Q & A with Rod Adams

Rod Adams is a pro-nuclear blogger and writer who for (15) years has been writing and teaching others through his websites and articles about nuclear energy. He runs the blog Atomic Insights and produces the Atomic Show Podcast. He recently started working in an engineering role on the B&W mPower™ reactor development team.

He gained his initial nuclear knowledge in the navy as a nuclear submarine engineering officer. In 1993, he founded a company called Adams Atomic Engines, Inc. with the goal of designing smaller nuclear energy systems that could serve markets where extra large nuclear plants could not fit. He has become a valuable contributor to the nuclear energy support network. He gave testimony to the Blue Ribbon Committee on August 31, 2010.

1. Loan guaranty’s are meant to do what exactly?

Tough question. There is a muddled legislative history. In its original form, the program was intended to give access to lower cost capital to help alleviate some of the risks inherent in being the first new nuclear plants to be built in the United States in more than 30 years. Despite the excellent financial performance of currently operating nuclear plants, there is no quick payoff available from building first of a kind units. Most of the units operating today took a number of years to achieve financial success.

Under those conditions, banks were demanding interest rates that were several percentage points higher than those associated with other capital investments. For the companies that would be building the plants, high initial costs associated with being first, unpredictable but definitely lengthy licensing and construction periods, and high interest rates make the projects fail most investment decision tests.

Congress attempted to help out by providing access to lower cost capital, but the program as implemented has not achieved that goal.

a) Is it a matter of, after so much time, when profits are delayed or when they don’t happen that the loans kick in? Do the dollars appear in the beginning stages?

Under current law, the guaranteed loans can only reach closing after the company is granted a combined operating license (COL) from the NRC. By the time that a company reaches that milestone, they might have already invested a billion dollars for a large project in the form of engineering, license application fees, site preparation and long lead time equipment. David Crane of NRG recently told the Nuclear Energy Summit that his company started spending money in 2006 for a project that will not see its first returns until at least 2017. NRG has already invested more than $450 million in its South Texas 3 and 4 project.

2. With so many venture capital firms out there you know the economy is hurting when companies like Japan’s IthEMS asks for 300 million to start a revolutionary fleet of MSR powered ships. $300 Millions seems small in comparison to other nuclear ventures. Can you speculate as to why they have not found an investor?

I am not familiar with that effort. There are enormous political risks associated with building new nuclear power plants because there are so many ways to delay projects. Time is money. Venture capital is not patient; most people in that business expect to reach some kind of impressive payoff within 5-7 years.

Adding technical risk for “revolutionary” projects turns the effort into something that is not attractive for most venture firms because they like technology that they can see in operation. Logically enough, they are not terribly interested in investing when they do not fully understand the technology and its advantages over other alternatives.

3. You recently had a link to a nuclear powered ice breaker. I know this is still immensely dense energy compared to oil or gas but from what I keep hearing from the Thorium people is even greater density and more complete burn up of fuel. I have two related questions. The various vessels of the water that run on nuclear power include submarines, aircraft carriers and there was a cruise ship that had a short life. What is the intermediate step that runs the ships engine? I mean they could run on electric engines or on steam engines or some type of turbine. What has been the trend and have all these options been used? Am I missing anything?

Nearly all of the nuclear ships ever produced use steam turbines to directly turn the propulsion shaft. A few use steam turbines to produce electrical power that is then used to supply large electric motors that turn the propulsion shaft(s).

Thorium is interesting, but I think most of its advocates are trying to solve the wrong problem. Low fuel cost and low waste production is already one of the largest advantages that nuclear fission has over its competitors. The problem that needs solution is lowering the capital cost barriers through repetition and process improvements that reduce time to market. We also need to help some people get rich enough from being nuclear specialists that they will supply the capital required for continued improvements in the technology. Take a hard look at the history of most large industries and you will find that they are expanded by people who achieve success in that industry and then reinvest because they understand it better than any bankers ever could.

