Episode Transcript

Cortney Piper: Welcome to Energizing Tennessee, powered by the Tennessee Advanced Energy Business Council and FirstBank. We’re your number-one podcast from news about Tennessee’s advanced energy sector. I’m your host, Cortney Piper.

Tennessee is rooted in nuclear energy innovation, and today Oak Ridge is a thriving epicenter for next-generation nuclear technology. So, what are we doing today and what does next-generation nuclear energy even look like? To dive into today’s topic, we’re first speaking with Tracy Boatner, president of the East Tennessee Economic Council, an organization dedicated to supporting the federal government’s missions in Oak Ridge. We’ll discuss the power of partnerships and why our region is ripe for nuclear innovation.

We’ll also talk with Mike Laufer, CEO of Kairos Power about advanced nuclear innovation, why the company chose Tennessee to build its demonstration reactor and what an advanced nuclear future looks like.

But before we dive into today’s topic, I want to remind you about TAEBC’s Annual Meeting in Nashville on March 7th. This annual event allows TAEBC members, stakeholders, potential members, or anybody curious about advanced energy to gather and celebrate our growing advanced energy economy. It’s free for members and public officials. If you want to register to attend, please visit our website at tnadvancedenergy.com to stay up to date about the latest event developments. Follow us on social media or sign up for our newsletter.

Energizing Tennessee would not be possible without the generous support of our sponsor FirstBank. It’s partnerships and collaborations like this that allow us to support our growing advanced energy economy. Today, we’re welcoming Brent Ball, FirstBank Market President for Knoxville, Tennessee.

Brent, thanks for joining us.

Brent Ball: Thank you Cortney.

Cortney Piper: For our new listeners, could you tell them a little bit about FirstBank’s mission?

Brent Ball: Sure. So at FirstBank, our mission is helping people build a better future. And really, that means a couple of things. So first off, of course, for our, our bank clients and helping them achieve their financial dreams.

Secondly, it’s, it’s for our team members. So we, you know, we want to be. The best place there is to work and you know, we have a great work-life balance here. And then, and then lastly, you know, it’s really giving back to the community as well. We really here in Knoxville that’s a really big part of our DNA through many different nonprofits that, that we’re able to give back and, and help the community.

Cortney Piper: And we have certainly appreciated our partnership on this podcast, so thank you, Brent.

Today’s episode is about advanced nuclear energy in the Oak Ridge region, and the legacy of innovation and economic development activities in East Tennessee. What role do you see financial institutions playing as more businesses relocate or start up in East Tennessee?

Brent Ball: Well, there’s a couple, so you know, first you, you’ve gotta be able to, you’ve gotta have team members that understand Knoxville. You know, what are, what are the strengths and the challenges that this area has you know, compared to other cities. You know, second, you’ve gotta have people that work at the bank that are advisors you know, that can walk along with the entrepreneur.

Through the many different stages of a business. You know, we don’t have just order takers here. You know, we’ve gotta have people that understand, you know, everything with the business. And then, and then lastly, you have to be able to evolve the relationship as the business grows. You know, a startup has different needs and challenges than a company that’s been in business for five years or 10 years.

So again, you’ve gotta have, and that really all goes back to the people. You know, having advisors at the bank that really understand business and are able to communicate with the entrepreneur you know, ways to better their business or, you know, again, just be an advisor there along the way.

Cortney Piper: Brent Ball, FirstBank market president for Knoxville. Thank you for joining us on Energizing Tennessee.

Brent Ball: Thank you.

Cortney Piper: To help us understand the power of partnerships in the nuclear sector and why our region is ripe for nuclear innovation. We’re talking to Tracy Boatner, president of the East Tennessee Economic Council, also known as ETEC. ETEC is a valued TAEBC member. Tracy, we’re happy to speak with you today.

Tracy Boatner: Thanks so much for having me.

Cortney Piper: Tracy to begin, tell us a little bit about ETEC and its mission.

