ERP036 - Advanced Nuclear Energy w/ Canon Bryan

Welcome to Evolved Radio where we explore the evolution of business and technology. Today on the podcast, I'm speaking with Canon Bryan, CFO of Terrestrial Energy. An industry leader in next generation nuclear technology. Nuclear is a fantastically efficient and clean source of energy. But over the years, it's earned a bit of a negative reputation. As Canon and I discuss, this reputation is really unfair if you examine the facts. Terrestrial Energy is working hard to build the next generation of nuclear power. It's much more compact, it's dramatically safer and could be the key to our energy future. If you enjoyed the show, be sure to subscribe on iTunes, Stitcher or wherever you get your podcast from. Also, be sure to check out the web page evolvedt.com/podcast for show notes, links to my guests and to check out previous episodes. Now, let's get started. Joining me on the podcast today is Canon Bryan, the CFO with Terrestrial Energy. Welcome, Canon. Thank you, Todd. Nice to be here. So, as I usually say, this is an exciting topic that we have on today. But for me, this is quite exciting because as I was telling you before recording, Terrestrial Energy is one of the companies that I had on my wish list for having on the podcast for quite some time. And managed to get in touch with you through a mutual acquaintance and really excited to have you on and and chat about this technology that I think is really amazing, really blew my mind when I found out about it and I think that it's something that will be uh have a huge impact on the future. So, really appreciate you coming on and uh and joining us on the podcast. Yeah, thanks. I'm I'm often surprised at how word spreads around about the technology. It's it's kind of nuclear power is in its in it of itself pretty abstruse subject matter. Advanced nuclear is even more so. And it's just really interesting to me about how news of these types of technology developments gets around to the. Not only the highest levels of industry, but the common man on the street, the taxi driver and uh everyone in between. So I I really I love to hear when when someone is has learned about the technology and and has developed an enthusiasm for it. Yeah, so we're talking about nuclear power and nuclear physics, we'll we'll try to keep out of the the science at a reasonable level. And make it accessible to the common man, right? But I I think it's pretty doable. I was able to capture and understand this technology pretty easily. So we'll we'll talk about it much at the high level. You don't need to be a nuclear physicist to to understand why this is amazing. And I think people will will recognize that pretty pretty quickly as we get into it. So maybe I'll start with where I became excited with this technology and how I found out about it. I was watching a TED talk from a guy named Taylor Wilson. And a lot of people will will maybe recognize Taylor even if they don't know who he is, but they they've probably seen him talking in some spaces. And this is a guy that built a nuclear fusion reactor in his garage at age 14 called a fusor. And he was giving a TED talk about the technology that you're really now building, a form of it. Which is called a molten salt reactor or an MSR. And what really amazed me about this technology was one that it's kind of an older technology now being reborn through industry and and some technical applications. How incredibly stable and reliable and safe the technology is. And I think it really addressed a lot of the common concerns around nuclear that we'll get into a bit later. That was really my exposure to to the the MSR technology, the molten salt reactor technology. And obviously, this is uh something you're passionate about, spending a a long period of time building an organization that can take on such a huge project. So, um maybe that's my exposure to it. If you want, you could tell us your impressions of the technology, the MSR and and why it's really radically new. Sure. Well, it is true what you say, it is a it is actually not a new technology. It was developed in the 1950s and 60s as part of the Manhattan projects by the Americans. And the design culminated in a series of prototypes including one, the most famous prototype called the Molten Salt Reactor experiment, which actually ran operated as a power reactor for almost five years. A smaller reactor, about seven and a half megawatts thermal and produced some amazing results. And you could say it's an old technology, but if you look at it in the context of of energy. And the development of of energy technology, which really, I mean, it goes back to the invention of fire by by prehistoric man. And and in fact, it goes back before then. Uh even before then, we had energy, human energy. We would use our our own human force to perform actions. So if you look at it in those terms, you get a sense that the the development is. Any any nuclear technology development is is very new. Uh so but Molten Salt Reactor technology is a technology that lends itself. Particularly well to the market demands of today. So, let's go back to the 1950s for a second and the 40s and 50s and even the 60s and