Load Following Advanced Nuclear With TerraPower

On the fifth episode of Cowen’s Energy Transition Podcast Series, Chris Levesque, CEO of TerraPower, joins Industrial Gas & Equipment & Oilfield Services & Equipment Analyst Marc Bianchi to discuss the company’s nuclear development, including their first Natrium reactor, which is targeting commercial operation before the end of 2028. The Natrium reactor is safe, uses a molten salt energy storage system enabling a high degree of load following, and carries the promise for a lower cost.

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Transcript

Speaker 1:

Welcome to 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, Mark Bianchi here from the Cowen energy team with another installment of our Energy Transition podcast series where we’re now covering nuclear power with a focus on small, modular and advanced reactors. I’m excited to be joined today by Chris Levesque, who is CEO of TerraPower. TerraPower is several technologies under development, including a unique advanced reactor design. So Chris, maybe to kick it off, can you give a bit of a background on yourself and the history of TerraPower?

Chris Levesque:

Sure. Thanks a lot for having me, Mark. My background is I’m an engineer who’s worked in nuclear energy my whole career, about 35 years now. Started off in the US nuclear navy where I relied a lot on nuclear fission, my shipmates and I relied on nuclear fission to keep us safe really and it helped us propel the ship, make water, desalinate water, make electricity and control our environment. So I’ve always associated nuclear energy with something that had great benefits and kept me safe.

After I left the navy, I worked for a couple big nuclear companies on older technology and about seven and a half years ago I had the chance to come join Bill Gates at TerraPower. TerraPower had been around seven years at that time, we’re about 14 years old now, and TerraPower’s a nuclear innovation company that was founded on the principle that when you look at the challenges we’re facing with climate, with energy and even some health challenges, nuclear technology has really been under-leveraged to solve some of these problems.

So we have a nuclear energy and a medical isotope product. I’ll focus more on nuclear energy to begin with. We’ve developed a plant called Natrium. Natrium is a reactor, it’s a fission reactor like the hundred reactors in the US today, we make heat by breaking uranium atoms in half. And fission is pretty well understood in the US but the advanced part about it is instead of cooling the reactor with water like most of the plants around the world today, we cool the reactor with a liquid metal and that’s sodium. And there’s advantages to using sodium, it’s a really good conductor of heat. It also has a very high boiling point and because it has a high boiling point, it means our plant operates at very low pressure, about atmospheric pressure. So that helps us lower costs, it has safety benefits. And then I’m going to mix a couple things here, there’s sodium and there’s salt. So we have both of those in the plant.

We’re cooling the reactor with liquid sodium, so it’s a molten metal. And then about four years ago we had a big breakthrough where we realized that lots of plants and lots of customers were being challenged by all the wind and solar we’re adding to the grid, which is a really good thing we’re adding all this emission-free generation, but that creates a challenge too because wind and solar are intermittent. They could come and go during the day. So what we did was we implemented molten salt storage. So when we make our heat with our reactor before going off and boiling water and making electricity right away like today’s reactors do, first we heat a very large tank of molten salt and this acts like a thermal battery and it lets us be able to change the output of the plant very quickly if we need to, let’s say if the wind or the sun isn’t there. And that’s turning out to be something that’s much sought after by utilities as they look at the challenges they’re facing in the 2030s.

We also, as I mentioned, have a medical isotope we’re developing called actinium-225. It’s not nuclear energy but it’s really applying nuclear science, which is a field that’s really been underutilized to solve the world’s problems. We’re producing actinium-25 and there’s multiple drug companies who want to use actinium as what we call a payload. So with existing cancer drugs, they want to use these drugs and pair them with our actinium and then their drugs go find the cancer in the body and our actinium gives off a small amount of radiation right at the tumor or the diseased cell. And what that does is it kills the cancer but not a lot of tissue around it. Really excited about both of these technologies and looking forward to talking more about them today.

Marc Bianchi:

So you mentioned Natrium, you mentioned the reactor technology there. You’ve got two other reactor technologies is my understanding, maybe there’s more that haven’t been made public, but just can you explain the variety of reactor technologies that you have and why is the one sort of going with Natrium?

