 Hey, good morning. Hey, good morning. You can see how confused I am. Okay. Welcome. I apologize for holding people up. This is the first time I've walked in and everybody's ready and I'm not here to say welcome. It's kind of embarrassing. I've got too many things going on here today. My name's John Hamry. I'm the president at CSIS. And we're given an opportunity today to really host the rollout of two very interesting studies. I've had a chance to read them. And quite important to introduce this analysis into the Washington policy landscape. You know, America has been struggling over the last several years to kind of restart its nuclear industry. And of course the great challenge facing nuclear is the long gap between your commitment to do something and getting electrons that come out of the plant that you can start generate revenue. It's always been the great, and this is now turning into seven, eight, nine years kind of a lag. And there are very few companies that have the financial throw weight to take on a $10 billion obligation, put that money at risk for eight and nine years and then start to see a revenue stream. This is a real problem. And of course there are probably no merchant suppliers of energy that are able to do that, regulated utilities at least have the capacity to put something like that on a rate base. But even then that's becoming problematic in places. And so one of the most interesting developments in recent years has been the so-called small modular reactor. It offers the promise of, you know, factory construction efficiencies and a much shorter timeline so that you can see, you don't see this huge gap in lag in seeing revenue to offset capital costs. I mean, so it's an interesting idea. But there hasn't been authoritative work in front of us as to this trade-off between the value of scale that you get with large reactors but the time latency problems that come with large-scale construction versus the inefficiency of modular reactors but having them available on a much shorter and growable patterns. So it's a very interesting problem. Fortunately it's a problem that can be analytically solved or at least studied. And whether we have the national will to do something, that's another question. I'm not sure that's probably not on the table today but it certainly can be augmented with knowledge and that's what we're going to treat ourselves with today. We're very lucky that our colleagues from the University of Chicago have been studying this and they called and said, wouldn't you like to hear from this about this from us? I said, well, only if Vic Rees would show up. So fortunately we druged Vic and Vic. Vic has been bugging me about this for several years. So it's a great opportunity for all of us. I thank all of you for coming and I think we should now turn it over to you, Chance. Let's get this thing going for real. Thank you. Thank you very much. I especially would like to thank CSIS for being the host for this presentation. What we're going to do is I'm going to give try to be reasonably brief and go through our talk and then we're going to try to turn to questions. I suspect that there are going to be lots of questions, lots of discussion and we really encourage it. An essential point about what I'm about to say is that we view this really as a start of a conversation because many aspects of what I'll be talking about are questions that we're raising, issues that we're raising. We think that we believe on balance that we do have a case to be made, but it's a case that has to be argued out and thought carefully about. And as you just heard, ultimately it would be translated hopefully into national policy and there's a long distance between what we're doing right now and actually implementing national policy. First, just a very short word about what Epic is. Epic is the University of Chicago's first venture into energy policy, energy environmental policy. It was just started earlier this year. I'm the founding director of it. If you ask why yet another energy policy institute, the answer is we think that Chicago has a particular role to play both because Chicago from the point of view of economic analysis has a kind of a brand about how we go about doing our business. And then of course we also manage an important energy lab so we have the technical background, the resources to draw on to actually being able to do analysis that basically draws both on technical expertise, basic sciences, applied sciences, engineering, but also from the economic sciences and social sciences. So that's why I'm really here. I'm particularly pleased, I'm a physicist so I have to confess that I'm not a social scientist and some of what I'll be saying you'll probably guess that yeah, I'm probably a physicist. So for example I'm death on point estimates of anything. I mean a point estimate to me means nothing unless you have some notion of for example errors. I think it's a good idea. So the scope of the study was really defined originally by the Department of Energy. The Department of Energy came to us and said you folks had done a study back in 2004 on the economic future of nuclear energy and could you update it? And then the update really takes two forms. One having to do with the focus on what you might call the classical reactors, the gigawatt scale reactors. The other is the possible new generation of reactors, modular reactors and you just heard the key question will be to what kind of advantages accrue from building modular reactors as opposed to the traditional way of building reactors. So you can find if you don't have copies of the report you can find them on our website at Epic and here are the instructions. So first let me just talk just for one moment about the gigawatt scale nuclear plants. Some years ago there was among some circles there was a view that we might have a nuclear