Calibrating hype with Akshat Rathi

Latitude Media covering the new. Transition. I'm Shayle Khan, and this is Catalyst. I have been reporting on gas turbines, which are currently, as my editor put it, the laboooboo of climate solutions. That's the first one. Very I I get it. That seems right. Very high in demand and there's a year's waiting list before you can get the the one you want. Coming up, just a whole bunch of things with Aksha Rathi from Bloomberg.

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I'm Shale Khan. I lead the early stage venture strategy at Energy Impact Partners. Welcome. All right. So this week is a fun one. My friend Akshat Rathi is a senior reporter at Bloomberg News and also the host of his own podcast called Zero. So he covers climate and energy stuff at Bloomberg. And you know, he has an interesting different perspective on the world from me in that he one is more plugged into the sort of high-level uh government stuff.

We we talked, for example, in this podcast about Paris, the Paris Accord, which I don't think I've really ever talked about on this podcast before. Uh and also he has a more global perspective. He's based in the UK himself, but he's also looking at um global dynamics in a way that. I'm admittedly and I have said this before, always a little bit too US centric or US and Europe centric in things that I tend to see and talk about. So

Uh he and I got to chatting and thought it'd be interesting to compare notes. So we do it through a fun game show style approach and uh we covered a whole bunch of interesting things. So this is a fun one. Here's Aksha. Shill, welcome to Zero. Thank you, Akshat. Welcome to Catalyst. Well this is a different kind of podcast and and we're making it across an ocean but with similar politics. In the background? Yeah.

What's what's going I mean, I have a question for you. You're in London, right? Yep. Okay. So and you you work for Bloomberg Green. And one thing that I have found is that in the US Places where like green or clean or climate is in their name have been having an interesting set of discussions around nomenclature. Uh is that true for I mean Bloomberg is obviously based in the US, but so I'm curious how you see it from the Bloomberg perspective, high level, but also in the UK and in Europe.

Yeah, so Bloomberg News is a global news organization. But yes, it is US headquartered. I would say there isn't that much muzzling of terms as it's happening in the US government, but there's certainly a backlash on the politics here. So there is a party called the Reform Party that's on the rise over here. doing in the polls better than the main two parties, Labour and Conservatives, and they are against net zero. So uh we are usually a step behind America, but then eventually catch up.

Well, in this case, I'm not sure I want you to catch up, but we'll we'll see what happens. Um, all right, so this is gonna be fun. What's our what's our plan here? So we're gonna do something different where we're gonna go through a number of topics. that our producers have selected where we're going to say whether we think it's underhyped, overhyped, or hyped just right and explain our positions for why we think so.

Uh let's start with meeting load growth for electricity, which is a hot topic everywhere, but specifically within that. What do you think about distributed energy resources? What are they and where do you land? Right. So distributed energy resources is like a grab bag category of a bunch of different things. I would say the way I define it is anything that you deploy at a customer site, so it's sitting behind the meter, the customer side of the meter, that either um generates energy,

stores energy or shifts load. So canonical examples generates energy, think rooftop solar, stores energy, think power walls and batteries, home batteries, batteries of buildings.

uh shifts load, think smart thermostats, right? Where you can shift it. And there's a a broader array of things that fall within that, but we they get grouped together as distributed energy resources. Um On the question of DER's for meeting load growth, which is the question here, is it overhyped, underhyped, or hyped just right?

I think my argument here would be in in the circles that I travel in, which are pretty like wonky energy tech circles, it's becoming increasingly hyped because we're just starting to see this wave of announcements that are Inexorably coming. um, where there are gonna be partnerships between hyperscalers or data center operators and third parties who do aggregations of DERs to deliver capacity to get data centers on the grid and things like that. Like that's coming, no question.

Um, and so it's starting to bubble up into the hype world. But I think that is a my my world is a pretty small portion of the world, and broadly I think even in data center universe. It has not really been considered very much yet. Like mostly it is we're gonna build a data center. Can we get grid capacity? If not, can we build a big gas turbine? Um, and so I my argument is because of all that, it is still underhyped as of today.

