018 Rishi Jain & Paul Murphy, Managing Directors at Cross River Infrastructure Partners

[00:00:00] Rishi Jain: Here’s the truth. Here’s how this works. And by the way, this waste is actually just unspent fuel that probably gets used and to think that human ingenuity hasn’t solved this? It has! We have solved how to do all of this stuff, right? Yeah. So what I’m most excited about is a recognition of that we need a growth mentality and abundance mentality.

The earth can support everything we need to do with the population we have in a growing population if you let it. And this is literally energy from the gods, right? The uranium was created with two neutron stars colliding, and you don’t want to use it. Are you? Can you imagine how ridiculous that is?

Yeah. So here we are.

[00:00:44] Intro: Just because the facts are A, if the narrative is B and everyone believes the narrative, then B is what matters. But it’s our job in our industry to speak up proudly Soberly. And to engage people in this dialogue, those two and a half billion people that are on energy poverty, they need us. America cannot meet this threat alone.

If there is a single country, of course, the world cannot meet it without America that is willing to, we’re gonna need you the next generation to finish the job. Nuclear regulations, we need scientists to design new fuels, focus on net public benefits. We need engineers to invent new technologies for over absurd levels of radiation production entrepreneurs to sell those technologies.

And we’ll march towards this. We need workers to. With High Tech Zero Prosperity Football, diplomats, businessmen, and women and Peace Corps volunteers to help developing nations skip the development transition sources of, in other words, we need you.

[00:01:48] Mark Hinaman: Welcome to another episode of the Fire2Fission podcast, where we discussed the development and utilization of energy dense fuels and how they can better human lives.

We’ve got two great guests today. Uh, Rishi Jane, managing Director of Business Development at Cross River Infrastructure Partners and Paul Murphy, managing director of Nuclear at Cross River and Infrastructure Partners Rishi Paul, how are you guys doing?

[00:02:09] Paul Murphy: Doing well. Thanks for having us.

[00:02:11] Rishi Jain: Yeah. Great to be here. Thanks.

[00:02:13] Mark Hinaman: Awesome. I might have you go individually for folks that are just listening to in introduce yourselves, including your name, so that we can clarify who Paul and who Rishi is. So Paul, why don’t you start.

[00:02:23] Paul Murphy: Sure. So thanks for having me, Paul Murphy as you said, Managing Director for N uclear for Cross River.

My background is in project finance and energy and infrastructure. From the majority of my career, I’ve been on the legal side of things helping to develop and finance projects. And that’s very much in, in many ways consistent with my role at Cross Rover, focusing on our nuclear efforts and looking at it from the project development and financing side.

[00:02:53] Mark Hinaman: Awesome. How about you, Rishi?

[00:02:54] Rishi Jain: Yep. My name is Rishi Jane. I’m one of the partners here at Cross River lead our business development as mentioned. My background is and the other partners, we come from the investment side of the world. My own background was focused a lot on energy and natural resources.

Also industrials. And really this is probably your next question, but how did we come to form Cross River and really where we were playing? There was a recognition when you look at , the world of finance and funding. When you look at venture capital, they’re really good at taking technology risk, really terrible business model and structure for capital intensity.

When you look at project finance and infrastructure capital, really love capital intensity, really terrible at new technologies and often new markets. And so you have this very big gap when you think about technologies that are, let’s call them 21st century technologies. That are industrial in nature.

How do you, if you have, a technology that’s commercially ready for deployment, how do you get that out there, and really if you are planting equipment, let’s say your plant requires a hundred, $200 million, in, and there’s a balance of plant and there’s a whole bunch of project development that has to happen.

Typically technology developers are, not project developers, right? And they’re really good at tech development. They’re not so versed in how do you get something so that other people’s money feels comfortable in taking a, your project on. And so that’s really what we. How we approached this, we’ve started partnering with technologies that that had high capital intensity needs and said, okay, well how do we bring institutional capital, whether that’s strategic or financial, into the space that is, has lower development maturity.

So when you look at solar and wind, those are commoditized product. Hundreds of different developers out there of all sorts of shapes and sizes, thousands, if not more, that, that know what they’re doing. And you have limited returns on those projects. And when you think about nuclear as an example, there is no nuclear developer out there.

Right? There’s certainly, even, the GEs and the strategics of the world have long lost the ability to, to develop a project. And so we sat there and said, well, we have a view on nuclear being absolutely essential to the decarbonization of the world and the physics of it, just making the most sense for the planet that we live in, and the realities we have to deal with.

How do we get involved in this? And we’ve been involved in the nuclear fuel cycle and upstream, et cetera, but how do we get involved? And so that’s what led us to our partnership, and our project in New Brunswick, which we could talk about.

[00:05:47] Mark Hinaman: That’s awesome. Yeah, I’ll try and summarize for myself and hopefully our listeners, but you said venture capital often struggles to be a project developer, but, they’re comfortable taking big bets on technology and then established or incumbent infrastructure companies are comfortable taking, big bets on capital, but aren’t good with new technology. And so you guys have kind of identified a niche to marry those two ideas and bridge that gap, so that, that’s awesome. Okay. Well, I appreciate that overview of kind of Cross River. Did it start out with that thesis?

