A Nuclear Comeback: Are New Reactors the Answer?

0:00They recognize we have the sensational need for energy. We're not going backwards in our energy consumption So if we're gonna have new energy Generation has to be clean energy Deliveries of fuel are a clear vulnerability Natural gas obviously can hold an entire nation hostage the typical construction timeline is really like 6 to 15 years on the big reactors right now. Maybe nuclear energy is a lot safer than we actually originally realized The radiation exposure from living next to a coal plant is higher than the radiation exposure from living next to a nuclear power plant we can reduce the radiation.

0:35The really exciting thing for me is that really far into the scale of portal microreactors we haven't really achieved that yet and you could actually produce these in a factory because they're portable, you could do mass production. Ten or fifteen years from now the idea that we can't just immediately turn on a reliable and enduring power source for a community, it's going to be unimaginable, it will be a solve problem. What might surprise some people to learn is that nuclear energy accounts for 20 % of the electricity in the United States. But what I think will surprise very few people, it's a learn that this carbon -free energy source has quite the story history.

1:11Over the last few decades, resulting in new reactors slowing almost entirely to a halt. However, the past few years have been what some people might call a comeback story. In 2023, we saw America's first newly built reactor come online in over three decades. But we're also seeing startups build entirely new types of reactors, public discourse shifting, and even the US government itself recently announcing its intent to triple nuclear power production by 2050. So in today's episode, originally recorded in In the heart of Washington DC back in January and A16Z's American Dynosom Summit, we talk about this truly unique moment in time for nuclear energy.

1:57A16Z General partner David Yolvich joins forces with Doug Brunauer, CEO of Microreactor Company Radiant, and Dr. Katherine Huff, Assistant Secretary of the Office of Nuclear Energy, as they collectively discuss nuclear energy's role in our country's future. Because remember, energy is vital to many of the industries that we talk about here. Energy powers the data centers that run our clouds, the electric cars that drive on our streets, and of course, is fuel for the factories that build our future. So if anything feels certain, is that we're going to need more energy, not less. So tune in here as this group of policymakers, founders, and funders discuss why increasing our nuclear capacity should be a national priority.

2:42And what it'll take to reverse this multi -decade trend. Oh, and if you'd like to get an inside look into A16Z's American Dynismosummit, you can watch several of the stage talks from the event featuring policymakers like Congressman Jake Ockingcloss or Senator Todd Young, plus both founders and funders building toward American You can find all of the above at a16z .com slash 80 summit. All right, let's get started. As a reminder, the content here is for informational purposes only. Should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16z fund.

3:26Please note that A16z and its affiliates may also maintain investments in the companies discussed in this podcast. For more details including a link to our investments, please see a16c .com slash Disclosures. [♪ OUTRO MUSIC PLAYING [♪ Nuclear has quite the story in history, and in the last 50 years in particular, progress is really slowed, and I'd love to get your take, Dr. Huff, on the key factors that you really attribute to that. Yeah, I think critically, the expense of different kinds of energy technology typically determine what utilities are going to select. And there was a serious period of time where, for example, natural gas was an extremely cheap option to build quickly with low capital investment.

4:11And that, I think, is the primary driver for a lot of reduction in the builds for nuclear. And then as you lose that muscle, it becomes more and more expensive to get it back. Right? Much like if you stop working out. Yeah. And I think there's a lot of public opinion around nuclear. some people attribute that to, again, that slow down over the last few decades. Doug, is there anything you'd add there and maybe other misconceptions that you think the public holds? I think over the past 50 years a lot has happened. Solar and wind technology really came about and was deployed in the middle of this nuclear story we're telling.

4:45And these forms of low -cost energy, but that are not resilient forms of energy. And by the time we deployed them significantly to the grid, we started to look for a source of power that you can scale. that you can throw a lookin' down on demand. And at the same time, scientists started to care about climate, and then I think the public really has come around to really care about climate. And not just to care about, to want to do something about it. And so I think nuclear has this really cool, new role to fill instead of natural gas, which I agree with Dr. Huff, the low cost of it definitely causes to adopt that, to fill that need, rather than nuclear.

