By The Horns: A Bitcoin podcast about South Africa
By The Horns: A Bitcoin podcast about South Africa
Breaking Down Nuclear Power: A Conversation with Hügo Krüger
Welcome to an electrifying episode as we sit down with Hügo Krüger, a brilliant engineer and energy policy expert from South Africa. Get ready to dive into the captivating world of nuclear power and energy policy as Hügo enlightens us on the potential, challenges, and misconceptions surrounding this controversial topic. From the significance of nuclear fuels and new reactor designs to the integration of Bitcoin mining with nuclear power plants, we explore it all. Join us on this stimulating journey as Hügo breaks down complex concepts and provides insights that will leave you pondering the future of clean and efficient energy.
In the first chapter, Hichou sheds light on the constraints and opposition faced by nuclear power. Discover the physical limitations of nuclear energy production, the centralized nature it requires, and the culture of fear that has driven up its costs. Explore the implications of the linear safety standard and the misconceptions surrounding radiation. Hügo's expertise and nuanced perspective will challenge your preconceived notions and provide rational clarity on the potential of nuclear power.
Next, we venture into the realm of vendor financing and nuclear power exploration. Hügo shares his insights on the importance of structure and contracts in building nuclear power stations, drawing from the mistakes made in the Kusile project. Discover how different countries handle the risk and reliability of nuclear energy, and the geopolitical implications of their deals. Gain a deeper understanding of the potential held by nuclear energy and the challenges we must overcome to harness its full thermodynamic potential.
In our final chapter, the intersection of Bitcoin mining and nuclear power takes center stage. Explore the power of pump storage and its applications in producing hydrogen, while uncovering the economic advantages of integrating Bitcoin mining with nuclear power plants. Learn how risk is split between parties and the countries that have a commendable track record in nuclear energy. With Hügo's expert insights, we delve into the intricacies of these innovative technologies and the promising future they hold for a greener and more sustainable world.
Tune in to this thought-provoking episode and join us on an enlightening journey through the complexities and potentials of nuclear power and energy policy with the remarkable Hügo Krüger.
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Hello and welcome to another episode of by the Horns. Today I had the privilege of speaking to Hichou Creer, a South African structural engineer who is currently living and working in Paris, france. Hichou has been doing the rounds on the podcast circuits lately discussing energy policy, something he knows quite a lot about after doing his master's degree in structural engineering of nuclear power plants and then working in the energy industry for the past decade. Hichou is extremely well read on a wide variety of topics and is someone who I think provides a lot of signal amongst the noise of our current energy debate. Being an engineer, he provides that rational clarity that is missing from most conversations about clean energy. Unfortunately, I got so excited by the conversation that I lost track of time and Hichou had to leave at the end of the podcast pretty urgently as he had another call to jump on to me. But it was a great discussion and I look forward to our next one. I'm sure you'll enjoy this as much as I did. But before we get into the show, here's some brief words from our sponsors.
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Ricki Allardice:Cape Town is getting its first Bitcoin conference. From the 26th to the 28th of January 2024,. The Adopting Bitcoin Cape Town Conference is taking place at the Cape Town International Convention Centre. The theme for this conference is one that I think is extremely interesting, and it's all about parallel institutions and Bitcoin. Now, most of the Africans know about the likes of the AfriForum, saakalicha, the IRR and Solidaritate. These are parallel institutions that, for the past few decades, have been filling the vacuum left by governments and competence. Bitcoin is building the parallel institution of money, so this conference aims to bring these two groups together to discuss ideas and learn from each other. No parallel institution can function without the ability to transact, and Bitcoin can't function without motivated individuals building the foundations of the new parallel economy. This makes these two groups natural allies. If you want to be part of what is going to be an extremely interesting conference taking place in the most beautiful city on earth, grab yourself a ticket today. There's only going to be 350 of them, so get one before they're gone. Click the link in the description to get yourself a ticket and be part of history being made.
Ricki Allardice:That's Adopting Bitcoin Cape Town from the 26th to the 28th of January 2024. See you there, hey, and we're alive. Ich bin Kroer, welcome. Welcome to Bay of the Horns. Good to have you here, man. Thanks a lot. I'm going to go get my bag. I'm going to get my bag. I'm going to get my bag. I'm going to get my bag. I'm going to get my bag. I'm going to get my bag.
Hügo Krüger:I'm going to get my bag. Thanks a lot, Rick. I appreciate the invitation and thanks to your listeners for listening to me.
Ricki Allardice:It's my pleasure. So I have come across your work in the last few months and for me personally, just finding signal like this is rare, finding someone who gets straight to the heart of the issue Like I find. You have you clearly very well read. You write a lot, you articulate your ideas a lot, so I'm very excited for this discussion. I think people are going to be hearing a lot more from you in the future. So, yeah, welcome to the show.
Hügo Krüger:Oh thanks. Thanks a lot for having me.