look at some of the political and market demands that they had back then. They were in the middle of the Cold War and it was important for a nuclear technology to also be able to have the capability of making weapons. And when they developed the Molten Salt Reactor, well, they found out, one of the things they found out was that it wasn't particularly good for weapons. So that was uh one of the reasons why it was not as successful as it was. Uh and it was put on the shelf for many decades. And a Canadian PhD physicist named Dr. David LeBlanc, a business partner. Uh picked this technology out of the trash and basically redesigned it over the last 20 years. Making it into a far more commercial application, a commercial design. It and it does, it fits very well with today's energy needs. In the sense that it provides low cost power, which is uh very low carbon on a life cycle basis. And the design lends itself well to low upfront construction costs. What we finance people like to call CAPEX or capital expenditures. So, I think most people, whether you know nuclear power or not, sort of have the sense that when you build a nuclear power plant today, it has a big ticket on it. It's a multi-billion dollar project. And that's true. These these nuclear power plants are typically 5 to 10 to even 15 billion dollars. You look at the power plant that the that the UK is building at Hinkley Point, upwards of 30 billion pounds. I mean, this is big, big capital. And the private sector is not interested in in that that kind of risk on one project. So, to have a design for a nuclear power plant, which is less than 1 billion dollars in in upfront construction costs. That's a game changer. That is a psychological barrier which has been broken. And when industry can can have the confidence that they can build a nuclear power plant providing stable, low cost, low carbon power for many decades. Uh that that makes a huge impact on their decision making, on their risk assessment. Uh of getting into these types of new technologies. So, I think it's really, really important that we emphasize this point. Because if industry does not adopt a clean technology, then we're not going to have clean technology. Industry leads the way, industry makes the investments, they have to be totally confident that it's going to be the lowest cost option. Uh the most convenient option for them and uh hopefully uh low carbon. Uh so the energy industry today is characterized by being majority fueled by fossil fuels, over 85% of all global energy is is powered by fossil fuels today. And that number is growing despite what most people think that renewables are somehow taking over. There is a lot of renewables deployment, solar and wind deployment that's happening. But it is not being deployed as fast as new fossil fuel power is being deployed. So therefore, the level of fossil fuel power as a function of total energy is actually still growing. And that's obviously a big problem for the climate if we want to have a climate that is healthy for this planet in the future. Then these trends have to change and nuclear power has proven itself to be. Broadly deployable of relatively rapid basis, there've been a few examples in history where where nuclear power has decarbonized uh an energy system of an entire country. Uh like France, for example, uh a couple of examples, France, Sweden, uh the province of Ontario in Canada and even the USA. In the 60s and 70s, they built over 100 reactors. Nuclear power still today in the USA is well over 60% of their carbon free power, all of their carbon free electricity. It's definitely proven itself, the technology, nuclear power technology has proven itself to be a great engine for decarbonization. All we need to do now is get the cost down. That's where innovation comes in. That's what terrestrial energy is all about. Terrestrial energy is all about innovation. Technological innovation leads to cost innovation. That is absolutely the driving philosophy of this company. And if there if there is no cost innovation, then there is no adoption by industry. Then we're in deep trouble. So you mentioned the the scale of the the the facility being much, much smaller. And this is something that I found really striking about this as well. Most people, if you think about modern, we'll call them modern, even though, you know, they were built 20, 30 years ago. Most of the modern nuclear facility that we imagine in our head kind of look like a small city. Like these things are absolutely gigantic. It's no wonder it takes billions of dollars. And the MSRs are are relatively much, much smaller, maybe the size of a large warehouse or something similar. Is that is that am I getting the scale correct in that? Uh they are definitely a lot smaller. They are also less complex than conventional nuclear power plants. Molten Salt Reactor or the the Terrestrial Energy's design. It's called the Integral Molten Salt Reactor or IMSR, we call it for short. They're designed to be small. So they're our first commercial model is a 200 megawatt design. Uh so that's anywhere from 1/5th to about 1/8th in size of standard new build nuclear power plants that are coming online today. They're quite