Atomic Show #278 transcript, lightly edited for clarity.
Intro music (00:15):
[inaudible]
Rod Adams (00:21):
This is Rod Adams and it’s time for Atomic Show show number 278. Yes, these Atomic Shows are coming almost regularly these days. I guess it helps to have not only myself, but all of my guests, working from home. Today I have a show planned to give you more information about what may be the world’s leading very small reactor project. Of course lots of people like to claim that title, but this is a combination of Ultra Safe Nuclear Corporation, (USNC) and Ontario Power Generation, which have a joint venture called Global First Power. And today I have with me Mark Mitchell, who is the head of the MMR project for USNC and Eric McGoey, who is the Director of Communications and Engagement for Global First Power. He also wears a second hat for Ontario Power Generation as a director for remote power generation. And of course, a very small reactor is well suited for remote applications. Welcome to you both.
Eric (01:40):
Thank you very much, Rod.
Rod (01:42):
That was Eric. And Mark?
Mark (01:45):
Thank you. Thank you very much, Rod.
Rod (01:47):
Yeah. I try to make sure that each guest introduces themselves and speaks a little bit. So as people listen, they can tell who’s talking. That way we don’t have to introduce yourself every time. All right, Mark. Tell us about the MMR project and how it’s progressing, with the development of the first of a kind of project in Canada.
Mark (02:09):
Thank you Rod. USNC has been developing the micro modular reactor (MMR) since 2014, that was when we were approached by our then partners in Canada to look at using our unique, proprietary fully ceramic micro encapsulated fuel as part of a design for a nuclear reactor that would provide power to remote mines and settlements in Northern Canada. We’ve, we’ve been very successful in this development because we’ve been focused very much on a niche market. The micro modular reactor is tailored for remote power and mines.
Rod (02:50):
At this point, we experienced an audio hiccup. You’ll hear Eric taking over.
Eric (02:54):
OPG of course, has been in the nuclear business for over 40 years. And we’ve been primarily focused on, on-grid generation. In fact, that’s been our bread and butter for some decades. Now we produce about half of the electricity in the province of Ontario, which is Canada’s largest province. And, about 60% of that power comes from nuclear. That’s true at both the provincial level, in terms of the overall provincial supply and also in terms of OPGs own production. We are diversified. In addition to our large nuclear plants at Pickering and Darlington. We also have 66 hydroelectric facilities across the province. We have a number of gas plants, we have a thermal plant that used to be a coal plant that we converted to biomass – wood waste – in Northwestern Ontario. And we also have, a solar installation in Southwestern Ontario. So in recent years, OPG has been looking at growing our business, diversifying and really turning our minds to what the next generation of nuclear is. And when we look at that, we really see three distinct opportunities, or streams as we call it. So stream one to us is on-grid, nuclear technology. That includes SMRs, it could be ready to get going and produce power before 2030. Then we see another generation of advanced reactors that we call stream two, which we’re probably not realistically going to be in service until probably the mid 2030s. Some really interesting stuff happening there. Lots of promise, but nothing that we think would be ready this decade. And then stream three, which is where the MMR project at Chalk River fits in, is about off-grid generation. So Canada of course, is a vast country. And although much of it is very well served by provincial transmission grids in the Southern portion of the provinces across the country, once you get to the far North, not just the Arctic, not just the Territories, but even the Far North of Ontario, for example, doesn’t have a transmission grid that covers all of the communities. So there are many remote First Nations or indigenous communities and, also a number of remote mines. And so when USNC came to us to talk about partnering with Global First Power on this demonstration project at Chalk River, it was really interesting for the company because we could see a clear alignment between USNC’s technology and vision for deployment of off-grid SMRs and our own experience dealing with the regulator and doing community engagement, project management, indigenous engagements, environmental assessments, and so on. So it really was a good fit and it’s great to be formally partnered and moving ahead on this project.
Rod (06:14):
So, Mark tell us a little bit more about the specific technologies that make your MMR well-suited for off-grid applications.