Yeah, that's an interesting perspective. I would say in my world, which is a little bit broader because I talk to policy folks and I talk to big businesses and I talk to VCs. Is that it actually used to be more hyped because it was one way in which everybody was justifying having all these big renewables goals being set up.

Don't worry about it. I know it is variable, but we'll have these technologies that are just going to come online within the next few years and they'll make it easier to manage this variability in renewables. At that time it was pretty hyped. Now I would say it's underhyped because it's not something people talk about that much, but those solutions are actually starting to bubble up. So we had uh the CEO of Octopus Energy, which is the the largest utility here in the UK on the pod.

And this year they've launched a BYD lease uh program where you can just pay monthly to get a B I D BYD electric car and they would give you twelve thousand miles of free range in a year, as long as you make sure that you uh put your car into the charging port whenever you're home because they'll use the car

for a virtual power plant, essentially. Um, that sort of thing is now becoming very frequent. Like I get text messages from Octopus Energy saying, Hey, 12 PM to two PM today, free electricity. Use all you want. Um and so I feel like now those technologies are here and they can actually be put to use. And so they're kind of under hype because you could actually now see those things out there.

Yeah, I think that DERs are a second we're in a second wave now, right? Like we w I've talked about this before on the pod, but there was a wave of excitement around DERs, which I think is what you are referring to. maybe a decade ago. And at that point it was like, oh, we're gonna decentralize the grid and maybe this is gonna disintermediate utilities. And and none of that happened. But I think what is interesting that's different is is the frame of the question here, which is

Is it overhyped, underhyped, or hyped just right for the purpose of meeting load growth? And that was not That was not a thing we cared about a decade ago when DERs first emerged. So I think this second wave that we're seeing now, DERs as a solution to managing load growth is Interesting. It's one of the things that makes it more attractive now, alongside a bunch of other factors, as you mentioned, like the rise of EVs and EV chargers as a significant DR.

Source of capacity is another one. Okay, so we're but we're on the same side here. We both think it's currently underhyped. Um Let me ask you another one that I've talked about a little bit before on this pod, which is

Putting co-location with generation. So basically putting generation, largely gas, on site with data centers. Is that as far as meeting the load growth challenge? Do you think that is overhyped under hyped or hype just right? I think it is hyped because I have been reporting on gas turbines, which are currently as my editor put it, the labooboo of climate solutions. That's a first.

Very high in demand and there's a year's waiting list before you can get the the one you want. And so sure, you know, in principle, if you could get a gas turbine, you would build it close to where the data center is. But can you even get a gas turbine? Yeah, there is that. So you think it's hype just right because like it is it is a thing that would happen a lot, but the supply chain bottleneck is the is the rate limiter.

I I think that is generally true. I do think, as I've talked about a little bit before on my pod, I think it is a little bit overhyped, the degree to which not to say that we don't need a ton of new generation and not to say that we don't need a ton of new capacity on the grid.

But the degree to which that capacity needs to be co located with the data center to me is a little bit overhyped. We we will see it happen. It's already happening in some places, right? You're seeing this in in the US. We have the The XAI Colossus data center has a bunch of gas turbines. Uh, Meta is building a big facility that's gonna have a bunch of gas, and a number of these projects.

Will, but I I I think it's gonna end up being the minority of new data centers, not the majority of new data centers. I think the implications from what you would see in the news is that like every new data center is gonna come equipped with a bunch of gas turbines. Again, not to say that we won't build a ton of new gas generating capacity. I just think don't think it's all going to be co-located with the with the data. Yeah, I mean this the reason we are bringing this up is because

building the grid has been so hard, right? The goal would be with co-location. You don't have to wait for a grid connection to come through before you can build your data center. And sure, if you can pay really high prices for the gas turbines, which some tech companies can, then you might be able to do it, but most places won't. It's also there's an interesting embedded question in that too, which is

At some point will costs matter? Well, no, actually two questions. At some point will costs matter, and at some point will uptime not matter quite as much. Right. Because i if you have the same uptime requirements for your AI data center as cloud data centers have historically and you want to front run your grid connection.

by installing generation, you can't just build gas turbines, right? You have to build a lot of infrastructure because you have to have really, really high reliability. So you're gonna build your gas turbines, you're gonna build, you're gonna oversize some batteries. That's gonna be really high cap.