5:19But I think nuclear can leapfrog it. Yeah, and I think we are seeing renewed interest, which is exciting, especially over the last few years, David, what's your take on that? Is there a really strong why now? And is it just climate, or is there another series of factors at play? I think that we have this insatiable thirst for energy, and we have so many things that power the way we live, and the way we want to live, and the way we want to work, that require electricity. And so we need all forms of energy to be increased, I think, some are better than others, some have a longer future, or I think ahead of them than others.

5:55So for me, nuclear is this base load energy. You don't need the wind to be blowing. You don't need the sun to be out. And it can be delivered in a lot of form factors. And so to me, that makes it very exciting and really worth the investment in rebuilding the muscle to use the analogy that Dr. Huff made earlier to really rebuild the muscle of how do we build nuclear power plants and what kind of plants do we want to build and to power what kind of loads and what kind of circumstances. And so I think that climate is a huge part of it. Recognize we have the sensational need for energy. We're not going backwards in our energy consumption.

6:29That ship has sailed. So if we're going to have new energy generation, it has to be clean energy. And I think that there's also been a renewed interest in people getting reeducated as to what are the risks and opportunities with nuclear energy. And I think that's come from a lot of different places, whether it's from government or from industry or from academia, that maybe nuclear energy is a lot safer than we actually originally realized, and that's really worth the time spent there to see if that's a viable way to generate the kind of energy that we need in the future. Yeah, I mean, it's been a long time, right?

7:01We're not in the same place as many decades ago. There are new reactor designs, which we will definitely get to. But Dr. Huff, I want to talk about your house testimony that you did recently, and you referred to our current approach to nuclear as, quote, a national security vulnerability. And you reinforce that the office of nuclear energy is doing a few things. So first, keeping the existing fleet of reactors operating in online, deploying new advanced reactor technologies, sustaining and securing the nuclear fuel cycle, and expanding nuclear energy cooperation. And something I'd love to get you to touch on is really that role of nuclear in America's global standing and security.

7:36Thanks for that. And I think that why now question ties to this? In the testimony, the particular component of our approach that I think is an active vulnerability is the fuel cycle security. But an additional piece is the energy security and energy resilience that nuclear energy can provide to support those more variable sources to be on no matter what day it is, what time it is. To not require refueling, consistent deliveries of fuel we've seen in, for example, embattled Russia, Ukraine, invasion. We've seen that deliveries of fuel are a clear vulnerability. natural gas, obviously, can hold an entire nation hostage.

8:20Deliveries of those sorts of fuel, since they can be interrupted, really undermine the security of otherwise accessible and deployable sources, right? And if you cannot dispatch that power, then it's not useful to your resilience. Nuclear power, on the other hand, even existing conventional plants, they only need to be refueled once every 18 months, maybe two years, right? And so they can run alone as an island for quite a while and this really underpins what we can see as an energy security and energy resilience that frankly in today's geopolitical universe represents our access to sovereignty as nations are continued operation as independent states.

9:04The US has a number of other features that make it a secure nation, but there are a lot of other countries that really can be threatened by another nation that would use energy as a weapon. Yeah, and we have many technologists building towards these new reactors and improving that fuel cycle. But can you speak specifically to the government's role in that? What is the government's role in securing that fuel cycle and that global cooperation while also ensuring that we're getting these new reactors built in the USA? It takes a lot of pieces, right, with tax credits from the Impliation Reduction Act and grant funding from the bipartisan infrastructure law were able to do things like encourage subsequent licensed renewals to be economic for existing nuclear power or, in the case of the bipartisan infrastructure law, dollars, advanced demonstration programs.

9:53But the Office of Nuclear Energy's focus has historically been on R &D programs, the kind of R &D that takes startups like Radiant and support technological advancements and and through small grants we've tried to expand our support of as many companies as possible. And there are a lot of them. More than we could possibly support it actually. And I think a feature of many decades of working through the national laboratories, which we manage and operate from the Department of Energy, and ensuring that we have a basis at strong technological capability to support the kinds of scientific explorations that we need to propel those technologies forward.