Mark (06:26):
Sure, Rod. The MMR is an interesting mix of conservative design and innovation, which enables us to do this. We have very deliberately tried to keep the design as simple as possible, to make it easy to firstly, to license and deploy it. but also to field and support, in remote application. The MMR is based on USNC’s proprietary FCM fuel, which we believe in this application, especially, will bring unparalleled and previously unimagined levels of efficient product retention to a nuclear reactor and basically mean, that these facilities are both inherently and intrinsically safe. And these are packaged in a high temperature, gas cooled reactor or gas cooled reactor probably because it doesn’t operate at a particularly high temperature. And this reactor configuration is enveloped by the two operating high temperature gas cooled reactors in the world today. And by combining these factors, we get to a very small modular reactor that is extremely easy to deploy, and to support. And we believe will be, very much acceptable both to the communities where we’re deploying them nearby, and the regulator. The basic technical specs of a single unit is a power output of about 15 megawatts thermal, which translates to about five megawatts electric. And the idea is that these units would be deployed singly or in groups of say one to 10, and this would cover probably 80 to 90% of the sizes of applications inside this market we’re focusing.
Rod (08:30):
I know there’s a method of separating the primary, nuclear-heated portion of the system with the power generation steam plant, using molten salts. Can you describe that separation a little bit?
Mark (08:46):
I’d love to. Really, there are only two innovations in our design in terms of the big ‘I’ innovations of changes to what’s common in nuclear today. The FCM fuel, as I mentioned, and the second is using a molten salt, intermediate heat transfer and storage loop. And that is actually, we believe, an incredibly powerful innovation. It brings a lot of benefits. Some of the benefits are the separation of the nuclear plant, that is the nuclear reactor and the helium that cools it and transfers the heat to the molten salt, from the application. And that means that with a standard licensed unit, we could serve many different applications and that’s because the molten salt heat transport and storage, effective decouples whatever’s happening at the application from the reactor. The reactor doesn’t have to know about the application, be it generating electricity with steam or just providing distributed or process heat. And with the storage, there’s a buffer. So if we happen to switch the application off or change the load, the reactor can carry on at the desired safe points. And basically this simplifies and eliminates a lot of questions about designing reactors to operate in the sort of dynamic environment that is inherent to a micro-grid. You know, when you’re on a micro-grid and you’re the only generator, you have to absolutely match the load continuously second for second. And that’s essentially the, the most important, flexible generating factor that really drives our design for flexible electricity generation. And what I’d point out is that a lot of these settlements and mines have also got renewables deployed, and that means that we would be acting in concert with renewables that are operating on the micro-grid as well, and be able to adjust to ensure that the user gets effectively utility quality power at the sort of best possible price, while the nuclear plant is basically making sure it’s always available.
Rod (11:01):
Do you have a large amount of storage to the point where you could, say have have your reactor be secured for some maintenance for a period of time while still providing power?
Mark (11:17):
Not actually. Normally you would talk of storage in terms of hours of storage at rated load. Practically achieving very large storage ratings is prohibitive. What I mean by that is typically a large concentrating solar power plant would operate with enough storage to make it through the night at the nominal generation or the nameplate value. And that is already a very large amount of storage that you would have to put in place. Large molten salt tanks and quite a lot of complications. So we would typically not choose to do that. We can follow other approaches to ensure that there is reliable power output if we take down a reactor for an outage, which are a lot more economical and simpler.
Rod (12:11):
Okay. And if your load trips off, your reactor can adjust to that loss of load and a throttle back to some sort of steady state power?
