineers. There's no doubt about it. At COP 28, they were talking about tripling the world's nuclear. I think maybe they had some understanding of what that meant, but that's very ambitious because it's not just reactors that you need to build and operate. Then it's enrichment facilities, deconversion facilities, conversion facilities, fuel fabrication, fuel transportation, all of these different aspects that fit into that whole supply chain of ensuring this is possible. You're going to need a lot of people.