Good morning, good afternoon, or good evening from wherever you are. Welcome to Sustainability in Your Ear, the podcast conversation about accelerating the transition to a sustainable carbon-neutral society. I'm your host, Mitch Rackliffe, and thank you for joining the conversation. We're going to talk today about nuclear power, a carbon-free energy platform that has a controversial, accident-scarred past and that after the Fukushima Daiichi disaster in 2011 led many nations to pause or completely cancel their nuclear energy programs despite its other environmental impacts, including toxic waste that must be stored for centuries or even millennia in facilities designed to protect future generations from the genetic and acute effects of radiation. Nuclear power is considered by some influential environmentalists an essential component of the post-fossil fuel economy. For example, James Hansen, the NASA scientist who raised the alarm about global warming in congressional testimony in 1987, is an advocate of expanded use of nuclear energy generation. Our guests today are Jay Jang Yu, founder, executive chairman, and president of Nanuclear Energy Incorporated, and James Walker, CEO of the company. Nanuclear Energy is developing smaller portable nuclear micro reactors that can be moved to where electricity is needed by truck. These micro reactors can generate between 1 and 20 megawatts of energy. That's roughly enough energy to power between 400 and 20,000 homes depending on their needs. And that's plenty for many large manufacturing companies to use in a crisis when other sources of power are down. Nanuclear is working on two designs, the Zeus and Odin reactors, and they're designed for slightly different uses. We'll get into that. But what I want to do is preface this conversation by saying that I myself marched against nuclear power in the 1980s and am skeptical of claims that nuclear energy is safe. But the climate crisis requires we consider all options. Nuclear power is certainly safer than generating electricity by burning fossil fuels, which contribute to millions of deaths annually from illness caused by air pollution. However, the mortality statistics for nuclear accidents don't consistently include the long-term impacts to human and other animal health. So, it's hard to make an apples-to-apples comparison. So, let's get into this vexed and vexing topic to see what light we can shed on how and where and when nuclear power makes sense. You can learn more about Nanuclear Energy at nanuclearenergy.com. Nanuclear Energy is all one word, no space, no dash. nanuclearenergy.com. Welcome to the show, Jay and James. Can you first start off by introducing yourself so people can associate your voice with your identity?
Absolutely. So my name is James Walker. I'm the CEO of Nanuclear Energy. Just as a bit of background about myself, I am a nuclear physicist. I have a background with the UK Ministry of Defense where I used to work in the design and construction of manufacturing facilities to produce nuclear reactors as well as being seconded to Rolls-Royce for a while where I worked as a physicist in the design of nuclear reactors for the next generation nuclear submarines. When nuclear looked like it was on the decline a little bit as an industry, I did move to North America where I got more involved in capital markets and IPOs of public companies, and that's how I met our founder and our chairman, Jay.
Hi, I'm Jayu, founder and chairman of Nanuclear Energy. My background is in capital markets. I used to work for an investment bank back in the big bank meltdown in 2008. I left and I took my capital and I invested into pre-IPOs and into startup companies. These days I like to invest in myself and to surround myself with the smartest people in the world, which is where I found my number two, James Walker. Ever since then, he tells me every week Nanuclear Energy is the best startup he's ever seen in his life. And I'm happy that we placed a big bet on the right sector.
Well, let me ask you about that because we do know that after Fukushima there was a real pullback. What do you see in terms of the discussion broadening around nuclear?
So it's been a very significant change since we started the company, because when we did start, I was cautioning Jay that it was a very sophisticated industry with a lot of history and big players in it, and there wasn't a lot of interest in piling back into nuclear. But there's been a complete sea change. So just take COP28 as an example. There was an announcement that there has been a general agreement by the participant countries to triple the world's nuclear energy by three times within the next before 2050. So that will mean enormous increases in nuclear infrastructure, mining, uranium, processing facilities, reactors being developed. So that's really all come about within, I would say, the last three years, and you're seeing industry put big mandates on itself to reduce its carbon emissions. Effectively they put zero targets on themselves, and industry has largely come to the conclusion that is only really possible through nuclear energy. And so even big mining companies have contacted us directly to inquire about the feasibility of launching, say, a micro reactor at remote mining locations so they could displace their diesel systems which currently power these things. And you're seeing that not in the mining industry, but even in the oil and gas industry wants to decarbonize their industries in remote locations, and nuclear will be the way to do that. Maritime companies are looking to replace their bunker fuel with similar reactors that currently power the aircraft carriers and submarines that take the US Navy around the world. And even out of government, big bipartisan support on both sides of the aisle. Big RFPs and funding opportunities coming out of government now to build back the US's nuclear infrastructure and expand it to larger than where it was before. So we positioned ourselves at exactly the right time when the interest didn't seem to be there. So it's been quite remarkable watching that massive change in sentiment.