Mark (12:24):
Yeah, absolutely. So in the scenario with where your load tripped off you would have the option to keep running. If you have four hours of storage, for instance, you could keep the reactor running, potentially at full power, if that’s what it was operating at four hours. And if it was operating at less than full power, say 50%, while you keep operating for eight hours. That’s really very beneficial, because what it means is any operator, working with the reactor will essentially have a lot of time to be able to deal with things that are happening far away from the reactor without needing to pay specific attention to the reactor. Realistically, we imagine in a scenario like that, you would throttle the reactor back, effectively, and you could probably run for a significant amount of time, probably enough, especially if it was a spurious trip, to be able to bring the adjacent plant, as we call it, back online and to get generating again.
Rod (13:31):
Eric, your company’s a specialist in dealing with the Canadian regulator, or at least has a lot of experience in that. How is your process going right now for the first-of-a-kind unit?
Eric (13:44):
In Canada, there are three regulatory licenses that have to be sought and received from the Canadian Nuclear Safety Commission. So the first license, and that’s the one that we’re in the process of right now is the license to prepare the site. Then you can move on to a license to construct and ultimately a license to operate. Now, interestingly enough, although those are three separate licenses, the environmental assessment process covers the entire life of the project right up to decommission. So we’re simultaneously in the licensing process or the first of the three licenses, the license to prepare the site, but also doing an environmental assessment that covers everything. And so our public engagement is really a blend of talking about, introducing people to the project, talking about what we’re trying to do right now what the short term plan is, but also really making sure that people understand the big picture, which after all, isn’t just about establishing a single reactor at Chalk River. Instead of course it’s a demonstration project. And really what we’re trying to prove is the commercial viability of using an SMR as an alternative to diesel generation. That’s a high bar to clear. It’s really cheap to burn diesel. And, and so that’s a significant challenge for us to demonstrate a commercial model that can be competitive. We’re optimistic for a number of reasons though. One is that our design is built to run for 20 years on one load of fuel. And that allows you to give some price certainty to customers, over a 20 year lifespan. Whereas, you can’t buy diesel futures and lock in your price of diesel 15 years from now. Which you could do that if you were using an SMR. Also simplifies the logistics. You’re not having to ship and move millions of liters of diesel over the lifespan of the mine or the community, for example. And so, we’re, we’re pretty excited about not just telling the story of this specific project, to the folks in the Chalk River Valley area, the Ottawa Valley area, pardon me, but rather to talk about the potential for the deployment of SMRs across Canada and ultimately into the export market.
Rod (16:38):
Because of the nature of the communities where your deployment will eventually be, are you involving, indigenous representatives, First Nations and getting them interested and excited about the potential for having nuclear in their community?
Eric (16:57):
Yes, Rod. That’s definitely the vision. So, I would say a couple of things there. One is that Ontario Power Generation has had a lot of success with our non-nuclear fleet. In the last decade, every single greenfield project that we’ve built has been an equity partnership with local indigenous communities. So we’ve done three hydro projects like that, one in Northwestern Ontario, two in the Northeast, and also a solar project, most recently. And that track record of real indigenous partnership and equity ownership is a really interesting one to try to bring to the nuclear side of the company. And so I think that’s our vision. That being said, we have to be honest about the track record of engagement within our industry and the fact that indigenous communities have not been able to benefit quite the same way that municipalities, for example, have with a big, large plant that they can get property taxes on and, and a lot of highly compensated employees with good union jobs. We haven’t had that kind of impact on indigenous communities. Certainly not in Ontario. There are some encouraging success stories. If you look at, the Dene communities of Northern Saskatchewan, for example, that have done quite a lot of business in the supply and services sector related to uranium mining and have used that to branch off into more involvement in the nuclear sector more broadly. So there are definitely some success stories, but the average indigenous community is not familiar with nuclear in Canada. And so we’ve got a lot of listening to do to really understand communities and their aspirations and their concerns. And so we’re doing that locally, in the Ottawa Valley region for the Chalk River project specifically, but I think we also understand that there is a broader Pan-Canadian story to tell and engagement to be done and we’re still thinking our way through the best way to do that.