humongous and they're meant for large markets. It's important to point out, I think that even these gigantic behemoth power plants that they're building. They still have an extremely small footprint in terms of the energy density, the energy that they're providing. So you have to keep that in mind as well. I mean, if you if you wanted to deliver the same level of power from a large nuclear power plant in a solar farm. It would take many, many, many square miles of land to equal that. Uh whereas the power plant, even a very large nuclear power plant would fit on a few square miles as opposed to maybe hundreds square miles. The energy density is still very favorable and you're you're getting enough energy to power a city, really. That's what it comes down to. And yes, the Molten Salt Reactor or the IMSR is smaller still because the safety features that are inherent in the design. Means that there's a lot of parts of a conventional nuclear power plant that don't need to be there. That's what allows us to have the smaller footprint. It allows us to have a smaller materials footprint, so in other words, less steel, less concrete per unit of energy. And less of a what's called emergency planning zone. In other words, the the area around the nuclear power plant that is determined by the regulator to be an area that has to be evacuated in the in the event of some kind of an accident. So the American regulator has just very recently within this last month or so, made an official determination that advanced nuclear reactor designs. Uh can have a much smaller emergency planning zone. So that's a big victory from a cost standpoint. And and again, you know, these innovations, they translate directly into cost innovation. And that's what's going to win the race here is by delivering low cost power. And by the way, it's not just industry that's going to adopt low cost clean power. It's going to be smaller nations too. You know, smaller nations, they can't afford to spend 10, 12 billion dollars on one power plant. They can't take that kind of risk. Their economies are aren't big enough. But they also need to have power desperately, desperately they need to have power. Because they don't smaller nations or poorer nations, let's let's put it that way. They don't have access to the kind of energy that we enjoy here in North America, for example. And they're desperate to get any kind of power they can. If it's a choice between no power and dirty power, well, they'll they're going to take dirty power. But if we can provide an alternative that is both low cost and clean at the same time. Maybe we can help leap frog over the the fossil fuel decision and arrive at a clean power technology right from the start. Make and and massively strengthen their economy in the process. So as a relative of scale, the what the the note that I saw, I think it was on the uh the terrestrial website. Is that two IMSRs, two of them chained together essentially would power a city the size of Denver. And the footprint to that, you know, we're talking about fairly fairly small footprint. So, you know, even locally or in a far flung region, a poorer country, that type of energy density and the the the power to to build this stuff would be a game changer. That not having these gigantic city size facilities that cost 30 billion dollars, but you build up chain together a few different reactors or you guys are looking at building them scalable based on the energy footprint and the energy density output. So, kind of dependent on the region, depending on the need, you would have and purpose built an IMSR for the appropriate need for the person that has that energy need. Whether it be a city, whether it be, you know, an industrial facility, whatever that case would be, is that right? Yes, exactly. So, we could cater to larger markets, large urban centers. We could make a power plant which is operating more than one reactor in parallel and providing multiples of of power. Multiples of let's say 200 megawatts or 300 megawatts electrical. And uh in your example, you said, I think you said a power plant with two reactors could could power Denver. I'm actually not sure what the population of Denver is, but. Two 300 megawatt cores in a power plant would power a city with a population of about 500,000 people, half a million people. And yes, it would be quite small, but I don't think that's really our primary target market. We have the capability of capturing a a unique market segment, which today is dominated by fossil fuels once again. And that's that includes um smaller markets. So maybe smaller countries or even perhaps suburban cities. But most interestingly, we can participate in the industrial market. Uh so let me explain that. The one thing that's unique about Molten Salt Reactor is that it is a high temperature system. It it operates at 700 degrees Celsius naturally. Our product is not primarily electricity. Uh and that that may sound weird for for people that know something about nuclear power. Our product is heat power delivered in the form of a hot molten salt, which is a common solar salt. So it's the same salt that you would use at a concentrated solar plant, for example. And this heat can