Please welcome Colleen Suite of I Totem Analytics, Gregory Ferrerero of HGP Intelligent Energy, James Walker of Nanuclear, David Hol of the Consumer Energy Alliance, and our moderator, Lauren Clay of the Texas Nuclear Alliance.
Okay, thank you all for being here today. Thanks for everyone else who's here. This panel is really going to kind of take a look at what we perceive as the growing NIMBYism happening in Texas. You can see it with data centers, you can see it with transmission lines. And we're going to tackle that issue and we're going to break it down and then we're going to talk about how nuclear is sort of an answer, how nuclear's load following and collocation potential can ease some of these issues. So, I'm going to start off, I'm going to direct my first question to Greg. We had a great conversation in the speakers lounge. Give us the lay of the land on, let's start with transmission lines. Give us a lay of the land on transmission lines right now in Texas because that's been a big issue. Chairman Gleason touched on it. What's going on and sort of what does it look like in Texas right now?
So transmission is really key to anything, right? If you're going to do anything in power, it's what allowed wind and solar to develop 315 miles west of Dallas. And we built the CREZ lines to bring that stranded power into Dallas. It really is consumer friendly. Transmission ends up lowering prices. I ran the numbers today and we were talking about it. This is something I think everybody really needs to hear. Texas has 254 counties and only 120 of them have 345 KV lines, high voltage lines running through them. And out of that 254, only 11 have substations that can handle a gigawatt or more. Right? So you're talking about less than 5%. So without new transmission, it goes perfectly hand in hand with generation. And just for notes, a 345 line in the summer can only move 1.2 gigawatt. A 765 can move about 3 gigawatt. And we started the process of building 765 lines and then that got sidelined because of the midterms. But transmission is key to what we're all doing.
So if Texas is going to build the power it needs, it sounds like we need more high voltage transmission lines, but Colleen and David, Texans don't want that. It sounds like, what are y'all seeing out in the communities?
Go ahead. You go first. So, just to kind of take a little quick step back, Texas projection shows that Texas needs more power than frankly we've ever needed before over the next 5 years. We're going to see essentially what's close to a doubling of demand need across the state. So, what does that mean? That means more utilities, expanded utilities, more natural gas out of the oil patch, more 765, more transmission across the board, more storage, more nuclear, more wind, more solar, all that requires building something. So right now what we're seeing with data centers, with expanding utilities, with 765s, a little bit around the edges with nuclear, is concern. I think local communities have expressed questions, particularly around data centers. I think a lot of those questions have really good answers, but if you don't get good answers to your questions, questions become concerns, concerns become fear, fear becomes opposition. So we saw just yesterday the governor announced kind of another additional moratoria on top of a pause on data centers. Not necessarily a great trend for us where 765s are getting built and cited. We're seeing concern and opposition around 765s. But Texas needs this. Nuclear is part of that answer. Dispatchable, always available power, which is going to be nuclear or natural gas, delivered to the communities that are growing, is absolutely fundamental. So the gap here, back to your question, sorry, is local community engagement, local community education, because the more the communities know, the more they're supportive of these infrastructure development issues. The less they know, the more concern we're seeing.
Yeah, I'll just take kind of a step back. So a little bit about our company. We are a data science company and in our experience, if you show up early, you can really have impact and make a difference. And one example I can give is NextDecade in Brownsville, Texas, which is where we're located. You know, they made an agreement with the Port of Brownsville and did a dredging arrangement and made the port and attracted additional investment with Sempra and American First Refinery because of what they did there. And I think that is a model that could be considered with other projects.
James, what are you, as the nuclear company that we think is going to come in and solve all these issues, what are you telling communities? What are y'all looking at when you're maybe in Texas, if you're looking at partnering with the data center and you see the landscape now? How are you looking at it?
