Digging into CFPP With NuScale

Two nuclear engineers in a large power plant station wearing blue jumpsuits and hard hats and studying a large piece of machinery.

On the Energy Transition Podcast Series, CEO John Hopkins, and CFO Ramsey Hamady of NuScale Power, join Marc Bianchi, Industrial Gas & Equipment and Energy Oilfield Services & Equipment Analyst. They discuss the termination of the Carbon Free Power Project, their takeaways from COP28, and using small modular reactors to power data centers.

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Transcript

Speaker 1:

Welcome to TD Cowen Insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.

Marc Bianchi:

Hey, everyone. Marc Bianchi here from the TD Cowen Energy team with another installment of our Energy Transition podcast series where today we’ve got the management team from NuScale Power. We’ve got CEO John Hopkins and CFO Ramsey Hamady. Currently, NuScale is the only publicly traded small modular reactor company and the only one to have NRC design certification. The stocks come under a lot of pressure recently following the mutual termination of their first project, the Carbon Free Power Project, or CFPP, and there’s been a lot of media reporting saying that this demonstrates that the cost for NuScale and the cost for SMRs in general are just too high. We wanted to give the company an opportunity to explain the events that transpired at CFPP, discuss their cost structure in a bit more detail, and get an update on how they see the outlook unfolding. Thanks for taking a listen and hope you enjoy our conversation with the management team of NuScale Power.

John, Ramsey, thanks so much for joining us. Really appreciate you coming on. We all know there’s a lot of news out there about the termination of CFPP. The media has sort of talked about it as proof that small modular reactors are too high costs and the NuScale design is too high costs. So I wanted to hear from you guys what your side of the story is. So let’s just start with the announcement of the CFPP termination. What drove the decision? Was it entirely costs or were there other factors? I know there was a subscription level that you had to meet, but maybe not meeting that subscription level was driven by the cost increase. So if you could just sort of talk about that to get us started.

John Hopkins:

Thank you, Marc. The Carbon Free Power Project, the owner developer was the Utah Association Municipal Power Systems, 50 municipalities in seven states. The project was about a year and a half ago. We had an alignment meeting with all parties, the owner and his project team, Fluor Corporation who is the engineering procurement instructor and NuScale. And the customer stated that three conditions had to be met for the project to continue to move forward. And the conditions were one, is that they had to achieve a certain level of subscription from their members. Each member could opt in or opt out. The subscription goal was somewhere in the neighborhood of 462 megawatts. They had to achieve 80% of that by the end of this year, 2023 for the project to continue to advance, and so they needed roughly 380 such megawatts for the project to go forward.

The other condition was that a target price had to be obtained of $89 per megawatt hour. Now I’ll get into how that 89 came about. And then third, continued government funding. We believe Fluor Corporation and NuScale had the project continued, that $89 per megawatt hour is very achievable. Secondly, we saw continued commitment from the government. I spent numerous hours on the Hill, both sides of the aisle, both the Rs and the Ds wanted this project to be successful. Unfortunate part is a customer called and said, we just do not believe we’re going to be able to achieve the subscription levels necessary for the project to proceed. And at that time when we’d elected to mutually terminate, regardless of all the hard work that went into this on both sides, they were at about the 20% or 25% level of achieving that 80%. So if that was a condition, we decided that we probably need to mutually decide this project’s not going to go forward.

And a big piece of that, of the reason that their members could either opt in or opt out. And I think ultimately the concern was they just didn’t want to assume risk of a first of a kind nuclear technology is what prompted them not going forward in the matter of the subscription they needed. And so unfortunately, we mutually decided it was probably the best interest, in lieu of continuing to spend good money to terminate the project, and that’s what we did. The customer has been very straightforward in saying it was not cost, it was not a technology issue. It was one of the three conditions that could not be met was the subscription level that was necessary to move the project forward.