be used not only to generate electricity, but it can be used for other industrial applications as well that require heat. And a lot of people don't know this about the global energy system, but 30% of all the energy we use in the world today is used in industry. And a lot of it comes in the form of heat. Once I tell that to people, it starts to dawn on them that. Oh yeah, there are a lot of things that require heat like just envision the process of making steel, for example. Or aluminum smelting. Or making fertilizer or processing chemicals, making glass. I mean, all of these things require a lot of heat and it's sort of becomes obvious once you let people know about it. The problem is, there is no power source that exists that that is big or the right size, reliable enough and low cost enough to compete with fossil fuels for industrial power. Today, that's the situation today. So this 30% of global energy that we're talking about that's used by industry. It's almost entirely powered by fossil fuels, almost 100%. So it is a big, big contributor to carbon emissions and climate change. So until we develop a power system which is going to be able to compete with fossil fuels in the industrial market, the best we can do is just count on those emissions just being part of the part of our emissions profile. And that's unacceptable. So, for the very first time, we believe, Terrestrial Energy believes that the Molten Salt Reactor provides an alternative. A low cost, low carbon, right sized power source, which can provide the high temperature that's needed for industrial heat power in in a number of industrial processes. That's really interesting. That's unique. No one else is doing that. For that reason alone, but many other reasons as well, we think that this is a tremendously special project. One that doesn't come along every day. And I appreciate the enthusiasm that you talked about at the beginning of the program. I think that's appropriate. That level of enthusiasm because when you come across a technology like this that can strike at the heart of a big, big problem for billions of people. I think that's worth getting excited about. Now, the the other interesting thing about having heat as a product is that you can use it to make hydrogen. Hydrogen is a complex subject matter and I don't really want to get into it too much. And I actually don't know that much about it anyway. But there's something really interesting that you can do with hydrogen. And that is you can you can take hydrogen and you can combine it with carbon which is sucked out of the atmosphere. And you can make gasoline with it. Now, there's a hydrogen technology that most of the world uses today and it's all driven by fossil fuels. But it just so happens that there are alternative hydrogen fabrication methodologies. Is this like hydrogen fuel cells? Is that what you're referring to? No, no, it's not. We get that confusion a lot because because. Again, hydrogen is a pretty complex subject matter. But basically, there's a technology available that has a very high technological readiness level where you can make hydrogen out of water. So in other words, you dissociate H2 from H2O. And the the only other inputs are heat, you need a lot of heat to do it. The result is that you get hydrogen out of the inputs of nothing else besides water and nuclear heat if you use our our technology. What you do is you take that hydrogen and you get carbon, which is taken out of the atmosphere, like carbon sequestration technology. Which there are a few available out there right now, including one which Bill Gates is investing in. Another Canadian private company called Carbon Engineering. And you can take that hydrogen and that carbon and basically it requires a lot of power. But you can smush them together and make gasoline. Gasoline that would go in your gas station, in your car, in your tractor or truck or whatever you use to get around. Regular old gasoline, can't tell the difference from gasoline made out of petroleum. And the US federal government has been working on this for some time and according to the US government. They believe you can make this gasoline out of water and air for a cost that is comparable to petroleum-based gasoline. So that's incredible. It is incredible. In my mind, I get really excited about this. In my mind, this is almost like making gold out of lead. It's right. It's almost like magic. I think when when people learn more about these great magic tricks that advanced nuclear technologies make into a reality, I think they're going to have a different idea about nuclear advanced nuclear technology or nuclear power in general. That's a really cool use case. So one of the other ones that maybe pops to mind as well would be desalination. Is that another use case that you could you guys could offer as well? We certainly could. It's it's not a new idea using nuclear power for desalination. It's it's being done right now as we speak and it has for many years. So that's not a particularly new application, but it is something that we can do. And it is something that, for example, Middle Eastern countries are very interested in. You know, because they have all they have a dearth