Tracy Boatner: Well, ETEC is an independent nonprofit membership organization that exists to create regional economic prosperity by partnering with companies to support and advocate for the federal missions in the region. Most of those federal missions are represented by the Department of Energy, which generates about a $7.2 billion impact on the state’s GDP.

ETEC is celebrating our 50th anniversary this year, and we’re really excited about honoring our 50-year legacy while re-imagining the next 50 years.

Cortney Piper: Tracy, folks might be surprised to hear that East Tennessee has a rather vibrant nuclear supply chain. So, tell us what that looks like, what the companies in that supply chain do. Give us a little color commentary on what that nuclear supply chain looks like in East Tennessee.

Tracy Boatner: ETEC actually partnered with the University of Tennessee and NEI, the Nuclear Energy Institute, back in 2016 to do a study of all of the nuclear industries that were located in East Tennessee and Tennessee actually.

And we did that study in 2016 and created a map showing which companies were located here. And at that time, we had 122 nuclear-related companies here in the state of Tennessee. In 2022, before we, we had our last Nuclear Opportunities Workshop, we did another study and found that between that time period, 26 more companies had chosen to locate here in East Tennessee. So we do have a very vibrant nuclear industry.

Cortney Piper: That’s great. And it’s because of the robustness of this supply chain that ETEC has a nuclear working group dedicated to facilitating an advanced energy nuclear innovation hub in East Tennessee. Tell us the value. Tell us about the value of these partnerships and some notable projects in the region created out of this initiative.

Tracy Boatner: Yes. We started a nuclear working group many years ago to support, initially, it was to support TVA’s efforts to build a small modular reactor on their Clinch River site here in Oak Ridge. And that nuclear working group is made up of nuclear experts from the University of Tennessee, TVA, ORAU, Y12, ORNL, Centrus, UCOR and several other small and large businesses.

And, over the years, as we were just meeting to talk about nuclear subjects, DOE’s environmental management contractor, UCOR, has been in the process of getting the Manhattan project-era land ready for reindustrialization. And the Community Reuse Organization of East Tennessee has been facilitating the transfer of properties from the Department of Energy for public use.

And so after a few years, we were just meeting to talk about these nuclear subjects. The group decided to host our first Nuclear Suppliers Workshop in 2017. And this event brought leaders in the advanced nuclear industry to the region to talk with their peers and to learn more about the region’s assets and one of those assets being available property to locate here. And each year the event has grown larger and larger with more interest from advanced nuclear partners.

So today, when you combine unprecedented federal investments in clean energy technologies to combat climate change with property that is adjacent to assets like TVA, Y12 and ORNL, the results are everything that we ever hoped that they would.

The West End of Oak Ridge is transforming into an advanced nuclear innovation hub with investments from companies like Kairos Power, Ultrasafe Nuclear, TRISO-X, and Coqui Pharma. And none of these wins would’ve been possible without the partnerships that I have already mentioned. And all of these partners were committed to seeing this region grow and we could not be happier with the results.

Cortney Piper: That is just fantastic. And it’s been so interesting to see this region, especially in East Tennessee, the Oak Ridge area, all of those partners collaborating and working towards a common goal, which resulted in an increase of more than 25 companies in a six-ish year period. That is rather. Remarkable by any metric.

So just again, speaks to the power of partnerships and ETEC is clearly at the center of all of those partnerships. So, tell us why, tell us again, why our region is such a hub for nuclear innovation and what we can expect to see in the future.

Tracy Boatner: East Tennessee is a pro-nuclear community. We understand and appreciate the need for industries that utilize nuclear resources to produce beneficial products.

We have the workforce here. East Tennessee provides a pool of talented individuals in the region that have training and an understanding of nuclear operations. East Tennessee provides access to research and development capability and collaboration with some of the world’s experts relative to the nuclear industry.

And the future is really very bright here in East Tennessee in the nuclear industry. New private companies choosing to locate here will only generate more and more interest and new partnership opportunities.

Cortney Piper: Another bright spot in Tennessee’s advanced energy economy. Tracy Boatner, president of the East Tennessee Economic Council, thanks for joining us on Energizing Tennessee.

Tracy Boatner: Thanks so much, Cortney.

