Nuclear Regulatory and Policy Issues With Hogan Lovells’ Amy Roma

Representative of Nuclear power is the atom

In the fourth episode of Cowen’s Energy Transition Podcast Series, Amy Roma, Partner and Global Energy Practice Leader at Hogan Lovells, joins Industrial Gas & Equipment and Energy Oilfield Services & Equipment Analyst Marc Bianchi. Together they discuss the prospects for new nuclear power investments in the US and abroad, government support, including the Inflation Reduction Act, and the NRC’s licensing process as it stands today and in the future.

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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. Welcome to another installment of the Cowen Energy Transition podcast series, where we’re focusing on nuclear power and small modular and advanced reactors. I’m Marc Bianchi from the Cowen Energy team, and I’m joined today by Amy Roma, who is a Partner and Global Energy Practice Leader at Hogan Lovells, where she advises clients on all matters involving commercial nuclear. I’ve had the privilege of seeing Amy in action and reading her papers, which you can get from the website, all very thoughtful and important commentary on nuclear power.

So Amy, maybe to kick it off, you can give us a little background on your role at Hogan Lovells, and how you ended up in the seat? And what does your typical day look like?

Amy Roma:

Sure. So I have probably two hats to wear at a law firm. I’m a partner and my practice focuses on nuclear, very on point for today’s conversation. And I’ve been practicing for about 20 years. I started off my legal career at the US Nuclear Regulatory Commission at their internal court, the Atomic Safety and Licensing Board. And then I transitioned in the private sector and I have been there ever since.

I am also the Global Head of the Energy Practice Group for the firm. So we are a very large law firm. We have 46 offices in 26 countries. We are in every continent except Antarctica, and I have to oversee our global energy practice. And so right now, being a nuclear regulatory expert and overseeing a global energy practice is a very useful position point to see how the world is addressing decarbonization, the energy transition, particularly in the light of the world of energy security and nuclear is a very hot topic, not only in the United States, but around the world. And it’s been a very interesting last few months.

Marc Bianchi:

We’ve traded several emails and discussions leading up to this, and it always seems like you’re traveling somewhere far along place around the world. What’s going on in those visits and how are you specifically involved when you make those trips? Who are you speaking to? Problems you’re trying to solve? What does those trips look like?

Amy Roma:

So they vary depending on where I am and why I’m there. When people say, “Oh, you’re traveling non-stop,” I used to say, “This is unusual,” but you keep saying that enough and unusual becomes the usual. So I have been traveling pretty much non-stop since Russia invaded Ukraine. I used to travel a few times a year internationally, and then since Russia invaded the Ukraine, I was traveling at least once a week. And I was all over Europe, the Middle East, Asia.

The primary… The common denominator across most of those conversations is energy transition and energy security. So how do we decarbonize the existing power supply that we have? How do we increase the power supply? And then how do we create independent and secure power supply in various countries around the world? And the thing that has been fascinating to me is my kind of international travel post COVID kicked off with COP, and went out to speak at COP on energy security and decarbonization. It’s just been a very fascinating shift.

That conversation, I felt like there was so much of a disconnect between people who were talking about decarbonization and the options that countries have. And it was a lot of Western countries talking about all these options for power divorced, if it actually being applied to any specific country. And then you have countries like in Africa saying, “Well, hold on,” stepping up and saying, “We can’t do that because…” There’s a woman from South Africa who made a great comment on, “I can’t just shut down our coal plants because we have massive unemployment. And if we shut down our coal plants, which is a huge place of employment, we will literally destabilize our country.” And someone from Kenya saying, “In the last five years, we’ve now achieved something like 70% electrification.” And when the room clapped, he stopped and said, “Stop clapping. We have a light bulb, we just have a light bulb. And you can’t tell these people who just got a light bulb that they can’t live to the Western standard of living, that they see you guys living on TV.”

And so those conversations really showed the sharp contrast between various countries and that how individualized energy transition or just an energy security journey is. And the reason I mention that is because after Russia invaded the Ukraine, I was all over Europe. And every country in Europe faces a different situation. France already has a largely independent power supply system because they have a huge amount of nuclear. It’s also largely carbon-free because they have a huge amount of nuclear. Other countries are not in that position.

So I was in Romania, a lot of travel in Eastern and Central Europe. And in those countries, they’re trying to really figure out how do we get off of Russian gas and what can we build quickly? And what can we build that we won’t have to then tear down in a couple years because of climate change? And that really kind of narrows down those options, but there’s a sense of urgency in everyone’s voice and in every discussion that I’ve had, no matter where I was, and I’ll just probably end my long storyline with one of my last trips was to Japan, which was fascinating because the country’s still not open right now because of COVID.

I had to get a visa and I went to Fukushima. I went to Rokkasho, the fuel reprocessing facility, and then parked with the various ministries that work on energy issues. And then the utilities that do power generation and they are in a very desperate plight right now, like much of Europe is and other countries around the world, trying to figure out, “How do we transition off of Russian gas before the winter, without having our entire grid collapse?”

Their energy reserve margin in the winter time is projected to be less than 1%. And when I was there, they were having a massive heat wave and the air conditioning was all turned off. And so I spent a very sweaty week in Japan in 95 degree temperatures, wearing suits, hearing announcements from their Energy Ministry to turn off your lights and conserve your power because the grid’s going to collapse. These are really sobering discussions to be having and really shines the light, very starkly on what the energy crises around the world are. What’s driving them? Extreme weather events as well as energy security issues associated with the Russian invasion of the Ukraine. And then how each country is planning on addressing them.

Marc Bianchi:

It is going to be case by case with so many of these countries, but you’re in this seat being kind of the Global Energy Practice Leader. I’m curious, even if we had new nuclear coming on, if we said today, I want a new plant in Romania or what have you, it’s still several years away. So how do they bridge the gap between now and then?

Amy Roma:

Well, so sometimes they rejigger their energy supply. Other times, they put on… They build hydrocarbons because it’s all they can build in the time that they have. And sometimes it’s what do we look for our immediate needs… A lot of countries are asking right now, “How do we get through the winter?” So they’re trying to figure out how to get through the winter and I just had our energy practice group meeting a couple hours ago and our colleagues in Europe, each one started off with, “We’re facing a really rough winter.” And it was a very sobering discussion. And you would think, oh, these must be European discussions because they rely so much on Russian natural gas.

And then we had someone report on the energy crisis in California. So it’s not other worlds’ problems. This is not a problem happening somewhere else. This is a problem happening in the United States as well. And every country has to look at what their options are and what they can build quickly. At the end of the day, you can’t build a nuclear power plant overnight, but what you can do is keep one open, not shutting down Diablo Canyon and Germany continues to blow my mind. What seems to be a very illogical response to their energy predicament, which comes in part from shutting down your nuclear power plants and then relying very heavily on Russian natural gas.