You might add, you know, additional layers to your UPS system. Like there's a lot that you would build. And that comes at a real cost. Now, where we are in the cycle right now, you know, the reality is that the energy, total embedded energy cost in compute. is small compared to the capex of the of everything else, but mostly the chip. Maybe energy cost doesn't really matter, even if you're deploying a bunch more CapEx into that stuff. But there's an interesting question of will that

ultimately matter, which would dictate the degree to which this equation of speed to power versus cost of power shifts a little bit. I think inevitably it will shift. I just don't know when that is. There's also the chance that, you know, these guys would go and build the power capacity where the grid connection is available, which there are many parts of the world where there is grid connection available. So yeah, I think

It is a little too hyped with colocation for data centers. Some will get it, but most people won't.

Let's come to the next topic, which is following on from trying to build the grid. Um, here at Zero, we've done a series called bottlenecks because We are seeing these bottlenecks to build the grid, especially in Europe and North America, show up in so many places. There are so many bottlenecks that it's not just about permitting and politics, but about actual objects. So where is generating capacity on your hype meter?

on the hype meter as a bottleneck, right? So the question is basically are we overly cons like overhyped would mean we're we're too worried about it. Underhyped would mean we're not worried enough about it. Um I think that, you know, the the long lead times for gas turbines in particular are is very well established and reported and understood by everyone, which I guess argues that it's it's hyped because people do appreciate that

that is a real challenge. There also though has been a lot of good data to suggest that um generating capacity in the next few years is not the dominant bottleneck. Like there is enough capacity in enough places. to deliver the kind of load growth for the next few years that the grid will need. So I think this will get to the next one where I think there is a real concern, but I would say generating capacity to me might be a little bit overhyped.

you know, the cues are long if you want to build new gas turbines, but I don't think that is going to be the rate limiter on load growth, at least through like twenty thirty. I think that is right. We spoke to uh a utility CEO, the next era CEO in the US, who said, you know If gas turbines are going to be that expensive, that's just going to make solar plus batteries so much more attractive. And we'll build those instead.

So there is certainly no reason to think all forms of generating capacity is in a bottleneck and so all sorts of other things could be built. But there are other challenges in bottlenecks which are much more severe to me that we need to worry about.

So that maybe gets to the next one, I think, which is which is transmission, deliverability, basically is the way to put it. Do you think that is Overhyped, underhyped as a bottleneck? I think it's super underhyped. Like give let me give you a European example, which is that the Netherlands has twelve thousand businesses waiting for an electricity connection.

That companies like ASML, which is like the Netherlands' biggest company, most valuable company, isn't able to build extra factory because it cannot get an electricity connection for the next few years. And isn't the Netherlands in the same situation as the US where we just basically stopped building new transmission lines years ago? Like we I mean, not zero, but effectively zero for the past few years. Is that the situation in in Netherlands or in Europe in general? Or is it different there?

No, it's not that severe because a lot of European countries are interconnected and they have been building more interconnections between them. It's more like there are places around Europe where there is more generating capacity and there are demand centers which are typically further away from those generating capacity that aren't getting the power supply. as it's needed. So the transmission hasn't been able to keep up with the demand that is showing up.

And I don't think of the uh maybe I should know better, but I don't think of the Netherlands as having been a big data center hub historically. Uh do you know? No, I don't think so. Uh I mean it certainly has some industry. A lot of it is, you know, oriented towards electricity'cause it's high end manufacturing. Uh but no, I don't think it's a big data center hub.

Yeah, which I mean is is even more concerning if you think about the context of there's this big long cue to get grid connected in a market that hasn't yet seen the boom in like very large load interconnection requests that we're seeing in lots of other places. There is the aspect of DER like distributed energy resources that is affecting the grids in Europe. So uh Netherlands has the highest per capita rooftop solar in the world.