Cortney Piper: To dive into a particular advanced energy project in our region, I’m speaking with Dr. Mike Laufer, the co-founder and CEO of Kairos Power. He’s responsible for all business and technical operations within the company, as well as government affairs for Kairos Power’s, design, development, and commercialization of the Kairos Power fluoride, salt-cooled, high-temperature reactor.

Mike, welcome to Energizing Tennessee.

Mike Laufer: Cortney, thank you for having me. It’s great to be here.

Cortney Piper: Tell our listeners, for those that maybe don’t know about Kairos Power, give us your elevator pitch. Tell us, you know, tell us that 30 seconds, who you are, what you do, and, and how you’re going to radically transform the energy landscape.

Sure.

Mike Laufer: So our quick elevator pitch and I should caveat that there’s lots of nuance in everything and so the short summary can, can often be, only just scratching the surface. But basically, the key point for Kairos is we believe deeply that we need nuclear for in the toolkit for addressing climate change and fighting climate change.

If we don’t have nuclear, that becomes, extremely hard and, and much, much more difficult. So nuclear needs to play a role. We believe that we’re nuclear’s best shot, that we have the right team, the right strategies to realize that potential in terms of a technology that’s gonna be affordable and safe.

And then the third point is that we believe we have a credible pathway to delivering that technology and proving both to ourselves, to our customers, to the public that, that we can actually deliver. And that’s, that’s been kind of the Achilles Heel for nuclear is that it has all the potential, but time and time again, it’s proved very challenging to deliver the technology at cost and on time. And so we’re, we’re really trying to radicalize how we address those challenges and really change the way that that nuclear is developed and deployed.

Cortney Piper: And you’ll be doing that from Oak Ridge. So, and many of our listeners and our members are familiar with Oak Ridge’s legacy regarding nuclear energy and are following some of the advanced nuclear technology development and all the economic development activity that we have going on in east Tennessee. But can you tell us what does advanced nuclear energy actually mean and how has this technology evolved from the World War II era?

Mike Laufer: Great question. So advanced nuclear is a very, very broad label. And it pretty much applies to anything that’s not the current nuclear power plants that we’re operating.

So, the current nuclear plants are very large scale. They output about a gigawatt, a thousand megawatts of electrical energy. They’re really big facilities. They are kind of the evolution of technology that goes back to the naval development for navy reactors using regular water for cooling and for controlling the nuclear reaction. So they have those, that kind of connection. But civilian nuclear energy has kind of developed very slowly over the course of a number of years. And so we’re basically gone through three generations, many decades of development. It moves very slowly.

So advanced nuclear is pretty much the broad label for anything that’s not that. It includes smaller versions of the light water reactor technology. It includes reactors that use different types of fuel and coolants. And I think there’s a whole landscape of developers who are working on these technologies ranging from the usual suspects, the kind of large vendors, and typical players in the nuclear industry, many of which are, are in East Tennessee, to relative newcomers like Kairos, who are trying to break in with kind of a different model for the technology as well as for the company of how we’re gonna get there.

So, I think that’s the broad kind of perspective on advanced nuclear, but pretty much advanced nuclear is trying to I think deliver on the potential of the technology and kind of prove that we can do nuclear at lower cost and more affordably. And there are a number of different strategies of how to get there.

Cortney Piper: Yeah, there are. Our listeners might be surprised to hear, maybe some might not be surprised to hear, but broadly with the Tennessee Advanced Energy Business Council, we talk about energy innovation as to means to economic development and job creation. And some folks might be surprised to hear just how much room there is for innovation within the nuclear energy space, and I know that you guys are leading the way.

A couple of years ago, Kairos Power announced it would invest a hundred million and create 55 jobs to deploy its Hermes low-power demonstration reactor at the East Tennessee Technology Park in Oak Ridge, which I know is something that we’re all very excited about happening here in East Tennessee.

And so Kairos is using this project, to develop its fluoride salt-cooled high-temperature reactor technology. Can you explain what this technology is and what makes it unique for the advanced nuclear space, especially when you compare it to commercial light water-cooled reactors and molten salt reactors?