renaissance in the United States based on a gigawatt scale reactors and if you just look at how many reactors are being built it's clear that we're not in the midst of such renaissance. It's not that they're not being built, they are being built but there are very few of them and of course the issue really is the economics. The economics for these plants under current circumstances depending very much on the details of the market in states is it a market economy or not that really matters and so for example in Illinois it is extremely unlikely that we'll be building gigawatt scale reactors anytime soon. If you talk to Exxon you'll find that out. So we think there are real reasons for these economic penalties that these large reactors have and you just heard just a moment ago that some of them they really do have to do with the uncertainties in the process of actually getting from an original design concept to actually putting something on the ground and building it and it's a bit of a challenge. Now when we looked at small modular reactors it turns out to no surprise there are certain issues that came up that were really not issues at all in the gigawatt scale reactors. So it's very ambitious to think about. And we really had to face sort of plow new ground here. So it has to do with the fact that these are new designs and ultimately when you're in the market to sell these what you really are interested in is what are the nth of the kind costs that is once you have climbed up the learning curve what do you actually end up? What is the actual cost expressed as levelized cost of electricity or ultimately what money do you have to put in for capital construction costs? That's one issue. The other issue of course has to do with exactly what is the learning curve like. How many units do you have to build in order to actually get to nth of the kind costs? What is the competitive marketplace? You have to keep in mind that we're talking about for example natural gas prices not today but 10, 15 years from now when these kinds of reactors will actually hit the market and I think it's fair to say that it's a risky proposition to guess what the gas price is then especially given our lack of knowledge of whether or not natural gas prices in the United States will at some point again be coupled to the oil price the way it is in the international form. Here in the United States it's been protected from that but not internationally. There are lots of issues that relate to whether or not SMR investments are worthwhile for the government. To what extent government has an interest an active interest in this and then finally and I think we really believe this is key in order to actually make this work you do need to climb the learning curve and that means for the vendors this means that they need to be assured of an order book and the key question is how do you construct an order book early on so that you can actually convince the vendors to actually make the upfront investments to actually build a plant that can construct these kinds of reactors. Now it turns out size matters in some cases and this is one of the cases where size matters meaning that think of who the customers are the customers ultimately are going to be the utilities in the case of the gigawatts scale plants of course the key issue has always been that the capital construction cost for these kinds of plants are very large compared to the capitalization of the utilities here what you're seeing is the average capitalization but as you probably know even the largest of the of the nuclear utilities nuclear vendors rather power vendors, Exelon in their case they're not all that much higher than this number and so for them to go after a plant where you're talking about for a plant site of the order of $12 billion with the capitalization might be $25 to $30 billion you really are betting the company and that's a risky, risky proposition and that's then reflected back in the risk evaluation by the market it's going to cost you money when you go to the market and want to borrow so that's reflected in the cost of these kinds of plants so that is the sense in which size matters just as you're able to reduce the capital upfront, capital construction costs the risk capital of course becomes much smaller and SMRs have this benefit that basically there's not as much risk to the company as there is with the gigawatt scale plants that's an important factor in the cost analysis for these kinds of plants next is the issue of learning and here I want to be very clear about what the issue really is in the case of large reactors given the typical build rate that we've seen over the last 20 years which is extremely low you have to ask yourself what kind of learning has taken place well the answer is essentially no learning fundamentally because at each site that these plants are being built you're basically training the workforce anew for building that plant if that is the case for these kinds of reactors the game is up, you're not going to be able to there will be no learning the key element of the learning curve is that you have a workforce in a plant that becomes experienced you're not at each site retraining or training a new workforce from scratch these are not stick built plants they're modular units that are then brought on site and the key element the learning curve really has to do the workforce one thing to keep in mind is that the construction cost of a nuclear plant actually isn't a labor so saving on the labor cost is a huge huge element here and exactly what is the learning process, that's something I think that still needs some more work when I talked earlier about that this is just the beginning of the conversation I think this is a key element we really do want to understand better what kind of learning can take place in an industrial environment and this is a place