Was there something before the infrastructure partners piece?

[00:06:19] Rishi Jain: We had pivoted a few different times, in getting to this correct business model or the business model that is now correct in it. Started with partnering with other developers and, providing if you want to call the non-technical wrap around a project.

And often those developers who have a relationship, or a technology that was interesting or which we thought we could build something around. We sort of soon over a couple of different versions of, partnerships. We realize that even when you’re partnered with a develop, And you sort of say, look guys, this is not the way to do this.

It’s not gonna work. And then they still do it. You don’t have any control over stopping them from, from doing it. So we finally said this is, we just need to take control of this whole situation. And so while, Andrew Wilder, our CEO and myself are not technical. We’re financial, and operational types.

We bring in. The right skillset as program as we find a program which we believe we can develop. So fundamentally we build the business of a project, right? Which is what a developer does. Yep. And our technical partners, will deal with the technical aspects. So in this case, on the nuclear side, we’re partnered with our clean technology.

They are the 100 to 300 megawatt variant of, the E V R two Mary to the GE Prism and NB Power in New Brunswick, Canada Selected them as part of, the Stream two of Canada’s SMR program, which Paul actually helped author. And they take care of the technical parts and we start filling in the bounds.

So we gotcha. You Paul. Paul was one of those pieces that we had to fill in. Very well connected in the nuclear space. He’s doing a bunch of work with the DOE Department of Commerce civilian nuclear programs. He’s got a project finance background, possibly the only nuclear project finance background in the world, which, up until, up until our project probably was a very lonely space to be. But now we’re letting him unfurl his wings and be the butterfly.

[00:08:22] Mark Hinaman: That’s great. And prob probably a good segue. So, Paul, how’d you get connected with these guys and, what’s been your role?

[00:08:28] Paul Murphy: Well, back to my legal side, the general counsel of Cross Rivers a gentleman by the name of David Robbins, when I was at White and Case early in my legal career, as a mid-level and senior associate, David was a partner.

We worked together, we maintained a relationship over the years, and lo and behold, one day, I got a call from David and said hey, we could use some help on the nuclear side. And it’s grown ever since. And I think, a lot of the things that Rishi’s hit on attracted me to Cross River because you know what you see in the nuclear space and, having done stuff all over the world, working with large reactors, small reactors, the vendors have consistently have this statement.

I just wanna be a vendor that is my business. Yep. And that’s great. We’ve heard, we’ve heard that too. Finance lawyer. I sit there and say, wonderful, but that’s not a project. So who’s putting the project together? And you really just don’t see that, in the nuclear space, other than some large utilities doing it for themselves.

And even then, depending on what they’ve done recently, there could be some issues there too. But that sort of expertise to pull all the elements together and to do it in a way. Makes sense. That’s economically viable. That’s sort of where the challenge has been and I’d been talking about it, presenting about it, so it sort of became a, well, here’s where you better, put up or shut up.

Here’s the opportunity to get involved with the group that’s doing it. So you’ve been talking about it, you might as well get involved and roll up your sleeves, and it is a perfect time because I think. for the industry where you see the money that’s been coming in, there’s been a lot of money that’s come in, but it’s all been into technology investment.

I’m gonna invest in reactor design X or Y or Z, but not flowing into the projects themselves. And I think we’re kind of at this inflection point. We’ve been in this technology development stage, which is obviously essential, but now we have to be moving into project delivery because if we wanna see the industry meet the needs of development, decarbonization, energy security, all these cool applications that SMRs can do, hydrogen production, desalination, you’ll pick your topic.

We’ve gotta actually start delivering projects, and I think. that’s what we’re seeing, not just with what we’re doing up at bdo, but in working with arc. ARC is continuing to progress. On the technology development side, and then you’re seeing the transition for what they’re doing at Lepro with NB Power and then with us at bdo.

And so you see that, that evolution into, the project development and delivery space, but. That’s where we really have to get cracking as an industry, on delivering the projects. Not just the first ones, but scaling it quickly. Because, when you look at where the industry is in the S M R space, you’re seeing the various vendors, and we can mention them, of course, all taring.

Targeting like late end of this decade for the first one. And then you look at your 20, 40 or 2050 targets, and so you’re like this, and then all of a sudden it’s gotta go like that. And so you sort of sit there and say, how’s that supposed to happen? And that gets into supply chain issues. It gets into a lot of things, but having real projects to point to for investors, for the supply chain, for governments showing that pipeline.

Is critical. Like when I was at Bechtel earlier in my career, we were partnering with Ari. To bid for large reactors at the Darlington project, and there was a requirement that you needed a certain percentage from the Canadian supply chain and the Canadian supply chain is very experienced. But when we went to people.

They didn’t have the capacity cuz they were full and they didn’t wanna expand their capacity cuz they said, well what happens if the project never occurs? And of course it never occurred. So they were right. But that is one of those challenges is getting that investment into the sector is a function of a lot of different things, but one of ’em is not, Hey, I have this really cool technology and my reactor’s better than yours, kind of debate.

