00:13:12 · John Collison, Scott Nolan
[00:13:12] S1: Mhmm. [00:13:13] S0: And I think that will be nuclear and then the question, the really big question I think is does that happen through more of the gigawatt scale reactors or does it happen through more SMRs and what's that balance? And I think if you look at, if you just take a big step back and say okay what type of baseload energy, what type of energy do we want to power these data centers? I think there's going to be a lot of pressure for it to be safe and for it to be clean and for it to be baseload. And so the biggest, you know, the thing that people forget is that nuclear is by far the cleanest and safest baseload. It's actually safer than wind power per terawatt hour. [00:13:49] S1: Sorry, how do people get hurt with wind power? Just the maintenance of the turbines? [00:13:53] S0: Yeah. Yeah. Yeah, if you look at all downstream mortality it's more dangerous than nuclear. And then if you look at all downstream CO2 emissions nuclear is actually the lowest lower than wind or solar. So if you think that those things matter and that baseload matters then it will have to be nuclear. The one thing nuclear has not done a good job of in beating everything else is on cost. And so I think that's actually what it all comes down to. So the question of do we deploy lots of gigawatt scale reactors or is the scaling handled by SMRs comes down to who is actually deploying more quickly and cheaply on a per megawatt scale basis.
00:13:53 · Scott Nolan, John Collison
[00:13:53] S0: Yeah. Yeah. Yeah, if you look at all downstream mortality it's more dangerous than nuclear. And then if you look at all downstream CO2 emissions nuclear is actually the lowest lower than wind or solar. So if you think that those things matter and that baseload matters then it will have to be nuclear. The one thing nuclear has not done a good job of in beating everything else is on cost. And so I think that's actually what it all comes down to. So the question of do we deploy lots of gigawatt scale reactors or is the scaling handled by SMRs comes down to who is actually deploying more quickly and cheaply on a per megawatt scale basis. [00:14:31] S1: Yeah. Isn't the true competitor for nuclear solar plus batteries? Because those are coming down this... Both for... Are coming down a very aggressive cost curve. And so you could just be cost competed by solar and batteries in a lot of use cases?
00:14:47 · Scott Nolan
[00:14:47] S0: I believe the solar cost curve, I am not... I haven't seen data that's as compelling on the battery cost curve. That could be coming. But if you want a data center that's five nines you need a lot of storage. Yeah. So I'd actually delete one thing the battery piece and I would say the competitor for nuclear is actually PureSolar. Solar and Sun Sync Orbit for data centers if we're talking data centers. I do think that that's the one other angle that's pretty smart and could possibly win. If we're talking about power on the ground, I think nuclear still wins, whether that's data center, industrial Yes. Whatever it is. How will cost get solved? Or will it get solved? It will get solved. And then the way it gets solved depends on what you think the cause of the cost issues in nuclear being. So this is one of those overdetermined problems of like, why haven't we scaled nuclear? I think most people just say safety. You know they look back to the seventies and they say, there was a movie The China Syndrome, you had 3 Mile Island, you had Chernobyl and so clearly nuclear was going to stop and we wouldn't scale it. Then I do think the scaling piece is actually one of the proximate causes like we never hit economies of scale, we weren't doing it quickly enough, we never built out the supply chains, the workforces would shift around from project to project. Vogtle was you know way over budget, over schedule. But at a time of historically low interest rates 20% of Vogtle's cost overruns were interest rate overruns, interest payment overruns. And so you realize that the overnight cost of a plant when they take ten years to build actually doesn't matter as much as interest rates and how long are you actually taking to build these things. And so if you think about the big reactors I think the way that we bring the cost down dramatically is just build them quicker and build more of them. I think that goes a very long way. If you look at the period when things really slowed down and that that downward spiral began for nuclear it was the seventies. So you had oil price shocks, you had oil prices going very low, you had interest rates that peaked I think in 1981 on mortgages like 18% mortgages at that point. And so how do you finance a huge infrastructure project when your cost of capital is well north of 10%, way north of that?
00:17:10 · John Collison, Scott Nolan
[00:17:10] S1: Because, yeah, the classical story of what happened is this very accident based muse of things like 3 Mile Island and Chernobyl, and you basically reject that as an explanation where you don't think it was that we saw these near misses and accidents and things and said, screw that. We're going to get much... You know, we're gonna strangulate nuclear and overregulate and everything like that. You think it was much more of a WTF happened in 1971 type story where we lost the ability to build large infrastructure projects generally, and nuclear plants are an example of a large infrastructure project? [00:17:51] S0: Yeah, and maybe the safety concerns put a slight pause on it, but I think that that is often blamed as the only thing. And maybe that was, you know kicked off this cycle to some extent but I think it was probably inevitable anyway when your product is not cost competitive. So, think fundamentally that's the thing in nuclear. It's the cleanest baseload, the safest baseload, not the cheapest baseload. So, you have to be the cheapest. I also think people in general if presented with you know here's a new technology would you like this to power your grid? You've maybe heard some safety issues with it that are probably confusing of which side to believe. And then also your energy won't be cheaper. And so if we're talking about being in nineteen seventies nineteen eighties when global warming was not really a topic and emissions wasn't as front and [00:18:40] S1: center. Mhmm.
00:18:40 · John Collison, Scott Nolan
[00:18:40] S1: center. Mhmm. [00:18:41] S0: Why would you say yes to I want a more expensive electricity bill? Yes. So I think that that put us here. I think the way it gets solved is building more. I think I think the other side of it if we wanna talk about the cost structure thing in terms of being overdetermined you have to ask yourself why did the cost get high, why wasn't there more downward pressure on them and I think there just wasn't a strong enough incentive in the ecosystem to push prices down. You had utilities that are more like cost plus organizations and they're generally going to outsource the construction of the facility. And so you end up with this dynamic that was in some ways similar to the launch industry of no very strong economic pressure to reduce price. It just stopped being a [00:19:26] S1: market and started to become a place where people rent extract in all their local corners and... [00:19:31] S0: Maybe not intentionally. Yeah. But I think absent a strong pressure to keep prices low and push them down and compete them down Yes. I think in a lot of industries that happens. And it happened in space launch as well.
00:19:31 · Scott Nolan, John Collison
[00:19:31] S0: Maybe not intentionally. Yeah. But I think absent a strong pressure to keep prices low and push them down and compete them down Yes. I think in a lot of industries that happens. And it happened in space launch as well. [00:19:42] S1: I mean, it feels like in general, the nuclear mood is this very interesting story of extremes where there was crazy unbridled optimism early on. Like, remember the radium watches for, you know, people are making watches with radium two twenty six for the light glow in the dark dials and this energy too cheap to meter and the Jetsons future. Like, it was really ebullient in its optimism. And then there was this crazy pessimism where, you know, nuclear became the kind of public enemy number one and, you know, the enemy of environmentalists, which is kind of ironic given you're saying it is kind of probably the safest and lowest carbon format. [00:20:27] S0: And it was actually a big debate with the Sierra Club, actually, internally. Was about half of the Sierra Club... [00:20:31] S1: There was a pronuclear side of the Sierra Club.