Now your micro reactor designs are really, I mean, surprisingly small compared to these massive installations we associate with previous generations of nuclear power plants, which a lot of that was the cooling system. How do your cooling systems work to allow you to put this on a truck bed, for instance, and move it into a mining location?
So the first thing we had to accept is that we weren't the world's best. And so we reached out to who we believe was the premier scientists that would be best developing these kind of technologies. So we brought on two technical teams. One drawn from professors and scientists out of University of Berkeley, and another team that we brought on just to hedge our bets out of the University of Cambridge and the professors and scientists there. And we gave them the same memo, is that we want this to be small, modular. It has to fit with an ISO container so we can take advantage of conventional transportation infrastructure like trucks, trains, back of shipping vessel, and so we can get this anywhere in the world at any time. And we gave them that memo and they both went away and they came up with two different solutions to it. So the Zeus reactor from the University of Berkeley scientists, they settled on the idea that they would just remove the coolant completely because once the reactor was shrunk down to a certain amount of size, the heat generated was not substantial enough to melt certain materials.
Um but that was their solution to it. That is, we believe probably the most simple reactor you could possibly make. And we're just in the process of patenting that technology now. The University of Cambridge scientists, their solution to this was that they believed that what they wanted to do is have a natural convection system to remove pumps and pressurizers and all that kind of stuff. Their solution was a solar salt with a natural convection pushed by that uranium-generated heat. And that also allowed them to reduce the size of the reactor considerably. And that naturally circulating solar salt removed that heat again to a turbine system. It will be slightly larger just because it still does use that coolant and it's got a few more working parts. But it can still fit within that ISO container. The parts that are involved are incredibly cheap. And so we expect the capital costs of producing that reactor to be, you know, with economy of scale, it's really going to start to make it competitive with diesel generators in the long term.
So let me try to put a picture to this. What would somebody see and hear if they were standing next to one of your micro reactors? It sounds like a rush of air for cooling, but other than that, what are we talking about?
Well, you would just see the ISO container. We don't want to take it out of that. The ISO container contains the core, the heat exchangers, the turbine, and that will all be contained. The idea is that we will move a nano ISO container to the site and put it down there and be responsible for the operation of that reactor. You're not going to hear anything apart from the turbine. That's going to be the only thing you should really hear from it. And the footprint really of this is going to be the ISO container and the security fence put around it. The clever part of reducing the costs to the customer is going to likely be the fact that because it needs such little physical input, you could have a couple of people there that are in charge of physical intervention if, I don't know, a tree falls on it or a general level. But these things could be remotely operated because they need such little input. So you could have a central location where it monitors the transient behavior of hundreds of different reactors. And that's very likely to be an appealing business model because one, it reduces the opex and the staff costs of these things and reduces what we could sell the energy for. But it also would mean a lower footprint and that could fit into these remote operations anywhere in the world. So that's what we're aiming to try and achieve.
Now, China recently introduced what's described as the first fourth-generation reactor. Where are you in the fourth generation, or are we talking yet another generation of innovation in terms of the delivery of Zeus and Odin?
So, yes, so we would feature within that fourth generation as well.
Okay. So, how is the fourth generation markedly different from previous generations? What's changed?