Who cares? What’s your project pipeline? And so when you, how are you going to make money? Who are you gonna to sell? And, and so like, okay, multiple reactors at Lepro for Arc, for us at Be Dune, we’re talking a gigawatt. That’s a pipeline, that’s something you can start scaling a supply chain and developing, human resources to support it.

And I think that’s, It gets very exciting for us because we see the project helping. Pull the technology forward, we all have our part to do, but that project pipeline I think is really critical. And so a very long-winded Irish Italian lawyer answer to a very simple question, how did I get involved, with Cross River?

But there you go.

[00:13:45] Mark Hinaman: Oh, that’s, that’s perfect. I love it. I love that both of you identify or articulated this gap in the industry. And I’ve, I’ve identified it too, coming from kind of the upstream oil and gas space. All of the oil companies aren’t technology developers, right? They’re general general contractors.

They go out and they utilize the technology. And that, in my opinion, that doesn’t exist in the nuclear space. And it’s a huge opportunity. And I mean, at this point in the game, I think there’s lots of space for lots of players, but yeah, I’ve, I’ve had the same perspective that all of the technology developers kind of have the field of dreams view of, if you build it, they will come.

But that’s not necessarily how the world works. There’s a lot of work that goes into actually selling these things on this project. So exciting to hear that you guys have the that thesis and yeah. Let’s dig into kind of one of the current projects that, you guys are working.

[00:14:36] Rishi Jain: Sure. So, BDO is the first the first project that we are proposing to be nuclear industrial production hub.

BDO is a, an industrial port in the northern, on the north shore of New Brunswick, Canada. The province is for our American listeners. If you drive straight across the border from Maine, you’re in new Brun. And it’s not New Brunswick, New Jersey, which is an inexplicable number of times I’ve had to make that clarification.

So this is the province of New Brunswick. There’s an industrial port that has like many regions in the us and other parts of Canada, was a formally industrial zone that has against its will de industrialized with a lot of offshoring, a lot of low cost production. Mm-hmm. Labor in, in other parts of the world.

The port. And it’s CEO Dan Caron embarked on a redevelopment plan, a master redevelopment plan two or three years ago to reimagine the port as a green energy hub and, to utilize what is a beautiful federal asset that is not being used. It’s a deepwater all weather port. To that, is that hassig significant capacity available to, to attract.

Green energy and re industrialize the economy in the region in the 21st century into the 22nd century model. Now, new Brunswick is a nuclear province. There is a coal plant that is going to be decommissioned by 2030 that is at the port, but the, which means while the coal plant, we all have our views, on how coal needs to disappear, but the interconnection, the infrastructure, the cooling, it’s all there.

And that is a significant advantage. the transmission especially. So that site is where we’re gonna locate or we’re proposing to locate the ARC SMRs for hydrogen production and in our view and it’s a minimum of a gigawatt, but probably closer to two gigawatts of ARC technology, we’ll put there.

And New Brunswick very appreciatively as well as the First Nations have all made and are all supporting and have made a big. On the arc technology behind envy power, doing the global downselect. and there’s bipartisan support in this province for nuclear, and then there’s bipartisan support, federal level as well, which is awesome to have a stable environment.

Where you don’t have this fear of partisanship, bickering, tearing apart our program, there is consensus that this must happen and it is likely that nuclear gets added, as the green, as part of Canada’s green taxonomy. That’s seems to be, the way that’s going. And in fact, I think most places around the world will view nuclear as green, other than, Germany, which has a very, different story that we don’t need to talk about, and Colorado, but we can, we

can talk about And Colorado Yeah.

And, and Minnesota too. Inexplicably. Here we,

[00:17:22] Mark Hinaman: it’s bizarre. Yeah. I’m trying to, we’re changing that part of, this podcast will change that. Right.

[00:17:26] Rishi Jain: Okay. Very good. Well, I’m glad to hear that because I think what’ll happen is anyone, who takes the bet that New Brunswick is doing over the next 50 years, you’re gonna see business.

Heavy industry at attract, attracted to where low clean energy, low price, clean energy is and on pound for pound or gigawatt For gigawatt. Megawatt. For megawatt, there isn’t anything cheaper. Even new build nuclear, even when you look at vog, is still cheaper than the equivalent amount of unsubsidized solar and.

Or renew variable renewable from a system level basis. Now what, which is how we should think about it, which is right, a total system level cost of electricity or energy, is how we pay for power, right? That’s what shows up on our bill. So it’s fine that you keep these constructs of, oh, well, just the project, even though solar panel costs are going up and where turbine costs are going up, they’re not cheap.

That whole Chinese labor and, no, no labor standards, no environmental standards. Yeah. , that world that has run its course you’re never gonna get better, cheaper, denser power. And we have gone through, when we went through RX technology, we are not venture capitalists. So the fact that a, nuclear operator went through and said, this is the technology we’re gonna go through.

And then when we had our technology briefing with them we did another one in December. Our jaws just dropped. Just dropped at how, yes.