Chris Levesque:

Today we have two technologies we’re working on in nuclear energy and that’s Natrium which I was discussing already, and then a second technology which is earlier in its development called the Molten Chloride Fast Reactor. You may have heard and we have some information on our website about the Traveling Wave Reactor. That’s a technology that’s really kind of the predecessor to Natrium. So TerraPower in its 14 year history has been working on a sodium-cooled reactor the whole time. And then roughly four years ago when we had the big innovation with energy storage, we renamed the Traveling Wave Reactor or the TWR, we renamed it Natrium and that is our technology that is ready for commercialization. We won a very large government grant under the Advanced Reactor Demonstration Program, which is helping us with some of the first of a kind cost of Natrium, like the cost to license the reactor with the NRC, the cost to design the reactor for the first time because you design it once and most of that design effort doesn’t need to be repeated as you work on subsequent units.

There’s also going to need to be supply chain investments to enable the first Natrium construction. We’re very fortunate and really pleased to be working with the US Department of Energy on that. It’s a public private partnership, it had bipartisan support in Congress. Both parties now want to see the US move forward with clean energy. Also it’s important to the US government that the US keeps its technology leadership in nuclear. So those are some of the reasons for this really significant government program.

MCFR, the Molten Chlorine Fast Reactor, is another design where we’re super excited about it. It’s a little bit earlier in its development. We’re working with Southern Company and also with the Department of Energy on MCFR. But the next step on MCFR isn’t a commercial reactor, the next step is something we call the molten chloride reactor experiment. It’s actually going to be an experiment that we do at Idaho National Labs where for the first time in a long time the US is going to demonstrate running a fission reactor with a liquid fuel and that liquid fuel is a chloride-based molten salt.

So that’s a little earlier in its development but we think the two technologies together are really going to change the face of nuclear energy this century. And I should mention Natrium is really moving along in its demonstration project. We have great support in Wyoming where we’re building the first Natrium reactor. That’s going to be built in Kemmerer, Wyoming at the site of a retiring coal plant. This is really a great pairing in so many ways. In Wyoming they have several retiring coal plants. This was planned before TerraPower got involved, there’s something like 300 gigawatts of coal retiring in the US and Europe. And these coal plant communities really provide a great location for citing a new nuclear plant because they have the cooling water which you need for your turbine island. They also have an existing grid connection and we don’t have an unlimited amount of transmission and distribution in the US so these grid connections are really critical.

And then something else which is really neat and we’re proud of, we’re going to be able to repurpose the staff at this coal plant in Kemmerer, Wyoming. And Wyoming is facing some economic challenges with the energy transition. They’ve been a coal producing state and they’re seeing a reduction there, although they hope carbon capture continues to provide opportunities for them. But Governor Gordon, who’s been super supportive of the project, has committed to net zero. And when we first talked to him, Pacific Corp and I approached the governor to talk about citing this first Natrium reactor in Wyoming, he was pretty quickly on board because his vision for the state is for Wyoming to become very involved with clean energy technologies. The Natrium project has really been moving along. We selected the site in Kemmerer, Wyoming. We have about 800 engineers working on the design today. So the construction hasn’t started yet, but these projects, they’re EPC projects, engineering, procurement and construction. So we’re in that E phase of the project now.

Again, a lot of attention on this project, not just because the technology is so thought after, but also it is just a really great example of energy transition and taking a community that might have missed out on an economic transition like the move to clean energy and instead we’re making the folks in Wyoming part of this. And it’s not just the jobs at the power plant, which is about 200, but there’ll be 2000 jobs during construction. And then the University of Wyoming and the community colleges are making a serious commitment to getting themselves involved in nuclear energy and nuclear energy technology.

Marc Bianchi:

That’s fantastic. You mentioned all the retiring coal plants and the opportunity there. So your reactor is I think 345 megawatts electric, could go up to 500 megawatts and I want to talk about that in a second in terms of load following. But how does that size compare to all the retiring coal that’s out there and is there an opportunity if you wanted to double the size of it, you just put two reactors in the same location, how does all that work?

Chris Levesque:

Yeah, great question, thanks Mark. Yeah, it turns out that most of the reactors in the US today are closer to 1000 megawatts or a gigawatt. We really need those plants to stay in online and even have their lives extended because that’s good emission-free power. But if you look at the limited connections on the grid, it turns out that these coal plants, many of them which are roughly 300 megawatts, some smaller, it really creates an opportunity for plants of this size to be sited. Again for the grid connection but also for the cooling water. In fact, DOE just today released the report quantifying this great opportunity and all these sites which should become available for nuclear.