where we have more conversations with various kinds of vendors but not only in the nuclear industry but also outside the nuclear industry I think will prove very useful we want to be able to do that if you now look at the kinds of learning curves we've examined what you're seeing here are three learning curves these are basically what are called scenarios playing out and what we're looking at here is the levelized cost of electricity as a function of the number of units modules that are built and of course what you're seeing here is also the competition from the most important competitor for these kinds of plants which is natural gas and the band that you see there for the low and high end is I think simply presumptive I would be foolish to say that this is the band that will be operative in 10-15 years from now nobody would believe me if I said that and I'm not saying that but I think it's probably a pretty good guess that it's not going to be lower than what you're seeing there it's likely to be higher if anything especially if the natural gas price gets tied to all price the way it is outside the United States so what you're seeing there is that there is in fact an opening depending on what the learning curve is like where these kinds of plants can in fact compete in a marketplace where natural gas is the primary competitor and keep in mind that we're talking about units that are not being built next year the units that would be built 10-15 years from now the estimates that you just saw so the green curve the one in the middle has a bunch of assumptions in it and it's useful to look at what the assumptions are in some cases I would say conservative in other cases not so I think that for example the point estimate for natural gas prices if you compare it to the price today which is just around $4 I would say is on the reasonably conservative side I would say it's particularly optimistic I think on the contingency end I think that's an interesting question the contingency for the first of the kind is going to be much larger I think we would expect that but the contingencies once you get to infinite kind costs that's the key point I think that number is actually a reasonable number 15% for the very first plants is not reasonable which is why of course the first plants are more expensive if you ask what are some of the characteristics that make these kinds of plants particularly interesting for the marketplace I think here you see some of the key elements one of them has to do with the kind of market that is in the United States that it would not be easily served by the gigawatt scale plants for example replacement of the 200 to 300 or 400 megawatt coal plants that are aging that have been grandfathered under EP regs and are likely to be phased out over the next decade these kinds of plants sit in areas where the grid would not easily accept a gigawatt scale facility but could easily accept the kinds of plants that we're talking about if you look at the typical readjusted cost of capital I think if you look at the end of kind costs these are actually not unreasonable one key element that I think is a real game changer here it has to do with the nature of the reactor itself and that is that these are really fully passive systems meaning that they're at the extreme of the evolution of nuclear designs plant designs where you try to take human intervention during an emergency out of the out of the equation this is the direction in which many people have been urging the industry and in fact even if you look at gigawatt scale plants gen 3, gen 3 plus they're already moving in that direction and this is basically sort of the extreme in some of the designs some of you probably know the entire heat load at full power can be carried passively by thermal convection there's no need for pumps none of this really makes much sense if you don't have a business model and we can talk more about this discussion period the key elements in my view are that early on what you'd like to do is encourage as many participants to take part as possible there's a lot to be said for that thousand flowers bloom in the design space the interesting question will be how quickly do you narrow down the technology choices that's an interesting question don't do it too early don't cast your bets too early because you do want to go through a fair degree of the design process you want to go fairly far into the design process in order to know where you are in terms of the cost structure what the likely learning curve is like to be and in particular what your likely nth of the kind costs are going to be which of course will determine whether or not you have market potential enough so early on you're really doing in the design phase the design phase is designed to get you to build the very first plant that very first plant will need to have a customer and we're suggesting that the likely customer is going to be in fact the federal government it's not likely to be industry then building out to an order book once you have a much better idea of what the ultimate cost will be this is the point at which this is stage three when the vendors will now have to place their bets and have to invest in order to set up the plant to then actually have the assembly line where the learning takes place so stage four is the learning that's the learning stage at this point you've completed the design you're now in the learning phase and depending on how good you are and whether or not you have the order book to actually get there you can hopefully get to the end of the kind cost that I was talking about before the key element here the key element here is you need to have a story to tell about who constructs that order book to begin with and we believe that this is another place where the federal government can actually play a very important role so if we look at