10:28So let's talk about some of those new technologies. Doug, let's throw it over to you. So can you actually just break down the different generations of reactors and also where we've come, right? As I said before, it's been several decades. Where are we now in that technology? I'm going to ask Dr. Hutt to correct me on anything I get wrong here. I'm actually not an expert in all of the history of nuclear and every kind of reactor. There is. I'm really an expert in what I'm doing, which is portable high temperature gas reactor. But the generation's roughly, people use these Gen 1, 2, 3, and 4 terms.

10:56Gen 1 are really the reactors we first figured out. They're kind of pre -enrichment. They're usually like a graphite, moderated reactor. And then generation two reactors were very different because we started to do enrichment with these big gas diffusion enrichment plant. And in that time period, the US was really at the forefront of everything. I think we had over 400 uranium mines operating in the US. And really, we were the great developers and exporters of our technology to the rest of the world. And then Gen 3 really are meant to be an advanced form of those gen 2 reactors that can make use of enrichment.

11:28And they're like accidental fuels or ability to recycle fuel. They're kind of these advanced features. And then gen 4 is really meant to represent these things that are much farther away. They're kind of future that like they perfectly produce hydrogen, let's say, and make a hydrogen economy possible. That's pretty good. I would say there's one interesting nuance that, you know, a lot of the conventional reactors that are operating today are in that gen 2, 3 space, but there's gen 3 plus that people sometimes will introduce this language and what does that really mean? And who knows? It's like something in between Gen 3 and Gen 4 where you're incorporating modularity in the construction, but it's still a light water reactor, for example.

12:05And so we see a lot of different definitions, but I think you did a fine job. I'm on scale, I would do that. No, it's more fun. It's kind of interesting. Thanks. So you have like big reactors, right? Yeah. They're gigalot. They're for a million people, or a million homes, let's say. So it's more than a million people. This is kind of the right scale. And then we've got SMRs and the purpose of SMRs is really to take that big reactor and build it really fast. Okay. And the typical construction timeline is really like six to fifteen years on the big reactors right now, depending who makes them. Even for the exact same reactor, like an AP 1000, built in the US is very slow.

12:39Built in Asia is very fast. But you can make the reactor smaller and you can make faster the idea behind SMRs to make something that's maybe for about not a million homes, but maybe about 250 ,000 homes. Right, a quarter of the size, but be able to build it really quickly. And if we could achieve that, it would be a great economic success. But the spectrum is getting longer and longer. I think one of the interesting things happening now, people are looking smaller and smaller, looking at microreactors, and there's kind of two categories of microreactors, portable and non -portable. And if you do a fully portable microreactor, this is around the scale of 1 ,000 homes.

13:13So it's 1 ,000 times smaller than the reactor all the way up the other, and the spectrum. And you have microaggers which are not portable, which are 10 or 20 times larger, maybe 10 or 20 megawatt electric, something like that. The really exciting thing for me is that the really far into the scale of portal micro reactors, we haven't really achieved that yet. And you could actually produce these in a factory because they're portable, you could do mass production, and then ship them around and very quickly deploy them in all these little areas where you have equivalent of a thousand homes, which could also be like a workplace that has 2 ,500 people, a minor military base, a hospital, in some key kind of remote region.

13:51So I like this scale better than thinking about the advanced ones more about deployment and like, how can you put them out in different areas? Maybe we can talk about the use case, right? So when we're talking about, let's say, a military base, what is the current state, right? If we're not using these microreactors, what is being used today and what's the trade off there if we can actually get to that future reactor? The current state of the luxury base is that they have backup generators. Any site that has critical infrastructure, those backup generators will have diesel storage tanks. There will be 40 ,000 to 150 ,000 gallons of diesel on those sites, and they will only use it in a backup scenario, so it requires they put batteries all over the installation.

14:34And if there is an outage, they're typically going to run out of that diesel, especially if there's something like the colonial pipeline ran somewhere attack where we lost an ability to move fuel in a huge multi -state area and they ran out of fuel before their time frame, which is usually a 14 -day resilience time frame. So, they've got a problem and they're looking for solutions and they're actually very interested in both categories of microreactor because those are around the scale of the base, all of the larger ones, an SMR or a gigawatt class reactor would be too large. David, let's bring you into this conversation.