Ricki Allardice:My pleasure, Hiko. Do you mind giving us a bit of background about yourself before we jump into the topic?
Hügo Krüger:Yeah, sure. So I'm from South Africa originally. I stay in France now I'm also now a French citizen. So I'm a French South African. I'm a bit of a French citizen this year. So basically I've got a background in civil engineering.
Hügo Krüger:I worked in South Africa for the FODG at the time for about two years after completing my studies. I also worked in self-untilog construction for about six months, so it wasn't something major. And then I got to learn the coal business, because the coal in South Africa, the fly ash, is used for various applications. My grandfather was actually one of the scientists that pioneered it in the country at the time, so he worked for the CSIR years ago and that ash is in the Burj Khalifa. So anyway, the coal this was my introduction into energy. I've got a lot of through him and constructions. I've always had an interest in both of them. Then, while working there, I studied French, because Lafayette was a French company, and then one of the lecturers proposed a scholarship for South Africans that would like to study in France and I applied for the thing and at the time they gave me the scholarship to come and do my master's. So at the time I wanted to do it in cement, but I missed the enrollment for that university and then I applied for a random degree in nuclear civil engineering without knowing too much about nuclear at the time.
Hügo Krüger:And then since then I've worked in a variety of nuclear related infrastructures. So I've worked on Inkley Point, which is a big nuclear power station they're constructing in the UK. We did the design in Paris. I worked for French Belgium company at the time and then I worked at ITER, which is International Thermonuclear Reactor, where they're attempting fusion in the south of France. We've also well in that office close to Marseille. We did a lot of what they call re-evaluation projects for electricity to France, which is their version of SCOM on what they call external aggressions, kind of nuclear building still resist paleosythmic, post-fukushima events, nuclear safety, all that type of stuff I did.
Hügo Krüger:And then my wife's Iranian, so she came back from Iran, she did a PhD in France, actually as an mathematician, and she went back. And then when she came back she got a job in Paris. So I quit the job. Then I came to Paris and I've since then been working in the welding gas industry. So I left nuclear for that to try and get a feeling to how something similar does it. But gas is very efficient. So I sort of became, you can say, a nuclear expert not nuclear, nuclear and energy expert. And I've now even been invited by people to podcasts and I've given a presentation the Free Market Foundation. They say I'm an expert. I don't know if I am, but yeah, that's more or less me.
Ricki Allardice:You know, something that's missing in the discussion today and it's gotten worse over the last few years is the discussion of energy being the basis for civilization and for standard of living. And in my opinion, our standard of living is driven by kilowatts. You know how much power do you have available to you? That's the ability to get machines to do work for you. And if machines can do work for you, your standard of living can increase. And this is what makes nuclear such a phenomenal energy source, because it's so energy dense. Right, like this is the correct me if I'm wrong here but like this is way more energy dense, but what is the magnitude than anything else we've got?
Hügo Krüger:Yeah, but you see I caution against something. So first of all, yes, energy is the capacity for work, and the book I always recommend on this is Sir Anthony Regle's book, the Energy in the English Industrial Revolution, and he made the same conclusion that the Japanese actually made during the major restoration of the Industrial Revolution. So the Western, as we said, was property rights, free markets, rule of law, that democracy that allowed us societies to develop, which might be true, but if you read, actually the communists at the beginning of last century, lenin in particular, lenin had a statement I can't remember the exact quote, but it's something that if we don't develop energy as a society, electricity as a society, we stay a peasant society forever. There was some communist slogan. So the communists came to the conclusion, through Das Kapital, which Karl Marx actually wrote, that the steam engine was what we call Marx, the prime mover.
Hügo Krüger:So it's a capacity for work and we can argue that wealth is just energy being dispatched in the economy. So everything is energy. Your house behind you was this scraper that built it, it was constructed, it's this potential energy, it's an aeroplane, it's got energy to move around. So everything uses energy. And you can argue that GDP per capita is actually low entropy fuel. What does low entropy mean? It's energy that's not been disturbed yet. And that's where, if you follow the logic to that, you come to the conclusion. That's why coal was so sufficient during the Industrial Revolution. That's why fossil fuels are so efficient, because you can just put it everywhere and apply.
Hügo Krüger:Now nuclear has got a weird conundrum where its energy dense was just true and it's got a lower form of entropy. Actually then coal, because the energy that went into coal actually comes from nuclear, geothermal energy derived from nuclear. Some people say there's a nuclear reactor, others say it's from the big bang, whatever your view is. So it's the basis of the energy that they gave and that energy is stored in coal. One way or another came from nuclear. But then you have this weird conundrum why is the cost of nuclear then said to be expensive if it's got this energy density favor and it's also got the material density favor? We use fuel materials and it actually comes down to the materials. If you're from the science way, why it's true that nuclear energy dense?