[00:18:49] Mark Hinaman: Maybe let’s clarify some of these, some of these entities and organizations. So the, location that you selected for a nuclear deployment is in New Brunswick.

It’s at, a private. I assume?

[00:19:00] Rishi Jain: No, no. so it’s a federally event. Okay. So it’s a federal port authority. Yeah. And so let me, I’ll clarify a little bit further. So New Brunswick Power is the utility They currently operate a can-do reactor at a point Lepro in the South, which is just north of main,

[00:19:12] Mark Hinaman: at a different location Yeah.

Than where you guys look at.

[00:19:15] Rishi Jain: They have decided to take the first of a kind, or I should say first in a while, risk Sure. And order units one, possibly two, three, and.

[00:19:25] Mark Hinaman: Because they have an existing power demand and they have a coal plant that’s closing and they need to replace that power with something else.

[00:19:30] Rishi Jain: They have to decarbonize in general. They’re at 80 ish percent roughly, but they gotta get to the, rest of the way. And they are looking at this as a development opportunity because the units will be assembled in New Brunswick, so there’s an economic benefit. New England obviously is a mess from, in terms of history, and so you have an opportunity to, really take advantage of power pricing there as well.

And then of course the, ARC units produced an immense amount of heat, and as, do fourth generation in general. And that heat is where what we got very excited about. So we said, all right, so arc from a financing standpoint, you have a nuclear operator. You’ve got them saying, we’re gonna take at least the first unit, possibly the first four units.

That is something that we can then build on. And of course, Paul is a project finance lawyer, can tell you these are the elements you need in place in order to have a successful project financing to attract third party. Right. If you don’t have an operator, what does it matter? You be able to get your, you get your,

[00:20:32] Mark Hinaman: so maybe, maybe give us a little bit more background , on arc for those unfamiliar, I mean, you said you were excited about the technology, your jaw dropped again with Yeah, but who are these guys? What’s the tech?

[00:20:41] Paul Murphy: Paul maybe is, yeah, why don’t, go ahead .

[00:20:43] Mark Hinaman: I mean, I think, you know, taking almost a step back, when you look at the number of S M r Advanced reactor, micro reactor developers just in North America, 60, 70, if you throw, fusion on there, there’s so many out there. And so, which in, in some sense is very exciting.

[00:21:03] Paul Murphy: I teach for Texas a and m, a graduate program that they do, on a bunch of issues, and I do a segment on SMRs and I throw up a picture of all the dots where everybody’s located and I say, you know, it’s a nuclear engineering student. That’s exciting. Right? That, that’s, that’s a good thing.

But unfortunately they’re not, all gonna survive. And so, you put on your financing hat and you start to triage them all. And it, an imperfect process, but you say, what are the touchpoints that, make this seem like it has a chance of success? And when you do that with arc, the ARC design is based on the E V R two, which ran for three decades at Idaho National Lab.

So there’s one point you have. You know the relationship with NB Power, there are these three tracks in the SMR program in Canada. This is one of the tracks. And so not only is it a track, but it’s at an existing nuclear site with an operator. And so you put those things together and you say, well, that, looks pretty good.

And then when you look at what we’re trying to do at B Dune, where we’re doing. As nuclear enabled blank, it’s not, the primary purpose is not to just put electricity on the grid. It’s to produce hydrogen and pneumonia and, and maybe do other interesting things with hydrogen at the port as well.

And you say, well, what makes sense for that purpose? And as Rishi mentioned, the high heat factor gives us a benefit that others don’t have. So it’s not to say, well, across every factor, arc is the best in everything, but it’s the best for us and in the province where they’re already developing. And so when you’re looking to de-risk, A project development effort, you wanna have those core factors and that’s where, for us, it all fits together and makes sense because of the unique characteristics around arc, it’s technological lineage.

And then when you get even more on the project side, what gets exciting for us is, We can message the project differently depending on our audience. So when you’re talking to the Canadian government about its S M R roadmap, well clearly we’re in that as a nuclear new nuclear development project. Well, Canada also has a hydrogen strategy, so we can talk to it on that and.

The port needs development. This is really important for the province and for Atlantic Canada in terms of a project of this scale and all that. It comes with it. And so it’s a development project, which also, you’re talking jobs, economic benefit, all those things that is also very important. So you have different touchpoints that I think, in nuclear we have to be very conscious.

Of stakeholder engagement and messaging. And of course, one of the things we haven’t touched on, but the Port has an excellent relationship with the First Nations. In, the area and, their support, the press releases that have been put out. We’ve had the First Nations on those press releases, which is hugely important.

I once, going back about five or six years, they gave a presentation to a US audience about doing projects in Canada, and I said, if you think Native American relations are important in the us, multiply that by. And that’s Canada. And that means you have to invest the time and get that right. But they can be really important partners for the development of the project as well.

And so I think I. From a technology perspective, from a location perspective, we have these things to build on that help set the project apart. And coming all the way back to the question that I think is for us, what sets ARC apart for Canada. even though Cross Rivers US Company ARC is ultimately a US company, ARC has a R D P funding from the Department of Energy, so the US is a very important market for ARC as well.