It's interesting actually. We have a big partner in Texas at the moment. They're building a data center right now, like they're actively building up the site. And uniquely for me, I think, is that when you go to local council events or things like that, they're the more controversial partner, which is, you know, interesting being the nuclear company sitting there and watching the pushback that they're receiving. And a lot of the pushback they're receiving, to be honest, some of it might be quite genuine because they might be responsible for taking more power off the grid that pushes up utility bills and that's what people are concerned about. So it's not that the concerns are illegitimate or anything like that. Some of them might have basis, but from when we go up there, it's just like, look, you know, then we can say, you know, we're not looking to take power off the grid here that is going to basically create a supply demand problem that will push up prices. We can take this, so we can be off-grid, we can be offsite, we can collocate, and then it's not going to be responsible for any utility cost rises for you, the consumer. And like, if you take that fear away from their price rises, because obviously I think people can be very constrained with their own finances, a lot of the opposition can go away. So it's an odd pairing, like, you know, prior to 2020 or whatever, like pairing up tech with nuclear, I don't think anyone was really considering it hugely, but now it's becoming an increasing conversation. I think not just our tech company in Texas, but I think just nationally, the data centers, AI centers, tech, they're looking, all of them are thinking, well, we need to repair our public image and if we can be more off-grid and out of sight, out of mind, that's going to do, we can repair our public image. We can receive less pushback. And at the moment, I think even on both sides of the aisle, Republican and Democrat, like there's opposition because it's political capital to being opposed to these things. And that's obviously infiltrating in Texas. Now, Texas is obviously a bit more liberal than a lot of these other, like economically liberal when it comes to industry, but still, like it's something we see, like, and it's something we've had to go and confront ourselves.
Yeah, the opposition to data centers in Texas has definitely reached a fever pitch. I mean, from my perspective, it started at the local level in some local communities, but it's definitely become a statewide issue. There's an election in November. It's become an election issue. And you're right, it seems like nuclear can come in and save the day. So, let's talk about that a little bit with regards to data centers. So across the state, when a community hears about a data center, they think it adds strain on the grid and the water supply like we talked about. They think their electricity prices are going to rise. But if these data centers all had a collocated nuclear plant, that could be the solution. What is the more accurate story and how do we make sure that story is one that communities are hearing? What can nuclear do?
Yeah, I'll take a pitch at that. So my company HGP is a collaborator with the DOE in Project Genesis and Project Prometheus and we are validating and verifying with Idaho National Lab and Argonne National Lab a digital twin and some equipment changes that take the paradigm and really shift it. Nuclear in the United States, we have 95 active reactors, was always set to be on and not load follow. So if we're going to island and we're going to try to avoid these transmission constraints, we have to bring the technology into the 2020s. And Congress has passed laws requiring digitalization of controls which allow for islanding. There have been executive orders that are working in that favor and the biggest gap is having industry work with the regulatory agencies and validate and verify through the trusted national labs. And that's something we're doing, but we have to make the most of the existing infrastructure that we have as we continue to fight to get the 765s up and get communities on board. One thing, I'm not sure if this quite addresses your question, but one aspect that I believe AI does support is it allows you to localize context like never before. You can bring where everything was analog previously and you would deal with, you know, 50 different departments over months, you can do in minutes and you can also make things very relatable. And that includes your messaging and understanding who your audience is, and shame on you if you don't. And so that's just good business. And so that I think is an opportunity to grow.
Helping the builders that are coming into the communities figure out who they should talk to and what they should be saying to push back or get in front of the NIMBYism early. Earlier, you want to jump in and I'll...
I'll do clean up. I don't mind. Yeah. But I was going to say, so the question, kind of a related question we get is like, why hasn't nuclear done this before? Almost like a, you know, a skepticism question. And like, I would say, you know, it's an easy answer to answer. It's like, you know, the tech is different that's being developed now. Like there's a number of microreactor and SMR companies that are developing this tech and nuclear's never been deployed before in this sort of commercial way. But the tech now allows for things like collocation whereas that was not previously possible. But when you explain why, like for instance, we're building a reactor at the moment in the middle of the University of Illinois campus. It's right in the middle of the campus surrounded by dorm rooms now. With a conventional light water reactor system, that's not possible because you need big emergency planning zones and things like that. The fact that you can do this means you can now collocate with data centers and you can put these things in remote locations. You can be off-grid. It's why it's never been done before. But when you can advocate for all the advantages that this new tech can deliver, you can begin to understand how it is solutions for these things. It's just almost coincidental that it's marrying up at the same time as data centers and AI and tech are having this controversy around it. It's great for nuclear, you know, it's great for tech as well, to be honest.
