What's Really Standing in the Way of a Nuclear Renaissance?

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:15)

And I'm Tracy Alloway.

Joe Weisenthal (0:16)

Tracy, we recently did that episode down in Austin with Jigar Shah of the Department of Energy.

And he said a bunch of interesting things about nuclear. I mean, we talked about a lot of stuff related to electrification, decarbonization, but I think both of us found the nuclear comments to be particularly interesting.

Tracy Alloway (0:34)

Well, absolutely. So there were a couple things to pull out there.

On the one hand, he sounded positive in the sense that maybe nuclear is getting more traction than it has previously. You have these new types of, was it smaller?

Joe Weisenthal (0:49)

Small modular reactors, SMRs.

Tracy Alloway (0:51)

Which he described as neither small nor modular. So I have questions about that. And sort of groundswell potentially of support for cleaner energy technology in which nuclear theoretically could fall.

But on the other hand, he also described these long running structural roadblocks to nuclear, at least in the US. So this idea that there isn't really a nuclear industry. There are utilities that might own nuclear plants, but no one's really pushing for it. And then also if you're a utility CEO, you're probably not gonna be that incentivized to build a massive nuclear plant because historically it's been a massive risk and responsible for a number of bankruptcies in the sector.

Joe Weisenthal (1:39)

Right. And so I think that was really like the key thing to me too. It's like, well, why did the US stop building nuclear? And in my mind, and I think probably in the minds of a lot of, or at least the rhetoric, of a lot of advocates of nuclear power, it is a clean carbon-free source of energy that has a bad reputation, and environmentalists stymie it because of outdated views.

Tracy Alloway (2:00)

Are you gonna say the three-eyed fish in The Simpsons again?

Joe Weisenthal (2:03)

The three-eyed fish on The Simpsons.

His view is like, actually, that's not the story, that as you say, that because of historical cost overruns, there's real financial risk in financing these, and that part of the reason these cost overruns happen is that there's really no domestic nuclear construction industry or nuclear industry, until no one is good at building plants, and that's why you have these cost overruns. And then ultimately, these are the stumbling blocks, the impediments towards this nuclear renaissance that many people would like to see.

Tracy Alloway (2:31)

Yeah, it's kind of this muscle memory effect. For some reason, it reminds me of the lumber industry post 2007, 2008, where no one wanted to have overcapacity anymore, so they just became incredibly lean.

And then when we did need more lumber in 2020, we didn't have enough capacity. So it kind of feels like that. It feels like everyone's been so scarred by the experience in the 70s, the 80s, the 90s that it's hard to kind of get people within the industry excited about it again.

Joe Weisenthal (3:06)

Absolutely. So we wanted to follow up and actually like explore some of these themes. So I'm very excited. We have the perfect guest to do so. We are going to be speaking with Mark Nelson. He is a founder and managing director at Radiant Energy Group, which does energy analytics.

He is an advocate, I believe, for nuclear. And he is going to talk us through, as he sees some of these issues that Jigga raised. So Mark, thank you so much for coming on Odd Lots.

Mark Nelson (3:31)

Good to be here, Tracy.

Joe Weisenthal (3:32)

You are an advocate for nuclear energy. I said, I believe, but you know.

Mark Nelson (3:36)

Yes, definitely.

Joe Weisenthal (3:37)

What is Radiant Energy Group? What do you do? Why should we listen in? Why are you here?

Mark Nelson (3:41)

Well, I didn't start out as a consultant. I started out as an energy analytics expert, working for a nonprofit out in California that was attempting to figure out why nuclear plants were closing around the world and how to stop it.

So I was working with Michael Schellenberger at Environmental Progress, where there had been a sudden growth in environmentalists turning towards nuclear in the Bay Area of California, practically where they first turned against nuclear energy back in the 60s.

And the thinking was, on one hand, if you developed an academic basis and a scientific basis for understanding nuclear energy properly, people and other environmentalists would come around. On the other hand, there was a crisis. There was a fire in the house, which was nuclear reactors were being closed around the world. We're not talking about nuclear reactors that people were proposing and needing to find financing for. These were nuclear reactors where the hard part was already done. They were constructed, they were making super cheap, reliable, carbon-free electricity, and they were being shut down all over the world. So at Environmental Progress, we needed to figure out how to stop that. And the first step was figuring out what was going on. And so I came in as a nuclear engineer to do that.