But I think Canada presents some unique opportunities because of the S M R MO roadmap, because of, something we haven’t really talked about yet, but the regulatory structure in Canada where you’re, in the US it’s prescriptive and in Canada you’re talking a more performance-based approach, which when you’re in the new technology space, that approach is, is really helpful.

Because, especially when you’re looking at multiple technologies, it’s a bit of a challenge to write prescriptive guidance for every different technology, whereas performance results oriented, I think is suitable. And going back to that i n L history with E B R two. Arc has all the data from that.

And so when you’re working with the regulator, it’s not just saying, well, I think this works and here’s why, but No, no, no. Ours actually worked and we’re just scaling it up to go from the size that ebr R two was to the size we’re gonna use at Lepro and Bedo. Scaling an engineer, and I’m not an engineer.

An engineer will say scale is not just math. There are technical issues that arise of course, but the fact that you have the design with all that operating history, I think is, a real confidence building measure for us when we think about what we need for the project, but also as we engage with the Canadian go.

The provincial government, the first nations, other investors as well. Really important pedigree for the overall project.

[00:26:59] Mark Hinaman: That’s awesome. Well, lots of detail there. So the E V R two, that was the experimental breeder reactor, right. That, like I said, functioned for 30 years. So it’s not like it’s new technology, but they may repurpose it and perhaps scaling it up from the experimental design.

But provides two multiple potential profit streams, or not, just one utilization of selling electrons, but yeah. Operates at perhaps a higher temperature than some lightwater or can-do design. And so you can yeah, that’s, that’s right.

[00:27:27] Rishi Jain: What we’re gonna be doing is, when we look at, when you look at electrolysis of hydrogen, 30 to 50% of the power usage of an electrolyzer is simply heating up the.

And so if you can, just have heated water already with no energy penalty, which is what happens with a reactor, how can any level of gig gargan, wind, solar, and wind only system ever compete with that? it’s not possible. It can’t, yeah.

[00:27:56] Mark Hinaman: The hydrogen’s an interesting play

[00:27:58] Rishi Jain: of, of, two Costcos like.

We’ll put two gigawatts on the ca in the space with two Costcos. I mean, how is that, how can you beat that?

[00:28:07] Mark Hinaman: Yeah, that, that’s awesome. The hydrogen’s correct me if I’m wrong, but I think Canada has some mandates around hydrogen and there’s been some studies done about, okay, can we get it from Europe?

Well, Europe is shipping it, and I’ve, I’ve seen them. I’ll say hobbyist engineers have put analysis together that demonstrate that that’s just ludicrous. And the efficiencies of trying to grab or bring hy ship hydrogen from, somewhere in Europe over it’s actually gonna be the reverse.

It’s shipping to Europe, right? You’ll be shipping to Europe. Yeah.

[00:28:34] Rishi Jain: The world in the last year, as we all know, is, has faced an unprecedented series of shocks, right? The Russian invasion. Has upended the energy world and civilization is dependent on energy. So it’s upended every facet of everyone’s life everywhere on the planet.

And that is something that’s short of a, world war has never happened. Right. In, this regard where to so many people simultaneous.

[00:29:01] Mark Hinaman: Certainly for like our generation, right? I mean for, yeah.

[00:29:03] Rishi Jain: Well, right. But if you just think about the sheer number of people. On the planet that this is affecting no other, nothing else has affected so many people simultaneously, right?

As this energy shock and, that is crazy, right? So when you think about, all right, how, for instance, How Germany got itself into a position to be dependent on. Russian gas is another long podcast, but, but it did, and, Northern Europe is at risk of massive de-industrialization while they’re trying to decarbonize simultaneously.

You have an energy shock. How do you deal with that? Well, you’re not gonna use your clean electrons. It doesn’t make sense to use your clean electrons to produce fuel when it should be used for the electricity you need to get off of the coal that you’re now massively burning because you don’t have the natural.

So there are a whole bunch of dynamics at play here, which, everyone is trying to figure out in real time, and everyone has an opinion on every time we reanalyze how we’re doing this, we keep coming back to the nuclear hydrogen is what makes the most sense. The question is, does the hydrogen get shipped in as, for instance, as ammonia to Europe, or do you use it locally and produce a higher value product?

For instance, direct reduction iron is something we’re following up on very. There are other metals that can be reduced with hydrogen. Cause that’s just what hydrogen does, it binds. And so there’s a lot of possible development and a lot of de industrial sterilization. But even, for instance, if we do a, a direct reduction iron plant or a steel plant, there are heat requirements in these processes.

They’re not, there’re endothermic processes. That either you’re burning some energy or you’re trying to, you’re consuming something for energy, or if you can get it from a reactor, then you can drop your cost of production there as well. And so that’s what is so exciting about creating industrial clusters.

And we’re, we can’t talk about any names, but we are and Paul has really been spearheading this because of this connectivity people have, are looking at our bedo model from around the world and their reaction, Wait a minute. We want, we would like to do this here. Yeah. And so we’re in process of a bunch of, you know, which is incredible.