But I think it might… Maybe it was this morning and we talked about it in our practice group meeting today, they announced that maybe they might not shut down some plants and hold them in reserve. I don’t really know how that’s going to work. It’s really hard to mothball a nuclear power plant. It’s not really cost-effective. I think they might re-visit that one. Maybe they’re just kind of swallowing their medicine slowly on keeping those open, but I’m not sure.

Marc Bianchi:

Yeah. It’s interesting to see how this whole experience, as awful as it is, changes the thinking around some of that stuff, and we can get to ESG later on in the conversation. Maybe from a high level, we’re going to drill down into some stuff, but just sort of sticking with a high level, what do you see as the biggest hurdles to seeing more nuclear power built out in the US and abroad? And how does public perception factor in as a hurdle or an opportunity? There’s a perception is reality kind of thought, even though it might be wrong or misplaced, that is the reality that we have to deal with, with some of the public pushback on nuclear.

So maybe the question wasn’t necessarily about public pushback. It’s more broadly about hurdles, but I suspect that’s one of them. Maybe you can kind of talk through what needs to happen?

Amy Roma:

Sure. And I think probably the flip side of the biggest hurdles are one of the biggest opportunities, and I think I’ve talked about that already with the climate change and the immense task in front of us. I’m talking about this first because this goes into the public perception comments as well, is the large recognition now that climate change is an existential threat and that it’s latest IPCC Report said climate change is happening faster than we thought and it’s hitting every area of the world, and we’re seeing that.

We’re seeing headlines that says India is pressing brink of human survival with how hot the temperatures are there. And other headlines about extreme weather events that continue to happen and that is creating a shift in general about how people see energy. And then when you see these constant headlines about these energy crises that are emerging because of Russia’s invasion of Ukraine, and then about natural gas supplies and making sure that the power stays on, you really marry the two together in a way that makes the conversation more holistic, which is how do we decarbonize our energy supply, which is an immense task in and of itself?

How do we increase the amount of energy we have to meet the increase in the world’s electricity needs? There’s almost a billion people in the world that don’t have access to reliable electricity. So energy growth is increasing. And how do we make sure that we do that in a way that makes sense so that our lights can stay on and that we have energy security and independence? And so energy is a national security issue. Whether your lights stay on impacts a huge amount of how your country operates, and the national security of your country as well as the economic growth of your country.

With that, the biggest hurdle for nuclear has been a fairly consistent issue. And that’s been, they need to be built nuclear power plants need to be built on predictable schedules and with predictable costs. And so having constant redesign of a reactor or redesigning it unique for each site, changing the design that you got approved midway through the process of constructing it, all these things lead to schedule delays, an unpredictable cost, which no customer wants. And that’s enough to be something that could potentially kill the entire industry if it’s not something that is gotten under control.

The good news in that regard is that the next generation of nuclear is largely intended to be advanced reactors, which are meant to be smaller, simpler, scalable. They’re meant to be built in factories. The companies that are designing them are aware of the problems of the past and they’re trying to avoid them for the future. So they’re not planning on redesigning a unique design each and every time they license something. They plan on doing one design and then replicating it. They plan on building in factories and the things that can help drive these changes are the fact that they’re so much smaller than the large scale nuclear. The projects that are under construction in the Southeastern United States are huge, huge projects. And if you can have a reactor that’s orders of magnitudes smaller, then it’s something that you can build in a factory and then go and deploy on site.

And they also, a lot of these reactors are designed to incorporate constructability, literally are designed to be more constructable and to reduce costs. And so I think things that can significantly change the reputation of large scale nuclear in the past. And then with that, I just kind of want to shift to the public perception. So I’ve been doing this for about 20 years and it’s always fascinating to me to see how the conversation shifts over the years. And I would say that when I first entered into this industry, I had a lot of conversations with people that started with, “Well, what about the waste? And what about the safety?”

And I would say that over the years I feel… and I’m still having conversations like that. It kind of depends on where I am. I’m traveling all over the place and so people’s level of familiarity with nuclear ranges from very sophisticated to absolutely nothing, and don’t even think about nuclear or where my power comes from. So they range the gauntlet but the things that I’ve noticed is a shift for where I expect my baseline conversations to be now. And this is why I want to tie it back in with the energy security and independence and the decarbonization and climate change discussion is I’m seeing a much more… Having much more sophisticated conversations with regular people about decarbonization and how we get there and what energy sources that we need that can get us there, the importance of having a diverse energy portfolio, not putting all your eggs in one basket, as well as the importance of keeping the lights on and making sure that we can have consistent, reliable power.

So the conversations that I’m having have almost elevated in that sense. And I feel like there’s also a much more of an appreciation for the all in environmental cost of different power generation sources. So in the past with renewable energies, oftentimes nobody looked past what you were building out in a field with the solar plant or on a rooftop, or out for a wind farm. Nobody looked at where you were getting your materials from, for your copper or your cobalts or your rare earth metals and what the supply chain looked like for that. And now people, they have access to that information. And I think things like the internet, honestly, just help. You can go Google it and figure that out. There are now reports that are synthesizing all this information for people.

And so the UN has put out some reports, the IEA has put out some reports that help distill the information that compare the all in environmental impacts of all your power generation sources, or the all in safety impacts of all your power generation sources to be like what’s the safest? And when you have that data and it’s been collected and it’s through a reputable source like the UN that says, “Hey, we looked at the all in environmental impacts of range of power generation sources. And we actually found nuclear ends up being some of the least impactful on the environment and that includes nuclear waste.

And that changes the discussion that you have with people and when you look at the safety information that has been compiled and it says, “Hey, we’ve looked at the all in safety reviews of a whole range of power generation sources. And we can actually tell you that nuclear, even assuming… A ton of people died at Trenoble that did not die at Trenoble. Even assuming that nuclear is still on par from a safety standpoint with things like solar and wind, people now have access to that data, which significantly shifts the conversation.”

And so from a public perception, public perception very much matters, but what the public is concerned about has been shifting. And when things like climate change take a priority, then people have a different cost benefit analysis that they’re willing to do.

Marc Bianchi:

Yeah. And we highlighted some of that stuff in our report earlier this year, especially on the safety and kind of life-cycle CO2 if you take into account what goes into mining, the materials and all that stuff. But I think what we’ll do in the program notes for this, we’ll get some of those report links from you, and we’ll make sure they’re out there for people to read some more if they want.

I want to move on to under the recent legislation in the US. So the Inflation Reduction Act, IRA had a lot of good stuff in there for nuclear. Maybe you can help us sort through that. What were the most positive elements of that and what gray area may there still be on any of those points? Is there any procedural stuff that needs to get worked through so we understand how this stuff directly flows?

Amy Roma:

Sure. So the Inflation Reduction Act was passed, gosh, was it a few weeks ago? I feel like time doesn’t mean anything anymore. So it was a few weeks ago, it was passed and include a number of provisions for nuclear. The things that were probably the most interesting are the production tax credits and the investment tax credits. But then there was also a big chunk of change, 700 million for HALEU, which is high-assay, low-enriched uranium, which is the fuel that many advanced reactors will need.