the overall case that we have we we as I said earlier I'm a deep skeptic about point estimates what you can do is provide a kind of bounding analysis of what cost might be and that's basically what we've looked at the key elements that underlie our analysis really has to do with to what extent are we successful in having a factory that really does experience learning what are the real costs in actually setting such a facility up what is the the scale of this facility what will be involved on the vendor end to actually make the investments and in particular how fast can they learn if you look at the curves that we have it's clear that the learning rate the faster you learn the better off you are on the long term because you'll get to the point where you actually start making money faster I'm being told how much time I have and I have to speed up one of the one of the issues that always comes up here is you want to of course be in a case where you don't just are pushing product out but you actually have market pull that is that the market actually goes through in in purchasing these plants early on it's likely that the only customers especially for the lead the first of the kind plants that it's going to be the federal market but eventually we believe there is a market out there that really is suited well suited well matched to the kind of reactors we're talking about for example in the foreign market is if you look at the folks currently nuclear states that is they're not currently in the market they have not yet made the transition to putting up nuclear plants many of them have grids that would find great difficulty in accepting gigawatt scale plants but would find it relatively well suited to have a reactors of this kind where the typical megawatt rating is somewhere between 50 to 150 megawatts that is much easier to absorb some countries that would be in this market might surprise you Poland is an example Poland is an example of a country where building a gigawatt plant there remains a challenge because their grid is not suited yet to handle that kind of plant but on the other hand the kind of plants we're talking about here are actually quite feasible to do that requires some work on the federal side really be thinking how we deal with export credits there needs to be some coordination the agency export strategy which we currently don't have at the beginning of my talk I mentioned one of the obvious customers in the United States which are all those utilities especially for example in the coal states like Kentucky where they are currently running large numbers of coal plants which have been grandfathered which are likely to go out of business within the next decade or so and these are plants that have a scale that are actually well within the scope of the kinds of plants we're talking about here they're not very large plants they're more in the 2 to 300 megawatt range much smaller so one of the key issues is that this relates very much to what the EPA finding is going to do with their eggs it's an interesting question we'll see over the next 12 months how that works out what the actual Clean Air Act rules are like especially Clean Air Act rules for old plants which will definitely determine the future of those plants so finally let me just leave you with some thoughts I already mentioned what the issues are the key ingredients one thing to be very clear about is that upfront it is very important to be clear about the need to push the design engineering costs upfront because we want to know as early as possible whether or not these plants are actually economically viable and that really means that you have to front load the process one of the interesting advantages of these kinds of technologies is that in principle these construction of SMRs can be highly vertically integrated within the United States this is an area of manufacturing that would be very difficult to move offshore and therefore it's a kind of manufacturing going toward green technologies that really is of the kind that people have talked about as generating green jobs one of the interesting challenges will be for the NRC and for industry to think through the rules for safety and security for these plants they have certain huge advantages in this regard for example the fact that they're buried they're below grade has important implications for for example on the security side it really does change the picture for example airplane impact because you have to be awfully good at targeting one of these so that's a major issue exactly how the NRC deals with these issues remains to be seen and then of course the crucial issue at the very end is you're not going to go anywhere unless you have investor acceptance and this really has to do with this first mover somebody has to be a first mover to get this going basically that the federal government has important role here to play as a first mover so with that I'm going to turn it over to Steve I want to pass on what was said earlier about thanking everybody for attending both we have people also on webcast and I want to thank those who are virtually with us as well I do want to recognize a few people in the audience before we start the Q&A Kinet Benedict has joined us and she is a partner in Epic and she is more than just a partner she is also a very important consultant to us and has given us many many great comments Joe Heiser who is up here at the podium on to my left was a very crucial person in the analysis particularly the business case the budgeting issues as well as licensing strategy Ed Davis who is in the audience supported us very very importantly in the gigawatt level reactor analysis and who cannot be with us today as Dr. Jeff Rothwell who did a lot of the core and supplemental analysis you may have noticed when you picked up the report that there was a number of people we had