[00:31:07] Mark Hinaman: Well, it, it kind of competes with L N G export terminals. Right. I mean, you think about the amount of natural gas resource that’s trapped in the eastern, the United States, and they can’t get to market because there’s no l n g export terminals. But then you guys found a port that you can build a nuclear reactor on export hydrogen which is an energy carrier just like, natural gas and.

Yeah, I, I think it’s brilliant.

[00:31:30] Rishi Jain: Yeah. I mean, you see clear, you see, sorry, Bob before, I just wanna put this out there. We are engaging in early consultation work with the communities and the First Nations. So let us not presuppose that this is a fatal. We have a, long process here that is, includes the licensing regime, but so far the reaction has been that’s,

[00:31:49] Mark Hinaman: that’s the target.

Yeah. Yeah. That is the target. Thanks. We’re

[00:31:52] Rishi Jain: not imposing this on anybody.

[00:31:55] Mark Hinaman: Partnership.

[00:31:55] Paul Murphy: You know, I think, mark, what’s important in, all of this is you see too, I think extreme forcing functions that have arisen. In the last few years, for someone that’s been in this industry for a while and, saw the nuclear renaissance in the two thousands, that really didn’t happen and then, sort of a lull and now a comeback.

It’s. I think it’s really being driven by two things. forget all the people that like nuclear and actually understand nuclear and why it makes sense. that they’ve always been there. But I think the two forcing functions are climate change slash decarbonization, net zero, whatever label you want to put on it.

Just the simple math of you can’t get there without nuclear. It’s not to say that renewables are bad, but you just need too much of it and you can’t get there with the intermittency you need lots of it. And that’s where nuclear comes in. And I think as, more and more people have come around to that recognition and seeing the math of it all that’s been a driving force.

And I think the other thing is, as Rishi touched upon energy security, I’ve been given presentations for years and I always used to talk about the intangibles of nuclear. And one of them in that list was energy security. And you would sort of mention it, no one would care and you’d just move on.

Even though. Well, it’s true, but then a lot of these points people could debate and take different views, but we’ve seen over the last, even more than a year, because we saw already prices going up in Europe in advance of February 24th, 2022. It again, it’s just reality has hit, you can ignore reality.

You can say, oh, something else should work. But then when it doesn’t, it doesn’t. And, and I think that energy security and decarbonization, and then you throw on top of it, you look at somebody like A B A S F in Germany who’s. We’re shutting down because it’s get, the price is too expensive, the reliability isn’t there.

You’re telling me I can’t use the dirty stuff and I don’t wanna use the dirty stuff because I wanna be re I gotta shut down and go somewhere. And so that’s so crazy finding and, again, I think for a lot of these companies that are that, that are a business, They want stable electricity. They don’t necessarily need the cheapest at all times.

I mean, they’re not gonna complain if it’s cheap, but they wanna know I can get this for a long time at a stable price so that I can model my business off of that. And what’s happened is that that’s gotten thrown completely out of whack. And so as you start thinking about new ways to think of energy, And, kind of almost in this, this concept of critical infrastructure in modern society, we just need it.

The lights have to go on. Or for a business, they just need to know that they can run all the time. And when you throw on energy security and decarbonization, like these projects have a huge opportunity, whether it’s ours or others to deliver. Electricity, the grid, electricity for end use other products that are part of the production cycle, like a hydrogen, like an ammonia.

all these things that, are gonna drive the economy and industry and where those can be produced. You’re gonna see. Industries reconfigure along those lines, and that means jobs and economics and all those good things and, tax base and all of that stuff.

[00:35:48] Mark Hinaman: Awesome. I think you guys answered one of my questions, which was do we think these projects will be developed in the US and internationally?

Sounds like you’ve had some discussions and conversations with folks that have interest and certainly the A R D P supporting arc demonstrates the us should want to invest in this.

[00:36:02] Paul Murphy: I mean, just Mark real quick on that, I think it underscores the importance of government and all of this too, and providing.

Support, yes, we have to scale, but we’ve gotta get these first projects done early on. And you can see some of the numbers with, the pr, the investment tax credits and production tax credits in the United States, and how transformative those can be. I mean, CWE just happened and all the oil and gas companies are talking about that, right?

So you see how government support, whether it’s at the regulatory level or just at the. The early stages to facilitate the facilitate things and to kind of just signal the market that the government is supportive of this so that it enables companies like ours to then do what we can do. Yeah, and you, you hear the term public-private partnership.

You think of it at a, project level, and it can be that, but it almost goes broader than that, that it’s a recognition that , having that government support. Can be critical and not for all time. It’s at these early stages to get the technologies developed, get these first projects going, show that it can be done, because, as you just touched upon, as we’re talking about our project in Canada, We’re already getting interest from other players to say, Hey, we would like that too.

And, and that’s exciting because that’s how you get the scaling that we all hope for. Not just as, a our business, but for the things we really need to do to decarbonize

[00:37:42] Rishi Jain: as we we’re, as we were working on this project actually. Quite, we were expecting policy support around the hydrogen and Canada announced that, but in the same breath, they announced 30% investment tax credit for SMRs.