Marc Bianchi:

And I think it’s notable for people that have followed for a long time, this wasn’t a surprise. I mean, you guys were on your Analyst Day and sort of sounded like it was encountering some challenges and then even if we go back to the 10-Q earlier in the year, there was a statement in there about how it was potentially at risk and there was cash reserved for it. So are there other things that occurred over the past 12 to 18 months that besides the change in requirements for the 80% subscription level, that would’ve sort of hinted that things were less likely to move forward?

John Hopkins:

No, I think the customer made every effort as we did. We had numerous sessions with our members to try to get them to understand why they needed to stay in the project. If you recall at the time too, they were looking at competitive energy processes. And so about two, three years ago when we were in a Class 4, Class 3 estimate, Fluor announced that we’re looking at a target price of about $58 per megawatt hour. Then when inflation and interest rates hit, and by the way, that 58 was also predicated on if they looked at combined cycle at that period of time where they were located, it was low sixties to mid-forties. So they said, okay, let’s set a target for 58.

Then when the interest rates and inflation occurred, it went from 58 to 89 and again, they looked at a comparative technology, combined cycle, and at that time it was in the low nineties to mid-nineties, so they set a threshold of 89. And so as we worked forward to the project, Fluor corporation felt very comfortable as well as that we could get within that $89 threshold. So again, coming back to this was not a cost issue.

Marc Bianchi:

People are focused on costs, so I want to ask some cost questions. How much did the plant cost go up from initial estimates? So you just talked about it in sort of levelized cost terms 58 going to 89, but what was the sort of price tag for the construction initially? Maybe there was an earlier estimate before the $58, and just sort of walk us through how that evolved and if there was anything unique to this site that might not be something we’d see at other sites.

John Hopkins:

Well, the site was a challenging site. It was located at Idaho National Lab. To get our modules there, it was going to be extremely difficult. We did a transportation analysis. Also, we did see commodities increase over that period of time, but there was a number that was thrown out there, and I’m not sure where it came from that the plant estimate looked like it could be in the $9 billion range. And quite frankly, I don’t know where that number came from because if you think of costs, there’s three bundles of costs. There’s the NuScale cost where we deliver our technology to the site. There’s the owner’s costs, and then there’s the contract or EPC costs. If you look at our costs as a supplier of technology, our suppliers, as you know are most of them are actually investors in NuScale. So they take a holistic view of not looking at a one-off site.

They’re looking at multiple sites that they’re hopefully going to be working, because that’s our model to have more than one plant going on any given time. So they gave us very competitive pricing, so we felt comfortable from our price that in fact, when the estimate from went from a level three to a level two, our costs overall did not increase as a technology provider. So the cost went up, but as I stated before, when the escalation occurred, we’re still at that threshold of $89 per megawatt hour. That was still cheaper than the alternative on a combined cycle plan at that location, which at that time was low to mid nineties. And then, as I stated, I think, which is really important, we felt comfortable as NuScale and Fluor that 89 target could have been met.

Marc Bianchi:

John, do you have a sense of what natural gas price would’ve corresponded to those combined cycle levels that you just mentioned? Just so we can get a sense, if natural gas is two bucks, that’s obviously a low level, that might be unsustainable, but if it’s $14, that’s also a high level that’s unsustainable.

John Hopkins:

Yeah, I’m not sure in that. Again, we’re talking in the west where they have limited infrastructure and what they did predicate, they looked at the cost of gas at the time and they did feel, Marc, that that 89 number was sustainable and supportable for this project to be competitive against gas.

Marc Bianchi:

Okay. Well, you mentioned this earlier that your scope of the project, if you will, or your technology contribution to the project, those costs didn’t go up. Can you talk about what proportion of this plant or what proportion of a typical plant your scope would comprise? And I guess scope might not be the right term because you have the entire plant design, which you’re providing, but you’re not doing the construction, but then you also have your technology, which is the NPM. So maybe give us also just to explain where the dividing lines are there.

John Hopkins:

Yeah, as I mentioned before, there’s three buckets of cost, there’s the owner’s cost, the contractor’s costs, and the technology provider costs. Our cost typically, and as you know, our model is that we build these modules in a factory. They’re fungible assets, then we could ship them. Of the total total install cost of that plant, that’s nominally for us about 25 to 30% of the total. The remainder obviously is the owner’s costs and EPC costs.