consulted with in the industry and there are some who are here and we thank them very much and I want to publicly thank the others who really supported us tremendously as we went through our working papers and got to a final copy and last but not least there are a number of Department of Energy people here in the audience including Vic who was recognized earlier and they always provide us with incredibly great counsel and many times good advice but not all the time just say many times I would say forceful critiques forceful critiques so with that I would like to open it up to questions we are very interested in your questions would you also identify yourself? Peter Rosecrans Lockheed Martin so I was interested in a chart that I think Mr. Goldberg presented perhaps in a preliminary version of this at Platts where you were analyzing levelized cost of electricity for large versus small and how many small modules do you have to put together to where they are about equivalent now that the study is over can you comment on your thoughts on that? okay I'm trying to remember that was back I guess in the springtime when our thoughts have evolved and I'll do a good job because I'm not sure I have that chart in my head very well but let me see if I can try to remember it what we were trying to do back then was we were looking at volatility of natural gas we had some assumptions made on historical natural gas prices and what could happen in the future so we were trying at that time and we didn't have as much of the information on shale gases we have today so we had to change our analysis back then but in that time we looked and saw how nuclear large and small would play out for various natural gas futures and as I recall on the large nuclear when we looked at that as a snapshot in time that would be a deregulated large utility that would have to go into the market to get market rates for their large nuclear so it would essentially be in a certain natural gas future at that time when we did it which was probably slightly higher than the natural gas prices we're looking at in the final report as far as SMRs are concerned when we did that preliminary analysis we were looking at SMRs for overnight costs that we've gotten some more information from the vendors that helped us in more refining those costs so I would say that these are the better estimates than the were when we did the preliminary analysis for plants so to get to the what are we getting at what are the challenges with small of course is if you have only a few megawatts and you have over fixed costs say with the site the levelized cost is going to be higher at what so one of the things we're interested in the industry is at what number of modules or what total capacity does large and small become more or less equivalent okay well let's see if we can because there are a lot of variables in your question but let's try it this way if we're just dealing with the best cost estimates I would say best achievable cost estimates which is anthropocon we looked at building up a case of amortizing the fixed capital cost over 1, 2, 3, 5 and 6 and we looked at basically a 100 megawatt per module scenario with a half plant being 3 and a full plant being 6 and you'll probably have to have 3 to be able to get into the ballgame for what we had in our analysis now there are we've gotten a lot of comments on this from the vendors and I'll just call it generically vendors and as some would argue 3 is probably too large we could do it for less than 3 but we were using fairly conservative fixed capital assumptions for building and for for the structures around the RTG sets the reactor turbine generator sets so we were basically I would say 3 is the sort of the number we were we were striving toward Joe would you want to add to my explanation? No I think that's a good estimate I think and that would be for if you will once you get to it if you will anthropocon module my name is Roy Adams I write for atomic insights one of the questions I have on your modeling is how do you model the volatility of natural gas prices compared to historical natural gas prices back in the 1990s we were told that natural gas is going to be cheap forever and it wasn't I'll answer Dr. Rothwell was our expert here and he's not here but I will do my take on it and I'm going to turn it over to Bob to add we looked at we had a modeling routine called at risk and we looked at historical Henry hub pricing over a period of time and projected out what kind of that volatility if it continued going forward having said that and Bob is sort of weighed in on this during the peer review felt that that is only one indicator that there are other indicators that will be more important going forward on gas prices particularly on the BTU issue equivalent and what's going to happen over time when SMR's will get into the marketplace which will not be in the next two years but more likely the next decade or two so Bob why don't you add to that so maybe the thing to add is if you ask what would hugely change the picture for national gas it really has to do with the question of how much is there and is there enough so that for the folks that are actually producing the natural gas that the export market and the money making advantage that you have for exporting becomes enough of a draw to then to start exporting once you start exporting you have this interesting issue of whether or not you can maintain the price levels United States at the level that you've been detached from the oil price because that would be a huge change and very hard to predict Hi Paul Geno of the Nuclear Energy Institute and I really appreciate the study and the opportunity to hear the presentation and it's really clear we've all been thinking about the opportunities for learning in the manufacturing of the actual modules themselves and that makes sense do you