of water, of potable water. And, you know, the only way they have of making it is with desalination. But that requires the burning of a lot of fossil fuels and which is one of the reasons why some of these Middle Eastern cities, urban areas have some of the highest emissions in the world. Yes, that that is a very important application use case. It's becoming ever more important. As we start to find ourselves running low on clean water, on potable water. So, yes, that's um. Yeah. And the reason that I ask is I know that desalination is hugely energy intensive. And as you noted, if the cheap way to do that is fossil fuels and and you can offset that in a low cost manner with uh high energy density. Then one that water becomes a lot more cost effective and as you said, you're not necessarily dumping more carbon into into the atmosphere. So, interesting, yeah. Yeah, yeah, no, it's uh. It's kind of a natural fit, actually. Our our system is a you'd almost call it overkill for for desalination. Because with a heat output of 700 degrees C, that's far more heat than you need to do desalination. So you could use the waste heat in an industrial facility from our power plant to do desalination. One of the other use cases that I I'd considered when I thought about this would be industrial centers. So like if uh if like a regional government is developing like a trade zone or something and they want to set up a large manufacturing facility, they could invest in setting up basically the heat and the energy source for the rest of the businesses to cluster around. Is that something that that you guys have considered as well? Well, you know, there's almost an unlimited number of possibilities. Because almost everything we have in our industrial society requires a lot of power. I like the example of data centers, for example. These giant server farms, they require a lot of power and a lot of cooling. Sometimes you have data centers which are owned by, let's say, governments or most often when you have data, it's sensitive data and it you want it to be as off grid as possible in a way. That's another nice feature of IMSR is that it has the capability of being totally off grid. It doesn't require offsite electricity in the event of an accident, the design obviates that. It doesn't require, obviously, a pipeline to to pipe fuel in like a gas plant does. Uh most importantly, it doesn't require a source of water, a source of continuous water. So, that's really important. Because that's unique amongst any kind of power plant technology. And and and what it means is that it takes away a lot of the geographical constraints that you have on siting a power plant. And it also means that you can have an off grid self-contained facility. So let's say it's say it's a military facility. Or let's say it's a government of Canada, the the Canada pension plan database or something. You know, some something that that has real high level security demands. I think ideally the Canadian government or any government would would not want to be relying on power from the grid to supply power to that kind of a sensitive facility. Ideally, they would want to have off grid power and be a totally self-contained unit. And the IMSR gives them that that possibility. And also, most of these types of facilities are not going to be in the 1,000 megawatt, 1 to 2,000 megawatt range. I mean, that's far too large. Terrestrial Energy can come in with the 100 megawatt, 200 megawatt, 300 megawatt power source. And we can provide electricity, we can also provide heat for other applications. Or cooling or whatever, whatever the case may be. So you can have what's called co-generation, a co-generation facility where you're providing both heat power and electricity from the same power plant for different applications. So you you touched on some of the safety aspects, which I think are are really strong support for the the IMSR technology. This is one of the things that really appealed to me about it is that the big boogie man, you know, nuclear kind of has a bad image for for most people out there. They associate it with disasters like Chernobyl and Fukushima and things like that. And correct me if I'm wrong, but my understanding of this is a lot of those issues are born out of exactly what you noted. Is external cooling in the event that there's power loss, either Fukushima, it was the flood knocked out the the power reactors that that engaged the cooling mechanisms. And then Chernobyl was kind of this runaway reaction that was that they couldn't contain. And neither of those are a problem with the MSR technology. Because it essentially it's self-regulating, it's a chemical reaction more than it is. A full-blown sort of nuclear bomb that you're sitting on top of trying to contain. Those other systems, if if it gets away from you, then there can be huge risks for a disaster. Whereas with the MSR, essentially you you uh drop it into a cooling bath or it kicks in some some engagement technology and starts to basically cool itself off automatically. And you don't have those same situations of a runaway effect and my understanding that correctly? Sort of. Let me sort of clear that up a bit. First of all, let me