Hügo Krüger:We still struggle to exploit its full thermodynamic potential and that's because you still need water to make a turbo, to generate electricity and to contain the water. The nuclear pipes have to be 300 degrees and that's to maintain the boron. So there are other reactions and other factors that limit us from fully exploiting it. Of course that's only the pressure water reactor. There are different types of reactors but they all have their own constraints. They are physical constraints to exploiting it fully. So you're right to have an intuition to say that yeah, okay, it's energy dense, but the it's the same mistake people would make by saying but protein content determines food prices. It does to a point, but then you get to a point where you just eat in a restaurant, otherwise one more expensive than the other, and that comes to subjective value, to services, other things right. So nuclear also has its limits, but it certainly has different potentials and doesn't be fully exploited yet.
Ricki Allardice:I suppose the other thing of nuclear is it requires massive centralization. You've got to build a big nuclear power plant to extract the energy. It's not like coal that you can well I suppose coal's got a scale factor to it as well but you just can burn the coal and generate energy. It's not that you have to split the atoms apart like you do with nuclear. So nuclear requires scientific investments and it's much more further down the line than in terms of technological development and burning coal, but nevertheless, nuclear obviously has a lot of potential, and places like France, where you live I'm not sure the percentage, but a high percentage of France's energy comes from nuclear versus South Africa, where it's a small percentage because we only have one nuclear power plant.
Ricki Allardice:What is it, though, that is? I mean we saw a massive uptick in nuclear power plant production, people building plants. Obviously we discovered the technology. I don't know if I'm right or wrong on this, but it would seem like nuclear production is tapering off and they're not really building that many nuclear power plants anymore, or at least there's strong opposition to it. And why do you think that there is that opposition?
Hügo Krüger:So there's two things, that there's a few things that came together. First of all, the first application of nuclear was the atomic bombs Hiroshima and Nagasaki and in particular in Western countries the political left, particularly in Germany and the United States, was highly opposed to it. So there was a counter-cultural movement in the 1980s that came to oppose it and then came to the United States and Chernobyl and that just sort of strengthened their arguments. But it actually predates that. It comes down to the first Earth Day protest and I've even spoken to Patrick Moore who is the founder of Greenpeace. That changes view. The first protest of the environmental movement was against hydrogen bombs. There's always been this cultural fear to it, and when humans are scared of stuff we tend to impose safety regulations onto it. Simultaneously, in the 1930s there was actually an excitement about nuclear when Marie Curie and these people discovered it and there was new reactors being built and lots of creativity into that field because there were no regulations at the time.
Hügo Krüger:Now then, around the 1950s, the United States government, general Eisenhower in particular, looked into the effect of radiation fallout in the population because opposition to atomic bombs during the Cold War was rising, and in particular they looked into Nevada and Utah. Now Utah is in Nevada. They dropped 12 atomic bombs and there was a population, particularly in the Mormons next door, were exposed to the radiation fallouts. And the questions being raised are they going to get cancer, are they going to get sick? What are we doing? And Eisenhower constituted what was called the Bayes Committee and this committee was staffed by geneticists who were surprisingly related, linked to the ominous sounding Rockefeller Institute, and there's a lot of speculation there. But they came then to accept the safety standard of radiation, saying that every single dose of radiation is dangerous, which is just absurd because a bananas radioactive. And they called this standard linear, no threshold. And since then that standard itself has affected the cost and the knock-on effect.
Hügo Krüger:Because you just impose safety regulations on a technology, you increase the risk. And then private investors would say I'm not going to take that risk, I'm not going to spend $200 billion that Japan spent off the Fukushima, for example, even though they should probably not have done it. And then there's also just a social psychological effect. You can't see radiation, people don't know it. You need an eye understanding of what it is. So all of that adds to the perception of risk and might be the cost is driven by the perception of risk.
Hügo Krüger:Also, the 73 oil crisis played a role here, where the United States had high interest rates. Nuclear has got large plants. As you said, they need low interest rates, so that sort of chased a lot of engineers out of the industry and since then the industry hasn't recovered in the US. But surprisingly, if you look at Russia, china and Iran even, and now India, india is building at $2,000 a kilowatt hour. The US historic was 3,000 and now 10,000 in the States, so the Indians would one-fifth the cost.
Hügo Krüger:Some countries still have the cost of nuclear under control. I would say it's a more or less competitive call if you do it right. I don't think it is as cheap as the proponents argue but certainly there's a business case from it if you buy it from the right country, if you build the right country. And you know I thought a lot about this question. But I think it comes down to the culture of fear, because the regulations don't change that much between countries, but it's how they being applied and interpreted and sort of the culture of courage. Are we scared of nuclear or not? That comes with it.
Ricki Allardice:Do you? I mean, I understand what you're saying about people being scared, but do you not think that they're, that the fear is being driven in a certain direction by certain actors that are anti-nuclear?
