White House Nuclear Energy Push Meets Uncertain Market

a crawl. The country has fallen far behind Russia and China in terms of its technology and equipment being used for nuclear power builds around the world. The Trump administration has made no secret of its desire to change this, and last month issued four executive orders that seek to reinvigorate the US's domestic nuclear power fleet. But is this policy push enough to stimulate a risk averse private sector and what forms of nuclear technology are North American companies

looking at today? I am joined by B and EF's lead nuclear analyst, Kris Kodoonsky, and we discussed findings from his note, Trump pushes nuclear, but market pull is uncertain. Which B and EF plants can find at BNEF go on the Bloomberg terminal or on BNF dot com. All right, let's get to talk about the future of US nuclear energy with Chris.

And so I'll be very very curious to see what transpires and how the executive orders will be able to work and coexist with Everetts by DOGE to sort of cut the government workforce and create an environment where the private sector will rally behind what is left of government funding to support this to go ahead and build out nuclear power in the country.

I'm not just a fan who has come lately. I'm familiar with your entire back catalog, so I know that in December twenty twenty four you also published a piece called US Nuclear Goals in the Cards or just an Illusion, which was in reference to some targets put in place

by the Biden administration. And I also remember that in May twenty twenty you published a piece I've got all the receipts here called Trump Administration Aims to make Nuclear Greats Again, which, unlike those other two titles, doesn't at a slight skepticism on your part on the gap between ambitions and reality. But I'm just going to read from the executive's summary, and this is again from May twenty twenty.

The US nuclear industry has ceded global leadership to Russia and China, as evidenced by the underwhelming presence of US vendors participating in global markets. Be in the f questions whether the appropriate strategic elements in place in the nfwg's plan. NFWG, by the way, Sorry's Nuclear Fuel Working Group will materialize to US re establish the US as a contender without

bipartisan support and appropriate funding. The nfwg's policy goals represent wishful thinking rather than an executable objectives to restore global leadership. So again, although it was in the title definitely have your and I say this, you're someone who is I think it's fair to say pro nuclear.

to support nuclear if the economics weren't working out. But then right at the end there was this ambitious set of goals set out for nuclear and then of Trump has come back in and he has come out as being very pro nuclear with these executive orders. So we're starting to see actually a little bit of bipartisanship emerging around nuclear. And yet you're still a bit skeptical maybe about how challenging this is and whether that challenge is fully appreciated.

SMR operating in the US by twenty twenty. Come twenty twenty, what has happened is that the Russians are operating in SMR north of the Arctic Circle in a floating nuclear power plant, a tremendous innovation that has implications for global markets in South Asia and in Pacific region, and the US development looks like, well, we might be likely if

we have something by twenty thirty. So I'm trying to look and say, well, what has happened to the US industry why we can't deliver where you look at the Russians and they are very very aggressive in delivering SMRs in remote places, and they're leading global construction, and so I sort of am and wondering what it is that has handicapped the US industry so we can't build, And there are a whole slew of reasons for doing so.

But that's why I remain skeptical, because what's really really important is not so much policy push but market pull. Then I use the analogy of pushing a string as opposed to pulling a string, And so if we had a lot of market pull, if you until the executives stood up, raises hands says, I want a nuclear reactor that's a very very strong single and we're starting to see that from the hyperscalers because they are facing tremendous demands for electricity to power their data centers.

for small modular reactor. It's a next generation nuclear reactor, and as the names just, it's significantly smaller than a conventional nuclear actor and therefore is less restricted by where

it can be deployed. Before we dive into the reasons why we think that nuclear progress in the US has fallen so far behind, I think that you actually, and you laid it out really well in the note you recently published the number of reactors under construction worldwide by the country, not of where they're being constructed, but by where the technology comes from. It paints a very stark picture. Can you just really illustrate your point talk us through that very quickly.

in Bangladesh, and four reactors in India. So that brings Russia to a total amount of twenty six reactors under construction that are Russian designs, and if you compare that to the US, there are no nuclear reactors under construction of US design. Now there's an issue here is that China is building several CAP one thousands. CAP one thousands are the Chinese version of the AP one thousand that

is a Westinghouse or US design. Westinghouse will argue that is they're part of their design, but we look at the components are eighty percent manufactured in China. There are certain other modifications and changes that they've done, so we characterize that perhaps incorrectly, but I think realistically as as a reactor of Chinese design as opposed to US design, that will be a debatable point.