Mike Laufer: Sure, happy to talk about that a little bit. So, the technology that we are focused on developing, and I think it’s important to also note: Kairos is singularly focused on this one technology and this, this one type of reactor technology. That focus is actually one of, I think our great strengths and everyone in the company is trying to do everything they can every day to push us toward getting this technology ready for commercialization as quickly as possible.

I think the key attributes of the nuclear technology that we’re trying to make sure are there are really cost and safety. And one of my key messages about nuclear as it exists today is that it’s clean, it’s reliable, but it’s not affordable, and this is really the key hurdle. So, we’re trying to really attack the challenge of cost for nuclear power. And maintain the high level of safety that the industry has delivered in the United States. Those two drivers really are key aspects of the technology.

So, the technology we are the only developer working on this specific technology, although we have common attributes to other developers. And those are the fuel and the coolant. So the fuel is called TRISO. It’s a coated particle fuel. We have these tiny particles. They’re about the size of poppy seeds and they have a number of coatings on them.

And that basically serves as the main containment for all the fission products that are generated during the nuclear reaction. So each of those tiny particles and those coatings is what basically keeps all the radioactive material contained that results from the fission in the reactor system.

This is a technology which has strong connections to Oak Ridge. Oak Ridge, as well as the broader Department of Energy programs, has been working on a program to develop the capability to produce this fuel and to test it. And so one of the reasons why Kairos can talk about our really aggressive timelines for deployment is that we’re not trying to create anything new on the fuel side. The fuel is very well established, and the Department of Energy has been investing in this for many decades. And there are number of companies, Kairos included, who are trying to use this fuel for different reactor technologies.

Now, what’s unique about Kairos is that instead of the conventional deployment, which combines this fuel with helium coolant, so high temperature, high pressure, helium gas, we’re combining it with liquid salts. And the salts are high temperature, but low pressure. And they give us the ability to move around a lot of heat in the system very efficiently and at low pressure, which means that the components we’re using are much thinner. They don’t have to survive very high pressure, which doing high pressure and high temperature creates a lot of engineering challenges.

And this is of course, is technology, which has very deep roots in East Tennessee and Oak Ridge. And really the formative history of that technology goes directly back to Oak Ridge National Laboratory in the ’50s and ’60s and culminated with the molten salt reactor experiment, which operated for about five years on the lab, and really kind of it’s actually an interesting experiment.

So, the combination of these technologies: the fuel is the most robust nuclear fuel that’s ever been developed. Our reactor never pushes the fuel even close to the limit in terms of where it’s improvement to perform. But the salt is a key backup barrier and actually was developed to absorb all the fission products because it was developed for reactors that didn’t have solid fuel, was developed for reactors that had no solid fuel, had liquid fuel.

So for us, those key attributes provide really the fundamental safety case for the technology and that actually ties into the economic potential of technology. Because we have this robust intrinsic safety from the combination of the fuel and the coolant. It allows us to shrink the physical area of our plants that really performs important safety functions.

When you’re dealing with parts of the system that are important to nuclear safety, it’s much harder to do innovation and to change those, especially when they’ve gone through the rigorous regulatory approval process. But what it does give us is more of the plan to envelope where we can do what’s much more conventional with non-nuclear technologies to iterate and do innovation.

So that’s really been key. The other thing is that because the safety case is really robust from those intrinsic characteristics. We’re focused on a lot of non-nuclear technology development. So, we have facilities and labs in our headquarters in Alameda, in California, as well as our R&D and production facility in Albuquerque New Mexico, where we’re doing a lot of non-nuclear development and setting the stage for us to come to Oak Ridge to do really the first nuclear iteration of the technology.

But when we get there, we’re gonna have all this experience working with the salts and high-temperature environments. Many of the components are very similar to what we have for the system in Oak Ridge. And I think maybe this is a point. So if you go to the K-33 site today, you won’t see a lot there.