Hügo Krüger:Well, if you take it nuclear, historically it came from utilities. Utilities always had a captured market. Escom had a captured market until they really performed. You have to perform badly before people start asking alternatives. Right, and Escom is the good example of that. But generally speaking, that a captive market. So they never saw the need for advertising, for communicating to the public, and that made them vulnerable to attacks when, in contrast to well, industry historically has been private with investors, and they were throwing money left, right and center in ads, in anti-nuclear propaganda, if you will.
Hügo Krüger:In Australia the coal industry was opposed to it historically. So there's a lot of interest. It's difficult to say who exactly is pushing it. And then also the environmentalists were pushing the political left in the United States at one stage at the long march through the institutions. So I didn't list it at one stage of all the interest against nuclear power, but it's quite extraordinary. And then there's also the fact that there's no real grift in the nuclear industry. The oil market annually is $4 trillion. During oil stock it goes up to six. Nuclear is $600 billion. The cow dung market in India is bigger than the oil, than the nuclear market. So you've got a small market already that is susceptible to attacks. That saw no need, historically, to communicate to the public. So of course it's going to happen.
Ricki Allardice:Yeah, and I mean I saw the stuff firsthand. We were speaking off air about it. I studied at Sellembosch and I was in the botanical and zoology department and we went to the Fanebosch Forum in St Francis in 2011. And tastepint is that nuclear site that Escom owns. That was down. People think it's St Jeffrey's Bay, but it's actually near Cape St Francis and the Fanebosch Forum was right there and we had a bunch of leading academics at this forum and all of them were rabidly anti-nuclear obviously because they were the botanists and zoologists and they effectively managed to lobby and play a part in shutting down the nuclear deal that was happening in South Africa. And the area I grew up in my family home is another site where there's a nuclear site, bandsam's Clip, which is between Pearly Beach and Khaanspai, and another site that got shut down where we should have had three nuclear power plants by now. We still only have one. So the environmental lobby is very strong against it. I've seen firsthand.
Hügo Krüger:Yeah, and the environmental lobby. I did an interview with Ken Braun from the Capital Research Institute. They get the institutions of staff of $2.3 billion annually, which is the cost of finishing the paper bed, by the way. Okay, now that doesn't all go for anti-nuclear stuff. But you just like, do you really have to throw that much money at a technology if there's no business case for it? I mean, you're really desperately trying to do so.
Hügo Krüger:And then the interesting things that Africa shows this to me. I've looked at opinion polls in the country and I sort of put my finger on it. But if you look at the Afrikaners, they tend to be okay with nuclear profit, in favor, some of them against, but mostly in favor. The black populations overwhelmingly in favor at the moment, and so the color in Indian population. But if you go to the English speaking whites, you know who tend to stop Stellenbosch these days for weird reasons they tend to be opposed to it, and they are the guys who often get their power from nuclear in Cape Town, right. So there's a strange sociological phenomenon.
Hügo Krüger:It's not driven by rational debate because the depths of nuclear per kilowatt hour is more or less the same. The cost depends on your price set. But yeah, it might be a bit more expensive than in solar and wind, you know. But that's if you accept the levelized cost, for intermittency can be compared to base load, but it's by large on par with coal, you know. And if you do it properly in mass production you can actually get it down. And then the other benefits of South Africa were to build it. We don't take the construction risk, so that extra cost is not on our balance sheet. I've never seen that being debated in the public. It's just nuclear is bad. The Russians are coming and then also the anti Russian propaganda is played in the backdrop of it, as if Russia is the only country that builds it.
Ricki Allardice:Exactly, right, exactly, and I do apologize for my people. That's why I brought my friends. By a certain means, the Viet-Extriniu will tell me I'm not English, but I do apologize for the Anglo and Cape Town. They make very bad decisions all the time, but it is what it is. But look, we love putting a solar panel on our roof and they're feeling good about it. But yeah, look, it is a head scratcher. And, like you say, it's not just Russia that can supply these nuclear power plants. I mean, the French built Kuburg. South Korea is building very, like you saying, very cost effective nuclear power plants. The Russians are doing it. You've got a whole bunch of different suppliers to choose from and maybe can you, can you delve in a bit more into this about how you structure the deal so that you don't take the cost risk as a country?
Hügo Krüger:Yeah, so it's basically building your house. I mean, if you're ever going to build a house, you tell the builder to put part of the money down. He takes a risk as well, so there's compliance. So if these people doesn't perform, he fires them and he gets a better manager right, so at the same point. So what they call vendor financing is simple the risk is split between both parties. Now the ratio depends on the deal. Generally speaking, 85% of the money comes from the vendor country.
Hügo Krüger:So a good example of this was when Finland recently built the EPR. The French were building it and they were yes, they did go over budget, but the French pensioners absorbed that risk. So it was better split between the two parties and then both sides didn't get hurt. You know, ideally, obviously the French didn't make money, but they said we protected our industries because of this. It was. The Russians are even prepared to cover sometimes the entire cost and only pay them back in tariffs, especially with the boats that they're doing. The South Koreans and Dubai I think Dubai put up a greater proportion than the South Koreans.