So on the production tax credit, there was kind of two bins for that. The first was existing nuclear. So it provided a PTC for existing nuclear to help prevent the premature shutdown of a number of nuclear power plants that are economically troubled, oftentimes economically troubled because they’re not valued for the carbon free power that they produce. And so the reason for the production tax credit is to try to provide that value.

And so the credit would begin in 2024 and it would extend through 2032. It’s kind of an expansion upon the Civilian Nuclear Credit Program, which was a $6 billion credit program contained in last November’s infrastructure lock. And the PTC would be about… I think it’s $15 per megawatt hour for operating nuclear power plants that can be gradually reduced as power prices increase above 25 megawatts per hour. So that’s one bin. So that’s the keep existing nuclear plants open.

And so then the other bin is what about new power generation facilities? And so there was a production tax credit and an investment tax credit contained in the IRA. And the thing that was interesting about these provisions is that in the past, tax credits were technology specific. So it would say, “This PTC or this ITC applies to…” And it would list the technologies.

And so this time around, it shifts to a technology neutral credit. And we can talk about that when we talk about what is a qualifying facility for purposes of these provisions, but the PTC applies technologies that were put in place in 2025 or later. It’s a tax credit of at least $25 per megawatt hour for the first decade of operation. The ITC applies to clean technologies that were placed into service in 2025 or later and it ranges from 6% for most generators to 30% for units that produce less than a megawatt of electricity. And for both credits, there’s some common factors.

They both phase out in 2032 or once CO2 emissions from electricity production fall 25% below 2022 levels, I suspect that they will probably phase out in 2032 based on that, and that both the PTC and the ITC include a bonus of 10 percentage point for facilities cited in certain energy communities, such as those both retiring coal plants, and you can only get one or the other. If you qualify for both, then you have to pick. Do you want the ITTC or do you want the PTC?

And then I’m just going to suppose your next question is what is a qualifying facility? Should I just go ahead and-

Marc Bianchi:

No, that’s exact, but maybe just before we get there, on the vocabulary that we’re using. So we talk about advanced reactors and when I think of advanced reactors, I think of TRISO Fuel and HALEU and all that stuff. And I think of the evolution of the light-water reactor, like the small modular designs that are using light-water fuel in a different category, but maybe as far as like US government’s concerned in this legislation, it’s all the same, but maybe talk about how you think about those categories, and then what does it mean in the letter of the law here?

Amy Roma:

So interestingly, the definition of advanced reactor has evolved over time. And it’s shifted from, we used to say SMR, small modular reactor, and then switched over to advanced reactor. And then now, if you go to Europe, if you say SMR, that means a smaller modular light-water reactor. An advanced reactor means like you’re talking about alternative fuels, alternative coolants. It varies for the purposes of the letter of the law.

So advanced reactors in my head, I oftentimes think of the alternative fuels, alternative coolants, next generation nuclear technology. But then the back of my mind, I also include the new sales of the world or the last energy designs of the world or these other PWR, some light-water reactors, smaller light-water reactors, because they include a lot of design features that are really unique to a next generation technology. But for purposes of the letter of the law, the definition of advanced reactor depends on what they are citing.

And so oftentimes, the definition in a statute, a new bill or act will cite back to another definition. With the nuclear, I think it was probably in the Nuclear Energy Innovation and Modernization Act, I think that was passed in 2019. There was a definition of advanced reactor that is very broad and it includes an advanced vision reactor that is considered substantially more advanced than the existing operating reactors, and advanced can be alternative fuels, new safety features that are imposed, alternative coolants.

It also includes fusion reactors and a radioisotope PTK system. And so when I think of advanced reactors, there are no situations that has me thinking of advanced reactors as fusion or a radioisotope PTK system, but sometimes that’s what the law says. And so for many of the definitions that you hear, when you hear advanced reactors, it can be more broad than you think. And so in the CHIPS and Science Act that was passed last week-

Marc Bianchi:

Last week, something like that.

Amy Roma:

Last week, right? Advanced reactor for purposes of that definition cite and it has all these provisions for creating research demonstration and deployment for advanced reactors and that defined advanced reactor, it referred to the statutory definition that was an advanced vision reactor, a fusion reactor or radioisotope PTK system, which is pretty surprising to me because I read the text of the CHIPS and Science Act. And then I went and double-checked the definition and I was like, “Oh wow.” I don’t even know how many people who are in the fusion world, though that they were included in that too.

They’ll probably be very pleasantly surprised. I’m not sure, but the fusion community doesn’t consider itself an advanced reactor, and the radioisotope PTK system community does not consider themselves an advanced reactor but sometimes the letter of the law says that. And the good news though, with the PTC and the ITC is it doesn’t matter because a qualifying facility is just a facility that generates electricity, that doesn’t produce carbon, in a nutshell. And so it’s pretty broad in and of itself. And so it’s not defined for purposes of those provisions.

Marc Bianchi:

Before I get to HALEU, because that’s the other thing I want to ask on IRA. Just any gray areas here, anything where we need further clarification in the coming months as to how IRA gets applied?

Amy Roma:

Not that I am seeing, but sometimes you don’t know there’s a gray area until you see how it’s applied. Once you see how it’s implemented by the agency that is authorized to implement it, so here it would be the IRS. Sometimes you don’t know you have a gray area until they go ahead and write a regulation and then you look at it and you’re like, “Oh, hold on. I think we’ve got to disconnect,” but there’s nothing apparent to me that’s sticking out at this moment.

Marc Bianchi:

Yeah. Let’s jump into HALEU a little bit. Why does the government need to put up $700 million to stand up HALEU supply? Why can’t private industry do this and how is this going to work?

Amy Roma:

So HALEU is a very interesting question. So it’s high-assay, low-enriched uranium. Most reactors operate on enriched uranium. So it’s mined out of the ground and then it’s enriched up to certain percentages. The operating fleet right now uses uranium that’s enriched to less than 5%. It’s enriched in the isotope of uranium-235. It’s just the type of isotope that it’s enriched in.

And so it’s enriched to less than 5% right now. If it’s enriched to up to 20%, I think it’s probably between the 10 and 20 range, but is considered high-assay, low-enriched uranium, and anything above 20% is considered highly enriched uranium and that’s considered weapons grade. So nobody goes above 20%. For a nuclear weapon, you need way more than 20%, but 20% is weapons-grade uranium. Nobody goes above that.

So the reason that a lot of these advanced reactor designs plan on using HALEU, which is a high-assay, low-enriched uranium that’s closer to that 20% level is because it allows you basically to get more bang for your buck. You can have a smaller facility that can provide significantly more power and operate longer between refueling when you have higher enrichment levels. And so a lot of the next generation nuclear technology designs use high-assay, low-enriched uranium fuel.

And it can take a variety of different shapes like TRISO fuelers in a graphite ball so it’s circular. That’s actually really good from a safety standpoint because the fuel can’t melt because it’s in the graphite. In the event something goes wrong, it doesn’t kind of create a meltdown scenario.