You’ll see the product of DOE environmental cleanup effort from decommissioning the gaseous fusion plant there. But a lot of what we’re developing right now at our other facilities gives us confidence that we’ll be able to move fast. So we’re a couple of months away from loading salt into a test in Albuquerque, which will be the largest FLiBe system ever built in operated, FLiBe is the particular salt that we use.

It was also the salt that was used for the molten salt reactor experiment at Oak Ridge. But our test is gonna use more FLiBe than Oak Ridge’s used than any of their tests. We basically have built that system out in less than two years from flat earth, from pouring the foundation. So all, all of this experience that we’re gaining we’re really excited to be bringing that to Tennessee.

It’s the right place to do the nuclear developments, the opportunities to collaborate with the laboratory as well as other regional parties like Tennessee Valley Authority and the support for the local communities has been fantastic. People are excited for us to come, and we’re excited, but we’re working really hard to make sure that we we’re ready to go and, and ultimately delivering that project quickly on cost is gonna be what’s necessary to prove to our future customers that we can also deliver future power plants on time and on cost.

Cortney Piper: Now listen, you stole my thunder here a little bit with the next question, but I’m gonna, I’m gonna tell you, you’ve gotta elaborate on it because we are, the name of this podcast is Energizing Tennessee. So why did Kairos Power choose Oak Ridge, Tennessee, to build its demonstration reactor? What did you, what did you like about us? What did you like about Oak Ridge?

Mike Laufer: So there are a number of factors. So I already kind of highlighted one of the big ones, which was the opportunities for collaboration with Oak Ridge National Laboratory. I’ve been, I, I’ve been working professionally with Oak Ridge for, for a long time, going back to, to my university research days.

The labs in Oak Ridge in particular have unique capabilities from kind of decades of federal investment in those capabilities. Many of those capabilities are really hard or expensive to recreate in the private sector. And so taking advantage of those opportunities is key. The other factors are, really kind of looking, looking a little bit further ahead, and I’m very cautious to, to not make commitments that, that I’m not totally confident that we’ll be able to fulfill.

But we do know that there is substantial growth potential for Kairos in East Tennessee and that that opportunity allows for opportunities beyond Hermes, as long as we’re successful in delivering that project. So, so recognizing those growth opportunities is key. And then I think looking at the regional power markets in the United States. Tennessee Valley Authority has been very clear about their intent on future advanced nuclear development.

They haven’t made, you know, they haven’t made commitments about what technology exactly is gonna be the best technology for that, but they’re clear about the value that that nuclear brings on the scale. And then other utilities in the southeast are also current nuclear operators. They see the value. So regionally, the southeast is where kind of the seeds of future nuclear developments make a lot of sense.

And then combine that with the opportunities for the lab and the kind of the unique workforce capabilities that we have in East Tennessee and everything kind of aligns to make a lot of sense for us for our next phase.

Cortney Piper: Absolutely, and you’ve hit on two of the three assets that we talk a lot about with the Tennessee Advanced Energy Business Council that makes the state of Tennessee in particular so unique, especially East Tennessee. So no other state or region in the country has the Department of Energy’s largest science and energy national Lab, which is Oak Ridge National Lab. We’ve got TVA, the nation’s largest public power provider, which Mike, like you said, they’ve got a commitment to advanced energy and especially advanced nuclear technologies that they want to see incorporate into their system.

And then the third asset is the University of Tennessee. Our flagship university has a really great nuclear engineering program and they also place a key emphasis on energy innovations and research. So, you know, I’m a little bit biased, but I think we’ve got the perfect trifecta here in Tennessee and we are glad that Kairos Power is going to be joining in on all that great activity.

So Mike, next question is you know, we talked about this a little bit, but who do you anticipate to be your first customers? Generally defining, or maybe you’ve got some specific names you’d like to share.

Mike Laufer: I will of course, provide the caveat that, that utilities are very conservative, and I won’t make any statements for them. You know, we don’t have, we don’t have the commitments from, from utilities yet, I can say we have a lot of good communication with utilities. We’ve established a small consortium of utilities called KP-OMADA, which is, that is public, so that includes TVA, Constellation, and Bruce Power from Canada.