15:08Obviously, we have invested in radiant, and I want to get your sense of where you see capital being deployed in this new ecosystem as new reactors are coming online. What's the opportunity here and where do you see, again, some of those private dollars actually being deployed to? Yeah, both Doug and Dr. Huff, touched upon some really important points that relate to why having modular or just numerous points of energy generation spread across our grid and possibly amongst our allies is a really important concept because I think we touched on it but for people that are not spending all their time and energy it may not be obvious why energy and defense are in national security and sovereignty are really, really interrelated.

15:49I'll just give one example, take an island country like Taiwan that does not have its own energy independence. You can imagine a blockade of a country like Taiwan where coal, oil, or other fuel sources that are normally supposed to go deliver fuel to the island are prevented from reaching their ports. At that point, a country like Taiwan may only have a week or two or three weeks of fuel on the island. And rather than having some kind of a kinetic or war, on Taiwan, a blockade would just be equally potentially as devastating. You can imagine hospitals running out of their generator supply, military bases, not able to turn the lights on, runways have no runway lights, I mean, the gas gates from there, and just all the infrastructure eventually just quickly starts to fall apart.

16:33And so that same example actually applies to the US. We do have lots of geographic things that protect us as a country. We have two major oceans on both sides. We have lots of resources. We obviously have our own fuel supplies. But our grid is very brittle. There's multiple ways to make the grid more resilient. But one way is just adding capacity and distributed fashions so that when there are power line issues or fuel transfer issues, you're not totally reliant on these major sources of power or for fuel to power entire parts of our country. And so that's just critically important that we increase the resiliency of our grid by adding redundancies in lots of power generation.

17:10And if we are able to do that by creating these more modular reactors, even if they're not mobile, but modular reactors, one of the issues with nuclear historically is is a cost a lot of money to build, not just time, but a lot of money. One of the reasons it costs a lot of money is we don't actually make that much of it. And if we made more of it and we sort of developed that muscle, the idea would be we can make more reactors more cheaply. And by doing that, we could place them in strategic places across the country, make sure they're close to our key air force bases or military bases in places where we need really reliable and enduring energy.

17:42So that's why it's so important for national defense and for security and why our allies care about it as well. No country wants to be totally at the mercy for energy of other countries. And so that's important. So, did I say anything wrong there? I think I got that right. So, I heard Deploymore. Deploymore Energy. We're kind of scared. Yep, we didn't even talk about data centers, but we're going through an AI revolution right now and it's going to bring lots of cool apps to our phones and our devices and our new vision goggles or whatever. And all kinds of new devices we don't even have yet. Our cars are becoming electric and we got to charge those things up.

18:16and so all those things need power and so we just need way more resiliency and way more capacity on the grid And then again, that's going to come from lots of ways, but nuclear is a really really good way That's why I think this is this much more palpable energy As we get these new reactor designs coming into this ecosystem, is there a new play? Is there a reason why now private dollars are interested? I think the national lab system, which is really a unique and special thing about America other countries have things that they try to replicate the national lab system, but there's nothing quite as robust.

18:48The national lab system has many roles, and Dr. Huff can speak to this better than I can, since I think she helps oversee the national lab system in her current role. But not only do they provide research, but they're actually part of the supply chain of fuel for nuclear power plants. They provide grants and funding for private industry to work on nuclear reactor designs. there's a competition element that the national lab system and the DOE fosters. And so that has been all wonderful, but I think that we have noticed that there's an opportunity to be an accelerant to what's happening in the national lab system, which is closely tied to academia, to say, hey, look, maybe there's a commercial opportunity.

19:26And actually, maybe it's possible when we think about all these data centers that people want to build, and we think about the fact that, you know, a lot of utilities are private, even if they're regulated, they're private companies, maybe we could say, hey, look, Maybe there's an opportunity to really jumpstart a different kind of power industry, and that's a bet that we're willing to make. We think that there's tailwinds from a regulatory standpoint. We think there's tailwinds from an economic standpoint of building reactors. There's a talent tailwind. It's a dog worked at SpaceX. When SpaceX first started, there was only one company that really reliably put things into space.