The reason HALEU is problematic is that we ended up with a chicken and an egg scenario. Because there’s no commercial market for high-assay, low-enriched uranium, no market has developed. And so there’s a couple uranium enrichment facility companies out there that have the ability to increase the enrichment levels that they’re enrichment plants, but they don’t have a commercial reason to do so because the market hasn’t yet been established.

And the other scenario in that chicken and egg is the market cannot be established unless the first movers have the HALEU to operate their reactors. So you can’t have a new industry established without the fuel, but you won’t have the companies that make the fuel making it until they know that they have an industry there.

Marc Bianchi:

And your government support.

Amy Roma:

Right. So hence the perfect situation for government support to come in and say, “Hey listen, we can help spur the commercial side of things by providing a financial incentive to help cover the gap,” and that can take form in many different things. And so things that they have talked about is creating these uranium reserves so that you had access to uranium, though mining uranium is not a problem. Uranium mining has declined for economic reasons, but we have plenty of resources in the United States, like uranium mining capabilities, certainly a significant amount of uranium reserves.

Anyway, that is a very long explanation for how we got to this situation in the first place, and we kind of are moving forward in these weird fits and bursts because I think the federal government had a hard time figuring out what it wanted. Other side of uranium enrichment is that uranium enrichment can be used for weapons purposes or defense purposes, or to put fuel in research reactors that could be used for defense purposes.

And so there’s that additional consideration when it comes to the US government of what does it want enriched uranium for? Does it want enriched uranium to support the commercial market? Which is really where the need is, or do we want enriched uranium that can also be used to support US defense need? Which can vary significantly in what those are. But because of those restrictions, it would depend on who could get supported.

And so depending on whether it was foreign obligated technology, that wouldn’t enable that technology to be used for US defense purposes or whatnot. You ultimately get into a lot of laws and a lot of trees that apply but I think the US government could not make up its mind about what it wanted, and then the commercial nuclear industry was kind of left by the wayside. So Congress was like, “All right, we need to stop this problem and get out of our own way. And we’ll write a law saying what it’s supposed to be used for.”

So the IRA included $700 million to help kind of stand up a commercial uranium enrichment facility, and that’s a follow on from the Energy Production Act of 2020, which was basically like, “Hey, stand up this program,” but it didn’t have funding. So this provides the money to help support that program to stand it up and there’s a whole number of companies that are kind of clamoring in the wings here. And so the advanced reactor industry has been coordinating with the Department of Energy and with people on The Hill, as well as the companies that could be the uranium enrichers or the fuel fabrication companies, all kind of in the mix talking to key stakeholders to help stand something up.

Marc Bianchi:

How does the funding work? Is it like we’ve seen with this advanced reactor demonstration program where government’s putting up half-ish of project cost? Is that what’s going on here? The private sector’s going to come up, need to come up with another $700 million to make this move forward or…?

Amy Roma:

Right. So this is where the gray areas happen, is you can pass a law that says something black and white, but you’re not really sure how it’s going to be implemented by the government agency, here, the Department of Energy. And so if money is used for research and development, it could be a different cost share. So money that is used to support commercial development will likely end up being a 50/50 cost share.

So hey, commercial company that came in and had this… The government will probably do an RFP and a company will come in and bid on it. And if it wins, then it’s probably going to be a 50/50 cost share where the US government puts up half of it. And then the private sector company or companies, because it could be a collaboration of companies, puts up the other half. And that’s how the ARDP projects were run. It’s a 50/50 cost share.

If it’s R&D, if there’s elements of it that go towards R&D, that can be something like an 80/20 cost share, where the US government covers 80% and the private sector covers 20%, but it just depends on how DOE structures this. I suspect it’s going to be stand… What would they need is HALEU. So if it’s going to be stand up a commercial HALEU facility, I hope it’s something similar to the ARDP with a 50/50 cost share, but that’s really kind of where the devil’s in the details and we’ll see what they end up coming up with.

Marc Bianchi:

Okay. So sticking with the government side of it, I was mentioning, we had Jigar Shah from LPO on here, the DOE’s Loan Program Office, and I’m curious from your seat, how can LPO or what’s the most important thing LPO can do to be helping the deployment of advanced reactors?

Amy Roma:

So I think LPO is actually in a really unique position right now, and it’s one of those times where I’m really glad that Jigar Shah’s in this role because he has a very strong entrepreneurial spirit. And what we’re looking at for deploying advanced reactors is we’re not looking at kind of a one and done situation. We’re looking at, we’re going to build the ARDP projects. There’s a whole host of other projects that are under development as well and we’re looking at standing up a whole new manufacturing base.

So these facilities are hoping to be… A lot of them are hoping to build factories to actually build their facilities. This is where programs like the Loan Program Office can be huge because companies can apply for loan guarantees for not just their new power generation facilities, but new manufacturing jobs and industries in the United States. And there’s a whole host of states that are actually really aggressively trying to develop kind of new tech corridors to support this new advanced reactor industry and the entire manufacturing base that they expect to come up around it. And so I think that’s where the Loan Program Office will have a really, really huge impact.

Marc Bianchi:

And when do you think we’ll start to see some movement on that? Is it in the next sort of year or two, or just because of the timelines and everything, it’s further out than that?

Amy Roma:

Probably we’ve already had companies go in and engaged with the Loan Program Office about the different types of enterprises they’re looking at. So some of them are, “Hey, we’re building a reactor here, but we’re also planning on building a factory here and we need to do a new fuel fabrication facility because we have a new type of fuel that nobody makes and we’re going to do that here.” And so each one of those could be something that you could apply for a loan guarantee for.

And so I suspect that’s already being mapped out and in process, and we’ll I think start to hear announcements in those areas and probably in the not too distant future. I don’t think we’re looking out too far before we see LPO playing some kind of role in the advanced reactor, kind of the emerging advanced reactor industry.

Marc Bianchi:

Shifting to the regulatory side and your role now, and then your background leading up to your role, having worked with the NRC, can you give listeners sort of the layperson version of how licensing works for a nuclear facility and for a nuclear technology? There’s this Part 50 and Part 52 that are out there and some companies are going one way, some companies are going another. Just maybe for someone that’s showing up to this sector and doesn’t know anything about it, how would you describe it?

Amy Roma:

I would say good luck figuring out Part 50, Part 52. And then you’ll start to hear about Part 53 and you’ll just throw up your hands and walk away. So it’s actually not so complicated. And just for context, I have worked on probably every aspect of the NRC of the regulations in some kind or some form over the last 20 years. I did a lot of work on the NRC’s kind of existing reactor licensing framework under Part 50 for the COLAs in the last kind of generation of new reactor applications.

And I’ve done work in the Part 50 space with licensing, working on kind of initial preliminary pre-application work for a commercial non-power reactor facility under Part 50. So I have a lot of experience and some recent experience in this space. And just in a nutshell, the NRC offers right now, two types of licensing paths that somebody can choose and they can choose either one for the most part.

