An extract from this interview with Dan Poneman of Centus in...

An extract from this interview with Dan Poneman of Centus in which we get amention.

https://www.cowen.com/insights/uranium-enrichment-with-centrus/

Marc Bianchi:

That’s interesting. I want to shift a little bit and talk about maybe the barriers to entry, or the moat that’s around your enrichment business. So you’ve got an NRC license for HALEU production, I’m curious, how much of an advantage you think that provides you, maybe a number of years of lead time, or what the challenges would be for others to do that? And then the other one is around enrichment technology. There’s these laser technologies that are moving forward, and some of those, I guess, don’t use LEU as their feedstock, they use the tails, which would seem to solve this problem of LEU supply concern. So maybe you could address both of those.

Dan Poneman:

Yeah. So NRC licensing is a very thorough, rigorous process, it’s been a lot of comment around this. We were very satisfied in our interactions with NRC. They were very rigorous, they were very analytical, they were very disciplined, but they were also, to be candid, efficient, and I don’t recall NRC ever missing any of their deadlines in the interactions we had with them. That said, the process to secure an NRC license, and this is appropriate given the nature of the technology and criticality risks and so forth, is lengthy, and I would say, it’s measured in years, not months. Again, I’m not going to speak for who’s how far down that timeline, but we feel we have a significant time advantage in terms of the NRC licensing. On the other topic you raised, Marc, of laser isotope separation, again, I’m certainly aware of other efforts that are going on in GLE, and so forth, I am not privy to what they’re doing, and so I can’t really comment.

I view, overall, this is a technology-rich environment, and I think you’re always going to have people trying, and they should try, to find disruptive ways to radically cut costs and so forth. And I think time will tell. We in this company tried this for a while in the so-called ABLA process that was looked at by USEC 20 plus years ago, did not go down that route, but I can’t say for sure what will happen in the future for other efforts to go down that road.

Marc Bianchi:

So maybe as we wrap it up here… this by the way has been great, so thank you so much for joining us, as a major stakeholder in nuclear power, Centrus is hopefully supplying a lot of HALEU to all these advanced reactors, what do you think is the biggest bottleneck to new nuclear capacity in the US? One of the major challenges is overcoming first of a kind costs and timelines, nobody wants to sign up for the first one, and it seems government backstopping can only go so far. So how do you think this plays out?

Dan Poneman:

You framed the question well, and your question contains the seeds of the response. And I commend all of your listeners to a really terrific interview with Joe Dominguez, the CEO of Constellation, and my colleague, Steven Clemons, our friend over at Semafor. And Joe says, “On these things, we can do it, the question is, will we do it?” And having gone through all we went through on Vogtle, we showed we can do it. And there is no question, Joe said this in his interview, that those first of a kind costs, they’re always high. That’s just the nature of advancing technology. So yes, a major bottleneck is overcoming the first of a kind costs and getting to the nth of a kind cost. The good news is that, it’s not rocket science to get to nth of a kind cost, it turns out to have a lot to do with things we call practice.

So I was actually running around visiting Haiyang and Sanmen, and you see these swarms of workers going from one site to another site, and guess what? You get better. Look at Barakah, the four plants built basically with Korean technology and UAE, each one got built better and faster. And it’s a pretty steep and favorable learning curve. So that’s thing one. Thing two, and it’s related, is execute. We need to execute. I’m so proud of our team at Centrus. We’re a small company, but boy, they killed it, notwithstanding all the challenges, and they were real challenges, Marc. During COVID, we delivered that project on budget, on schedule, and that is everything. And Bret Kugelmass has talked a lot about this in some of his podcasts. There’s been a lot of talk about the waste issue and various things that have been adduced as possible impediments to the widespread deployment.

But I really think, A, getting our costs down, and B, executing well against a schedule and a budget, given the imperative, and it is an imperative, in terms of climate change, in terms of energy security, in terms of the incredible asset you have in nuclear power. But Bill Gates sums it up really well, he puts a one sentence case in his book on averting a climate disaster for nuclear, “It’s the only technology that’s been shown to work day or night, summer or winter, almost anywhere on earth, at large scale, and has been deployed successfully for decades.” It’s just an incredibly prodigious producer of carbon-free electrons. And the last thing I’ll say is that, I commend your readers, listeners also, to a great book called Taming the Sun, by Varun Sivaram, in which he will tell you that you will not be able to max out on wind and solar and intermittent sources of power without having firm fixed dispatchable power behind it.

And what better way to do that than with nuclear? And in fact, the Natrium reactor being developed by TerraPower does just that, in backstopping solar deployment. And so I think that those two things, A, government support in overcoming inexorable, first-of-the-kind costs, and B, industry contribution, both in terms of matching some of that government investment, but then in terms of fulfilling their role in terms of project management, excellence and execution, getting the workforce, and so forth, that they need, and the supply chain to support. These are the things that make history. And I think, frankly, to be able to save our planet, we have no choice but to succeed.

Marc Bianchi:

Well, that’s a great place to leave it. Dan Poneman, CEO of Centrus Energy, going to be handing over the reins on January 1st of 2024. So thanks so much for joining us. We look forward to your next act.