Russia is currently the world's leading exporter of that expertise and know how. And the US neither has a thriving domestic market like China which would be a platform to become an exporter, and it is certainly not an exporter today. So this is a pretty clear picture and it's hard

to argue with it. So before we talk about how these executive orders might try and address some of this, before we talk about the demand pool, what in your view has gone wrong here, Like if we go back to when you were having that conversation in twenty ten, where there was ambitions around small modular reactors, for example, at that point in time, maybe already the US was being to lag, but at least people to be making

the claims that have a smaller modul reactor. By twenty twenty, there must have been stakeholders in the US who felt the US was in the race, you know, And since then the US are so comprehensively lost.

and that are two necessary steps. And licensing is a very challenging process to undergo in the US, and it's one of the executive orders that Trump signed on May twenty third was to address NRC reform and but doing so it will help speed up the process and reduce the risk of these nuclear technologies. We're all new innovative technologies, most of them coming across the finish line getting licensed

and then get it constructed and built. So I don't want to paint a picture that there's no nuclear leadership in the US. There's nuclear leadership as far as developing new technologies, but we are certainly laggards in actually building UCAR power plants. We have no nuclear reactors under construction in North America, never mind in the US all lot.

that area. It is making sure that this other great hope of these next generation of technologies is that the US doesn't get in its own way of winning that race, which it is well positioned to win.

lot of sense. There are a couple of proposals right now to build reactors in Eastern Europe that have not been built in the US, and to me, that strikes me as a very risky proposition for the new host country to consider a technology that has yet to be built in the US. And I think that.

same reactors. And that's a very very important key is that the key too mass deployment of these nuclear reactors is having a significant project pipeline. It's very hard for a developer or a vendor of a nuclear power plan to say, give me a couple of billion dollars and I'll build your reactor. It's a much easier line, and the financial community is much more receptive. It says, give me a couple of billion dollars to build a factory with which I can manufacture ten to twenty reactors, and

here's the project pipeline I have. So General Electric Hitachi, for example, has four projects now underway, at least in Canada, more in Alberta and Saskatchewan. For in the US at the Tennessee Value Authority, some perhaps in Estonia too. The General Electric Attachi maybe was a contender for the Great British Nuclear Program, although Rolls Royce has seemed to have succeeded in taking being nominated first. But that doesn't preclude

General Electric Katachi for participating in that market. And if I was the UK policy makers, I've sort of divide allocate eighty twenty percent, give eighty percent to the SMR of Rolls Royce Company and twenty percent to General Electric Tiktaci to create some tension in the marketplace so that there'll be some cost considerations and that if Rolls Royce is too expensive, we have another operation. And finally, in Poland, they have talked about building twenty four of these general

electric katachis. That's a pretty long project pipeline, and they can make the long term investment necessary to get from a first of a kind cost to end of a kind cost as quickly as possible. That's the secret to getting a widespread deployment of nuclear power.

very ambitious. There's three potential pathways that have surfaced right now for them to do that. One, they've signed contracts with the Westinghouse eight p one thousand for three reactors or went to three reactors at a very very high cost. They've also looked at the General Electric Katachi and looked to build They've announced twenty four projects and finally the Koreans wanted to get into the act as well, and they're making proposals for a smaller one gigawatt version of

their reactor at another site. So you have three potential solutions to Poland's nuclear ambitions. Perhaps two or three will go through. But it's important to recognize that for Poland, building large reactors that are manufactured in the US or Korea does not necessarily solve all of their social and

political problems. You have a large percentage of the population who is reliant on coal and a coal industry that you're introducing technologies to reduce their participation in the Polish economy. So the idea for Poland to sort of develop a technology that they can build locally and create a knowledge industry and industry where there is a lot of participation from society to support the developing commercialation of lear power

is very very important. And if they can build a lot of the components in Poland for the long term perspective, that would be much healthier.

your research. They're not going to be commercial as soon as some might hope, but they are still you know, one day, these next generation nuclear technology is going to be very relevant, and the US is in the lead on those, but has fallen behind when it comes to conventional nuclear technology. And so this is the narrative I'm going with is that, you know, maybe these executive orders will help ensure the success of these new technologies by

removing roadblocks. And so I think it is still important to understand why the US fell behind in conventional nuclear technology because I'm presuming that some of the challenges faced there could impact the next generation of nuclear technologies and therefore why some of these challenges need to be addressed by these executive orders. So why has the US fallen behind in conventional nuclear technology if you.