And earlier you alluded to our ability to change power, yes. So our kind of name plate electricity capacity is 345 megawatts. So a good way to think about that is it’s enough electricity for 400,000 homes, but we can rather quickly change our power output and go from 345 megawatts to 500 and we would do that due to changes that might happen in the day. It could be an increase in demand during the day. If we’re in a region where at 5:00 PM everybody cranks their air conditioning, that could be a reason you need to increase the power of Natrium. Or there’s periods during the day when the solar intensity might be less and that utility needs to make up for the loss of solar output and turn to Natrium.

So the use case is kind of different at different places in the country. In the mountain region where the first Natrium reactor will be will be paired with lots of wind, in the southeast will be paired with lots of solar. Different use cases depending on where you are. But what we’re hearing from utilities is, “Gosh, when can you get the Wyoming project done so that we can show this technology’s demonstrated? And then how quickly can you ramp up and produce multiple units per year?” All our indications are is this kind of technology is going to be massively needed on grids around the world 2030s and beyond.

Again, driven by all the fossil retirement, a growth in wind and solar but our models say wind and solar will peak out around 60 to 70%. And as you grow wind and solar, you add needs for energy storage, things like batteries and our models show that the best way to complete the carbon-free grid is with 20 to 30% nuclear. And Natrium is just kind of an ideal solution because it’s not just a generator, it also has built in storage so in one plant it’s generation plus storage.

Marc Bianchi:

Does that storage over a 24 hour or whatever the period is, do you need to discharge that storage? Because I assume the reactor is continuing to run and generate heat and the heat needs to go somewhere. How does that dynamic work?

Chris Levesque:

Yeah, thanks for exploring that more with me. Yeah, the storage system, which is a large tank of molten salt, it’s partly potassium nitrate, so these are nitrate salts that have been used for storing heat for decades in different processes. So there’s nothing nuclear about the salt, it’s a commodity that’s been used in industry for a long time and it was proven out in the solar industry. So the concentrated solar industry is already using these large solar tanks because they have transients during the day where if clouds go by for example, they need to continue running their turbine. So if a cloud goes by at one of these plants, they’ll continue to make steam and make electricity by drawing heat and energy out of that molten salt battery, same thing for us.

So again, there’s different use cases around the country. But for many different situations, anything from California to the southeast, what we’re seeing is with Natrium we can really optimize what they call the duck curve, okay? There’s a change in electricity demand that happens in every region throughout the day and it could be due to coffee pots in the morning, air conditioning coming on at 5:00 PM, could be due to loss of solar intensity at the same time everybody’s coming home. And that’s what utilities today need to manage. And Natrium is just ideal for doing that.

And the way it would work is the reactor runs at 100% fission output all the time and then at different times during the day, we’re either charging heat into that thermal battery or we’re removing heat out of that thermal battery. The use case we talk about most is this one where we can increase our output to 500 megawatts for five hours, but that would also correspond to maybe in the middle of the night there’s a period where the electrical output is below 345 megawatts and we’re using the reactor to charge up the battery to get it ready for the higher demands during the day.

Marc Bianchi:

I’m sure there’s some proprietary element of the reactor and molten salt storage combination, but can this concept be applied to other reactor designs? I mean, I think anybody that’s got a high heat reactor could look to employ this. As you said, it’s used in the concentrate solar industry.

Chris Levesque:

There’s a lot of great advanced reactor designs out there and we’re going to need multiple solutions. I mean, the climate change challenge is so great. And what you’ll see is multiple nuclear plant designers are now committing to be able to load follow and change power to make up for some of the hourly changes that I told you about. But the thing that really makes Natrium ideal is we don’t need to change reactor power. Some of the other designs, they’ll actually change reactor power during the day to accommodate those changes in demand or changes with their solar output. They have to do that because they don’t have the built in storage system.