And so if you’re going to apply for a nuclear reactor for a power generation facility, you can either apply for kind of a Part 50 license, which is the traditional license where you apply for a construction permit. And once you get that construction permit, you can go ahead and build your facility and then you apply for an operating license, and that operating license allows you to then operate the facility that you just built.

The advantages to a licensing approach like that is under the two-step licensing process, your initial licensing with the NRC for the construction permit is under a preliminary design. So you don’t have to have your detailed design work completed in order to submit your license application to the NRC. Preliminary design for nuclear reactors, it’s still pretty lengthy and still pretty technically in-depth.

So you’re not getting buy and a wing and a prayer with these applications, [inaudible 00:35:19] but it allows you flexibility to build your facility and then update your final safety analysis report in your operating license application to reflect kind of final design that you ended up on. That’s the traditional reactor licensing approach.

The NRC in the past had received criticism. This is way back in the last generation of nuclear power plants, particularly after Three Mile Island where they were changing regulatory requirements as people were building facilities and it ended up driving huge cost overruns and introducing significant amounts of uncertainty. And so they developed what’s called a one-step licensing process and that’s a Part 52 license, where you get your construction permit and your operating license in one application, one submittal to the NRC all up front, where you say, “Hey, we want you to license our construction and our operating license for this reactor.”

And so that was kind of the last wave of new reactor applications. We’re all coalesce. Those are combined operating license applications and the advantages to something like that is it introduces regulatory uncertainty. You have one licensing process and as long as you construct your facility as you said you would, and your license application, you go ahead and start operations.

And so there’s some problems with that type of licensing approach as well. Namely, you have to have detailed design information upfront in your application, which can be hard for you to do if you’re designing a first of a kind facility. And so sometimes you don’t know what the final design is going to be looking like until you start building it, and you need to try to preserve that flexibility. And so a COL license can be pretty restrictive if you have already gone in with your final detailed design work and you’re building a first of a kind facility, and then you have to change something.

And so those are the two existing licensing paths. The third new potential licensing path, which will be optional is the so-called Part 53 path. And these are named after 10 CFR Part 50, Part 52 and Part 53 of the NRC regulations. Part 53 does not exist yet, so don’t go pick up a 10 CFR and try to find 53. It’s not there yet, but under the Nuclear Energy Innovation and Modernization Act, Congress directed the NRC to come up with a technology neutral, risk informed regulatory framework for advanced reactors.

And so what the NRC has done is it’s designated that as Part 53. So the Part 50 and Part 52 regulations are based on the existing large light-water reactor design. And so the criticism that the NRC has long faced is, “Hey, you’re asking everybody to put a round peg in a square hole. These regulations were not intended for advanced reactors which use alternative fuels and have alternative designs and use alternative coolants. We don’t need half these systems you say we need, or a bunch of this stuff can’t even physically apply to what we’re doing. And under your requirements, we’re obligated to meet them or get an exemption, which is not easy to get.” And so it’s really, you’re making inefficient licensing process.

And so the NRC had reviewed its regulations to figure out how would we license an advanced reactor design under Part 50, under Part 52? But then Congress said, “You know what? Just come up with a new framework for advanced reactors.” So it’s been undertaking the Part 53 rule making. It is supposed to be done. It’s supposed to include any type of advance reactor design that you have regardless of how it is because it’s technology neutral, and it’s risk informed. So it’s not supposed to be prescriptive. It’s not supposed to be, you must have A, B, C and D. It’s more, “Tell us how you meet this safety criteria that we just set.” So it allows the applicant to have more flexibility in saying how you meet a criteria.

It’s supposed to be kind of an easier process in that regard, but the NRC was directed to develop these regulations without having seen any advanced reactor license applications. So they didn’t really know what these technologies look like. So they’ve done a lot of engagement to try to figure out like, “Hey, what is it that you are proposing? And let’s try to figure out what these regulations would look like.” And they were directed to finish that rule-making by 2027, but then Congress sent them a letter saying, “Can you do it faster?” And so they said, “Hey, well…” The NRC Commissioners said, “We’ll get it done by 2024.”

And so that’s what they’re working towards now with advanced reactor licensing. And so that my friend, in a nutshell is Part 50, Part 53, Part 52. And the one thing I would add is that if you plan on applying for a commercial non-power reactor, so if you plan on using a nuclear reactor for process heat, and it is not to generate electricity, for some reason that nobody knows you cannot apply for a Part 52 license, combined operating license. You have to apply for a Part 50 license, which is the two-step construction permit operating license.

That’s just a little known provision in the Code of Federal Regulations that can be a bit surprising.

Marc Bianchi:

And that’s why people call you. On Part 53, maybe talk to us 50 and 52, what the timelines are like for those? And then what the timeline could be for 53? I would suspect that it’s compressed, but maybe that you don’t see it that way.

Amy Roma:

Well, so the NRC has generic milestones in their regulations for license reviews, for reactor applications that can vary depending on, are you submitting a construction permit application and an operating license? Is it a combined construction permit operating license? Have you referenced a certified design? So that’s a reactor design that the NRC has reviewed independently and they’re all about… all the reviews are about three years.

I have to say the NRC’s reviews, and it doesn’t really matter whether it’s big or little, they’re all like three years. Sometimes they’re more than three years. And so their review schedule, their milestone schedules never really kind of aligned with what I would’ve expected because when I was working on an application for a commercial non-power reactor facility, which is in kind of like the research reactor size, so a research reactor is 10 megawatts or less reactor size.

So the NRC, it’s not like they don’t know small reactors. All the research reactors, most of them are two megawatts. They can go up to 10, but they’re all barely small. Above 10 megawatts, you kind of go into the test reactor size and you can get 20 megawatt facilities. So the NRC’s used to these sizes, but I felt like somehow back when they were figuring out how they were going to license things, they only looked at large scale nuclear and then said, “Okay, what do we do with large scale nuclear to figure out how to make it smaller?”

And I’m like sitting there like, why didn’t you start with the research and test reactor once and say, what can we use from this existing guidance and these existing set of regulations that already work within your Part 50 framework, like you’re already in the reactor licensing framework? And so when I worked on a medical isotope production application, it was a 10 megawatt reactor. It was two 10 megawatt reactors, which was a commercial non-power reactor license using the existing NRC guidance for research reactors, which also applies to non-power applications. And it was so easy to use and really understandable and very user-friendly. And for some reason, the NRC’s like, “No, no, we’re just going to use other guidance.”

And so I’m not really sure how that came to be but the reason I noted that is that at the time, the NRC said for a 10 megawatt reactor application, it’s 18 to 24 months per application to review a construction permit and then the subsequent operating license. So that’s on the longer end, a four years all in and on the shorter end, a three years all in. And so that’s doable. That is something that makes sense and I’m hoping that as they get more used to advanced reactor applications, particularly with smaller sized facilities, that they apply a more, maybe risk informed perspective to the licensing durations and their reviews, because they don’t, I think need to be so long, particularly for smaller facilities.