Uh, which you know, for a European country you'd be like, Oh, that's odd but you know, that's what you get. You get cheap solar panels and you get some policy available and you'll deploy a lot of solar panels. But it's causing real problems at the transmission and distribution network locally, because the grid has been built over the last hundred years and many of the objects of the grid

uh are much, much older. So that brings us to the next topic, which is transformers. Um transformers are this object that sit between generation between a power plant and your home because they have to make sure that the voltage at which power is delivered is just right for the devices that you're going to attach to it. And uh where do you land on whether transformers are overhyped, underhyped, just right hype? So again if the question is Uh overhyped, underhyped.

a in as a bottleneck to load growth to meeting load growth, then I think that they're overhyped. I wanna clarify, transformers are incredibly important. Um, and there is a bottleneck and the lead times are very long. And I've I've witnessed it firsthand both from the utility side and the load side. It is a problem.

I don't think it is the rate limiting factor even today with long lead times. It's an annoyance to get anything built. Things will still get built and and certainly those lead times for transformers are still shorter than they are for gas turbines. Um, but I I do think we also will see a lot of new transformer manufacturing capacity.

come online in the next few years. It's the the lead times are gonna come down. And I think we'll see a way of of new technology. I'm an investor in a company called Heron Power, which is building solid state power electronics. You know, I I think Stuff like that is going to revolutionize that sector. But even in the absence of things like that, I don't think it is going to be the thing that stops the load growth from getting met. So I'm gonna say overhyped on that one.

I would go underhyped if I look at the non data center crowd because for Because transformers are needed for everything. And in my reporting, like I've come across many, many projects, like housing projects that are completely on halt for eighteen months because they're missing this one. object that they need before they can power

the area. And so it is affecting a lot more people, but the people who can afford to pay for it can jump the queue and get the object, then yes, they can they can get there. And then On the manufacturing side, again, my reporting says these companies are very Conservative. They will invest, but only if they have surety that there will be demand for transformers for twenty years or so, which they are not yet sure there will be. No, I

I totally agree with that. And I and it's already evident in the fact that we've had these long lead times for Transformers back to, I don't know, 2021, 2022. It's not a new thing and it has been persistent. for longer than I think a lot of people expected, in part because of the conservatism of that industry, who, to be fair to them, they've gone through cycles before where they've overinvested and then been underutilized and so on. And so they're reticent to do that again.

I I think that the expansion of capacity is not entirely going to come from the incumbents, though. I think there's going to be a wave of upstart. companies, whether they're doing traditional oil filled transformers or solid state stuff like like Heron is doing. Um, I think they're gonna fill in a lot of the supply gap in the next few years, even if the Hitachis of the world, you know, expand capacity slower than you would want them to.

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Well, let's take a diversion for a second here. You had a thing that I have no context on, but you want to talk about this that's relevant to my day job, which is you wanted to talk about VC as a tool for scaling climate tech. What what do you wanna you're gonna grill me on something here. I just don't know what.

I would happily agree with you on many, many topics. But this one I wanted to put us on the hype or under hype because, you know, it's your business but From the perspective of venture capital helping scale climate solutions. I think VC is overhyped because That model might work in America and I don't know if it's working because there are not that many companies that have really been VC oriented big climate champions right now.

But the rest of the world are building climate solutions and a lot of those companies aren't V C backed. Your BYD wasn't a V C backed company. while it became an electric car giant. Um so to me, that is one model. It can work in certain cases and it's not working in so many cases. that perhaps it's time to look at m other forms of ideas that would allow maybe existing companies to pivot towards climate solutions, which also can happen.

I think what we've broadly seen historically is that venture capital, particularly venture capital in the US, I will say. um plays an outsized role relative to the dollars that go into it, plays an outsized role in getting new technologies into commercialization. Right. Like from the lab to the market. And usually there's one or two pioneering companies that are venture backed that do that and are the first. So if you want to talk about BYD, like what would BYD be if Tesla hadn't been Tesla?