It's kind of interesting because in the industry, you don't really use, they don't really talk about fourth-generation nuclear reactors essentially. There's many differences, like for instance with a lot of SMRs, they're concentrating on things like HALU fuel as an example, which is a more enriched fuel to allow for a more compact energy density of the reactor. And there's different design factors that feature into that sort of definition. But effectively, really, it's kind of an amorphous term because they're really targeting sort of better safety, which might be like passive cooling, efficiency, and cost. And really, they're looking to try and bring down a lot of the capital costs associated with the big nuclear projects. And you can call those the generation 3 reactors. A lot of those capital costs that made nuclear seemingly expensive were the fact that with nuclear, all your upfront capital costs are at the front, because you're not refueling like a gas-powered station where the gas is brought in on a regular basis. But because that capital cost was quite large up front, the financing costs were quite large. And so 70% of the project cost could be financing-related costs, and that's going to go away immediately as you bring in these SMRs. And so the efficiency and cost of the next generation, the generation 4, is a factor in that definition. But it can refer to all sorts of things. So for some people when they refer to generation 3, they're talking about conventional nuclear reactors that use uranium, whereas the generation 4 might include other designs that are not considered conventional. So high-power gas reactors, molten salt reactors, the high-temperature reactors, because conventional reactors operate at sort of a lower temperature because they're much larger. So there's lots of factors that feature into that sort of definition.
So you described the reactors as walk-away safe, and as I said during the introduction, I protested against nuclear power particularly after Three Mile Island back in the 80s. So let me ask this question. Why is nuclear energy safer today and safe enough to use within a community or on a ship that could theoretically sink in the ocean?
So nuclear definitely does suffer from a very bad reputation that I don't think is deserved, because what we like to point out sometimes is that if you were to examine, say, deaths per gigawatt hour of all the energy systems, and you can include wind and solar or geothermal or hydro in those estimates too, nuclear comes out in front. It actually beats out wind and solar because the death generated for the power it produces is the lowest of all of those energy systems, and that's orders of magnitude lower than the fossil fuels, as you could probably imagine. So already it's the safest form of energy. Once you start reducing the size of the reactor, it becomes incrementally safer because you are reducing the complexity of the system. As soon as you reduce the complexity of the system, it becomes inherently safer because there are fewer failure mechanisms. You go to SMR from a big civil power plant, there are fewer modes it can fail. Once you get to a micro reactor, that is probably the safest form of energy mankind will possibly come up with because there are very few failure mechanisms. It's already a safe system inherently. And when we talk about walk-away safe, that basically means a passive cooling system. So with a big civil power plant, the worst thing that can really go wrong is you get a coolant leak that can lead to overheating and you get a core melt and then you have a cleanup operation. That's incredibly inconvenient. No one's going to die in that kind of situation, but it's a Fukushima or Three Mile Island incident where nobody dies but it's very inconvenient. It's messy. With a passive cooling system, you can't get that core melt. So if you say you get even a coolant leak, even with Odin that uses coolant, say you get that coolant leak, it still will not generate enough heat to melt the core. So you're not going to get that core melt and have that messy cleanup operation. So that's why it's already the safest, but it's going to get safer.
So one of these reactors couldn't explode, is what I hear you say.
Yeah. I would also like to point out the reactors can't explode. So whenever you see something like, I don't know, a TV version of a nuclear reactor explosion, that was almost certainly either the high-powered steam explosion, but the uranium is not enriched to a point in any civil power reactor or any SMR or micro reactor to a point where it could explode. If, say, for instance, if a terrorist wanted to...
Well, I don't mean a nuclear explosion, but I mean the steam explosions you're talking about.
Yes. So you could still get a steam explosion with some SMR designs. It's not going to happen with our ones because we don't use that sort of high-pressurized steam. That certainly could still happen, but even if you get that event, that's not going to lead to the worst outcome that you would historically associate with a conventional reactor, which would be once that steam escapes, you're removing the heat removal mechanism, and that will lead to the core overheat, which will lead to the core melt. And then you have to clean up your reactor and the reactor is effectively defunct at that point.
So stipulating that this is a lot safer, and it certainly sounds that way. Jay, you put money into this seeing the opportunity to apply nuclear energy in a variety of new contexts. What are some of the applications you see as new markets for these micro reactors?
That's a great question, Mitch. So recently Microsoft announced they were hiring a lead engineer or innovations person to focus on nuclear energy, in particular small modular reactors and micro reactors. They want to actually focus on creating or implementing data centers off-grid. So you talk about the new kind of case studies out there or the future of our micro reactors, this is one of these case studies here. Microsoft, one of the biggest tech companies in the world, is already looking into this. Perhaps because of cyber attacks, I don't know what their kind of mindset is, but it's also probably the clean energy aspect. And also Bitcoin mining companies, a few of them have approached us as well to do partnerships because obviously with data centers and Bitcoin miners, there's a tremendous amount of heat created. So if you're actually able to bring it off-grid to, let's say, Alaska to have the cooling system for the HVAC, I think these are the reasons why they're looking into clean energy solutions like our Zeus and Odin.