And right now they’re going to be looking at a bunch of new types of facilities with new fuels and new safety cases, and they need to get their feet underneath them and figure out what is the range? What is the universe of technologies that we’re looking at? And what is it that applicants are looking to do? But I’m hoping that that’s the first of a kind. By the time we get to nth a kind, they can really identify ways to have a more streamlined and efficient licensing review based on these lessons learned.

Marc Bianchi:

Yeah. It goes to the standardization of everything if they’re coming up with more standardized designs. The discussion so far has been almost all about fission and just fusion is a bit more of a science project at this stage, but something that people are excited about. And we talked earlier about how, I guess the idea that fusion considered an advanced reactor, but how is the licensing process looking for fusion? Because the whole issue with radioactivity is not a concern and just risks overall should be a lot lower, and I think they’re trying to go for a different licensing path.

Amy Roma:

So yeah, fusion, for context for people, first of all, I’d say bite your tongue that it’s a science experiment. Many of them would argue that they’re more engineering experiments at this point, but there’s been a lot of significant and really exciting technical advancements on the fusion. A few years ago, one of my colleagues, who’s now the General Counsel for Helion Energy was like, “Oh, we should start paying attention to fusion.” And my initial reaction was like, “I don’t have time for this. I don’t have time to sit here and figure out what would the regulatory and legal framework look like for a technology that is so far away.”

I wouldn’t say this was probably 2017, so I’ve come a long way since then. And then once we kind of sat down though and talked about the technology and where their state of development was, and honestly, once you hear about these leaps and bounds that they’re able to make in their technology designs based on advancements in material sciences and computational sciences that we only achieved in the last few years, you’re able to realize why the joke that fusion will be transformative when it happens, but it’s always 20 years away, may longer not be the case.

And so on the fusion side, it’s interesting because when you ever have a first of kind technology, you have to look at the NRC regulations and say, “What do the regulations say?” This is the first of kind technology when it’s regulated by when it’s nuclear. So you look at what do the regulations say? And then you look at what is the atomic energy X say? So the NRC, all their regulations stem from the Atomic Energy Act, which is… and some other acts as well, but it’s the enabling statute for the Nuclear Regulatory Commission.

And so when you look at the NRC regulations, fusion kind of falls… So from a technology standpoint, I’ll step back and say advanced vision is on the really heavy side of the periodic table. If you just remember chemistry class in high school, and you looked at the periodic table, way down at the bottom, over to the right is where you’re dealing with vision. And when you’re dealing with fusion, you’re way, way up at the top left-hand corner.

So instead of dealing with the heaviest materials in the world that stick around for really long times, you’re dealing with the lightest materials in the world that stick around for a really short amount of time. And instead of breaking apart atoms, you’re squishing them together. And so both processes relates huge amounts of electricity that’s carbon free, huge amounts of energy, by the way, that’s carbon free, doesn’t produce carbon in the process, but it also doesn’t produce high level nuclear waste.

And so the only radioactive material that most fusion companies deal with is Tritium, which has about a 12 year half life. From a regulatory standpoint, when you look at the NRC regulations, Tritium is a byproduct material that falls in Part 30, 10 CFR Part 30 of the NRC regulations, which is the byproduct materials regulations. And you would just need a radioactive materials license to build a fusion facility. You don’t need any license to build the facility itself. You may say, “All right, a fusion facility is like a particle accelerator.” And so you have to get a state permit in order to build a particle accelerator, but you don’t need a federal license for that, other than the radioactive material that it produces.

And so that’s what the fusion community was kind of like going on, but the NRC does have the ability. So if you look at the regulations, that’s what it says. If you look at the Part 50 regulations, the Part 50 regulations actually doesn’t really talk about a reactor. It talks about a utilization facility and a utilization facility is designed to be a fission reactor, its definition is what it means.

And so, then you have to go and look at the Atomic Energy Act to say, okay, well, so it’s not included under the Part 50 regulations, utilization facility reactor license regulations. It would be included under this byproduct materials license regulations. What does the Atomic Energy Act say about this? Because at the time, a lot of these regulations were promulgated. Nobody thought about fusion. And so you look at the atomic energy, the NRC does have the ability to define, expand the definition of utilization facility to include other than fission vision reactions, to include transformative forms of energy that have a significant impact on the public health and safety or the environment.

And so if they decide that… If the NRC decides like, “Hey, listen, this really fits into the definition of utilization facility,” then it kicks you right back and the NRC can revise its definition of a utilization facility in Part 50. And then the Part 50 rags apply, which doesn’t really make sense for fusion. That’s really a square… We say Part 50 is a square peg in a round hole when you’re talking about advanced fission reactors versus existing light-water reactor fission reactors. It is definitely a square peg in a round hole when you’re talking about fission.

And so the NRC is currently under NEMA, they were directed to do a technology neutral, risk informed regulatory framework for advanced reactors, which included advanced fission, but also in that definition, because that’s why definitions matter, included fusion. And so based on that, the NRC has undertaken a review of what the appropriate regulatory framework for fusion should be.

It has split it out from the advanced fission Part 53 rule-making, why it evaluates this issue and has engaged in discussions with stakeholders for the last couple years to better understand their technologies because the NRC doesn’t really have fusion specialists. There are people who are familiar with fusion, but they’re not really at the NRC because it’s been traditionally fission. And so they’ve been engaging with the Department of Energy and with the various companies involved in the fusion world to get a better grasp of what their technologies are, what they’re trying to do and what type of radioactive materials they use, what type of waste do they generate to figure out how should we regulate it?

And I think later this month, they’re going to have a draft policy paper. The NRC staff will have a draft policy paper written. It’s going to evaluate three options as far as I understand, including under the existing radioactive materials framework and Part 30, defining it as a utilization facility which would be a reactor licensing framework, or creating a new framework that’s somewhat of a hybrid of the two.

And so nobody knows what they’re going to recommend, but the staff will come out with the paper later this month with the intent of receiving, I think, comment on it and then finalizing it. And I believe they’re planning on making a recommendation to the Commission in the November timeframe on what the framework should be, and the commission could, except reject, tell them to do more, that will remain to be seen.

Marc Bianchi:

That’s great. And I assume you’ll be writing on that when it comes out. So we’ll look out for some kind of commentary from you.

Amy Roma:

Yep. That’s right. Something I’m very actively involved in. I would also add, people are now more aware about fusion. The White House had a summit on commercializing fusion within the next decade in March, I spoke at that. It was a really cool event. And then the Department of Energy had a stakeholder workshop on how to support the commercialization of fusion in June. I was speaker at that as well. So a lot of great activity and good symmetry going on kind of across government agencies.

Marc Bianchi:

Cool sticking with the regulatory environment but going outside the US borders, and help us. One of the things I’ve heard is NRC process, NRC license is kind of the gold standard. It’s the most rigorous, and then if you can get through that then, you can go around the world and say, “Hey, I have the NRC license. You guys should just rubber stamp it.” I know it doesn’t work that way, but that’s kind of how investors are thinking about it.

Talk to what it means to be through certain stages of the NRC process and how important that is for getting plants approved outside the US and what that process might look like?