It's an interesting question. If there had never been a Tesla Would BYD still be what it is today? Would it have scaled as quickly? Or was the existence proof? Of a company like Tesla, the thing that caused BYD and the Chinese government to deploy a lot of capital into it. And you you've seen versions of that, I think, a lot of times.

Yeah, I mean one other example would be C ATL, which is the largest battery company. You know, what would it be if LFP lithium ion phosphate had not been invented in America and then first commercialized by E one two three, which is a venture back company? That's right. Now that's a good example of there is a separate question that I think is a good question, which is

Do the do the investors, the venture investors and the companies that they invest in reap the full reward of that invention and commercialization? And A one two three is a perfect example of like that company went public and then went bankrupt pretty quickly.

Um, so maybe the answer to that is no, although some early investors did make some money on it. So I I don't know. That that is a different question and that's one that I grapple with all the time. But if you're just taking the big step back, thirty thousand foot ecosystem view. Um, I still think it is true that again, relative to the dollars deployed, because where are the dollars actually getting deployed? They're getting, you know, in in total volume.

They're either getting deployed into the BYDs and CATLs of the world or they're getting deployed in infrastructure, right? The real money goes to building big solar projects and things like that. Um, but on a, you know, sort of impact. two dollars invested ratio, I would still claim venture capital plays an outsized role.

I would just put back on one thing, which is there's a phrase uh that Dan Wang, this guy who wrote uh Breakneck, used, which I liked, which is America is good at going from zero to one, like creating something that didn't exist. But China is good at going from one to hundred, really like giving you the solution at the cheapest price possible.

But a lot of that zero to one in America happens because of the level of science funding and the talent that it has and the basic sciences and the research. Which in the current administration is going to go down or is going down already. And so there is a risk that that thing that VC enables, which is translation of this immense amount of basic science into a usable product, becomes harder.

Yes, I agree with that. And I think I think it is incumbent upon the US to do everything that we can to maintain that position as the as the part of the world that is best at going zero to one and then arguably competing for the one to one hundred as well. Um, but I don't think it's a foregone conclusion that we will. I'm saying historically it is clear to me that that is true. Looking forward, you know, we've got work to do there.

I have another weird one that I've picked for you, which is what do you think about the hype on the Paris Agreement helping shape businesses towards climate solutions? Bye. So I don't think I have a good answer to this one because I to be totally honest, I don't hear about or think about the Paris Agreement at all.

Like basically zero. So maybe that tells you something. It's it's certainly in in my world, it's not hyped. I can tell you that, but I couldn't tell you whether it should be hyped or not. Do you have a view? Are there things that are like downstream of the Paris Agreement that are affecting my world that I just don't know, you know, came from Paris? Or is it just sort of a it's there and it's a big geopolitical thing, but it's not really affecting business?

Yeah, I would say this is the bit as a journalist that I find fascinating because I see many worlds and The Paris Agreement actually works as I've seen across all these worlds.

but some people have very strong views and other people have no views. So let me explain. In climate diplomacy, Paris Agreement is the document that was agreed on in twenty fifteen by all countries in the world, which is in principle voluntary but sets a goal of one point five or two degrees Celsius warming that all countries must keep to.

It was twenty five years in the making. That's how long it took to come to a conclusion. And then what you got was a volunteer agreement and a lot of the people in diplomacy are Happy and sad at the same time. Like we have something, but it's not good enough. And they think about it a lot. We meet at COP meetings every year, which we're going to do in Brazil next month, uh in November at COP thirty, and we'll talk a lot more about those words.

And the people in that world continue to be frustrated by Paris. But Paris' impact on businesses is actually quite big because it has become translated into government policy. And then government policy gets translated into all forms of directions that businesses are taking, which they may not always explicitly tell you it is because of Paris. They'll say it's because of government policy and every government has its own policy.

Its tentacles have far reaching impact, even if most people don't see the direct connection. I believe that. And I also think probably I'm colored by the fact that I'm in the US where, you know, our relationship to Paris has been fraught and back and forth over the years, as opposed to like Europe where it's been consistent. And so probably the

policies have had more time to take hold. But it is interesting your point that like people either have very strong opinions about Paris or no opinions. I'm clearly in the latter camp there.