But also think about military deployment, remote communities in northern Canada where a lot of these communities are run on diesel generators, right? Fossil fuels. We could essentially replace diesel generators. So that's kind of our use case. James mentioned also we've spoken recently to one of the largest mining companies in the world, approached us to do a feasibility study in one of the remote mining operations as well. So once again, Mitch, you're in a remote area now yourself, right? So you understand having this kind of independent base load energy that could provide consistent long-term energy that doesn't disrupt your internet, that doesn't disrupt your TV, that's important to people. And also it's carbon-free, right? So we're not emitting all these carbon emissions in the air. And I think that's the key here to kind of looking into the future.
Also, think of just some of these remote islands in the Caribbean or in the Philippines or in Southeast Asia. All these islands are run on, once again, fossil fuels and diesel generators. So we could actually disrupt all these remote islands as well. So a micro reactor could be the basis of a micro grid that was self-contained and it intermittently maybe connected with the grid but was able to live and operate on its own.
Exactly. Right. And you're seeing a lot of interest actually come out of a lot of countries with large island communities. So we've already spoken to a big energy company in Thailand. We spoke to some people within the Indonesian government. Almost all of their islands are run predominantly on diesel because they obviously have grid connection issues there and they're trying to look to decarbonize things. But also, to power these things with diesel is incredibly expensive. And so they're looking at solutions because it's not just the cost of diesel, it's also the logistics and the shipping of this on a daily basis to power an increasing number of homes. It's very polluting. It's very damaging for the island ecosystem and it's just enormously expensive. And they want a solution and this could really be a game changer internationally, just replacing a lot of these conventional fossil fuel power systems with a zero-carbon emitting energy that does not have these logistical requirements and uses a far smaller footprint as well.
Okay, I'm really intrigued. I want to take a quick commercial break and come back and talk a little more about these applications and particularly the cost because it sounds like there's some remarkable equity opportunities here. We'll be right back. Let's return to our discussion with Jayu and James Walker of Nanuclear Energy. Gentlemen, this is, I mean, it's really interesting. And when you talk about, for instance, Indonesian islands using a reactor instead of fossil fuels, that's a really intriguing opportunity to introduce more equitable no-carbon energy all over the planet. How much do these installations cost? And I know you can't characterize that specifically, but can you paint a picture of what a government would be looking at in terms of bringing one of these in to solve the problems you described.
So, what we probably won't be able to do is give you exact numbers now, but we can probably explain exactly where we're coming from on this. So from analyzing the business opportunity here, it was apparent to us that the larger market was not to sell the reactor, for a start, to a potential customer, but to sell the energy over a contract. Power as a service. And that would, one, bring in a far bigger customer base, but also make it a far more feasible application to install into these remote locations, for a start. The real benefit here is that the economy of scale of mass manufacturing these is going to bring the cost down considerably within the first few years of deployment of these micro reactors. So it's like a pharmaceutical drug. The first one costs tens of billions and every subsequent one after that is pennies or cents. The cost of a micro reactor is going to come down quite considerably. I mentioned that conventional civil power reactors, they suffered from the problem that almost in the majority of their cost was financing-related. But once you reduce the size and those capital costs down and that financing cost goes away again, it becomes cheaper. The ultimate plan here is to make an energy system that competes with diesel generators and creates an energy system that actually beats out things like bunker fuel costs for maritime vessels. And certainly, we're talking about beating out the cost of remote power systems for remote habitation, remote industrial projects, remote mining costs. That cost is expensive. And so ultimately that's what we're targeting. We believe we can get these reactors to a point where, say, for instance, a big mining project in the middle of nowhere that had to ship in diesel on a daily basis, the nuclear power plants that we would install will ultimately be aiming to beat out those energy costs. So you would have reduced manpower requirements, reduced logistical costs, but also cheaper energy on site at zero carbon emitting and actually much safer for the on-site staff because it still carries health consequences of having enormous diesel power systems powering these remote operations and remote habitation, remote locations.
So Nanuclear Energy is a founding member of the US Department of Energy's HALU consortium. So HALU for the folks at home is high-assay low-enriched uranium, and that's the efficient fuel that James was talking about earlier. I know that this is not a commercial reality yet. When do we anticipate that kind of fuel will be readily available?