And if you change reactor power to load follow as we call it, what that means is sometimes you’re going to run your reactor at less than 100% power. And what it means is at the end of two years of what they call your fuel cycle, you’re going to discharge good fuel. Some of the great things about Natrium are, because we operate at 500 centigrade, that is the ideal temperature for these proven molten salt storage systems. Really if you’re going to use one of the proven nitrate-based salts, it has to be a certain kind of reactor. Today’s water-cooled reactors operate at 300 centigrade or so. And at those temperatures our nitrate salt would be frozen. It wouldn’t be molten, it would be like cake type salt. And then at some higher temperatures the nitrate salt wouldn’t really be stable. So it turns out that a sodium-based reactor like Natrium is really ideal to work with molten salt storage.

And you’ve asked about proprietary stuff, when we had this breakthrough several years ago, we filed different patents around the world and it is a pretty unique thing to TerraPower.

Marc Bianchi:

Fantastic. Maybe getting onto the construction of the project and the timelines and so forth. So you’re working with GE Hitachi and Bechtel, can you talk about the nature of that relationship? And for those companies’ involvement, I mean they’ve got a lot of reference in the nuclear sector, but is there any element of the design that they’re bringing that might be proprietary that makes it really important to have those two?

Chris Levesque:

TerraPower is the owner of the Natrium design and it’s something we developed with GE Hitachi, and Bechtel is on our team as well. It kind of comes to our model as a company is we’re a nuclear innovation company, we’re really a technology leader in nuclear. And to design the first atrium reactor requires a pretty large engineering effort. As I mentioned, we’re going to get to over 800 engineers and it turns out there’s great resources in companies like GE Hitachi and Bechel who can help us with that kind of large engineering effort, which will come and go. After you do the first design, you won’t need that volume of engineers working on the project. So it really made sense for us to partner with these companies that, as you said, have really strong records.

Marc Bianchi:

Are you going to be outsourcing all of the manufacturing or are you going to have any roof line for making stuff?

Chris Levesque:

Even today if you look at the nuclear industry, the supply chain is something that needs an investment. But largely the nuclear companies are going out to the global supply chain all over the world to manufacture components and procure piping so we’ll do the same.

On Natrium for the first plant especially with the large government grant, that procurement will happen as a government contracting process because we have 50% government money involved on the first project, we’ll be doing the vendor selection and everything to government contracting rules. And as it should be, that was a big US government investment and the reason the US government wants us to follow that process is part of the benefits of this advanced reactor demonstration program are that we reinvigorate the US supply chain. So that’s part of the reason for the program and we’re glad to be a part of that.

But then I think what you’ll see is as we go into the 2030s, we’re going to increase our delivery rate of these Natrium reactors. So I really see us having a US team that’s delivering multiple units per year with US engineering teams and US vendors. Then working closely with the US government, which we do for all nuclear energy exports, we really see expanding capacity and developing similar networks in Europe and Asia. Our vision is that there’s going to be many Natrium plants and later MCFR plants that are going to be needed this century. The US government really wants to see US nuclear energy technology exported. It’s a sensitive technology, so it needs to be done in cooperation and under control of the Department of Energy.

But there’s also a recognition that many new countries who don’t even have nuclear energy today are going to turn to nuclear, I mean in Africa countries like Ghana, Indonesia, you’re going to see countries who to move their economies forward and to manage emissions, they’re going to need nuclear energy and companies like ours and the US government want to offer a US technology. And the way the US government sees it is if we’re not there with a US based technology, China or Russia will be there with theirs. So there’s a big public private-partnership aspect to this and we’re really glad to be working with the DOE on this.

Marc Bianchi:

Maybe you could talk about the timeline for the advanced reactor demonstration. When are you supposed to be in commercial operation and what are the major milestones on the timeline between now and then?

Chris Levesque:

Sure. It’s a super aggressive schedule. If you look at the track record of new designs in the US and Europe, it’s not very good and that’s one of the reasons nuclear energy is doesn’t have as big of a place as it should today. Well when the US government and especially the drafters of ARDDP and Department of Energy and the congressional committees worked on creating this program, they said we have to put a stop to that. And they said, “We’re going to make these first builds for the RDP demo winners,” that’s TerraPower and X-energy. We’re going to make these national projects, okay? So we’re going to assist with some of the first of the kind of costs and we’re going to give them a very aggressive schedule.” Seven years for the E, P and C, the engineering, procurement and construction. And Congress said, “We’re going to ask the Nuclear Regulatory Commission who oversees these licensing processes to support that seven year schedule.”