Marc Bianchi:

The owner’s costs and the EPC costs, what are some things that would fall into that bucket versus the things that fall into your technology bucket? Do you stop at the reactor building and then everything outside of that is sort of on the owner or how do we-

John Hopkins:

Yeah, for us, all the nuclear supplies systems is under us. So it’s the stuff that goes into the reactor building and the reactor building, that’s under the scope of NuScale. All the balance of plant, which is really, so if you’re building the modules in a plant, all the risk net essentially is in the factory being built. In the field, you’re dealing with heavy civil work. So you got the concrete, rebar, a lot of what goes into generally the balance of the plant and the construction of the reactor building, et cetera, and the turbine building.

Marc Bianchi:

Well, maybe let’s talk a little bit more about the reactor building because one of the things that I’ve encountered as we’ve tried to do more reading and learn more about what’s gone on here is some criticism that the Voyager design has this large reactor building to contain all of the NuScale power modules, and that’s inside a large reactor pool. And just the civil works involved in putting that whole thing together is quite significant and could be a challenge for design if you have high civil works in perpetuity, which presumably we will.

John Hopkins:

Yeah, and as I stated before, we’re building our modules in a factory. So the civil works at CFPP, Carbon-Free Power project. It was going to be a six module configuration. So the reactor building was designed for six modules. The beauty of it is we’re building in the factory concurrently, they’re doing the civil in field. So once they’re complete, we bring the modules in one at a time. So the reactive building size and proportion of the total cost was very minimal. It was not that… And again, at the end of the day, Marc, if we’re not cost competitive, then the owner’s not going to buy. And in this particular instance, we were cost competitive. For other reasons they elected not to move forward, and that was unique to CFPP. We’re not going to go through that again. So often when people talk to me about levelized cost of electricity, it’s very difficult to have that conversation.

So much of it’s predicated on where are you building? What’s the labor productivity? Where’s the labor coming from? So we’ve kind of got off that. Fundamentally, it’s up to the customer to make the determination that we are competitive against the alternatives. Here in this country right now, typically we compete against natural gas. In Europe, it’s not a natural gas, we compete against state owned enterprises. So there’s that difference also. We’re building a plant in Romania, the costs there are going to be significantly different where the plant location is, what the productivity is, and the labor availability is going to be different than it will be at CFPP.

Marc Bianchi:

Yeah. I’m curious, can you share any maybe high level differences that might exist? If you build the plant in the highest cost location versus the lowest cost location, how much different is that? If we just keep a generic, maybe you can avoid discussing any sort of sensitive information.

John Hopkins:

Yeah, I think, I can’t speak for Fluor who’s also doing the plant in Romania, but in discussions with them, the EPC… One, productivity and labor is going to be cheaper than it would’ve been at CFPP, which was, again, constrained in terms of you’re in Idaho National Lab and in terms of availability of labor. The other, our ability to ship these modules as CFPP would’ve been, we did the transportation analysis and it was going to be a real challenge getting those modules up to that location where let’s say another location in the southeast, if you can barge them in, it significantly lowers the cost. Or if you don’t have to go across the fourth, a Snake River as an example, 20 times, those all have a major impact in overall costs. And then also the other component of this was owner’s costs was they had over a billion dollars as I understand in contingency, we don’t foresee that in our next project.

Marc Bianchi:

So what does that involve, the billion dollars of contingency?

John Hopkins:

That’s just from a liability perspective, what the owner felt that they had to have in that project from a liability contingency plan and should it have been-

Marc Bianchi:

So if there’s a cost overrun or something like that, that’s sort of what that’s the placeholder for?

John Hopkins:

Yes, yes.

Marc Bianchi:

Okay, okay. I think it’s interesting to talk about too, we’ve talked before, you’ve mentioned the $58 going to 89, and that I think, if I remember correctly, was sort of the lowest and the highest price comparison for all the things involved. So interest rates were really low when you did 58, and then they were really high when you did 89, and then I think a bunch of other materials were. Can you kind of talk about that comparison and then where some of those items have gone since the $89 was put together? I think maybe we’ve seen some decline in some raw materials, but maybe interest rates are up from where they were.