19:58There was NASA, and now we have SpaceX doing it so often that it's almost a non -event now when they launch satellites into space and rockets into space. And we think the same thing can be true with nuclear. And it doesn't seem like the kind of market where only one company can win. As Doug mentioned, there's all kinds of different approaches and nuclear for different use cases. And so that's pretty exciting. And I think that since our investment in radian, what I've discovered is that there's a huge amount of what I call downstream capital. So other investors who have larger pools of capital that are maybe not as risk tolerant as we are at the recent Horowitz, but who want of new project financing or who want to fund large scale capital projects, they're very interested.

20:40And then companies like Microsoft have spun up nuclear energy teams to figure out how do they procure energy that comes from a nuclear power plant. And so that to me just says, it's unclear exactly what the roadmap is going to look like. I think my two colleagues here will know better than I do. But there's just a lot of momentum and enthusiasm for something that we know as possible. There's no scientific risk. That's another important thing is we invest in all kinds of things. There's no scientific risk with nuclear energy or minimal. We know how it works. The science is understood. Yeah, we've known for a while.

21:07We can come up with better designs and better programs and we need new kinds of fuels, but we know how it works. It's not science fiction. Science reality. It's very real. Yeah, it's science reality. So that's why I'm excited about it. And that's why I think there's a lot more capital and interest in it now. And if people recognize it's a predicate for everything else we want to do. Yeah. I mean, something you mentioned several times there is the economics and even you talk about space and that whole industry being rethought due to the economics fundamentally shifting. So, can we talk about that and the role of regulation in impacting some of these projects?

21:38I think a lot of people cite Vogel as a project where the economics were far out of proportion, at least relative to the original project. Plan and a lot of people think that's an example of where people aren't willing to invest in nuclear. Dr. Huff, can you just speak to maybe how regulation plays a role in enabling some of these projects and whether any of that is changing or maybe whether Vogel is an outlier, how do you think about that? Vogel in a very real sense is a first of a kind build. As was already mentioned, those AP1000s can be built faster in different environments, but those different environments aren't different just because of regulation.

22:14They are also different because the workforce capacity available. So you look at Chinese build of an AP1000 in of paratobogal, and they had real differences in the sort of workforce availability. And I think that's one of the longer polls in the tent, not to divert from your question about regulation, but I do think the Nuclear Regulatory Commission does an incredibly good job keeping nuclear reactors operating safely. They have an incredible safety record here in the United States. And the NRC makes sure that that's true. It makes it easy for me to say nuclear power safe. It's going to continue to be safe here in the US.

22:47US nuclear technology is some of the safest in the world, and people should import it, rather than some different technology. And we know how to do it well. It can increase timelines, it can increase costs, but I think even more critical is going to be workforce and supply chain issues that can delay the deployment of mega projects. So regardless of whether you're a nuclear reactor that you're building or whether you're looking at building a bridge or a highway system or a rail line. These mega projects and the billions of dollars take years, they sometimes take significantly more time than they should.

23:26And each day in a project like that is another day on which you are holding billions of dollars of capital and not making profit. And the cost of capital then starts to play into the total cost of the project. And so the timeline on which you can deploy a reactor depends on yes regulation, but also workforce availability and supply chain issues and simple project management that adding up all of these things, the US has lost this muscle of being able to do this efficiently in these big mega projects, whether it's an airport or a nuclear reactor. And by executing Vogue all, we have succeeded at getting there with some reactors.

24:05I mean, the Vogel Unit 4 will turn on in a few months. Vogel Unit 3 has turned on and is providing clean power to the people in Georgia. And in the course of doing so, it has ensured the availability of some supply chains around nuclear. It has trained thousands of workers that are otherwise excellent skilled crafts workers and now nuclear trained skilled crafts workers, electricians and boiling makers and welders and everyone else, all of the building trades and et cetera. I mean, they had peaks of staff on site, around 8 ,000 people. It's a huge number of people on site building a reactor. Union crafts workers from 48 states.