Though our current once through cycle is terribly inefficient from a resource utilization point of view, we are not actually throwing away useful material. We are simply storing it away in a form that gets easier to reuse with every passing year. In my opinion, the weapons proliferation argument is a clever distraction. Used material from power reactors is one of the least attractive raw materials for a weapons program; any group with the skill to possibly use it for a weapon has much simpler paths available. However, used material from power reactors is a reasonably attractive raw material for new reactors and that is what many “non-proliferation” specialists actually want to discourage.

4. Why are water vessels a better choice than aircraft? Technically the main argument has been nuclear aircraft would be too dangerous at airports but what if they never flew over cities? That is feasible correct? When comparing sizes airplanes seem to have reached the same size as submarines. So how they’re so different?

Weight. Airplanes may look as large as ships, but they have to be far lighter. Nuclear shielding works by putting a sufficient quantity of dense material between reactors and people. There are some intriguing paths that might produce reactors compact enough so that they could be fully shielded inside a container with small enough external dimensions to work within the available weight envelope of a long distance plane (which has to carry a lot of fuel). The nuclear aircraft project was planning to use shadow shielding that only protected the cockpit crew while accepting high radiation fields in all other directions. Obviously, that concept has no utility for a passenger plane.

5. Small modular reactors are appealing for a variety of reasons. What are the main advantages?

Broader market potential
Initial capital investment within reach of smaller entities
Smaller initial investment can reduce risk perception
Early adopter customers with greater needs can accept higher cost per unit of power associated with early units. ( The current price per unit of power for commercial shipping and remote areas is several times the cost of power in highly developed areas with access to hydro, existing nuclear plants, or established coal units.)
Factory production replacing site construction for a larger portion of the project
Larger unit volume to take advantage of series production techniques

6. What other applications besides electric power could modular reactors be used?

Ship propulsion, process heat generation, desalination, cogeneration.

7. Kirk Soresen recently posted on facebook how it would be possible to turn 1 metric tonne of thorium into a billion dollars. There should be incentive there. What obstacles might an investor see getting to that billion dollars?

There are no available machines that convert thorium into heat. Before thorium can be valuable, a developer has to also build an infrastructure from scratch to enable that conversion. That is a big hurdle.

If there were machines available, the investor would want to have some means of limiting the number of others with access to them. Thorium is not a rare material, if there was an available means of converting it into valuable heat, there is a real possibility of flooding the market with cheap heat. That would drive down the price. That would be great for everyone except the people who spent the money to develop the infrastructure and need to sell enough material at a high enough price to recover their investment and make a sufficient profit to make the initial risk worthwhile.

I hope you understand that I am a huge fan of nuclear energy and that I think it has the potential to be one of the most beneficial resources that mankind has ever discovered. It is a disruptive technology that threatens the wealth and power of one of the world’s richest and most powerful industries. It is not easy to make the transition from a world where there is great wealth available based on controlling limited supplies of hydrocarbons to one where clean energy has a growing abundance with ever lowering costs.

There is no easy path. The best hope is building a growing coalition of people who want cheap, clean energy. That coalition will not include many people who sell energy fuels today as their primary business and primary revenue source. It may include people who control large stocks of raw materials that could be sold, but are not currently cost effective due to the energy required to process them.

See Rod’s blog on Growing Alliance Between Renewable Energy Industry, Natural Gas Industry, Big Banks, and Political Supporters

One comment

  • December 29, 2012 - 8:36 pm | Permalink

    The big trouble with “investors” in scientific projects is the one that the seekers after the “Philosophers’ Stone” had. If you can cheaply turn lead into gold, you have to keep it a secret. But if a society wants to advance rapidly in science, it should use conditions in which secrecy among the scientists is minimised. Unfortunately for the USA, China may be able to do that. France, in a way, did it and are now dependent upon non-nuclear energy for less than 25% of their electricity. I believe that they especially did not want to import coal from the Ruhr in Germany.

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