Rod (19:20):
So Mark you’ve described, the fact that you use the fully micro encapsulated fuel and then also mentioned that your reactor operates at a rather modest temperature among high temperature reactors. I think it’s somewhere in the 650 degree C range, probably that’s a result of the temperature limitations of the salt that you’re using. What kind of margin do you have between where you’re operating and what the failure point of your fuel would be?
Mark (19:55):
I think we are still completing scientific studies to understand the real failure point of the fully ceramic micro-encapsulated fuel. But this fuel is based on Triso fuel, which is quite commonly known. And Triso fuel being understood already we expect the FCM process to improve the failure tolerance of Triso fuel, but typically in Triso fuel you would start to see meaningful numbers of failures at about 1800 degrees Celsius. And failures are de minimis, or at an acceptably low rate up to about 1600 degrees C. What’s interesting in gas cooled reactor safety, as well as that, when looking at situations where you switch off all the cooling to the core and rely only on passive conduction, convection and radiation to take the heat out, the situation is normally that the fuel temperature immediately after you stop the forced cooling starts to increase. And a lot of the safety design on passive gas cooled reactors is about finding the peak temperature, which may take days or weeks to reach and comparing it to a limit of about 1600. And that way you can say, well, there’s no fuel failure expected or additional fuel failure due to heating up. In an MMR, it’s completely different. In reality, in an MMR, at the power levels, we’re talking about for Chalk River, the fuel is hottest when it’s operating and the moment we stop operating and we remove cooling, or shut the reactor down the temperature of the fuel only decreases. And that gives us exceptionally large margins. So we’re looking at margins of 40 or 50% on the 1600, which is really pretty convincing. And I think that is a very convincing part of the safety argument.
Rod (22:08):
So in your safety argument, it seems to me that you might not have very many components that are critical to ensuring this kind of physical performance. Is that correct?
Mark (22:22):
Absolutely. I think we look at it from a safety philosophy approach where we put a lot of effort and quality into the fuel and the fuel is comparatively, per giga joule energy content, more expensive than the fuel used in a light water reactor, for instance, today. But it enables a lot of offsets. So in initial discussions with the CNSC, we’ve put forward a case, and I think this is something that’s been verified by the Chalk River project well that, we have no dedicated safety systems on this project. And by that, I mean, in the Canadian context, because that phrase is used slightly differently, but no system that exists solely for the purpose of assuring safety. And that’s a big potential improvement to the approach to reactor economics that a lot of other reactors follow. There will, of course, be systems and structures that are important to safety, but probably they’re more structures than systems, and that’s just got to do with knowing the state of the core at all times.
Rod (23:36):
Sounds pretty good. Have you done some cost analysis? And either one of you or both of you can answer this. I understand first-of-a-kind is a challenge, but what are your Nth of a kind goals?
Eric (23:52):
Rod from our side, these reactors are not going to work like today’s reactors. They are designed to be fully factory manufactured and tested, and then transported to site and integrated on site, or basically installed. And that is actually very interesting because what it means is that the breakdown in cost of this reactor is very much in line with a renewables project today where 70 or 80% of the capital cost is effectively in equipment that’s brought to site and the onsite construction cost is pretty low, like 20%. And what’s exciting about that is, when you’ve got 70% of the value of what you’re doing, being built in the shop, in the factory, that provides a very powerful way to apply learning, to improve the production process. Today, we think we’re, and when I say we think, I should say that one of the objectives of the Chalk River project from our perspective in terms of demonstration is demonstrating our construction methods and the economics of it. So today we expect, that the total cost of a fully fueled reactor would result in costs that are 30% or more, less expensive than diesel, and would compare very much to the cost of renewables. But more than that, we expect that the trajectory, as we scale out and deploy more of these reactors and, learn lessons and get better at building them more reliably to higher quality and cheaper, will basically result in a cost profile or trajectory that looks a lot like what you see in the various renewable technologies today.
Rod (25:54):
Eric, any thoughts on this particular topic?