Which, yeah, which came out, which was so unexpected. Thank you. Yeah, this is, this is incredible. You know, that, that this is on there and it, and I think it’s got bipartisan support. So to Paul’s point, and I, think I say this as a reformed libertarian, there is a very real role for government in initiating new, the real move towards new technologies, both on a carrot and stick perspective.

[00:38:23] Mark Hinaman: Gotcha. Well, that half answer is one of my questions, which is where where will the, will the capital come from to support these projects? And it sounds like your guys’ view is of the seed capital, if you could view it that way. Could be government support, right? Or government incentives or public part, private partnerships.

But is there,

[00:38:39] Rishi Jain: yeah, it all requires private capital to be there. And so that’s where,

[00:38:44] Mark Hinaman: so what are some of the private sources that you like to

[00:38:46] Rishi Jain: It’s strategic. It’s Both the technology company itself, like our, has their funding rounds. And so these early development activities are very accretive uses of equity capital, right?

Because this, is forming your business for its future, big way and, ensuring that you have orders coming. We have our own partners and such and such strategics who have expressed a strong interest. Participating, they certainly would like, they want to see that there is government policies support, right?

So that they’re not taking all of the early risk by themselves for sure. But no one’s sitting there saying, okay, just make this government funded. Just make government funded. Because I think everyone recognizes one, especially in the post pandemic world, their government balance sheets are not in any shape to be doing that.

And I think that for some reason, north America, you. Even though we pride ourselves on being very capitalist people have become addicted to government doing everything right. Whereas in France, you’ve got anywhere. I couldn’t agree more. Yeah. Public private partnerships are how their infrastructure is built for some reason.

I mean, government is terrible at building things absolutely awful at bridges and tunnels and roads. And why are they doing. And real estate and everything. I mean, they’re awful at it. So there’s a recognition that cannot be, it feels like there’s a recognition that can’t be the model going forward, and nor do they want it to be the model going forward.

Gotcha. Yeah.

[00:40:14] Mark Hinaman: So nuclear typically has a long lead time. But what’s, the timeline target perhaps for the New Brunswick Project and in your guys’ view, what, does the, perhaps the timeline need to be for project development

[00:40:27] Rishi Jain: in the. So this is for us, Bedo is a multi-faced project. There’s an initial pilot commercial pilot that then is gonna be expanded to an, if you can, if you’ll say, an enormous size by the, nuclear.

So we’re already moving forward on that first page, which, which is gonna be powered by wind and hydro new wind and new hydro in, in line with whatever rules are in Europe. But what that does is it sets up the power. As you know, cuz you, otherwise, you’re doing mega several mega projects simultaneously and that’s not really feasible unless you’re in the Middle East or in China or something.

we are setting up an earlier phase, which is gonna start production in 2027. The first reactors are slated at Point Lepro I believe by 2029. 29, 20 30 is 2029 is when we expect. To go in. Our plan is for the first reactor to hit c o d at bdo in 2031. And then, we’ll be rolling two a year across five years.

Or you know, if we expand it to two gigawatts

[00:41:31] Paul Murphy: and, and part of that, it is really important because. for us, we want to take the learnings from what they’re doing at Lepro and move it over into our project. So you think about something like preparing an operating license application. Well, it’s the same technology, the same operator, how difficult it is.

Is it gonna do the second operating license application? And that’s where we can leverage things. But you need to have that stagger and I think that , having the first phase, I think that’s one of the things that we’re seeing too in the market, is people liking this two phase model because.

From a government perspective, if people start hearing, well, 2030s, they’re like, but I wanna see stuff happening now. We need to get into this area now and we wanna show activity now. Well now is, now in nuclear is, different than how most people think of now. But having that first phase to come in, and help to develop the port and get things going, I think is, unique to our approach, but it, getting great receptivity in the market, which is exciting for us.

[00:42:40] Rishi Jain: I did I know we’re coming close to our time here, so I did wanna 0.1 thing out about new nuclear in the US as an example. In the RTOs, the deregulate quote unquote deregulated grids, which are often even more regulated and cumbersome

[00:42:54] Mark Hinaman: than disaster. Yeah.

[00:42:56] Rishi Jain: Yeah. But using ISO New England as an example, right?

If you are just facing the grid as a new nuclear plant, the way these rules which are upside down and, they, favor the heavily subsidized intermittent first, and you’re not being rewarded for resiliency. Or, and, and you’re sort of being treated apples to apples, which is insane. You are not apples to apples.

You’re something that sometimes works in a very sporadic way versus always works and doesn’t have emissions. So if you are trying to build a new nuclear plant and that’s your business model, it’s, it’s probably not gonna happen in an rto, which is huge slots of the us right? That’s California, that’s pjm, that’s ISO New England.

That’s Texas Orco. You really can’t compete very easily, but. If you are producing something else and you are only being called upon on a as a capacity and you’re getting a capacity payment, when there’s stress, then you can make a bunch of money on those stress periods because the electrolysis can be turned off in a minute, right?