John Hopkins:

Yeah, and again, as I said before, that 58 number was predicated on what was the alternative other than SMR, NuScale SMR. It was gas, it was combined cycle. So at that period of time when they targeted 58, the combined cycle plant was somewhere in the low to mid-sixties. Then when that escalation and interest rates, that combined cycle plant went into the low nineties, so they targeted a number at $89, and Fluor accepted as well as us that we will use that as a target and the basis of the cost to ensure we remain competitive against the alternative, which was gas. So that’s how those numbers were determined.

Marc Bianchi:

So it wasn’t necessarily that much of an increase, that was just the cost to beat.

John Hopkins:

Yeah, and again, don’t get me wrong, there were escalations in commodities and et cetera, having the interest rates. We also, during COVID, had supply chain, a lot of that’s been relaxed. A lot of those commodities that were necessary for that site, we made that determination. And if you looked at that time, we were at a Class 3 estimate, and we went to the Class 2 estimate, you saw reductions, and that’s where Fluor fell very comfortable that they could meet that $89 because they saw relief in some of the pressure points that they had during the COVID period in supply chain risk.

Marc Bianchi:

One of the questions that we’ve gotten from investors, and this isn’t just a NuScale question, but it’s a question for all large projects and large infrastructure projects these days is a higher interest rate environment just makes it more challenging to get the economics to work for any large ticket item. How are you seeing that with your customer conversations? And is there a sweet spot for where interest rates are? So if the 10-year treasury right now is something like four and a quarter percent, is that a level where things can move forward, or is the sweet spot something with a three handle on it? Or if we get up to 5%, again, it’s really challenging, just maybe talk through that dynamic.

John Hopkins:

Yeah, let me start and I’ll turn it over to Ramsey. As I commented before, I think there’s some misperceptions of what is NuScale. We are not a developer. We don’t achieve power sales. We are a technology provider to a plant, and that’s what we want to be. And so our piece of cost, our supply chain is very critical to have strategic suppliers who, as I said before, are not looking at a one-off deal. They’re looking at a more of a whole holistic, how do we make our money on multiple modules? You want to touch on the treasury, Ramsey?

Ramsey Hamady:

Sure, sure. Marc, I think it’s a great question. Higher interest rates increase overall project costs as they apply to financing and rates broadly increased expenses throughout the supply chain. The impact is felt during construction as well as cost of a permanent capital. However, the reality is those affect everyone and all energy and industrial projects. Because of that, we don’t view the interest rate environment as meaningfully affecting our opportunity set. Acknowledging that, we benefit from several mitigating factors relative to our competitors. NuScale’s factory fabricated modular construction reduces risks of delays that plague the energy and infrastructure projects with substantial and field construction. By shortening the period to commencement of operations, NuScale projects take away completion tail risks, are positioned to pay on costs more quickly. Also, NuScale’s SMRs are cost competitive, other forms of consistent base load energy and nuclear is the only form of base load power that’s zero carbon. Finally, I’ll add that just the other week at COP, more than 20 countries stated their commitment to triple nuclear energy capacity globally by 2050. So we feel strongly that we tend to be well positioned.

Marc Bianchi:

We talked about the CFPP and the levelized cost being cost to beat, but pick a generic site. What should you be able to deliver on a cost basis? Maybe on a first of a kind we know that’s going to be higher, so maybe just talk us through what sort of cost you should be able to deliver to, and what’s the aspiration? Where will it go after a bunch of repetitions?

Ramsey Hamady:

Marc, first, we can only speak to our SMR technology, which again, is only one component of a plant. Our view is that NuScale portion of total plants is roughly two billion for 12 module plants, and that represents about one-third of total plant costs. Importantly, let me note several things. First, the IRA provides significant benefits in the form of the investment tax credits that now apply to nuclear plans. We estimate that the IRA can offer up to 50% of the cost reimbursable by the government. Additionally, we’ve designed our SMRs with the modular design. We as well established, approved readily available materials that could be factory fabricated and transported to the site, which keeps costs down. And finally, Marc, we’ve spent years meeting rigorous quality assurance professional certification requirements and completing comprehensive [inaudible 00:21:23] action trials to get to this point.