Eric (25:55):
I’m coming at it from, I guess, bit of a more, skeptical angle, because I’ve heard a whole bunch of different vendors make, you know, pretty, pretty ambitious claims about costs and what I’ve found, you know, looking back. And when I first started to dip my toe into this side of the business a few years ago is I didn’t find many of those projections terribly helpful, because if you said, great, I’d like to buy one, when will it be ready? And how much will it cost? You were always, greeted with silence at the other end of the line. So the way I look at this is this project is about answering all of those questions. You know, if we come in and our commercial model despite everything working well and technology functioning as promised, and at the end of the day, we realized that we’re going to come in at 10 times the cost of diesel. Well, that’s just not gonna work. But there’s no way to know how we can actually land that with certainty and signed contracts that won’t be, either impossible for us to deliver on or bankrupt the company if we don’t do this work. So it’s really about answering those financial questions, with certainty that, that I think is, is the value proposition of this project itself.
Mark (27:29):
Agree
Rod (27:31):
And I assume, Eric since OPG is an owner operator of nuclear plants that somehow the consortium or the joint venture of Global First Power will be an owner operator. Is that a good guess?
Eric (27:46):
Yes, I think so. Absolutely. We feel really strongly and I think it’s true across the partners, there’s no light between Mark and I or anybody else on the project team. We want to make sure that this initial reactor we’re building at Chalk River is the first of many and that, in the decade to come, we would love to see a number of, I would say, a dozen is reasonable to think that you’d be able to get to within the first decade after we got first power at Chalk River. and hopefully you can get significantly more traction. I think the first sales are really going to come from mining companies. That’s a natural alignment. When you look at the average life of mine and the ability to run for 20 years on a single load of fuel, there’s a lot of synergies with mining projects. Particularly given that most of the mineral deposits that are close to infrastructure, transportation infrastructure, electrical infrastructure in Canada have already been exploited. So when you’re finding new promising mineral finds, they’re often in the middle of nowhere where you don’t have any, infrastructure at all. Maybe some fly-in communities nearby. And so that’s where we think there’s a lot of potential, but after you get those initial customers from, I think the mining community, I think it’s really interesting to think about how communities might start thinking about wanting to power themselves, not just their industrial applications, but power remote communities with SMRs. And so that would open up another whole category of potential sales for this technology and is quite exciting.
Rod (29:46):
As a demonstration project, will the first plant at Chalk River have a vision maybe after a little bit of testing and demonstration for your own sake, will you be training operators and training maintainers and people who might be used in the expansion process?
Eric (30:09):
Yes, absolutely. And that’s part of the vision is to build a project team and the skill sets within GFP so that we can immediately pivot from the demonstration to the commercialization and deployment. And that’s the kind of thing that makes sense to start thinking of early on. So, you know, even now years before we anticipate having first power at the site, we’re having business development-type conversations with industry partners and really trying to make sure we understand their needs, so that we can move quickly to deploy and have the people and the skills to do that.
Rod Adams (30:53):
Do you have a goal at this point for when the first power will come out of Global First Power?
Eric (31:03):
Yeah. Well, Mark is welcome to correct me on this, but, I think we’ve got ambitious internal goals for the mid 2020s that we think are achievable as a project team. That being said, one of the big factors here on time, is the regulatory and licensing process. You can’t assume that the CNSC is going to be happy with your first draft and assume that the environmental assessment is going to be really streamlined and convincing the first time around. And so we’re trying to make sure that we are listening carefully to what the regulator’s expectations are and to what community’s expectations are to make sure that we can put forward the most credible case for this project and for the licenses and environmental assessment. So we’re optimistic that we can do that, but we recognize that’s probably the most significant risk to schedule delay. Does that make sense, Mark?