And so this is a, I would say a select set of utilities that we are working particularly close with to, it’s two-way communication. So we wanna understand what their needs are, what their schedules look like, what their, what their needs are for their systems. But it’s also a way for us to share our progress and our unique development with them as well.

Cuz, we are trying to sell you know, reactor technology for power plants. But. We’re trying to also get them comfortable with a different way of developing the technology. And it’s really about, it’s not about seeing the end result, it’s about seeing the process that we’re going through to develop the technology and how that process enables us to go very quickly.

So it’s, it’s not necessarily about, about where we are, but how fast we’re moving. So that’s, that’s our shortlist of utilities that we’re, we’re most engaged with. And obviously, TVA is a really important part of that community. And then on the other side the Hermes reactor is in East Tennessee, it’s in their service territory.

So we also have a specific partnership with TVA that’s really focused on aspects of that project where both companies have alignment in terms of getting value out of the experience there. And so we have a really good working relationship with TVA on that project as well.

Cortney Piper: Very smart. Okay, last question. We always like to do predictions. What does the future hold for advanced nuclear in the advanced energy industry broadly?

Mike Laufer: Well, I said earlier that predictions about the energy, the future of energy markets are notoriously terrible.

Cortney Piper: I know it’s why the things that happened and over the last three to five years were very hard to predict if we look backward, but give us your best shot.

Mike Laufer: Sure. So I think I think the die is pretty much cast for what’s gonna be happening over the course of this next decade. I think the broad trends are set in motion. Utilities are going to be working on building out a lot of renewables, both solar and wind. They’re going to be, you know, coal is gonna be phasing out and they’re gonna be relying on, on their gas assets.

And the combination of gas and renewables right now looks like a pretty attractive option in terms of operating grid systems and having flexible generation along with the variable generation. The key question is what’s gonna come after that phase. So that you know, after the next decade or so, and if, if we really are gonna be serious about decarbonization in the US market, I should say Kairos is really focused on the US energy market. We see that as impactful, both in terms of reducing emissions globally and playing our part, but also, it’s a large market. And so finding that large market opportunity is key.

The question is, what’s gonna come next in that way for decarbonization? And as renewables penetrate more deeply, the challenges of grid operation are going to become more intense. And I think in looking at kind of what the energy system is gonna look like, there’s gonna be some fraction of the system. And people will, I’m, I’m not gonna be precise about what fraction, but probably somewhere between 20 and 40% of our generation at the end of the 2030s if we really are decarbonizing, is gonna come from a technology which doesn’t exist at large commercial scale today.

It’s either gonna be new nuclear, carbon capture or storage. None of those exist at scale today. Our ability to actually decarbonize is gonna be served by having multiple options available to us. But that’s the opportunity that we really see Kairos is trying to fill. And you know, right now things are set up so that it’s really gonna be market driven in terms of what technology is going to be most attractive to deploy.

So, that’s gonna be the really hard part. But I think, you know, over the next decade we’re gonna see increasing penetration of renewables, both solar and wind balanced by, you know, the flexibility of natural gas. The really hard part of the future energy system is how are we gonna decarbonize the natural gas footprint? And that’s, that’s, that’s why we really need nuclear. That’s why we really need companies like Kairos to be successful.

Cortney Piper: So, although energy predictions are notoriously horrible, I think we can all agree that decarbonization is here to stay. And advanced nuclear has a big, big role they can play. A big gap that can be filled with the technology.

And I know especially for us in Tennessee, we’re really interested to see how this all plays out. And we are excited to welcome Kairos Power fully into the Oak Ridge community. So Dr. Mike Laufer, the co-founder and CEO of Kairos Power, thanks for joining us on Energizing Tennessee.

Mike Laufer: Cortney, thank you. It’s been a pleasure.

Cortney Piper: And that’s our show. Thanks for tuning into Energizing Tennessee. Powered by the Tennessee Advanced Energy Business Council in FirstBank. We’re glad to be your number-one podcast for news about Tennessee’s advanced energy sector. If you like what you heard, please share it with others or leave a rating and review.

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