So I think to your question, fundamentally we have a kind of a communication issue. The earlier you engage in communications in the local communities, the better it is. And if we go back all the way to 2004, 2005 when the early opposition to fracking started happening in Pennsylvania, then you have the Keystone Pipeline. You have Dakota Access Pipeline. It's the same playbook we're seeing today. Exactly the same playbook. It hasn't stopped. So, a small pocket of concern in a local community, then you get outside influencers that come in and turn that small pocket of concern into an outsized emotional, maybe even fear, and then national groups kind of start weighing in and then it becomes a political hot potato. We're seeing this right now in real time with the data centers. So the earlier, and I would urge everyone in this room, the earlier the nuclear energy industry engages in Austin through TNA in the local communities where you're looking to site and you need permits, loud voices, strong voices tell the unbiased truth around this. Dispel misinformation, dispel the fear that's out there that's growing. Earlier communication is better. Now is better. Six months ago was better. We're already a little bit behind the curve. Data centers aren't doing anybody any favors. Now they're finally starting to kind of catch up, but they're behind the curve. But when you think about it from a data center perspective that can have good lessons learned for the nuclear energy industry, it's what's this going to do to cost? How does this help us from an electricity cost standpoint? What are the advantages behind it? Great answers. Ways to long-term lower cost, long-term stable energy for Texans across the board. Dispatchable, always available power that's able to peak up on cold winter nights or hot summer days, always there. Answers around water use, understanding that. Answers around nuclear waste with AMRs and advanced nuclear and SMRs. Great answers there. So, we just need to get more engaged in the local communities where we're looking to permit this, amplify that back to Austin. Austin is going to be an infrastructure session in 2027. That is issue one, two, and three. So, understanding all this, making sure that we're through TNA, through your own lobbyists, a lot of loud voices that are coming together that say, 'Guys, this is why it's so important. This is why it benefits Texans everywhere. Here's the tax revenue for local communities. Here's all the other benefits.' It's a great story. We just need to tell it or someone else is going to tell our story and they're not going to tell it in a way that we necessarily find helpful.
Perhaps one of the problems though is that data centers are being built right now. It doesn't take as long. Nuclear is still several years away. It's being built. It's being worked on. We're building, but it's still, you know, probably a few more years away. So what, without tying itself too closely to the data center industry, because right now I don't know that, you know, that helps us much, especially with what's going on in Texas right now. How do we help their industry? They're building now. We've got a few more years down the road, but without you going down with this...
You know, I would say the governor's clearly telegraphing he wants a little space on the data center issue. I don't know if he needed to make the announcement he made yesterday, but he did. So we have an election November 3rd. I think a lot of the communications coming out of Austin after November 3rd will probably be a bit different. Nuclear is an answer to data centers. Full stop. Data centers need power. Data centers are going to pay for their power. Is there a way that we can marry up nuclear and data centers that we can long-term reduce the cost of electricity for Texans? Is there a way to piggyback off data centers for nuclear energy development? Good question. Needs an answer. It would be a very positive discussion to have going forward. So, at some level, we're going to have to turn the data center questions into positive answers because data centers are going to get built. It's going to happen. They're too important. They're too important to rural communities. They're too important to urban communities throughout Texas. They're too important to national security throughout the whole country. If you just think of telemedicine for rural communities that don't have a hospital next to them but they can tap into their phone and they can get diagnosis over AI over their phone. That's data centers. Those stories aren't being told. It's one of the great communication fumbles over the last 10 years because it had a great trajectory and then all of a sudden they've stubbed their toe.
They can get it back, but it's going to take some help from nuclear as well. I think we tend to see the better angels in these local communities than they are. I've built in many counties in Texas and it always comes down to the landowners wanting to see direct money today, whether it's for their land or for their school. So let's not give the communities that much credit that they're acting with perfect faith. I've had landowners renege on deals because they thought I was representing a multi-billion dollar company as opposed to a smaller company because their pastor told them. So you have to leave it for them, right? You have to leave with money. So you have to, instead of saying in 10 years you're going to have these jobs, you have to say we're going to contribute to the tax base today. We're going to contribute to the school today and have an exact project. We're going to do this for this hospital. We're going to do this for this school and we're going to pay this and reduce your tax base. You have to give those quantified numbers and they're going to negotiate and as a rational actor, they're going to come back and ask for more. But let's not give them that much credit that they're trying to protect their water supply necessarily. They're also looking at their pocketbooks.
James, what economic benefits and otherwise are you talking about?