Mark (32:21):
Absolutely. I think that, as you said the biggest risk comes from things we cannot control. And, we know a lot about how to design it, how to make it, but what we don’t know a lot about is, is how to license it. This is an unusual thing we’re probably the first commercial fourth generation reactor to go through this process in the world. In Canada, it’s been quite a while since a new reactor construction was licensed, perhaps a global phenomenon, or at least the Western world phenomenon. And I think that there’s a lot of consideration that we need to give to the process of getting buy-in, public acceptance, which is a very high bar, in Canada. And so we’re not rushing it, but, we’re also not going to solve it on a whiteboard or in a boardroom. We have to get out there and actually go through the process and learn from it.
Rod (33:26):
My final question for you is, are you, yet considering licensing your system in other locations, are you going to go straight with a Canadian license first and then maybe start somewhere else?
Mark (33:42):
From USNC’s perspective, the Canadian project is the one project we have in the field at the moment. And, we’re a startup and we’re pretty lean. And so we don’t have resources assigned to be able to do successfully license in other jurisdictions. So I guess our current focus, and this may change over time, but our current focus is on the success of the Canadian project. And I would say that we may add to that, but I think we’re pretty much pretty committed to success with the Canadian project.
Eric (34:25):
Yes. And I would say the same thing from OPGs perspective. We have a mandate to be competitive, and do business across Canada and in the United States. We, as a company, do not currently have an international mandate that goes beyond Canada and the U. S. But certainly this is one of the projects that I think could take us to new jurisdictions. When you look at the global market for SMRs, it seems pretty clear that Russia and China have their own technologies, their own markets, and they’re going to do their own thing. We probably aren’t gonna play in their spaces, but the rest of the world, I think is essentially up for grabs and could be quite interested in technologies like this. And so once we, I think, prove this technology and the commercial model in the Canadian market, there’ll be some really exciting opportunities that will develop from that.
Rod (35:34):
Okay, I’m going to give each of you a chance to say whatever you think you need to say that hasn’t been stimulated by one of my astute questions.
Mark (35:44):
So I think what I would say is that we are extremely excited by this progress in Canada, and we think, it’s indicative of a long path that we’ve worked, on micro reactors and, in partnership or cooperation with OPG. We’re extremely excited that we think this will lead to the first, micro reactor deployed on a commercial basis. And I think we’re kind of excited cause we think, it is a great prospect in terms of improving, not only deploying nuclear in a way that hasn’t been deployed, but improving the lifestyle and economic position of many people in these remote communities and around remote industries and mines over the future.
Eric (36:46):
I guess the lens through which I look at this is, I don’t come from a nuclear background. I’ve worked, I’ve only been on this project for less than 18 months, but what has me really excited about this project is really climate change feels like the collective action challenge of our generation, of our times. And to really move the needle on carbon and on climate change, we’re going to need to do an enormous number of things simultaneously. We’re going to have to electrify large parts of the economy that currently aren’t electrified, including transportation and building sectors. And we’re going to have to significantly reduce our dependence on fossil fuels, not just for electricity generation, but definitely in electricity generation. And when you look across Canada, you can see that there are jurisdictions that can easily do that using hydro-power alone. You’ve got British Columbia, Quebec Newfoundland and Labrador, Manitoba. They’re unlikely to need nuclear to hit their climate change and carbon emission goals. But the other jurisdictions are likely going to have to follow Ontario’s lead. When Ontario phased out coal, which we did entirely by 2014, we did that by leaning really hard on nuclear, and that looks like the best path forward when you consider the limitations around the variable nature or intermittent nature of renewables, like solar and wind. And so if we can make a good case for nuclear to be that baseload, reliable, steady power supply for jurisdictions that aren’t rich in hydro resources, we’ll do a lot to fundamentally change the Canadian story about action on climate change. One of the things that OPG is most proud of is our coal phase out remains the continent’s single largest climate change action. And that’s a legacy that we want to build on and projects like this are the way to get there.
Rod (39:18):
Those are both terrific final words. So thank you both very much for your time. I wish you the best of luck and keep charging forward.
Eric (39:28):
Thanks so much, Rod.
Mark (39:29):
Thank you, Rod.
Final music (40:02):
Atomic Show closing jingle.