Most of our plant, even that 400, 500 megawatts, gigawatt and half, most of those electrolyzers can be turned off in. And you can, you

[00:44:08] Mark Hinaman: can suddenly the remainder of the time you’re making Yeah. You’re making hiking. Yeah. Producing other

[00:44:13] Rishi Jain: products. Yeah. So for New Brunswick, what we’ll be doing, they’re New Brunswick is not a deregulated market, but we will the idea is to provide capacity to New Brunswick power as the grid operator because they have a winter peaking system, as does Quebec.

And hydro is becoming scarcer and scarcer in just in terms of growth of electrical. Quebec is consuming lots more of its own hydro, than it was before. We can provide significant capacity to avoid fossil peaking assets, having to come online and we can turn down our electro lids. I mean, that, is a winning business model.

Right. That, that is

[00:44:51] Mark Hinaman: I agree.

[00:44:51] Rishi Jain: Allows certain new and nuclear to happen.

[00:44:54] Mark Hinaman: Yeah. Absolutely. One of the questions we ask much of our guests is, if we had to build more tomorrow, what would we do? And I think you guys have answered that. Well, we’re doing it. Yeah,

[00:45:04] Rishi Jain: exactly. Right.

[00:45:05] Mark Hinaman: Okay, well let’s, ask the hard question, which is there anything that concerns you about energy or nuclear development in the coming years?

And then hopefully leave us on an optimistic note. Where do you see this going in the future and how can help transform the future?

[00:45:17] Rishi Jain: I think regulatory efficiency is, one of those, the nuclear safety regulator plays a hugely important role, but figuring out how to create efficient pathways to allow for more rapid project delivery is very important.

I think, similar. Human resources development is, critical globally, especially when you’re starting to talk about going into new jurisdictions, not the us not Canada, but into new places. Developing human resources to support that is, very critical. So I think those are two things to watch and, obviously, Wherever you are, stakeholder engagement is really important.

I mean, even in a place like, I worked on the financing for Baracka and in the uae, which is not a democracy. They did so much in terms of stakeholder engagement in part to, to attract young Emiratis who were looking for a career that would normally go into the oil and gas sector. They want the best and the brightest to come into nuclear.

So you wanna create that excitement and that pipeline. that human resources piece is, really important. Scaling the supply chain also very important. So I think those are the things that, that we have to, to work on. I think the excitement is, already there in terms of these themes of decarbonization and energy security.

I think we’re in a situation. There’s gonna be this moment of, well, build it faster, deliver more quicker? Because so many people want it today and that’s, we can’t do it today. It’s gonna take a little bit of time, but how can we be doing multiple projects at the same time with the people with the supply chain and mobilize that?

Because I think it’s very, A results-oriented focus of we just need electricity. We’re moving to a hydrogen economy. That’s not gonna mean anything unless you can scale it. And we haven’t even talked about things like desalination, which is a huge growing need. And unless you do that cleanly and at scale, You’re just going to create one problem while trying to serve another.

And so I think if you think of nuclear as a tool, you know it’s, it is different than other things and people need to appreciate what those differences are. But if you think about it as a tool for modern society, To address the challenges we have. That I think is what gets exciting. And one last point, and I’ll flip it back to Rishi, is the geopolitics of it all.

when you think about the world we live in and how it’s changed, being able for. The O E C D countries to be deploying these reactors to various places instead of Russian or Chinese deployments. That’s also really important too, and that’s again, where you talk about governments being supportive, that whole geopolitical angle and the bilateral and multilateral relat.

That are built around that is, hugely important, maybe, sadly so, but the world has changed and we have to recognize it and nuclear plays a real part in all of that.

[00:48:45] Mark Hinaman: Yeah. Awesome. Thanks Paul. Appreciate. What concerns, what do you have to us about

[00:48:49] Paul Murphy: What I’m concerned about is sort of the, 1968 talking points, anti-science, not based in any sort of realism, confus.

What proliferation means, how unbelievably impossible it is to proliferate, or, what waste means? It’s not, oozing canisters of green goo, these, images are rearing themselves up again. And what concerns me is the nuclear industry not taking this opportunity to be unified and create count, you know, real material that says, no, that’s not true.

[00:49:20] Rishi Jain: Here’s the truth. Here’s how this. works And by the way, this waste is actually just unspent fuel that probably gets used and to think that human ingenuity hasn’t solved this. It has, we have solved how to do all of this stuff, right? Yeah. So what I’m most excited about is a recognition of that we need a growth mentality and abundance mentality.

The earth can support everything we need to do with the population we have in a growing population. If you. let it And this is literally energy from the gods, right? The uranium was created with two neutron stars colliding, and you don’t want to use it. Are you? Can you imagine how ridiculous that is?

Yeah. So here we are.

[00:50:04] Mark Hinaman: Well, that’s a fantastic way to end it. So Paul Rishi, really appreciate you guys. Thanks so much for taking the time to chat with me. Thanks for doing it. Thanks for having us. Yeah.

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