Amy Roma:

There’s a few things that come into play here when you talk about the stamp of approval from well respected nuclear regulator. It matters in several tiers. It matters, what is that regulator? Who is it? And is it necessary in order to do what you want in another country? The second tier is, is it necessary in order to get a customer in another country? And those are kind of two different things.

And so from a regulatory standpoint, there’s a lot of really well respected, experienced nuclear regulators around the world that have very sophisticated, long running nuclear programs. The UK does, Canada does, Argentina has a great program. And so it doesn’t have to be the NRC. It can be another regulatory authority, as long as they’re qualified and competent to do what they’re doing. It significantly helps in your commercial discussions if you do have… Just from what I’ve seen, if you do have an NRC stamp of some kind.

With that said, the NRC framework is designed for a facility intended to be built in the United States. And so an NRC design certification, which is the NRC review and approval of a reactor design is meant to be for a design that would be built in the United States. An NRC construction permit or operating license or combined construction permit operating license is for a facility that’s meant to be built in the United States, according to US standards.

So it should not be needed to get an NRC design certification in order to then market your product overseas because wherever you are selling it, their domestic nuclear regulator will have to be independent, will have to be sophisticated and will have to be capable of providing its own review of the application that you intend to submit. And so it’s not like you can go ahead and get an NRC design certification and then just use that to go build a plant in Ghana. The Ghana nuclear regulator has to review it.

If the NRC has already reviewed, approved it, that helps. Right? Because you already know it has been licensed by sophisticated nuclear regulator. Just like if the UK government or the Canadian government had already reviewed and approved it, then you already know it has been reviewed by sophisticated nuclear regulator and it has met their requirements. With that said, there’s an element to having that kind of stamp of approval in hand that can help you close, actually close the deal with your customer in a foreign country, because there’s an element of a sense of uncertainty when you have not had something licensed for the first kind as to what its license ability will be and whether it’s ready, and whether you can go ahead and do that.

So to know it’s already gone through a process like the NRC kind of significantly eliminates those risks, I think in terms of a customer’s mind.

Marc Bianchi:

Very helpful context. Shifting gears a little bit back to… Well, I guess back to the US somewhat, but it’s a global question as well. We’ve got this announcement with X-energy and Dow for industrial heat in the Gulf Coast. I’m curious what you’re seeing, obviously that specifically, but the question is more broad. If you look at all the applications or projects that are coming together around the world for small, modular and advanced reactors, what proportion are for electricity for the grid versus applications like this Dow, X-energy thing that we saw? And what might be… I’m thinking of there’s the industrial heat angle, but then there’s also like we could be making clean hydrogen with nuclear power. We could be doing direct air capture with nuclear power. So there’s lots of things besides just generating electricity for the grid.

Amy Roma:

So the thing that’s really interesting about advanced reactors is people can talk in the abstract about its potential applications, and we’ve been talking about its potential applications in the abstract for a decade now. And so it was, you can use it for power generation, water desalinization, process heat. At one point I was, “Should I still be doing this? I feel like, am I selling people on a false promise?” Because we just didn’t see anything being built.

And then things like ARDP were a game-changer because all of a sudden we do have projects that are being built. And then there’s a lot of projects being built and a lot of companies that have significant attraction underneath them now in the United States, in the UK, countries in Europe that we’re looking at evaluating whether they were going to deploy nuclear, now want to do it faster than ever, the UK being an example of that. And that’s great because the UK has a sophisticated nuclear regulator.

So they have a regulator that is capable of handling these new technologies, and they have a government that is very eager for energy independence and to reduce the price of electricity in London, which I think at one point this summer hit a 1,000 times its standard price when they had to import it from… I think it was Belgium or another country because of a heat wave that they were having.

And so the first wave was what are its potential uses? And then it was holy cow, we need electricity and we need to decarbonize the energy sector. So we have a whole bunch of announcements with the X-energy project in Washington state, with the TerraPower project in Wyoming. We’ve got Kairos that’s building a test reactor. We have Ultra Safe is planning on teaming with the university for reactors. So we have a whole bunch of new projects in that space.

And then a whole bunch of countries right now in Europe are looking at deploying reactor because they need electricity. They’re like, “We need this.” And so everybody right now is focused on that but the giant elephant in the room is when you look at where our carbon emissions come from, about a quarter of that is from electricity is a huge chunk and we do need to decarbonize it, but about the same amount is the industrial sector and that is a very difficult sector to decarbonize, and it’s a very hard sector to see real meaningful movement in that respect.

I think we’re going to see a whole wave of announcements for advanced nuclear to decarbonize the industrial sector. I think the X-energy and Dow was an awesome first announcement, kind of first wave in that respect. And for those who don’t know, X-energy and Dow announced an agreement where they would deploy an X-energy reactor at a Dow chemical facility in, I think one of the Gulf states to decarbonize the industrial process there. I think it’s also meant to provide electricity for the site.

And so that’s kind of a huge announcement because it’s the first time we’re really seeing a concrete project to team advanced reactors and the industrial sector, but I think we’re going to see a whole bunch of other announcements. Either companies are in negotiations and discussions and something will be coming down the pike, or people are still in arrangements, but we’re going to see it for desalinization, process heat. We’re going to see it for a whole range of industrial applications, hydrogen.

And the good news is that the Infrastructure Act last November included significant financial incentives for hydrogen. And that was for pairing hydrogen with I think an existing operating nuclear power plant, but hydrogen is very energy intensive. And for people probably… I think people used to never know anything about hydrogen but I think everybody knows by now how clean your hydrogen is depends on where you get it from. And so you really need to have a carbon free power source helping produce that hydrogen, or you just have a whole bunch of emissions as part of this manufacturing process. And so teaming it with something like nuclear is great because it provides that immense amount of power that hydrogen needs for hydrogen production, and it can do that with a carbon-free power source.

I think we’re also going to see probably… I have an article coming out. If it hasn’t come out already, it will be soon, but it’s a small article, but it’s just on mining, crypto mining, and crypto mining is incredibly energy intensive. And if that’s that’s something… Some Bitcoin mining consumes as much power as the entire country of Argentina, which is like, that blows my mind.

And so anyway, with things like crypto mining, that’s also a great thing that paired with advance nuclear as well to help decarbonize that process.

Marc Bianchi:

Cool. Just a couple more here because we’re running longer than I promised, but on ESG. So I think the ESG crowd is split on nuclear. The debate goes something like, “Well, it’s carbon free, but oh I have all these concerns about proliferation or waste or whatever,” and right or wrong, it’s written into some ESG mandates that nuclear is just no go, but there’s some others that say, “No go on legacy technology, but we would consider advanced technology.”

What’s your level of involvement with that and how do you think that changes or what gets that to change, if at all?