In some countries were China and Russia paused but realized that nuclear has a very big role to play in their societies, and so they went forward and recovered more quickly. In the US, we have a preference for renewables, and we had some support for renewables, and so that has been a priority in many many ways. And we also had very cheap natural gas, and we also have very high labor costs that made the prospect of building and operating large new your power plants more problematic than it

was in other parts of the country. Remember this, Our analysis suggests that to build a nuclear power plant in China, they can do it for approximately one fifth cost that it costs us to build the last two ap one thousands in Georgia. That's a huge delta. So one can understand, well, I can build reactors for one fifth of costs in China, continued doing so, and so in this country where where we have this high cost label attached to the nuclear power and I don't think we'll go forward unless we

can somehow address that. And some of the executive orders that Trump has signed may address some of those issues.

to revitalize the nuclear energy industry. And some of the issues that we have or the arguments that the Nuclear Regulatory Commission, which is the gold standard of regulation of nuclear power, has been too constraining to the society, and so we're talking about perhaps let's think of a way to make the process less expensive, less daunting to the companies that are trying to run down that path and accomplish that in say twenty four months, as opposed to

forty four months that has taken the less licensed application to get approved. So that's a very very important thing. And we're also talking about leveraging US Department of Energy research laboratories to help speed speed that forward. And that is something that we could also have. You have a lot of resources available to sponsor and spur research and development.

We'll try to adjuss that. And we want to reinvigorate the nuclear industrial base, and so Trump has said, let's try to have ten new reactors under construction by twenty third and he has set a target for four hundred giga wats of capacity, adding an additional three hundred capacity to the existing fleet by twenty to fifty. Those are very very ambition plans, more ambitious than the preceding plan.

It's also important that we try to develop and supply some of these nuclear power plants to support our military basis and also to support the anticipated demand from hyperscalers to power the data centers, which is in many ways

a national security issue. We've seen some progress already. There was a discussion about Oklahm, one of the companies that is developing an innovative advanced react to technology, was recently given the go ahead to move forward for supplying electricity very nuclear their five banguwatt reactor to a site Alsaid Air Force Base in Alaska, and that has created a tremendous amount of enthusiasm for the fact that perhaps the environment created by releasing these executive orthors may speed up

the process for the commercialization of a lot of different advanced reactors.

it that policy push is not enough? You use this analogy of trying to push a piece of string. Can we just explain a little bit more why why that wouldn't be enough? Because in some areas policy push is enough, but why not for nuclear.

power plant. Let's short the stock. Because the Wall Street's view, at least some of the bankers that I talked to on a regular basis, suggests that every project in the US will be first of a kind project, as opposed to down the pathway towards the end of a kind. And that's the case that all the workers who were assembled for the Westinghouse AP one thousand project in Georgia, there's no second project. They're all dispersed, and so recreating

that workforce is going to be much more challenging. So you're starting at a new site with a large percentage of a new workforce, and it's not like a cooker cutting approach like the Chinese. The Chinese will build six reactors at the same site, so the workforce goes the one reactor to the next reactor, the next reactor, and

each one becomes less and less expensive. And as a result of that, they can build reactors in a short period of time five years as opposed to ten years, and for a one fifth of cost that we can over there. So the utility executive is kind of saying, well, I don't want to be the next nuclear power plant builder because of the risks to the company by making

a decision to go ahead and do that. I happen to have visited Saudi Arabia at a time when Saudi Arabia was considering building nuclear power plants, and the reason I visited Saudi Arabia was to understand which company in Saudi Arabia could be the host institution to do that, and the only company that I have discovered in my travels there was Saudi Aramco. Saudis are still discussing building nuclear power plants, but they always end up discussing them

without any firm plants. I'm moving forward. So utilities are wary of the cost of building a nuclear power plant, and so they're standing back and saying I prefer not to be the next one to commit. Let's see if some some of the estimates from the US government suggests that maybe a thirty percent drop would be an appropriate estimate for a new nuclear power plant in the US. That takes it from thirty four billion dollars to twenty

four billion dollars or so. That's a huge cost. The Koreans, on the other hand, are suggesting that they can build two large reactors in Czech Republic for eighteen nineteen billion dollars, so still significantly less. But in the nuclear industry, price because of high interest rates inflation tend to rise, and so very infrequently do you see a nuclear project in the US or in Western Europe coming less than it's forecast to the cost. It's always higher, and sometimes significantly higher.