And so we’re a bit over a year into that schedule and so far so good. We met all of our milestones in the first year. We’re pursuing a two step approval from the Nuclear Regulatory Commission. So we’re going to be asking for two licenses from the NRC. One is a construction license, so that large package is kind of coming together right now, we’re kind of incrementally putting it together. We’re doing NRC meetings, even some public meetings as it comes together. And that final package will go to the NRC in 2024 with the expectation that we get approval to start nuclear construction in 2025 and then plan to have this first Natrium reactor online making commercial electricity in 2028. It’s a really tight schedule.

And as I mentioned for the nuclear part of the plant, we need that NRC license, but for the non-nuclear parts of the plant, things like that energy storage island, we’re pretty confident that we’ll obtain NRC agreement that we don’t need to wait for the construction license and that construction can start earlier, more like 2024. We will have activities going on at site as early as next year, 2023, because we have something called a sodium test and fill facility that is going to be required for some of the testing of the first pumps and the fuel handling equipment. And we’re kind of anxious to get started at the Kammarer site in Wyoming there because it’ll just kind of establish our presence there, deepen our relationship with the community, help us prepare for an even smoother construction process when the nuclear construction starts.

Marc Bianchi:

Are there elements of the project that are not at a high technology readiness level that need to come up the curve between now and delivery? Are there any things that you’d point out that there’s technological milestones that need to be achieved?

Chris Levesque:

We’re certainly going to have first of a kind challenges with the supply chain and simply doing things for the first time. But to answer your specific question about technology risk, we feel technology risk is quite low. And in fact the way the Advanced Reactor Demonstration Program was designed is DOE said, “Hey, for the companies who we choose for the demo award,” which is what TerraPower Next Energy was, “Our big criteria for that are going to be technology readiness, strength of the team and we talked about the strength of our team and then our business plan.” And including the business plan is our capacity to bring private investment to the project as well.

So I think even by our selection for the ARDP demo, that technology readiness was validated. And I mentioned earlier we have the other project, the fast reactor, that was placed by DOE in what they call the risk reduction category. There’s five or so US projects in that risk reduction category that have been awarded smaller projects to help them retire some of that technology risk you were asking about. And then the idea would be, well their next step is a demo project.

Marc Bianchi:

I think you’ve said, or we know this project’s going to be a $4 billion project and that the goal is to get it to a billion dollars at copy. That’s a massive reduction. Can you talk to what gives you confidence in that? What are the major categories that you’re going to be able to see the cost reduction in?

Chris Levesque:

The first ones always do cost more because there’s learning curves and the US unfortunately hasn’t built a lot of reactors. We created civil nuclear energy, but we haven’t built a lot of new reactors in the last 20 or 30 years. So some of those first time costs are going to be the learning curve, supply chain investments, we’re going to be building a fuel factory to make the Natrium fuel and the design cost, the 800 engineers who are working today who when we go to the second and the third plant, we won’t need that massive design effort. The design effort will be more about just tailoring the existing design to different sites. That’s one of the things that will help make the second, the third, the fourth projects cheaper.

But also, there’s just things we know about the reactor and its makeup that are going to make this plant cheaper. Earlier on I mentioned that Natrium is a low pressure plant and that’s enabled by our coolant being sodium. Our reactor operates at 500 centigrade and sodium doesn’t boil until 900 centigrade. So that has great safety benefits too to be so far from the boiling temperature of your coolant. But if you compare that to water, today’s reactors boil or they operate far above the boiling temperature of water, which is 100 centigrade they, they’re very safe. But to make them safe and to make the plant work, they operate at high pressure. And high pressure means heavy components, heavy piping, and even heavy civil structures. I mean we all are familiar with the really large reinforced containment buildings for today’s reactors. So Natrium having a low pressure plant will reduce the steel and concrete requirements of the plant.

