Blue Energy raises $380M to build the world's first project-financeable nuclear plant using prefab shipyard modules

Speaker 2: Yeah. Great to meet you.

Speaker 1: Have a great rest of your day.

Speaker 2: Cheers.

Speaker 1: We'll talk to you soon. Up next, we have Jake from Blue Energy. He's the co founder and CEO with a massive raise. It's a gong breaker. Jake, how you doing? Welcome to the show.

Speaker 3: Yes. I'm doing

Speaker 2: I got a feeling you have the biggest number first.

Speaker 1: I think you have the biggest number as kick us off. How much have you raised? And then we'll get into what you're going to do with it. But tell us about the financial situation for the company.

Speaker 3: We we have announced a $380,000,000 raise.

Speaker 1: And what will you be doing with all that money?

Speaker 3: Yeah. So our focus we're we're really unique amongst the field of nuclear players right now. Our focus is on building the world's first project financeable nuclear power plant. So we're using this funding to actually put deposits down on long lead equipment as well as finishing out the engineering and development licensing on some of our first sites.

Speaker 1: Does that mean, like, less r and d risk or more in, like, the GE or Westinghouse territory, more like, you know, going with, products that have been derisked, but it's very expensive and maybe the underwriting is is is different this time around? Or or are you working on, an entirely new reactor design somewhere in the supply chain?

Speaker 3: No. You you had it exactly right. We are not a reactor designer. We're a developer, but our technology is the proprietary approach by which we go about building the plant. Sure. So what bugged me and why I started the company

Speaker 1: Yeah.

Speaker 3: Was I had a lot of friends in nuclear space designing really exciting new reactors, and then you have a lot of incumbents in the space Yeah. Who are working on, you know, kind of the same old technology that we've been operating safely for seventy years. Yeah. But nobody was focused on the core issue of how do we build nuclear on time and on budget. Yeah. So I grew up in a construction family. I used to be a draftsman from my father's architecture firm. So I just grew up around a lot of construction. Did my nuclear engineering and physics degrees in the space and just felt like there isn't there hasn't been anyone really focused on the root cause issue. Yeah. So what we're doing is we're borrowing best practices from LNG and offshore oil and gas and offshore wind to prefabricate everything at existing oil and gas fab yards and shipyards, and then we barge it all as a prefabricated system on the order of a thousand or 2,000 tons to the operating site.

Speaker 1: Okay.

Speaker 3: And then really, you know, basically are just installing it like giant Lego pieces. But what that allows us to do is bring a lot more debt financing to bear. So we're not taking a lot of reactor technology risk to start in the beginning. We're using mature light water reactor technology to start Yep. But we'll happily work with the gen four reactors as they as they mature.

Speaker 1: Cool. Take me through

Speaker 2: I feel like you've been wanting a copy

Speaker 1: this for a

Speaker 4: long time.

Speaker 2: I've been John John's John's point has been

Speaker 1: Copy paste.

Speaker 2: Copy paste. Hey. We know how to do this.

Speaker 1: It works. Like, is it. We don't need copy paste.

Speaker 2: Reinvent I mean, it's great if we wanna reinvent the wheel.

Speaker 1: Yeah. We need the next gen tech.

Speaker 2: New reactors. But

Speaker 1: But also more of

Speaker 6: this current gen.

Speaker 2: Let's just build some.

Speaker 1: Yeah. So my yeah. My question is about Vogtle. Lessons from the Vogtle project. What what do you think they did well that you wanna copy, that you wanna learn from? What do you what, if anything, do you wanna do differently?

Speaker 3: Yeah. So to kinda put some stats on Vogtle, it it, like so many other nuclear projects in the West, was ended up being about two to three times over budget and behind schedule. But when you double click on where that cost was, you realize it wasn't actually in the reactor technology or the equipment. Yeah. It was over 40% of it was just the construction overhead.

Speaker 1: Mhmm.

Speaker 3: So it was the cost of training and relocating 10,000 skilled workers to book to the site at Vogtle, you know. Yeah. Think about the cost of training, relocating their families, retaining them once they're trained because data center projects are trying to steal that talent. Yeah. You have to set up a nuclear quality assurance program in the field. So there's all this overhead. It's basically like building a small town. Yeah. And then the hope is that you'd be able to move that, traveling circus around from site to site.

Speaker 1: Yep.

Speaker 3: And then a third of the project cost was just capitalized interest on debt because it took over ten years to build before it started generating revenue. So these are the two big problems we're trying to address, is we are moving most of that work off-site. We're keeping the workforce centralized at the Fabyard and the shipyard where they already are so we can start to put Nuclean to a learning curve

Speaker 1: Yep.