Now, when we place an order, our suppliers are ready to proceed with what’s needed. As a result, Marc, I’ll point out in many ways, we’re not the traditional first of a kind. We anticipate substantial potential to optimize our processes and design by swiftly applying learnings to benefit digital operations, engineering, project management, quality assurance, the resulting standardization we believe will rapidly produce an [inaudible 00:21:52] of a kind module, something that’s cost effective and delivers a predictable process for our customers. And just as important, we can avoid producing a series of one of a kind deliverables and the cost associated with that.

So let me also highlight our build to print philosophy, which means that any qualified and capable nuclear supplier can produce our equipment, allowing us to expand capacity to meet our book of business and to receive multiple quotes to produce equipment, obtain competitive pricing for our customers is a distinct advantage of NuScale. More costs will come down over time as we learn from early production and also by implementing advanced manufacturing techniques that the industry is currently perfecting. I’d say for these reasons, we’re confident, highly confident that NuScale will become the leader in low cost, clean carbon-free base load power production.

Marc Bianchi:

That’s great on the plant cost. Appreciate that. So I guess this is a bit of a more high level question, but obviously you guys are an SMR company, so it applies to you, but one of the reactions to CFPP has been, oh, well here it is, SMRs are too high cost. It just makes more sense to build larger plants because you can spread the costs over more megawatts. How do you guys react to that?

John Hopkins:

Yeah, Marc, I’d often hear before that everything is about economies of scale. Therefore, a large gigawatt size would be in terms of overall costs less than SMRs. But I think people need to understand the economies of scale, about two-thirds of the components of a gigawatt size we don’t need in the NuScale SMR, and we prove that to the NRC. And going back to CFPP, a lot of positives resulted from that engagement with that particular project. NuScale was able to get through the NRC licensing process, which is a very daunting challenge. As you know, we submitted our design certification for 50 megawatts for a 12 module plant. We’re currently going through a power up rate to 77 mega megawatts. The rationale behind that, we found that as we modeled our facility through the NRC and we scaled up our components, we realized that we’re conservative and that particular same module could produce upwards to 77 to 80 megawatts with very, very minimal engineering.

And that process is going very well with the NRC. We met with them yesterday and it’s on schedule, and hopefully it’ll be ahead of schedule. We’ll get that 77 megawatt approved by first quarter of 2025. The other things that occurred having gone through the NRC is that, as you know, we’re building in a factory. So as you build in the factory, you don’t have the complications of trying to build these modules at the site. So as I mentioned before, as we build modules, the civil works will be where we built at the site, and we don’t bring our modules in until after the fabrication is complete. So you bring them in one at a time. And the beauty of what I like is the scalability of these things are such that once you get one module in, you can get it up and running.

You can bring the second module and you can get up so you can start generating cashflow at that time. So from a competitive perspective, really at the end of the day, does the customer feel we’re competitive? That’s going to be the bottom line. If we have to bid out, I’m not worried about bidding these modules out. And then, like I said, the competitive landscape’s a little different in the US than it is overseas. Here I’m competing against gas and there I’m competing against state-owned enterprises like Russia and China. So I strongly believe we’re going to be very competitive in this marketplace or we wouldn’t be here. And some of the other firsts, Marc, going through again with that CFPP project, we had approved to the NRC that it’s from a first of a kind, have our emergency planning zone methodology approved, that’s huge.

So we can literally be at site boundary and maybe not at all sites, but many of the sites and the NRC approved that. The other, not having to be connected to the grid for safety reasons. And so you’re hearing more about not only utilities, but also so-called industrials now getting engaged because they understand they want to get into the carbon-free environment. How do they do that? They want to have process heat. They want to have energy for hydrogen or energy for ammonia production. And if you’re on the fence line, it’s a lot better than having… And most industrials don’t want to be within the emergency planning zone because the concerns, if something were to happen and the reactor were to trip, it would impact them on business interruption. But if your emergency planning zone is at the site, that’s not an issue. That all, having gone through the CFPP, that was a real plus for us.