see additional analysis or do you see opportunities for additional learning and improvements in the balance of plant I mean consortiums come together teams going out the same people doing the balance of plant work and do you envision doing more work along that line let me start and I'm actually going to turn it over to Joe and Bob we do envision more work and we do envision in the analysis we were doing a fully generic learning so we had three learning rates one for fixed capital one for variable capital and third for O&M we applied that same learning rate across all cost centers from reactor to balance from N triple S to balance of plant we know it is a first approximation and more work needs to be done in that area Joe do you want to Steve described we had a learning model it was really it was the first attempt to quantitatively try and create a learning model and so we think that it could be developed in further detail we also think that there are opportunities to for economies and balance of plant but we didn't try and estimate or quantify that in this first part of what we did we have a gentleman I think one clear refinement is exactly along the line set which is distinguishing between the reactor part and the balance of plant the learning rates are going to be quite different in the latter case there's been a lot of learning that's already happened of course yes sir hi Kirch Neblen with Eurenko question parallel to the gas price question what sort of fuel cycle were you envisioning for small modular reactors in terms of both refueling cycle length and enrichment levels correct great question because this is a question that has come up a lot in our drafts and our conversation and it's unfortunate we cannot pick the right one we try to be generic and when you're generic it's by definition wrong we assumed a it's in the report we assumed a burn up effectively and a time of burn that is conservative of a batch refueling cycle essentially not a continuous refueling cycle in other words you would batch out you'd go three to four years and burn down what that means is that there's a penalty we assumed a slight penalty for fuel cycle cost and compared to a gigawatt level conventional reactor that does fortunately not make too much of a difference on the LCOE because as you know the fuel cycle cost is a small percentage of the overall levelized cost but in fact we have a penalty embedded in the calculation this is actually where where the a module in nature or the plant really does make a big difference because you basically not refuel every module at the same time and that's a very important point no not at all did you have to make assumptions about how many people work at this plant and did you vary that and see what kind of effect that made okay this is a good question Dr. Rothwell has in his working papers which we have posted and you can find on the Harris site employees per site we do have a labor assumption how that now this is where it gets really interesting and going forward in our future work is important when we did the large report and Ed and Joe worked on it we have a pie chart on equipment on people on materials and other things where our goal going forward is to be able to see the labor opportunities for streamlining through learning so we have at least a structure to work from that we're working on but we don't have really gets crucial is how quickly we can reduce labor force from say the first stick bill plant down into when you go into the end of a kind so that that economy is something that we're going to be really focusing on going forward and just that I mean that is a key question precisely for modular construction you wouldn't have the first stick bill plants but you certainly have it here yes okay Ed let's go with Ed can I piggyback on that before you get to Ed? this is Gil Brown about the people on site you were talking about construction I think in that last piece how about in the O&M part how about there is that not relevant on the O&M part we do have quite a bit of analysis on that we do a learning rate on an O&M and in the O&M again the O&M as it is a percentage of the LCOE is still relatively small however the O&M in terms of metrics is important because it gives you an indication how mechanized you can do this much more efficiently and I think Joe in his business case analysis and I'll pick up with Joe has some information on the O&M side of the equation it was and I have to admit though I think that was most of that work was done by Dr. Rothwell when he put together the model and I don't recall what those numbers are but as Steve said it turned out to be very very a small component of the total LCOE so we really did not see that as a big issue as far as a cost driver okay we had we had on the O&M side did you figure in the cost of security the security force on current plants if we had to size it for that same size it causes $30 million a year or so can these plants be manned with lower security forces because they're underground or for other reasons you're getting now into the fidelity of security and how NRC is going to pass judgment on the major issues Bob touched on it a little bit in his introductory remarks security, emergency planning health physics the issue of operators, how many operators per unit so you're getting into right into the details I don't know if our study is going to be as satisfactory to your question because it really gets down into specific designs and specific decisions made by the NRC on how they're going to allow for security what's the footprint for security and so I don't think we either Rothwell's working papers or this report will actually address that issue maybe the thing to add is of course what you're alluding to is that proponents do argue that if you leave the risk profile the same that is you don't increase risks that in principle