Speaker 3: And drive the cost down over time, akin to what we've seen in wind, solar, batteries, and gas turbines. You know, what they did well was it was a mature light water reactor technology. It's a passively safe reactor technology. They they really pushed the the world forward a little bit in licensing space and steel composite structures, which we're looking into as well. They actually had this is not well known. They originally wanted to barge it in up the Savannah River, but they had to then dredge the Savannah. They would have had to dredge the Savannah River for miles, and that would have become part of their environmental impact statement. So they ended up it became such a regulatory and permitting nightmare that they gave up. Yeah. And they said, alright. Let's just truck it in. And then they had to truck it in and build a module assembly building on-site.

Speaker 2: Remind me

Speaker 6: So they ended

Speaker 3: up doing all the welding on-site.

Speaker 1: Yeah. Think way the remodel from night nightmare remodel. Very interesting. I yeah. I'm I'm I'm I'm I'm fascinated

Speaker 2: by company Where is based? Where are you guys based?

Speaker 3: We're in Chevy Chase, Maryland, pretty close to NRC headquarters. And then we've also got a big presence in Edinburgh, Scotland Yeah. Where there's a lot of offshore engineering talent, particularly from, like, kind of the history of shipbuilding and offshore oil and gas. Yeah. And then we've also got an office in Houston Yeah. Also in kind of offshore oil and gas capital world.

Speaker 1: Okay. I I read a blog post about one of the potential problems or stumbling blocks that nuclear projects run into, and I want a reality check it with you. The thesis was basically that we have a reactor design. We have a you know, there's infrastructure around that. Cement needs to get laid. Pipes need to go here and there. But oftentimes, the regulation will change while the project is underway. And so in order to stay ahead of the changing regulation, you might have to, you know, jackhammer a bunch of concrete and move a pipe to a different route because the regulation has changed. Is that real? And is there anything that we have done or can do to get to a regime where the the regulation is more locked and deterministic so that I imagine you're not gonna build this overnight. But Yeah. If it takes you a couple years, you know that the the the contracts that you put in place, the plans that you put in place today will hold and you won't face a massive Yeah.

Speaker 3: So that was another one of the big learnings from Vogtle. Vogtle was the first and still today, I think, only project that did a combined operating and construction license, which means once they locked the blueprint, they really were not allowed to make changes to

Speaker 6: it Mhmm.

Speaker 3: During construction. Mhmm. So every time they encountered something and said, oh, we need, you know, load the craft labor, wound the rebar clockwise instead of counterclockwise, you know, they had to jackhammer it up.

Speaker 1: Yep.

Speaker 3: Or they had to go and reapprove it all. And there's just a there's a long list of things like that that they encountered. So one of the things we're doing is we're following a slightly different licensing process, the original licensing process of part 50, whereby we're gonna incrementalize it so that we don't have to encounter that rework, that kind of regulatory triggered rework situation. But also, because we're following this prefab approach and we're moving 80% of the CapEx into a fixed price contract environment with these fab yards and shipyards, it forces us to go to something like 60% detailed design upfront and locking those designs because that is what is gonna be coming in prefab from the fab yard.

Speaker 1: Yeah.

Speaker 3: So it's it's sort of baked into the strategy. But really, this is about taking a lot of those lessons learned and making sure we don't make the mistakes of the past. But I'll also say we've never had a more supportive regulatory environment than we have for right now.

Speaker 1: Sure.

Speaker 3: Like, this is a critical juncture in the history of nuclear power that we can take advantage of, with where the NRC is presently at.

Speaker 1: What is the power output for the first reactor that you're targeting to bring online?

Speaker 3: So we are focused right now for the first project using light water small modular reactors, which the the power range of the units we're looking at range between 50 and roughly 300 megawatts Yeah. Per Yeah. Each site we're targeting doing is gonna have multiple units. So we're it's gonna be a gigawatt to a gigawatt and a half per site because multiunit operations That

Speaker 1: makes a lot of sense.

Speaker 3: Is is important. Yeah. And it helps drive down costs.

Speaker 1: And then are you already sharing a timeline? Do you have an optimistic scenario, a base case, a bear case? I'm sure you get asked this all the time. It's the worst question. But we talked to a lot of nuclear founders, and we hear a lot of twenty thirties, and there's a whole bunch of projects with hyperscalers and big tech companies that are looking at 2032, 2035. It's exciting. Better, you know, 2032 than never. But do you have, anything to share on, like, the the timeline of rolling out new nuclear capacity in America?