Hügo Krüger:But the point is, the risk is split between both sides and what's very important to me is if South Africa is going to embark on a nuclear mass built. I don't think we should go for mass built because they are risks. I don't think we can manage it that well. But one or two power stations over a decade or so, just make sure that if there's overruns you have construction penalties and you say look guys, you made the mistake, you said you'll fix it and that's your problem. South Korea, russia or America, we have a, built it and that's how we should structure it. And if you look at the countries with the good track records, the US and France at the moment don't have one. So obviously you would evaluate attendance, saying does the contract have a good record in the last 10 to 15 years? And you eliminate those who can't build it on time and you just accept from the better people. So it's like building anything really. It's just basic contract management and again, you don't see this being debated.
Ricki Allardice:Yeah. So who are the world leaders in terms of reliability, in terms of cost? Who's the best? China, south?
Hügo Krüger:Korea and Russia at the moment. And then India is in their own country but they're not in the export market yet, but they seem to be. So I would say South Korea is a quite attractive one for South Africa because there was 150 South Africans in Dubai Building that one. They had issues, though, with IP with the US, but actually saw today that they won a court case that they can keep the IP. So South Korea is building cheaper than Russia.
Hügo Krüger:I haven't seen that thing mentioned as well. So it just seems to be a no-brainer if you've had South Africans working on it plant and you get it back home. But again I put the tender out. And then there's obviously geopolitics involved, which is often the decision of what. Maybe the Chinese of bricks is a more attractive option. Chinese Chinese are building quite affordable in Pakistan at the moment. There's suspicion that they might absorb the cost with this state, because we were skeptical if you can build that cheap outside of your own country, they claim they can. But that's not our problem in South Africa. If they offer us a good price, you take the good price right. It's like buying a car. It's not my fault if Toyota made a mistake on this spreadsheet. So the buyer, seller distinction is not made.
Ricki Allardice:Yes, okay, but now a cynical South African person would say to you okay, but look at me to pay mid-toon Kusile. They are like Lord knows how many years over you and five, five X over budget and they're not producing anywhere.
Hügo Krüger:They should be producing, yeah, but well, first of all, you don't do what you did in the movie because he's. Let's see how that happened In 1998 when a school won the government need to build post power stations, government didn't listen. So they instructed a school at the time to fire their planning office. And they civil engineers. So when they rebuilt my doeping, because you that one or two civil engineers and one guys out of university, so what do you expect? What's gonna happen of those contracts? And then they structure the contracts idiotically.
Hügo Krüger:So back in the apartheid years we could build ourselves because we had this mass-built program, but because for 10 years you don't build people to the industry, so they had to rehire those contractors. And then they put out the contracts in a way that government would take the risk and pretend that this is not gonna be overruns. It's the dumbest way to manage a contract. So they did everything wrong to incentivize corruption and theft and then there was just actual theft. But you know, if we send out a tender for South Africa I mean if the contractual conditions are the same as with even Kusile I would say obviously not. But if it's done in a way where it's properly structured, like uber was built in the past, yes, sure, and let's assume it goes two or three years over budget. It's not our problem. In the contract they should absorb that risk.
Ricki Allardice:Yeah, I mean you saying things that sound reasonable Just from the cynical South African perspective. We've seen so many unreasonable things happen in our country by by the government controlling things that you know.
Hügo Krüger:But that is what it is I suppose.
Hügo Krüger:Well, the other thing why I would say it's not popular in the media is there's no. It's very difficult for middlemen to get into the deal Because of the way the contracts work, because there's five vendors. You just phone every five. One of them say well, how much does it cost? There's no middlemen, it's five calls. Theoretically you know they can send a brown envelope to a minister, but you can do that for anything. I don't see. I don't see how you can stop that.
Hügo Krüger:Basically, and like a car power ship at own a Reserve or something you know, that kind of stuff can't probably happen. I mean, I don't, you know dispute. I mean I understand people skepticism to this thing. Do we need it in South Africa? Well, I would say I mean there's obviously don't need anything right. But I would say South Africa's now had a pays refurbishment at Kuberg. It went relatively well, but yesterday with the liaison overcast, overruns, but it's gonna run for a minute into another 10 to 20 years.
Hügo Krüger:We have a semi-skill staff. They let's build another one. I won't say let's go overboard, and why would I say another one? Then all those old guys who worked on the payable bed and stuff that are about to retire or have a retired Really can transfer some of their skills. You've got a few more buys in the country then. And then when the SMRs, the small modular reactors, come online in next five to ten years and they've already been licensed, there's not theory theory them speaking of. We have some skills in the country to license them. What I caution again is us trying to build everything and us trying to manufacture the parts and the components. That's going to is also another Cossili and Maduppi. So you know it's, it's a, it's a acceptable risk coming under certain conditions and then the cost can be more, less.