The West has a terrible track record of building large nuclear power plants. It's interesting the way you describe it. You know that utilities would rather someone else goes first. There's various idioms we could apply to that.

fifteen to twenty percent risk for the cost overrun. But by doing so you start the process and perhaps the third or fourth project you'll be able to have a better higher confidence on what the cost will actually be.

And there's also mechanisms to isolate the cost of the nuclear components from the construction cost, so you can offer the utility a fixed cost contract for the reactor, pressure vessel and associated nuclear commitment, and then put it on the utility to manage the construction costs, so that you have partially a fixed price contract and a construction contract with the utility itself will manage and that will tend to sort of take some of the risk way from

the large deployment risk that is slowing to US utilities from buying Nuco. No Nuco's under construction in this country.

US is it is the archetype of capitalism. It is an inherently a country that relies on the private sector for innovation and development, and maybe this technology, because of the scale of involved, is not well suited to.

can help untangle this challenging puzzle? And they certainly have incentives to do so with the need for power for AI and how do the executive orders from Trump sort of enable those organizations to play a more leading role in the development of nuclear in this country.

of that. But the question has to be is how much money are they investing in the company itself versus how much are they committing in a power purchase agreement for that and so, or how strong is that commitment and how quickly can the vendors mobilize the technology. Some of these companies have yet to go through the licensing process, so there's still licensing risk and construction risk for a

first of a kind. So the large hyperscalers are circling the area looking where to place their bets, and we see companies like Amazon being a leader in that effort, and I would be curious to see how Meta, Microsoft and Google will sort of follow in placing bets on various nuclear companies.

than later. Is this technology ready enough? And maybe they are less averse to investing in first of a kind and being the first mover on some of these But actually there's some of these nuclear technology developers are not far enough along in the development process and the process of getting licensed to meet their needs. And so do you think the executive orders could help address some of that of that challenge?

important issue. China and Russia are leading the commercialization of nuclear power because they have very strong support from the top The Russian government is very interested in nuclear, as is the Chinese government in very interested in nuclear We have not had a significant because of our nature, because of our capitalist system, we tend to not have such

strong from the top down support. Perhaps this is an opportunity through the Executive Orders to demonstrate that yes, we have it, and we're starting to see some indication of that, specifically with the rapid announcement of the fact that Oklow, a project that has been languishing for two years, all of a sudden has been announced that now they had the go ahead there that one's selected. So the nukea

industry moves forward like molasses. Hopefully the Executive Orders will create an environment where we move some of the uncertainty and gives a clear path we're going forward. What's also helping, quite frankly, is the fact that there's been such a Definius demanded interest in large combined cycle turpins, that the backlog for that is now extending to the point that perhaps you may not be able to get a guest

turbine soon enough to meet your requirements. And so if you can have a very fast track for an advanced reactor, perhaps that might be an option that becomes increasingly more attractive, even though the technical readiness is perhaps not there, and the technical risk and the regulatory risk still.

they will come. Maybe that's what these executive orders are part of. And again, this is not a partisan issue. In quite the same way, the previous administration was also very pro nuclear. It seems like successive US governments are trying to figure out how to build the right environment to allow the US to capsulize on the progress that has already made in the next generation of nuclear That

is my takeaway from all of this. Interesting to see if you think that's a bad way of thinking of it or does that make sense to you, Chris.

forward in Canada and hopefully in the US. Then you have advanced reactors, the reactors that offer some innovation and a fast reactor, high temperature gas reactor a molten salt reactor that are technologically different and perhaps won't be more quest competitive and safer. And then you have the microreactors, which are very small reactors can be deployed in the back of a truck, and the lorry in an airplane yourself. And finally, the biggest confusing factor perhaps is the advent

of fusion. Okay, so if you are looking to buy nuclear electrons, there's a big shopping list, five different pathways, different timelines, uncertain courts, different technical readiness lists, different types of risks. So it's a very confusing landscape for the utilities and hyperscalers to operate in right now. And it's going to be fascinating to see which one of those many many companies that are participating will cross the finish line generate reactors or respond to your field of dreams.

Ghosts one at baseball. But this is a little bit like from Kevin Costner's point of view, it didn't matter which of the ghosts one, but for the ghosts, presumably as competitive baseball players, they wanted to have been the one to win. So maybe the government here is Kevin Costner. So long as somebody wins, that's a good outcome. And for the ghosts, well, they've got to turn up to the field of the dream and compete, but at least they have an opportunity to compete. Chris, this has been,

as always a fascinating conversation. I hope that there's more development so we have an excuse to bring you on again because I always enjoy talking to you. But thank you very much for joining us today.

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