Jigar Shah on the Three Big Things Driving the Nuclear Energy Revival

Joe Weisenthal (0:03)

Bloomberg Audio Studios. Podcasts, radio, news. Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:24)

And I'm Tracy Alloway.

Joe Weisenthal (0:26)

Tracy, how about that reopening of Three Mile Island nuclear facility?

Tracy Alloway (0:31)

You know what, I saw that headline kind of float by, and it seemed like a big deal. So I think Constellation signed a deal with Microsoft to reopen the Three Mile Island nuclear plant, which everyone remembers from the disaster that happened there in the 1970s. What I did see was Constellation's share price just exploded higher, like up 30 percent in a day. Maybe I shouldn't say exploded in the context of Three Mile Island.

Joe Weisenthal (1:00)

It melted up.

Tracy Alloway (1:00)

That's right. It melted up.

Joe Weisenthal (1:03)

A couple of things about this. So one, I'm not surprised because we all know that the big hyperscaler tech companies have all this demand for electricity. They have a desire to not use further fossil fuels and nuclear is an obvious theoretical solution to how to get more clean energy. You know, I will say one thing about this deal, and it's very exciting and I don't want to diminish it in any way. But there's one aspect of it. I didn't realize that one of the reactors at Three Mile Island had only closed down in 2019 So I only know there was like something bad happened in the 1970s and it probably contributed to the US as general, pulling back from nuclear. But I hadn't realized that actually there was still nuclear being produced at Three Mile Island up until 2019 Does it make it a little less exciting? But it's not like we're fully turning back the calendar to 1970s.

Tracy Alloway (1:56)

Well, I think there's a nice narrative, full circle aspect to this, right? Which you just touched on. After the Three Mile incident, I mean that really kicked off the death of nuclear in some respects in the US. There is a lot of hesitancy and fear really about building new plants. And so in some ways, we're restarting at least one of the reactors. It's a nice story, Ark. Let's put it that way.

Joe Weisenthal (2:24)

So, okay, so this operation is going to get restarted. And you mentioned the death of nuclear and how we basically went forever without building new. There was that Georgia plant. I think it came online sometime last year, the Votal plant. But it does raise the question of like, how much was the fact that we more or less stopped building nuclear a function of the fact that we got scared of nuclear regulations, we became too cautious, et cetera, versus the fact that we just had, as multiple guests we now have pointed out, this sort of flatlining of load growth, this sort of flatlining of overall demand, which is something that's now changed in the last few years with the re-acceleration of demand for data centers. And so how much is this a story of we got scared of nuclear and we overregulated it, versus how much did the economics just not make sense when there was not growing demand for electricity?

Tracy Alloway (3:15)

Yeah, I think that's a good point. I mean, there's another tailwind that's sort of behind the potential nuclear resurgence now, which is there's a lot of government funding floating around the IRA and programs like that. And so that's another thing that maybe is making, maybe this time is different. There have been a lot of predictions about a nuclear renaissance over the years, but maybe, maybe this is it.

Joe Weisenthal (3:39)

Let's learn why the stars have aligned, the constellation, if you will, why the stars have aligned for this seeming revival of nuclear in America with the restarting of the Three Mile Island reactor. We really do have the perfect guest. We've had him on the podcast multiple times. Truly one of our favorites and a fan favorite. We're going to be speaking with Jigar Shah. He is the Director of the Loan Programs Office at the Department of Energy, a key player in all of the Inflation Reduction Act's efforts to stimulate clean energy growth in the US. With the Inflation Reduction Act, his office went from a lending authority of about 40 billion to over 200 billion. A big advocate of nuclear and other sources. Jigar, thank you so much for coming on Odd Lots and great to have you in the studio. It's the first time we've talked to you here in studio.

Jigar Shah (4:28)

It's so great to be in the studio. Thanks for having me.

Joe Weisenthal (4:30)