Ricki Allardice:What Kuberg costs, I think yeah, so I highly recommend people to go and listen to the interviewer on the PowerHungry podcast if they want to get bit more into detail on the nuts and bolts of of all of this stuff and Because you know we don't have time on today's episode. But yeah, fascinating what you discussed down there episode. But so in terms of nuclear fuels and you just mentioned the Peel, ved and the and the small modular reactors, smrs what is the future of nuclear look like in terms of fuels, in terms of new designs, etc.
Hügo Krüger:Well, there's the smallest three types of designs that I you know optimistic about others as well, I might be wrong. The first one is just a smaller pressure water reactor, so smaller version of Kuberg. You know it's relatively safe and the advantages private investors can't really do anything about it. And the advantages private investors can get in because the big clients of these major the need state capital at this stage. The other one is the Pebble bait, which is a gas school reactor. You can do it not just with helium but with nitrogen, with carbon, this other types of gases, and they all have Technical challenges that I think R&D is still necessary.
Hügo Krüger:But I believe in America they're moving fast with it and it's actually South Africans managing it with X energy and the Chinese have licensed one already, so they probably gonna sell it soon. Gas school reactors have the advantages you can put them with. There's no water because South Africa's got a cold call, so we can replace those plants. And then the one I'm actually most excited about is the molten salt reactor and there's Danish companies, two of them, copenhagen and Tomix in Seabourg, and then there's one in Canada which is called I think it's Maltics, not mistaken and the advantage of that one is actually a battery. It can load follow. So it can load, respond, so you can actually store the excess solar and wind and potentially make that work and decarbonize, or you can just have nuclear working.
Ricki Allardice:And then, because the salt can salt as a battery, if you think of it, yeah, so you melt the salt and then that is that stores heat for a long period of time and that's used to boil water right to create steam.
Hügo Krüger:Yeah, it's like none of you know, concentrated solar uses salt. It's the same principle, except you can replace that salt with uranium and thorium salts so it can actually generate power on its own and it can stop and you can just couple it to a turbine and then it uses the heat when it's necessary and that way you've got a small battery in the area, because the battery storage problem is a big question. Marks over the renewables. Will the lithium ionide batteries fall by? Another fact I think they have to fall by a factor of six to be basically push every other technology out of the window, and we don't know yet. That's the answer.
Ricki Allardice:And are the uranium and thorium salts also mined by small Congolese children with their bare hands, like lithium and cobalters?
Hügo Krüger:Well, we can min it in South Africa. By the way, I think that story is also blown out of proportion a little bit. But yes, no, I mean you know, I don't know what I mean uranium mines in South Africa. Historically, if you mine gold, you mine uranium with it, and we've got mine dams in Caltonville where there's uranium everywhere and it's radioactive and kids are playing there and, by the way, nothing's wrong with them. I think this idea of radiation being dangerous absurd. But is that in the east round, west round, caltonville?
Ricki Allardice:West round. Okay, because you might be wrong about something not being wrong with them, but we'll leave that for another discussion.
Hügo Krüger:Yeah, but anyway, so just a point on the radiation.
Ricki Allardice:That's not the radiation.
Hügo Krüger:Yeah, the just a point on the radiation. This is the new threshold model I spoke about earlier says that every dose is of radiation is dangerous. But we now have good epidemiological evidence from atomic bomb survivors, from Chernobyl, from all these accidents, that it's actually beneficial to you. So your accidental risk might come into proportion a little bit. We call that radiation or mesas, and this is what environmentalists really hate when I say this to them because they they say I am just a fine murderer and child leukemia and all these things. But the trend, the correlation between, for example, leukemia and radiation is debunked. The idea that plutonium is toxic is complete nonsense. In low quantities radiation is not as dangerous. In low quantities I mean high end radiation is going to kill you, right?
Hügo Krüger:but so in other words, if a cut, if there's an accident, theoretically, and a population is a two or three CT scans are given, nothing's going to happen to them, they're fine.
Ricki Allardice:Everything, everything has a dose response curve. There, you know, there's no such thing as as like an absolute, tiny amount, you know being toxic and then increasing. There's a, there's a dose response curve.
Hügo Krüger:That's that's what I am. Yeah, that's what I'm arguing yeah we should change all our environmental laws on that basis. But you see, radiation law assumes precautionary principles, which is nothing ever safe. Now it just makes no sense because your in your wi-fi is your 5g radioactive, you know things of that sort yeah, the sun.
Ricki Allardice:The sun is radioactive, like solar radiation. You know getting radiation all the time.
Hügo Krüger:But you see, this is part of the dogma is the part of the fear came from the. The fear narrative started with McCarthy. Actually, uh, joseph McCarthy basically attacked oponium and these people and and they, they made the public believe that every dosage of radiation is dangerous for you. Even though we gave kids right on twiz in the 1930s and Marie-Korey and them were were working with plutonium and uranium, they bare hands things of that sort, and they obviously didn't die.