All right, we're we're short on time, but I think we should do a quick Grab bag of additional we could just do a few technologies and decide whether we think they are overhyped, underhyped, or hyped just right. Um all right, so let's start with a battery chemistry, sodium ion batteries, overhyped, underhyped, hyped just right.

So I know you've done a couple of episodes, so you probably have a better, more informed view on this. My view is that as somebody who's written about batteries for the last decade, getting new chemistries out to a commercial use case is really hard. When companies do that, kudos to them.

But given the pace at which lithium ion chemistries have fallen in price and the amount of manufacturing capacity that's been built around the world, if I look at Bloomberg NEF projections Sodium ion will make an impact, but such a sliver even after twenty, thirty years, that I feel like today sodium ion is overhyped because people think it could make a big difference, but really it may not. I think it's hyped just right largely first of all, I don't think it's that hype.

Um, to be honest, people talk about it, but you know, I I think for all the reasons you described, and everybody having had the same history that that you're talking about you people are reticent to like go all in on this is the next big battery chemistry, apart from clickbaity articles. But I think there is a degree of hype that is warranted, largely because it seems pretty clear that some of the big Chinese manufacturers, C A T L included, are investing a lot.

in sodium ion and are actually deploying. I mean, your point about getting new battery technologies into the field is true. They're doing it though, in China. And so it's coming. The question to me is, you know, sort of the one you were alluding to, like what portion of the market does it take up, right? And the last version of a big chemistry shift, which is a smaller chemistry shift than this one that we saw was LF the rise of LFP. And that has been a huge.

Right. Um, will sodium ion be the next wave of the same type of a thing or is it gonna be a more niche solution'cause it's lower energy density and so on. I don't think we know that yet, but But it's coming from from CATL and its cohort, so let's just see what happens.

The next one is advanced geothermal. Under hype, hyped just right. So in the US, advanced geothermal is very I would say. Um, it's hype for a bunch of reasons. Some of them, you know, legitimate success of companies like Fervo Energy, you know, sort of pioneering it. Um but also there's a political lens to that because um our new administration, our our Secretary of Energy, in particular, Chris Wright.

um is super bullish on geothermal in general. He he likes geothermal and nuclear. And those are the two sort of like overlapping clean energy things that that I think he he is full throatedly in support of. And so as as a result of that, it is highly hyped.

That may be warranted. Like let's let's see where it goes, but it's very early days. Like, you know, Fervo is hoping to have its first hundred megawatts of its first big project online sometime next year. Um So I I guess my argument here would be it's somewhere in the hyped just right to maybe slightly overhyped. stage in the US. I'm curious though, from your sort of more global perspective, the degree to which advanced geothermal is talked about.

So this is one where typically the rest of the world is following the US on its hype cycle. And so clearly there's a lot more talk about advanced geothermal because US has shown some success already. And surely, you know, being able to apply shale drilling type technology could make many other parts of the world which don't always have great geothermal resources suddenly more valuable.

The difficulty I feel like is that it's overhyped because the level of other types of talent and infrastructure that you need. to deliver on advanced geothermal exists in the US but will take a long time in other parts of the world to build. So engineers who can manage shale type drilling or like a study of the subsurface that would allow you to do it in the right way. All of that just takes a long time.

Uh, and I don't think that expertise ex exists in the rest of the world quite as much. And so We are going to see not as many projects built as many people think there might be. It's an interesting point, right? Because one of the reasons that it is so attractive in the US is that we do have all this expertise from oil and gas.

that is being leveraged for advanced geothermal. But of course we are we are a a country that has that expertise, has the resources, has been drilling, has been doing horizontal directional drilling for a long time, invented it in fact.

So yeah, that's a good point. Okay, last one. Uh continuing on the same vein of technologies that that Secretary of Energy Chris Wright likes, uh, advanced nuclear. Overhyped, underhyped, hyped just right.