Yeah, like to your question, obviously data centers are being built right now. The nuclear solutions are a few years away and like there's two aspects to it too because there's a number of companies that are moving towards that commercial license at the moment. Even when you get that, you're still going to have to be in a position once you have it that you can mass manufacture reactor systems so you can deploy them and build quickly. So that timeline of when you can mass deploy reactors is different to when you might be able to be commercially licensed and you have your reactor. It also implies you need to have all of your fuel supply chain built out and all of it ready to be mass-produced so it can go into reactor systems. So there could be a disparity there. And when we speak to tech companies, they're obviously looking for any solution they can get because they're building now. A lot of them fall back on gas as an interim solution. But the thing is that when you are planning to power these places, the planning really needs to start now. Like you can start on construction permit application work, geotechnical drilling, getting that data for the NRC, you can get that all in place so that when it gets to, so when you say for instance with our reactor, like the Kronos reactor system, it should be licensed, commercially licensed sometime around about 2030. But say we want to start deploying reactors to a site, that we should really start getting that geotechnical data, get the construction permit applications on those sites. You can even start with actual infrastructure works that are non-nuclear before you even get your commercial license if you're really pushed for time. So like for instance with a reactor system, you've got the reactor unit of course, but also the adjacent plant where you convert that thermal output to electric. That's not a nuclear device. You could build that. Even your interim energy storage systems, they can all be built. They're not nuclear devices either. You can get a lot of this work done now and then when the reactor is finally licensed, you could be in a position where you can then deploy that and then you have a very fast uptake time. So, yes, there is a time disparity. It can be narrowed significantly and you can work on stuff right now to get the reactor ready or to get the site ready so it can house that reactor as soon as possible.
And all this work you're talking about, you could be doing now, it's jobs, it's tax base...
It's jobs, it's construction, it's, you know, it's all of it. Like, look, this is going to be a trillion dollar industry, like data centers and nuclear and pairing up and all of this kind of thing. It's going to be massive. It's going to generate an enormous amount of revenue for the country. So ultimately it's beneficial. It's just that the pushback happening on data centers now is happening for a variety of reasons, but we just got to take those reasons away. So it's no longer a controversial business.
And I just want to say the inference economy is not going away. It's just going to grow. And utilities have a hundred years of experience of long-term planning. And I enjoyed my dinner last night. There were two gentlemen that have decades of experience in financing large capital projects and so there will be many different models. So I think they should do as he's suggesting and begin planning for these different commercial models and these community benefits should be built into the nuclear finance models with the utilities. I believe.
There have been several communities across Texas that have not been allergic to, I guess, this economic growth, the data centers and the things that come along with it. Can anyone talk to what they've seen with regards to that? I mean, I know there are data centers all over Texas and there are communities that are happy with them there. Lacy Lakeview is a community outside of Waco. There's been a few news articles and they're like, we can finally fix all the potholes and the pipes, the water pipes are cracking. So we've seen some good stories come out of it.
It really is, and nationally as well, and it's really the communities that are getting the most communication that understand what the benefits are. And if you take it, you pull it back a little bit and you look at Louisiana. So the Meta plant, the Meta data center in Louisiana, they're giving a stipend to teachers statewide. West Virginia, the governor announced a couple weeks ago that they were looking to reduce state income tax, if not remove state income tax altogether, on the backs of data centers. So, you're seeing states find good ways to get ahead of this conversation to say clearly here are benefits for local communities that data centers can deliver that far outweigh any concern or question that any local communities have. So what we've seen in the state of Texas is kind of a have and have not situation. And those communities that have said, 'Hey, we'd like answers to this.' East Texas is kind of one that's really, if you look at a pocket, you've got kind of some central Texas counties that have been very resistant. Those are the counties that said, 'Give us some answers.' And then they get frustrated because they're not getting the answers. The counties that are getting the answers, I think, are the ones that both polling and local perception and local feedback has been the most positive.
I would say I mentioned earlier on that we had the partner in Texas that's building a data center right now. If you're looking at positive effects and what they're doing, they have to do a lot of training programs. They are creating a lot of jobs. There's a lot of construction work and it's money that's going into that area that previously did not have much money going into it. Like those are real benefits that these things are bringing. Like I know there can be pushback on these things, but like even just watching our partner work and seeing how he's enriching that area, you know, you would want that distributed across Texas and like to see those additional benefits come to towns, especially when they're not like that economically successful previously. Like why not? But again, it's don't push up my electricity bill at the same time.
So, let's bring it back a little bit to the collocation benefits of nuclear. So if any of y'all, some of you are doing this, but if any of you are going into an area of Texas to build partnered with the data center, if you had to give a Texas county judge or a city council member one sentence, could be two, on why collocated nuclear is a fundamentally different proposition than a standalone data center pulling off the existing grid. What are you telling them?