Ricki Allardice:So it's, it's clearly not as dangerous yeah, and and what about the different fuel types? So obviously we know uranium and plutonium as fuels for nuclear power reactors. Is there is anything else on the horizon for different types of fuel?
Hügo Krüger:well. So if you mix uranium with plutonium you create what they call mox fuel. That's what francis using the reactors. That reduces the amount of uranium burned. It makes it more efficient.
Hügo Krüger:Um, then you also thorium and you can mix. Thorium is not fuzzal on its own, so needs a little bit of uranium to kickstart it. But that reduces the amount of uranium and enrichment. And then you need to take into account the canadian and the indian reactors. They use natural uranium and not enriched uranium, because they run on heavy water and heavy water is a better moderator, so you don't need enrichment. And so Canada did that to not make atomic bombs.
Hügo Krüger:So there are other ways of of skinning the cat here. Those are principally the the fields. Then there's also waste. Moltics is looking into encapsulating waste as a field, and if you take I think it's also a bit also better in matters I can't remember one of them is totally harmless to humans, so you can actually put it in your house in a small reactor, but that's far away and then you can imagine the greenies are not going to be happy about that and everyone's got a small little heat pot at home, but that's feasible technically, um, so yeah, there are applications for the waste, and there's actually an economy in the waste. It's not waste, it's spent fuel and it's it's some of it is valuable. It's like a gold mine. So we need to just figure out what to use them for medical applications, things of that sort.
Ricki Allardice:And are there some of the newer generation reactors like you just mentioned? Are they using spend fuel from previous generations as fuel sources now, or do that will just go into a concrete bunker and get kept there forever?
Hügo Krüger:So the French reactors use the mox fields already. The talks of the US doing it. Russia was actually leading in this market. Now the US wants to take back the monke. They're investing into fuel again. In terms of waste, I believe Bill Gates's reactor is trying to get a power account. I think it's a sodium cooled reactor. They're trying to use that to exploit it. But the thing of waste is, I'm a bit skeptical if you can use all of the waste as fuel because you get it to a point where your level of enrichment goes up and then you get into issues with the nonproliferation treatment and then, just taking the account of Fukushima, the price of uranium crashed by like 70%. So the economies of using the fuel was just not there. Just better to sometimes put something in a hole and it's like recycling. It sounds great until you start looking at the costs, right.
Ricki Allardice:Yes, exactly and just in terms of how much fuel a nuclear reactor uses or a person would use. I mean, I've seen I don't know how true it is, but I've seen infographics of a person. If you took all of your energy consumption, if it was all coming from nuclear power, you'd use like a coke can of fuel in your entire lifetime. Is that true?
Hügo Krüger:I'm not sure it measures per person, but if you take Kuber, for example, all the waste is half a tennis court after 40 years. Well that's nothing.
Ricki Allardice:And that's all in the fall. Puts there Not all.
Hügo Krüger:So the low end waste at fall puts, the high end spent fuel I'm not going to say waste because people get scared it's stored on site. It's welded in a dry cast storage that wastes 200 tons. You can't put it in the boot of your car, you need to steal a crane to steal it. Basically, who wants to do that? And then the reason we haven't moved the default puts yet is because it's not economically viable. You get because waste decays and because there's that decay function it actually gets cheaper to kick the can down the road. It's a negative interest rate. So South Africa was clever and the international atomic energy agency would allow for the trade in waste, which is now heresy. We can take fall puts. We can say come and store your waste, we put that in the bank, we earn interest on that account and then the waste burns itself out and you become a very rich country. So waste treatment is actually a profit, a lucrative business, if you just, you know, get the proper business model.
Ricki Allardice:And how much storage capacity have we got at fall puts?
Hügo Krüger:We've got enough for another 6700 reactors. Last time I calculated Just theoretically. Okay.
Ricki Allardice:How many are there in the world?
Hügo Krüger:I'm not sure, but I worked out. It's something for, like, south Africa is fine for the next like 10, 15,000 years. So we're going. There's no issue for us.
Ricki Allardice:Yes, those Buddha, they planned their bonds.
Hügo Krüger:I won't be surprised if the apartheid military carried some of the costs at the time. But it's paid off. So we've got the thing, and just what we need Don't have yet, is a deep waste depository and the stock's now building it. I'm not sure how much that will cost, but I don't even think that's necessary. I just really think put the thing in a can and then put a few pay a few guards until the end of time. We don't even pay them. Who's going to steal the stuff? I mean, if you know what?
Ricki Allardice:definitely Okay. Well, there's a topic I want to jump into and that is the unit economics of a nuclear power plant. Obviously, you build a space load power with a nuclear power plant. They don't really like to spool up and spool down. You produce base load power, but your demand curve from your general economy that obviously changes throughout the day and throughout the year, so you've got these like peaks and troughs that don't always match up. So with the nuclear power plant, that base load that's being produced at certain times of the day, you've got a big surplus of power that's presumably going nowhere. And maybe you could explain to people what happens to power in the grid that isn't consumed immediately. Am I right in saying it just gets vented into the ground? Right?