The other thing, Marc, that’s very important, when we talk about the simplicity of our design, we spent $1.8 billion de-risking that module. So when you think about it, there’s no exotic metallurgy, it’s conventional fuel. When we say first of a kind, we just haven’t built it and put it in the ground yet. But majority of all our components have been scaled up. Our helical coil steam generators were tested and totally scaled at [inaudible 00:27:21], Italy at SIET Labs. We just need to get it built and put it in the ground. And to your point, you’ve got to be cost competitive and you got to be on schedule.

Marc Bianchi:

So there were a number of things that CFPP helped with. So you mentioned the emergency planning zone and other steps that you went through with the NRC, that’ll be good things that you can apply to future projects. What were some of the lessons learned that maybe you would’ve done differently? Not that it might’ve changed the outcome, but just that help you decide how to pursue these projects going forward that might be different from what you did earlier on?

John Hopkins:

I think we got too engaged and somewhat of a helping in a development of CFPP. We’ll never do that again. We’ll never get involved in a project where you have a subscription model that requires the project to go forward commensurate with people coming in or out of the project. We would not do that again. So it was a very unique project that a lot of positives come out of. But the other thing is building at a location that’s commensurate, looking at the labor, looking at the viability of getting the modules to the factory, all have to be looked at. In many of these locations we’re looking at, Marc, in the United States whole refurbishment power plants or remote locations, a lot of them are on the river. A lot of them you can use some of the existing infrastructure, the water intake, the T and D, et cetera. We’ll be looking at all of that going forward. So I would say CFPP and what we did, of all the pluses that came out of that, it was still a unique project of things we wouldn’t do again.

Marc Bianchi:

All right, so CFPP had some lessons learned that you mentioned there. So talk about what the other projects are in your outlook here. We’ve got something that you announced with Standard Power, which is pretty exciting. Standard Power and ENTRA1, sort of a 4X the size of what CFPP was. You’ve got Romania. Maybe just talk about the opportunity set, what’s currently in the pipeline, what could come into the pipeline and how you’re thinking about planning around those.

Ramsey Hamady:

Sure. Marc, I’m so glad you asked that question. We are extraordinarily excited about Standard Power. Let me talk about the client for a moment, but I think what’s more important is to expand into the broad suite of opportunities which we see ahead of us and which we believe we NuScale as an SMR developer are uniquely positioned to address. Standard Power is a data setter and AI operator. They have sites in Ohio and Pennsylvania they’re currently operating. They have a longstanding history. They’re profitable and they have plants that develop large scale data centers in both those sites. Marc, you may know that the home of data centers really in America is Northern Virginia, Loudoun County. That’s where many data centers have established both for the good, reliable power as well as for connectivity up and down the East Coast. Loudoun County now with the prevalence of data centers is really suffering from issues around reliability, about good resiliency around power, and they’re scaling up to achieve that.

New data center operators today are focused on the Ohio to Pennsylvania corridor, not only because of good power, good transmission lines, but also good data. And importantly, the sub 10 millisecond relay back and forth to the East Coast where most of these data centers find their clients. The data center thesis for us is incredible. And this goes back to the idea that A, we can relocate at coal sites and you have a lot of coal that’s coming offline in that Ohio to Pennsylvania corridor. In fact, that’s why the areas where standard power is focusing. By going into former coal sites, setting up nuclear, providing power, we can provide communities with jobs, we provide committees with clean base load, reliable energy, and we can power the data center industry.

Marc, data centers are something that we understood was coming 10, 15 years ago, but I don’t think a one could have predicted the actual amount of power that data centers use and the prevalence of data centers in AI today. And that number is only growing. We feel very strongly that NuScale SMRs as evidenced by our being selected by standard power to be the technology of choice to power their data centers. We feel very strongly that NuScale SMRs are the best positioned clean base load power supply to address the data center market. And that is going to be an extraordinary, extraordinary market for us. And I don’t see anyone else who is as well positioned as us to be able to capture that.