And then also because what I was talking about earlier with energy storage, we’re going to be able to decouple the whole turban and electricity production part of the plant. Even the molten salt storage plant will be considered outside of the NRC condensates, right? So we pursued a design strategy that says, “Hey, the things that are required for safety, which are really important, those things definitely need to be under cognizance of the NRC.” And oftentimes because of that with the material controls, the oversight, those parts of the plant can cost like eight to 10 times more than they would’ve if it was a non-nuclear power plant. We worked on an architecture which on let’s say a 40 acre site, we tried to demonstrate all our safety functions on about one acre, and that was at the reactor building.

And we have a cooling system, an emergency cooling system that has basically air chimneys that don’t require any fans, it’s always on. And so we kind of compressed our safety case on a small footprint of the site. And that’s going to help with cost too because it’s put the nuclear focus where it belongs, and then the rest of the plant, the turbine island and the energy island can be built for the same commercial standards and apply a lot of the lessons from that equipment that’s being used at solar plants today.

Marc Bianchi:

Fantastic. And I guess people like to talk about levelized costs when they look at electricity and they look at power projects. And I realize that’s an imperfect metric, but what would maybe help us get an understanding of going from $4 billion to $1 billion? What does that look like in a cost per megawatt hour to a consumer?

Chris Levesque:

Sure, sure. If we’re talking in, I’ll agree levelized cost for electricity is maybe not the best metric going forward, but we definitely see Natrium providing electricity in the 50 to $60 range, which turns out to be quite cheap especially if you look at some of the prices of electricity in Europe today in the hundreds of do euros a megawatt hour. We think Natrium will be very competitive. It will also be able to provide electricity to premium markets as well because electricity pricing is the highest when demand is high or when wind or solar are curtailed for some reason. So Natrium is really being seen by utilities as something that can really help them manage that situation that is really new to them.

The last 30 years in electricity have been kind of static in the US and Europe, we’ve had maybe two or 3% demand growth per year. Our economies have shifted from manufacturing to services. We’ve had lots of efficiencies like LED lighting. The next 30 years are going to be much more dynamics though that with those huge fossil retirements and moving to electric vehicles, whole new source of demand, frankly that’s going to be very challenging for utilities, it’s going to be much more dynamic than the last 30 years. And again, that’s why people are really watching this first Natrium reactor, the demo in Wyoming, really closely because they’re telling us they’re going to need multiple plants going into the 2030s.

Marc Bianchi:

Maybe we could switch over and talk about fuel for a second. So one of the defining characteristics of the advanced reactor category I think about it as the use of halo fuel so a higher enriched uranium starting point, 5 to 20% enrichment. We’ve talked about halo on some of these other episodes here that we don’t have any capacity in the US but the Inflation Reduction Act has 700 million in there to help stand up halo capacity. Maybe you could just talk about what your fuel looks like? We had X-energy on, they talked about the pebble that they have. So talk to us about your fuel and then how do you see the risk of this chicken and egg of halo production versus your need for it? And obviously you’ve got 700 million of help for that now, but there’s still always a risk that doesn’t come on stream on time.

Chris Levesque:

Thanks for that question, Mark. So some of the really neat things about Natrium go all the way back to the fuel. And a lot of the fuel attributes have been proven out in US government programs in the past. Plants like the experimental breeder reactor in Idaho gives us a lot of foundational information on what’s possible with fuel. A sodium fast reactor has a fuel assembly that looks a little bit like today’s water cooled reactors, it’s many fuel tubes with uranium inside. Some differences though are instead of it being a square cross section like today’s reactors, it’s hexagonal and that just makes sense for the physics.

But then one other key difference is instead of it being a ceramic pellet like today’s fuel, we use a uranium rod, an extruded uranium rod. And that gives us some really great heat transfer capabilities, again leading to improved safety. So we have a metal fuel and a metal coolant. So the heat conduction is amazing, the reactor’s ability to cool itself is amazing and really excited about that. But it’s true that many of these generation four reactor designs utilize what you just mentioned, high assay, low enriched fuel. Today’s reactors are enriched up to 5% enrichment. There’s plans to go up to something like 10% with today’s reactors, they call that LEU plus, but generation four reactors need to go up to as high as just less than 20%.

And earlier I was talking about the global move with advanced technology. China and Russia both are developing these reactors, have established fuel supply chains that go up to these percentages. And unfortunately the US was somewhat behind in this and it was in the Energy Act of 2020 Congress said, “Hey, we need to create this capability.” So as we start the first plant in Natrium, the plan was, hey, we knew the US government was going to move forward with helping industry create the capability. Why does the government have to get involved? Because we’re competing with state owned companies in China and Russia. We really need the public-private partnership to make this work.