Amy Roma:

So the issue is interesting to me because I understand the premise, but there can be quite a bit of intellectual dishonesty in the process. And so I think one of the things that’s helped coming bear all in reviews on how you value things, comes down to better knowledge and understanding of what you’re dealing with. Also, trying to keep the politics out of that and come up with a technology neutral standard. In the past, when we passed legislation for production tax credit, investment tax credit, it was not technology neutral. It had a list of favored technologies and you had to be one of those take advantage of it.

And the converse side of that is it’s a disadvantage to everybody else. And when we’re seeing all these taxonomies being developed and the recent debate that we had in Europe about whether nuclear should be included, but nuclear was lumped in with natural gas and because of political reasons. And then the conversation with the political discussion that still is a political discussion. For a country who, for the life of me, I cannot figure out how it plans to get energy and keep its power on while keeping energy affordable and carbon free. I just don’t know how to do the math that Germany is doing on this one.

But when you look at these things and the more you kind of move towards, “We’re going to be technology neutral,” I think the more you’re… I think we’re going to see that happening more and more as we go down this journey. I also think in the ESG journey, it’s really easy to say these products are green because I think they’re green. Like me, the person who’s working on it thinks they’re green and we’ll just go throw in wind and solar. And we’re not going to look at where you’re mining the copper from, or we’re not going to look at where you’re getting your cobalt from or your rare earth minerals.

I think our conversations are becoming much more wholesome all around and that ESG is going to shift and evolve and become much more sophisticated than it currently is. And I think you and I were in the same room when we had this big debate about whether nuclear was clean, and the person who said it wasn’t was an investment banker who said, “Well, it’s clearly not clean because of the waste and because it’s not safe.”

And then the audience who was a largely nuclear audience all freaked out because we all know the data, the actual hard data behind this that says environmentally, it is very well performing in terms of impacts on the environment, in terms of emissions, in terms of land space that it uses, even counting for the waste. It performs better than a lot of other power generation sources that you would consider clean.

And she’s like, “Well, there’s no data out there that supports that.” There is data out there that supports that and we referenced just in that discussion, the UN report that does that all in environmental analysis. And that was a fairly discreet study, but it was for existing power generation sources and it compared all kind of the environmental attributes of a specific type of technology against each other on a level playing field. And I think we’re going to ESG move into that space, more of a level playing field so we can have a more honest discussion.

I also feel like it’s all over the place right now. I think The Economist had a great… I don’t know if you saw The Economist, was it last week? That had a big headline about the ESG debacle, and if we’re going to save the environment, it’s not with the way ESG is being applied.

Marc Bianchi:

Yeah. A lot of criticisms coming forward now with where the world’s at. And I think the other aspect of it, is it’s environmental, social and governments, which sort of brings into this whole discussion, adjust, transition.

Amy Roma:

Right.

Marc Bianchi:

And if you’re going to decarbonize the world, you kind of also need to make sure everybody has reliable, affordable energy at the same time.

Amy Roma:

That’s exactly right. Yeah. It’s a very complex discussion that I think people like to distill into quick soundbites and I think I love ESG. I like seeing companies have this holistic approach to what is our impact of the world? How do we evaluate and how do we mitigate it? I think this is fantastic. I just think it needs to get more sophisticated than it’s been, and it can’t be this willy-nilly, “My gut says nuclear isn’t good because I’m from New York and we don’t like Indian Point.” That can’t be your criteria.

Marc Bianchi:

For sure. We’ll see it evolve some more, I’m sure. Maybe just to wrap it up and by the way, I’ve got a long list of questions here that we didn’t get to. So hopefully you’ll come back on some time-

Amy Roma:

Sure.

Marc Bianchi:

But maybe to just summarize it all for everybody, and I’m going to ask for you to try to forecast something to the best that you can. If we’re sitting here, whether it’s five, 10, 15 years from now, how big do you think the market for SMRs and advanced reactors will be in the US and abroad, maybe number of plants that have been constructed or number of megawatts that have been installed or gigawatts that have been installed? And then whatever that forecast may be, what are the milestones that we’re going to look for as investors over the next 12, 24, 36 months to kind of see whether or not that’s on track?

Amy Roma:

So I would say I expect nuclear… Because we’re in a really unique moment in history with the need for carbon free energy, that also provides base load power, that’s power 24 hours a day, seven days a week. So it’s immense amounts of carbon free power. So you have that energy security and independence that goes with it. I expect we’re going to see a significant number of new nuclear projects.

I was telling someone the other day that I have my nuclear stump speech, like my talking points, and it’s almost like files in my head. And I pull out my geo competitiveness, economic advantage, decarbonization files from my head and just tailor my speaking points to each one of those. Never in my life have I had to read the newspaper every single day to update every single one of my talking points. So my energy security and independence conversation is different every single day based on what’s happening in Europe, and the conversations I had just this morning with my own colleagues about how scared they are for this winter means that I’m going to have to continue to check the newspaper every day to update those talking points.

When it comes to energy decarbonization and climate change, the same conversations I had today about the extreme heat wave in California and its deep stabilization of the grid, let’s just bring this full circle to the beginning of our conversations. What are the opportunities for nuclear? What is driving it now in a way that’s never driven it before? And that’s climate change. It’s climate change and then it’s kind of made finer tune point with energy security and independence.

And when you see daily headlines on both those issues because they are huge problems all over the world, we are going to see more and more and more people turning to nuclear to try to solve those problems. And that’s why I’m very optimistic that this is an industry that can hugely grow. The things that can threaten that is if we cannot figure out how to build these in a way that is predictable and on a schedule that is predictable.

Given the new technologies and the sizes of these new technologies, that is something that should be low hanging fruit, that should not continue to be a problem. We’re not going and building a very complicated, unique individualized, first of a kind technology that’s huge every time we do it. We can do it smaller, less capital intense, factory manufactured. And as long as the industry continues to be disciplined, and I think that they will be, we can grow this industry exponentially not only in the United States, but around the entire world.

And so that’s what I expect to see and I’m already seeing every single day new announcements for new projects using to build new reactors. And that’s especially with the CHIPS and Science Act that was passed last week, I had a number of universities call me and they’re like, “Hey, we want to build a new research reactor in our facility.” And so they’ve been using their existing research reactor for years and they’re like, “Hey, now we want to do this and we want to get in on this for our students because we want to train the next generation workforce, and we want to team with vocational schools and trade unions and build these whole tech corridors to help attract this industry.”

And so I think there’s just so much growth potential and as long as climate change continues to be a threat and as long as countries continue to care about where they get their energy source on and continue to care, that when they go and flick the light switch, it can turn on and you can get an affordable amount of electricity for that product, then I think nuclear is going to be the way to go.

Marc Bianchi:

Awesome. Well, we’ll leave it there. Like I said, a lot more questions to ask. So maybe someday we’ll get you back on here and continue the conversation. But Amy Roma, Hogan Lovells, really appreciate the time. There’s a great website that she’s got or page on the company’s website with all of her publications on there, gets updated regularly. So I would suggest you go check it out. Yeah. Just thanks so much, Amy. It’s been a great conversation.

Amy Roma:

Thanks for having me, Marc. I’ve really enjoyed it.

Speaker 1:

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


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