that you could reduce the costs but the NRC will have to deal with that that clearly is not something that we touched on I think you're up thanks one of the safety issues became more clear after Fukushima was the interaction between multiple units at a site and that does raise the issue of if you substitute one large reactor for the equivalent number of small reactors what is the minimum physical spacing between those units what is the how do you have to harden the barriers between them how do you have to provide to what extent you have to provide redundant equipment and other systems for each unit and so how have you thought about how to factor in those issues so the answer is that we have not looked at that those are important questions and the whole issue of common mode failure things like that are obviously things that have to be examined I think that's again one of the areas that the NRC will have to deal with absolutely Hi my name is Yong So-Hwang originally from South Korea and we are developing the modular reactor and we are now at the stage of the licensing review at this moment and even though we have a good combination of the NTPS designing people and the pure manufacturers and component manufacturers of industry and the BOP designers we somehow concluded that the price for the small modular reactor might be too expensive unless you are also going for either desalination or district hit and we have some number but I cannot release to the audience and since there is a big economic burden even though operation and the maintenance cost is relatively cheap we calculate all the details still is very expensive so do you actually believe that it can be accepted by the industry within the next 15 years or something like that? I'll go for it and I'm going to give it to Joe as well I am familiar with your co-generations modeling because although we didn't do it in this study that I supported the Department of Energy on we looked at co-generation for a small grid in the Middle East and we looked at desal and electricity and the trade-off and if you do more desal you don't need as much electricity so I am familiar with your question for the scope of our study here we assumed that it would be all electricity as the output but we also assumed that it would be a lot of production for the SMRs as Bob was discussing the order book is so crucial and that there would be international markets for the SMRs as well as markets in the US so in order for this to work and be in the economic range that the Koreans are looking at you would need to bring these overnight costs down significantly and to get into the competitive range I would just add that as Steve said we did not look at the option of co-generation or heat applications but clearly that would definitely improve the economics I would just simply point out that with the SMR type configuration as Bob pointed out in his presentation not only can you reach out to different markets the SMRs would be much more suitable for the types of markets for heat applications both for large industrials as well as commercial and district heating so I think there is another large potential upside if you will to the economics of SMRs looking at that particular option Yes I have a question on a country about development of SMR and modular reactor how do you see the Russian technology actually we are very concerned about the economic benefit of Russian technology so what if somebody in southeast Asian country would like to import the Russian technology with the floating ship that kind of thing then they can actually have a big financial benefit so how do you see the competitiveness of your SMR compared with the Russian technology We did not do a technology trade analysis of the different technologies there are other studies the OECD NEA study looks at a variety of international technologies the Russian technology the Korean technology various US technologies one thing I will say our focus has been more in the near return technology in the study so we looked specifically at a light water reactor passive technology there are others out there too including technology we are developing at Oregon National Lab with metal technology gas cool technology wet bismuth molten salt technology and we last but not least is the technology that is being developed at Temer Power so we think that and that could very well be in the game for that design issues that Bob talks about but we in this study did not dwell in these other alternatives Jim Gripschall and Lockheed Martin they yet they an earlier question about the comparison between a bank of SMRs that was the equivalent size of a large reactor did you look at that or were you looking more to the placement of the SMRs at places like the grids that couldn't accept the large reactors yeah let me answer the question and then I will turn it over to Joe during the study we did consider the trade off between a putting of a large big reactor and versus several small reactors at the end of the day we figured that we should get SMRs on its merits head to head with natural gas because that's really the crux of the trade off we should view the conventional reactors and the SMRs as compliments to each other it gives you a spectrum of choices so in reality we wanted to put SMRs head to head with natural gas plants I think Steve answered it right on but we looked at gas as the primary target and we viewed the differences between small and large as being complimentary rather than competitive you addressed different markets yes sir yes Francois yes SMR it's a range of potential power we have on the table potentially a power from 45 megawatts to 300 so it's not the same story in terms of technology and in terms of global economics so did you realize some sensitivity study containing the effect of the level of power concerning your results yes sir the focus of