Yeah, it's got the similar vibe as advanced geothermal in that, you know, in principle, wouldn't it be nice if we could build a small modular nuclear reactors because then we could make many of them and try and then lower the price of nuclear which has been going up and up and up in Europe and North America. Um and again the hype is following on from America where, you know, countries like the UK are now asking Rolls Royce to make a small modular reactor.

But the reality is the only countries that have functioning civilian small modular reactors are Russia and China. And the countries who have been building nuclear, not just domestically, but also around the world, are Russia and China. And South Korea if you want to include Right. Agreed. Yeah, South Korea too. And so To suddenly imagine that, you know, a new technology will unlock nuclear in Europe and North America to me is overhyped.

I think there's an interesting question we're heading into in in nuclear world, which is sort of between, I don't know what to call advanced nuclear and not advanced nuclear, but let me just like I'll I'll frame up two groups. Group one says we need to just we have a couple of technologies that are kind of the front runners from large

uh OEMs, right? So this would be the AP1000 from Westinghouse and maybe the BWRX 300 from G Hitachi, which is an SMR. That's a you know 300 megawatt reactor. Um those are the furthest along. They're bankable OEMs. Forget all this other noise. We need to go deploy as many of those as possible, right? And then the other argument is there's a whole bunch of new technologies coming from a whole raft of companies that could be deploying SMRs or micro reactors or whatever.

And some of those need to go win as well. And I you know, I don't think it's clear yet which direction we head, if either. Um one thing I do worry about is that I I personally think in the in the long run. Nuclear probably ends up looking like gas turbines look today, which is there, you know, in in the gas turbine world there are basically three OEMs that control like seventy, seventy five percent of the market. It's an oligopoly, essentially.

And I don't see a really strong reason why it would be different in nuclear. So we need to get through this winnowing. We need to cull the herd a little bit to get to the point where we're deploying enough. number of individual reactors to get down that cost curve. And that's gonna be a messy process to get there. So I guess my answer is that I think advanced nuclear, if I

broadly defined to include all of those things seems hyped about right to me. But I worry that we are overhyping too many individual technologies, reactor types, companies relative to what we actually need to do in that market. yeah that's an interesting one i mean on gas turbines yeah Siemens, GE and Mitsubishi, which are the three giants. Um, to the extent where China has been trying to make a gas turbine manufacturing

industry and it's not really succeeding because it's just so specialized and the supply chains are so tight. And the supply chain also ends up being one where the same parts are used by jet engines, for example. So like real complications.

Nuclear to me, it's hard to see if it comes down to those three, especially with the kind of political layer attached to nuclear where transfer of fuel and which country can build in which country is, you know, tightly coordinated by the IAEA, the International Atomic Energy Agency. That makes it much harder for me to see just the sort of market forces that drove gas turbine M and A happening in nuclear.

Does that argue in your in what you're saying for there actually being more OEMs than there are in gas turbines? I think there'll be national champions and more of them, whereas Siemens G and Mitsubishi are more than national champions. They are sure their countries support them, but they also have such large uh customers in other countries.

It's interesting because I could I could see an argument for what you're describing sort of pushing in the reverse direction, which is that actually it's gonna be getting through the gauntlet of being A nuclear reactor OEM is going to be so hard because of all the additional layers that even fewer companies are going to get through it.

Adding the national lens to it maybe complicates it a little bit, but but I could see that being an argument for maybe there aren't three, maybe there's really one or two rather than there being thirty. Well, you're imagining a more peaceful world than I think we are going into, but I hope you're right.

All right. I think we covered we covered a bunch of stuff here. This was fun. Thank you, Aksha, for doing this with. Yeah, this is great fun. Thank you for suggesting the idea. Akshat Rathi is a senior reporter at Bloomberg News and the host of the Zero podcast.

This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. Latitude is supported by Prelude Ventures. This episode was produced by Daniel Waldorf. Mixing and theme song by Sean Marquon. Stephen Lacey is our executive editor. I'm Shale Khan, and this is Catalyst.