But the plan was for the first core loader too for Narium, we were going to be in a position of having to procure that from Russia. Several days after the invasion in February, TerraPower decided we weren’t going to procure fuel from Russia and what we’re doing doing now is we’re working with the Department of Energy on one of a couple possible solutions that will probably involve down-blending instead of enriching material up to 19%. We understand there’s stocks of material owned by the government that are at higher percentages that can be down-blended to supply our first reactor core or two. And then that will help us keep the first reactor on schedule.

And then we’re really happy to see things like the Inflation Reduction Acts that through public-private partnership and government investment or are helping the US create a capability that’ll then be there for a long term. And we see those programs like the DOE is leading, we see that helping multiple enrichers come up to speed because we plan to sell many reactors and aside from seeing the reactor business expand, we also need to see the fuel supply chain expand because we want to see good competition within the nuclear fuel supply chain.

Marc Bianchi:

Yeah, absolutely. Help us understand your expectations for the business. And I don’t want to get into asking you about a forecast or anything, but just so we can maybe set the expectations, do you have a lot of commercial discussions going on right now for projects like Natrium or do we really need to see the demonstration project happen, things in commercial operation and then all the business comes in? So I guess the question is more like, could you be having multiple projects in the ground in the early 2030s or is it more like a late 2030s and beyond timeline?

Chris Levesque:

No, great question. We need to start additional Natrium projects before the first Wyoming project is done. And we’re talking to multiple utilities about this, again because they need this kind of power even in the earlier 2030s. Basically, they have a problem in some regions that only Natrium can solve. So the combination of being a mission free with not intermittent 24/7 with built in storage, what’s going to enable those additional projects start is us having successive accomplishments on this Natrium project. There’s multiple milestones. Boy, the day we get the construction license from the NRC in 2025, that’ll be a huge validation of the design, of the energy storage approach and then it would be our goal to get multiple plants going.

And we are a business, we are so fortunate to have shareholders, beginning with Bill Gates, who think in the long haul, we’re patient investors, but we are a business and we expect to get a financial return on the investments we’ve made in Natrium. So a great test of our business case really was the capital raise that we just completed. To my knowledge, it’s the largest ever capital raise for a new nuclear fission technology. It’s going to amount to over 750 million, led by Bill Gates and a Korean company SK, who is multinational and really interested in nuclear energy, but also in decarbonizing their operations. They have significant operations around the world in things like semiconductors and refining and they see Natrium as a great investment, but also as a way to decarbonize their operations.

So I think that recent fundraise is just a great indicator of our strong business case. We’re really growing TerraPower. Right now, we’re going to stay on the high end technology, we’re not going to grow to a thousand engineers and add a lot of commodity engineering. We’re going to keep a team who’s focused on the high end technology. But we’ll also lead the deployment of these plants. We have the product ownership and we’ll be leading the sales of Natrium reactors, our project director is in charge of the that 800 person team I told you about. There’s no plans for any handoffs, we’ve really been growing and establishing the right partnerships to move the technology forward.

Marc Bianchi:

We’re coming to the end of the time here. Just to kind of wrap it up, you mentioned the construction license as a big catalyst or big milestone in 2025. What should people look to more near term, maybe over the next 12 to 24 months to evaluate how you’re doing on this whole business plan that you have?

Chris Levesque:

There’s going to be a lot of oversight on our progress on this mega project DOE will be following it closely because there’s a large government investment there. So will our first customer, Pacific Corp. Before construction license, other milestones are going to be our different engineering design reviews. We’ll announce in a few months where we’re going to build the first fuel factory, fuel fabrication facility. We will lock down this plan for halo. We’re working on that in earnest with the Department of Energy right now. So I think there’ll be ample milestones along the way that we can hold up to people to show them the progress.

Marc Bianchi:

Well, that’s a great place to leave it. Chris Levesque, CEO of TerraPower, really appreciate you joining us and look forward to chatting again soon.

Chris Levesque:

Thanks a lot, Mark.

Speaker 1:

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

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