Marc Bianchi:

And you’re going about it in a different way, obviously with ENTRA1 as being the project developer and owning the asset. I mean that just on paper seems like it’s many times more efficient than what was going on with CFPP, but maybe just talk about kind of the confidence in this approach.

Ramsey Hamady:

Sure. I don’t want to contrast too much to CFPP. That project for us, again, I think of as success. It was a unique project, allowed us to raise a lot of capital and reach technical milestones, which would’ve been challenging to achieve absent of a project like CFPP. But you’re right, CFPP lacked a real focused developer, and that is something that’s required to bring these projects online. What ENTRA1 has enabled new skill to do is to have a consistent, reliable, knowledgeable developer with the experience to bring energy projects to market and the relationships and market confidence to buy and raise financing. And bridging that gap, yes, it’s important within the context of data centers, but really it creates a applicability of our technology to a wide array of markets and customers that don’t necessarily want to own the asset. This is the perfect combination for us.

And what we’ve seen is with the partnership of ENTRA1 and the ability for us to offer this unique and very powerful technology, a developer who’s able to take that technology and sell what customers want, they want power. This has been an extraordinary benefit for us as evidenced by us building a 30 plus gigawatt pipeline. There’s no other SMR developer in the world that can say that we have the pipeline, we’re in production, we have a developer, we have data centers that want to work with us. We have steel producers like Nucor that want to work with us. We have utilities that want to work with us. I couldn’t imagine being in a better position right now. And I think soon we will see the benefits of that partnership come to light.

Marc Bianchi:

That’s great to hear. John, any other comments on, maybe walk us around the world where you’ve got Romania moving along. Are there other prospects that have maybe changed in the past three to six months that are worth chatting about?

John Hopkins:

Yeah, Marc, if you’ve been following what’s happened at COP 28, unfortunately I didn’t get to go. I had COVID at the time, but I had people represented there and I did go to COP 26. I spoke at COP 27. You see the groundswell continue to build for the need for advanced nuclear around the world. And it’s either because of energy security requirements, it’s because of climate disruption or the fact that as mentioned, more energies need for hydrogen production or ammonia production, et cetera and advanced nuclear is a good place to get it. So the 30 gigawatt pipeline that we talked about… And a lot of these customers we’re talking to, to Ramsey’s point where the developer comes in, it was so critically important for us. Many of the data centers or many of the industrials, they don’t necessarily want to own a nuclear asset. They just want the energy.

Now they’re willing to be off-takers and provide long-term power purchase agreements. And even in some instances in our discussions become involved or put capital into the development of the project. So that ENTRA1, and again, proof’s in the pudding here, but we’re very close to coming to terms and what we’re seeing from customers that if we can offer that a build, own, operate or build, own, transfer, that is going to open the aperture tremendously now on a global perspective. So that’s where a lot of this 30 gigawatt pipeline comes from. And like I said before, what they liked about us when they did due diligence on NuScale is all the things I referred to before. We have been through the NRC, the EPZ zone at site boundary, not have to be… All the safety in what has been tested with that $1.8 billion I commented about, has significantly been used to de-risk the modules in the early front end through all the testing, which I don’t think anybody else has done anything close to what we’ve done to date.

So one thing we are is we’re much more focused on vetting our customers. What’s the regulatory frame at? Where’s the funding coming from? Because I found you could easily become a mile wide, an inch deep if you’re not careful. So what we’re doing now, we’re classifying customers commensurate on, do they have the certain requirements to carry this thing forward? And usually it’s regulatory framework and where’s the money coming from? Is the funding there? Because a lot of times we find funding always gets back to money.

Marc Bianchi:

Okay guys, I think that’s probably a good place to leave it. John, Ramsey, thanks so much for taking the time to come on here. Really appreciate it.

Speaker 1:

Thanks for joining us. Stay tuned for the next episode of TD Cowen Insights.


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