just say the nuclear power industry has had three major industrial accidents. Actually, I I personally wouldn't call them major, but they caused a lot of economic damage. With the exception of Chernobyl, there were no injuries, no loss of life. And Chernobyl, which is far and away the worst industrial accident that's happened. There were 50 people that that died, most of them were emergency responders. Firemen, they ran into a blazing fire and they they died of of burns. Uh and or smoke inhalation. Very, very few of them actually, I think 18 of them were deemed to have been killed by radiation. When you have an energy technology that provides clean power around the clock for 60 years and there are 50 deaths grand total. That is precisely what you call safe. The fossil fuel industry which provides energy when it's working just right is responsible for somewhere between 5 and 7 million deaths a year. From pulmonary disease and all sorts of other things. If you want to call something unsafe, you can you can point to the fossil fuel industry. And say that's very unsafe. Uh but it is totally inappropriate to call the nuclear power industry unsafe. That that's just it's just not supported by any evidence anywhere. It just so happens that the safety features in the Molten Salt Reactor as they were designed by the inventors back in the 1950s, have a a much more robust safety case than than conventional light water reactor designs, the ones we use today. It's uh it's it is a very unique safety case and the only reason we would point it out is that it leads to dramatic cost innovation. That's the reason to have safety innovation. Is because it leads to cost innovation and and in the case of the IMSR. That is certainly true. It's very true. We we enjoy tremendous cost innovation because of the the inherent safety of the design. I see it also as a necessity for the advancement of the technology and its deployment as well. Because I I can imagine without the education of this. Just to be able to go to a community, uh say you're setting up a new MSR outside of, you know, even 50 miles outside of a major city. People would freak out if you told them you're building a new nuclear facility there. Because people have this psychological fear that like you said, is not really based in reality. But it's still a pressure that you're going to have to oppose. And if you can actually educate people on the fact that, yeah, this is totally safe, like even if there was an emergency. Just go go outside and get outside of the fence, which is a couple miles away and you're fine, right? I think that that's. It's a lower barrier once people are educated on the fact of of how much safer the technology is compared to what they understand the risks are of conventional nuclear. Yeah. I mean, it's it's a point worth considering. I mean, industry knows that nuclear power is safe already because industry has the access and the capability of reading data. It's just that simple. The common man, they're not necessarily educated in energy, they hear horror stories through whatever propaganda they happen to be exposed to. And they get all sorts of wrong-headed ideas about this or that technology. Unfortunately. And the proof is that nobody in Canada has ever been injured by nuclear power. Or uh the environment's never been harmed by it. There's just mountains and mountains of of data that show decade in and decade out that nuclear power is really good for us. Provides a lot of clean power and it's relatively low cost and it's and it's about to get even more low cost. Nuclear power is really, really good, really good stuff. And it's the energy of the future. I couldn't agree more. And I I hope the the podcast lends people to do a little more research and find out more about the technology. And that you guys continue to have some success in adoption in the market and development of the technology. If people want to reach out to you and and follow what you guys are up to at Terrestrial. Any uh channels that they should follow, either social or email, anything of that nature? Terrestrial Energy has its own channels, uh an email list on our website. You're welcome to sign up for that. I encourage you to do that. Uh we also so we have a pretty active social media channels. Facebook, Twitter, particularly. Uh the Twitter handle is @terrestrialMSR as in Molten Salt Reactor. Terrestrial Energy is the curator of a blog. It's relatively new. It's called Fourth Generation. Uh the website is fourthgeneration.energy. So www.fourthgeneration.energy. And the fourth is spelled 4TH with the number four. Well, Twitter is @4TH fourth G E N gen blog, so fourth gen blog. @fourthgenblog, that's our Twitter. Uh and then we're yeah, and then we're on Facebook and all the others is generally fourth generation blog. Okay. And I'll link to all of the uh the the social and the blog as well in the show notes. So if you want to check out all of those those channels and follow along, I think uh be really interesting stuff. So uh really appreciate your time. Thanks for coming on, Canon and uh informing us about the next generation of nuclear technology. It's my wholehearted pleasure. Okay, take care. Thanks very much.