our study was to look at the feasibility of SMRs as a concept in our analysis in building the learning model and whatnot we created if you will a hypothetical SMR configuration that does not represent by design does not represent anyone vendors current offering and our purpose in doing that was really to look at the conceptual basis for the SMRs rather than to do a study to say that vendor A's offering may be more advantageous than vendor B's I think going back to what Bob presented earlier in this presentation that we do think that if the Department of Energy does move forward with a program that we would hope that they would support many of designs of different vendors early on so to begin to develop the kinds of data that would allow for that better type of tradeoff in terms of the different sizes and configurations of the different SMR technologies maybe I can also add that very much related to this is the marketplace one of the key questions will be who funds the learning curve and that the answer that may be quite sensitive to the nature of the plan that you actually propose I need the mic so let me ask this to Bob that this is an epic question right and epic and epic epic and epic since you name the name that is I'm not heard I'm trying to listen very carefully you never mentioned climate one of the reasons that one really is interested in nuclear in general and perhaps small modular in particular is its impact on the climate problem you didn't do that in the study I'm asking you the epic question beyond that because epic has to deal with the environment and has to deal with these larger pictures that's what epic means after now that you've done that where do you see the role of SMRs in basically dealing with the climate issue? I'd be glad to answer that question so as a preliminary let me just say that I'm a climate change believer that's the first point okay just so you know where I'm coming from and the second is that I'm also a deep believer in the maxim that if you're going to do something about it you better bet on things that you can be reasonably certain about so if you look at the green technologies that are out there and you ask the question which are available that is they're doable they're accomplishable where the R&D basically has been done from the technology point of view and which have a shot at being economically competitive with things that are carbon producing probably the only one in my opinion if I can just add to what Bob said I think if you look at what we do say in the report while we don't address climate directly we point out that even the early stage modules before one gets down this learning curve still look very competitive relative to other forms of carbon free generation particularly renewable energy absolutely the fact that this would be base low power and not intermittent power I think if one were looking for a carbon free source of generation this would compare very favorably our ultimate target obviously is natural gas which is a low carbon generation source and again we think that with the learning curve opportunities and again depending upon future prices that in fact those two points can converge and SMRs could be looked at as a very favorable option now obviously if there was such a thing as a carbon price that would just do that much more to spur the as we see at the learning curve and perhaps help in a way of providing an additional incentive yeah and what we did and I think back to Vic's good question is we try to be at the reference case a future where we didn't necessarily have a carbon price in there and when Joe did his analysis that you'll see in the in terms of federal support when you get into the from the lead into what we call the first of a kind plans even without a carbon price there are some opportunities with some production tax credits that we have identified put on given to investors who invest in first of a kind plants we can see that there are favorable competitive advantages to be investing in first of a kind plants yes sir one more question on natural gas the potential gas committee does a study every two years of the total the total that they project right now for proven possible and speculative resources in the U.S. is 2170 trillion cubic feet which sounds like a lot until you realize that we burn 24 trillion cubic feet per year right now simple math that's 90 years my granddaughter will probably still be alive 90 years from now right so I think that's a pretty scary prospect right you're making the point Bob has been making and he's been making continuously a study that venturing natural gas will move toward a BTU equivalent market that you'll get a situation where that band that Bob presents will be moving toward up the band which means the crossover point that SMRs could have could be at a fewer number of modules which is favorable for SMRs yes sir Sam Waldman from MIT about costs for carbon did you include costs for nuclear waste and future liability for nuclear waste and how do you see that playing out? we need that question as well because we don't know what the BRC is going to say at the end so we don't know what their program is going to look like and how much it's going to cost but let me sort of give you what we did is we put in a waste fee in the calculation you'll see it identified as a waste fee and it's assumed to be one mil per kilowatt hour now do we have a basis that it's going to be higher no but I think Bob and I have certain views about that and Bob do you want to articulate your view? it's hard to say how it's going to be much higher than that and no matter what you think about that it's not a major cost factor as far as the cost of electricity it's not really cost other questions? going once going twice thank you very much for attending and we really appreciate your questions thank you yes we support thank you