Hügo Krüger:We just literally wasted Well, usually you pump water or you vented.
Ricki Allardice:Yeah.
Hügo Krüger:You know you pump, pump, pump storages for that purpose. You see, that's why I don't think South Africa should have 100% nuclear. France did this in the 70s and 80s and they built too many power stations. They didn't know what to do with them. There was actually some concoct for some of them, but then the Europeans put interconnected, so now they actually supply base load to Europe. So base load, I would say your nighttime demand. You can easily match up nuclear, maybe not all of it, maybe half of it, and then it's constant. Otherwise you're pumping water. But there's people who say that they can use that for hydrogen production or for other things. You can make stuff of it. Whether it's economical I don't know.
Ricki Allardice:The case I would make is that we should be mining Bitcoin with it, and this is where the Bitcoin miners get involved, right, because you don't have to distribute that electricity, you don't have to send it anywhere, you can consume it on site and you can turn it into a financial battery. So you've got a guaranteed buyer for your asset or for your product, which is the Bitcoin network. They'll buy any hash rate you can supply. They'll take everything you can give them, and then the price of Bitcoin mining, obviously, or the money you receive from mining when you sell your Bitcoin. That is a global market, so that's globally competitive, so that's always this pressure driving it down. So you're not making a huge amount of money out of it, right, but you have a bio of last resort, and what I've seen happen in the States now is a couple of projects where guys are doing nuclear with Bitcoin mining integrated. Have you come across any of these?
Hügo Krüger:I don't know anything about the States, but I do know this that there was, I think, a contraband of us, ukraine or Iran. I don't know why I'm confusing it with those two countries. There was one guy who almost used all the power of a nuclear plant and there was a deficit in the country at one stage for his Bitcoin mining. So there's certainly been experiments. So that's the easy look into that one.
Ricki Allardice:Yeah, yeah, so I mean. The difference, though, is that if you mining and you just pulling power off the grid, that's a different story. If you just running your own Bitcoin mine, but if you are actually the one who's running the power plant, so you know a company that's running the plants and they selling power back to the grid. So I use America as an example, because they've got the free market system for power there. It could change the unit economics quite substantially, because they, when they're modeling this out, they're not assuming 100% of that. 100% of their power is being purchased all the time. Right, they're assuming a waste factor.
Hügo Krüger:Well, you've got what they call the bus power rate or the levelized cost of electricity, which is basically it's a cash flow model, and we say I need to sell at $50 per kilowatt hour, whatever it might be, and if the market price for electricity is more or less than that, I don't have lost, lost or profit. And then the end of the year you calculate all of that. So obviously put some contingency in. And then obviously in my business model I would say what if there's a geopolitical shock? What if there's XYZ? So if I can say there is a dedicated buyer, I go to a Bitcoin, mine and I say I've got a nuclear plant, this is my contract, and whenever there's excess you agree to buy it at the strike price. So I break it. At least that might be a business model.
Hügo Krüger:Okay that makes sense to me. I mean you would still feed into the national grid, because the contract with national grid is, as a bit, when, as a new operator, I don't want my plant to stop, because when I stops, you know you damage the plant, basically. So there's a potential of obstruction in contracts. That way, I mean it makes sense. Yeah.
Ricki Allardice:Yeah. So you could, for example, say I'm going to, I'm going to install 5% of my product, of my capacity of Bitcoin. So at the maximum draw of my minus we have 5% of what I can produce. And then I know at least I can offset that amount because I have a guaranteed buyer for my power. So then, whenever you've got your lowest demand, you can spin up your Bitcoin miners and then when demand retail demand, industrial demand goes up again, you turn off your miners and you pump their power back to the grid, because you get a price for it.
Hügo Krüger:You can use your Bitcoin miners as a heat sink basically with electrical sink and that makes sense. It's like a pump storage. That's actually what we need, because pump storage is just water being pumped for nothing, right? And you gravitate it down during your base. Bitcoin don't gravitate down, you switch off, so it's you reduce amount.
Ricki Allardice:What it also does gravitates to your pocket because you become a much. You become a much financially viable entity and you can isolate yourself from geopolitical shock as well. It becomes very interesting, and this is where the renewable side of things isn't. So. It's not so attractive for Bitcoin miners because the power is so intermittent and you can't really I need to join from the next chat, by the way, if you don't mind. Right, we've got two minutes left.
Ricki Allardice:Sorry, Sorry about that. Okay, we're gonna have to cut it short there Quickly before you go. Where can anyone find you? You?
Hügo Krüger:can find me. It's a newsletter where you can find me on Twitter or on YouTube with my name Iqo Kriar and yeah, thanks, I'll add them all in the links below.
Ricki Allardice:Thank you very much for your time.
Hügo Krüger:We'll chat again soon, man. Okay, thank you very much. I appreciate it have a great evening, cheers.