Speaker 3: Yeah. We'll be announcing things, very soon. But what I can share on the dates, and this is actually another unique thing we're doing, part of our strategy is we're pursuing this thing we call gas to nuclear conversion. So we're actually gonna be building half the nuclear plant right away.

Speaker 7: Okay.

Speaker 1: So the

Speaker 3: whole nuclear steam turbine system set up for nuclear steam conditions and quality. And we're gonna fire it early with two combustion turbines as a two on one combined cycle. Oh. So it's kind of a Frankenstein combined cycle. We've actually gotten the NRC to buy off on this methodology, through a top report recently. So that allows us to actually project finance half the CapEx for a first SMR, and then we will build the reactor and splice in the steam and switch it over from gas steam to nuclear steam. So that actually accelerates our commercial operation date with confidence. Interesting. So we're looking at generating first power in 2030, 2031, mostly driven by gas turbine delivery dates today.

Speaker 1: Yeah.

Speaker 3: And then our first nuclear commercial operation, we're looking at 2032.

Speaker 1: Okay. So is that is that switch out possible at any legacy natural gas infrastructure site in America currently? Because that seems like an environmentalist dream. Right? To say yes or no.

Speaker 3: Yes. So I think this opens up a whole new world of fossil to nuclear convergence, which we think is an important precedent to set.

Speaker 1: Yeah. It seems huge if possible. But, yeah, I imagine that, you know, it's not exactly USB C on both sides, but hopefully one day we can build the adapter.

Speaker 3: That's right. Yeah. The what we're really focused on is, you know, there there's a lot of announcements out there, a lot of sometimes, you know, noise of what you know,

Speaker 7: there's a lot

Speaker 3: of exciting things happen in the nuclear sector. Yeah. We think we've got the first project, financeable nuclear project, And the first one that's gonna power it'll be a new build that powers a new AI data center. Yeah. So we're excited about that. And we think our timeline is is credible is aggressive, but credible and defendable. Yeah. And we've got the right set of partners around it to make it happen.

Speaker 1: That's amazing. Don't use the word data center. We're using the word supercomputer. Supercomputer. They're supercomputers. They're supercomputers data center. Everyone likes a supercomputer. Yeah. Anyway, thank you so much for taking the time to come chat with

Speaker 2: us. To meet you, Jacob. I'm sure you'll be back on soon. Good luck with I really we really appreciate your approach. Yeah. Feels like you're you're making plays and Yeah. I like how pragmatic and It's

Speaker 1: very pragmatic.

Speaker 2: Innovative the approach is at the same time.

Speaker 1: It's great stuff.

Speaker 3: Thank you. Appreciate your

Speaker 1: you soon. Cheers. Goodbye.

Speaker 2: And we will close out on this. I need your reaction, John. Ferrari's first electric car is priced at the low price of $650,000.

Speaker 1: An absolute steal. They're giving them away at that price. It's electric. Right? So you don't have to deal with gasoline? You don't

Speaker 2: have to do Yeah. You save a lot on gas.

Speaker 1: You don't you don't have to deal with all the noise that comes out of a v 12.

Speaker 2: Yeah. You save on gas. Yeah.

Speaker 1: Oh, well, yeah. I mean, if you're saving on gas and you're driving I mean, if if if oil keeps spiking and gasoline goes to a thousand dollars a gallon and you're filling up every week, you could easily be spending millions of dollars a year on gasoline in a normal car. So there's potential cost savings here. So it's sort of a more you buy, the more you save situation.

Speaker 2: Think Yeah.

Speaker 7: Ferrari Luche.

Speaker 2: There's really gonna be a, like, what kind of Ferrari client are you moment?

Speaker 1: No. I think it'll be a statue because you see someone with this, you will

Speaker 2: know they can eat $300 of depreciation.

Speaker 1: And you know that they are that they are high on the list for the f 90. Like, they are working their way up buying in now. And when the f 90 comes out in a decade, they're getting a call. Yeah. They're getting a call

Speaker 8: for sure.

Speaker 2: Very interested to see how this does in the market. And the good thing is if you are excited about the Luche, but you're not excited about paying $650,000, you will have an opportunity to buy them for far less than that very, very quickly.

Speaker 1: Probably. Probably.

Speaker 2: But thank you for hanging out with us today. It's been an honor and a privilege to be here with you. We hope you have a wonderful afternoon.

Speaker 1: Leave us five stars and have a podcast in Spotify. Throw that flash bang. Sign up for our newsletter, tbpn.com. Goodbye.