00:00We're working on a micro reactor for the Department of War right now called Pele that will be tested, delivered to Idaho National Laboratory and tested in a couple of years.
00:10That one could be commercially ready in just a few years.
00:13Some of the larger reactors, your thousand gigawatt scale reactors that plug into the grid, those take longer, certainly, and typical would be, let's call it, six to eight years.
00:24And then there's an in-between case, small modular reactors that I would say you could have grid ready in probably five, six, seven years.
00:32So it depends on the technology and depends on the scale of the reactor, but nuclear is certainly coming on very fast at the moment.
00:40It's been such a big part of the conversation, Rex, that the infrastructure demand for data centers, that the demand there also means a huge demand on energy and energy supply.
00:49Have you had conversations with some of those hyperscalers?
00:52Have any of them come to you and asked to what the process would look like to have you specifically build nuclear reactors for them?
01:01We certainly have had conversations with hyperscalers.
01:04I would say, Danny, that when you look at what's going on with nuclear, there are multiple layers to the cake, right?
01:10Certainly seen as an AI derivative trade right now.
01:13But the base layer of that cake is decarbonization.
01:16We need to produce clean energy.
01:18We need baseload power.
01:19And I think increasingly people see nuclear as the solution to that if you want a clean grid.
01:24Wind, solar, hydro have a role, of course, but nuclear is the baseload power for that.
01:29The second layer of that cake has to do with the electrification of everything.
01:33We've got transportation demand moving from the gas pump to the grid, for example.
01:37And we've got industrial processes being electrified.
01:40And so they're moving from behind the meter to on the meter.
01:43So that's the second layer of the cake.
01:44I think the third one would be this idea of powering data centers, AI and data centers.
01:51AI is a very power-hungry process, and it's going to need enormous amounts of power.
01:56That demand is being satisfied right now by natural gas generators and various other power technologies.
02:02But I think people see that nuclear is the next wave of power for those data centers.
02:07And I would say also, maybe just to raise the altitude of the question, I would say that I think what's going on right now is that people have figured out, certainly this administration has figured out, that if you don't win AI, you don't win the future.
02:23And if you don't win energy, you don't win AI.
02:26And so those things are all locked together right now in a positive reinforcement loop.
02:32Well, Rex, I think we're recognizing also that this is a national security issue.
02:37And I note that you have a couple of micro-reactor programs.
02:42One announced this week, Janus, which I guess is a reference to the Roman god of transitions, of gateways, of doorways that you're stepping through here.
02:54And then one called Pele, which I'm not sure if it's a reference to the great Brazilian soccer player.
02:59But tell us about these two military reactor programs.
03:05Sure.
03:05So we've been building this micro-reactor for the Department of War called Pele.
03:11And we've been working on that for a few years.
03:13I mentioned that it delivers in a couple of years for testing to Idaho National Laboratory.
03:18This is a brilliant program.
03:20The idea was to create a nuclear reactor that would fit inside of a standard shipping container, a connex box, like you see on the back of a semi or on a train or on a ship.
03:32So we've designed a reactor, and we're assembling it right now in Lynchburg, Virginia, at our headquarters.
03:37It's a reactor that fits inside of a standard shipping container.
03:41There are other boxes that fit in.
03:43There are other components that fit into other shipping containers for power conversion and control systems.
03:47But all that fits in these standard connex boxes.
03:50And so the idea is you could put this thing in a C-17 or whatever and fly it to a military base.
03:55And the requirement is to be able to stand this reactor power up in three days.
04:00And that's what we've been designing to.
04:01It produces a few megawatts of power.
04:04So you could imagine that powering a small military base or some other application powering a missile defense site, things of that nature.
04:13So that one's coming along.
04:16That's what Pele is about.
04:17Now, this Janus program that you mentioned was announced by the Army the other day by Dr. Waxman, who runs that program, Secretary of Army and Secretary of Energy, Chris Wright.
04:27And that program is to take some of this microreactor technology and to put it onto U.S. military bases.
04:34So Pele or a Pele derivative would be the kind of reactor that you could use on that.
04:38Now, that program is just standing up and we haven't seen a request for proposals yet.
04:43But we certainly are interested in that opportunity.
04:45And we have the expectation that Pele or a Pele derivative, a commercial derivative, would fit that application.
04:52And it all squares with the Energy Secretary, Chris Wright, saying that the U.S. must boost its strategic uranium reserve, bolster domestic uranium production.
05:00Part of the reason why they tapped UNBWX technologies, Rex.
05:05How big of a problem is it?
05:06How behind is the U.S. in building up these reserves?
05:09Why the strong call for it right now?
05:12Well, I'd say there's I talked about the three layers of the cake in commercial nuclear power.
05:17There are similarly kind of three layers of growth on our government, the government side of our nuclear business, which is, by the way, two thirds of BWXT.
05:25And those three layers are the nations going through a recapitalization of the strategic nuclear systems.
05:32We, BWXT, make the naval nuclear systems, the naval reactors and all the fuel for that, and we're the sole provider for it.
05:41For example, we make the nuclear reactors and fuel for the Virginia-class submarine, for Columbia, and the Ford-class aircraft carriers.
05:48So we're basically going through an entire replacement cycle on those, and that's really driving our business, and it is fundamental to our baseline and our growth.
05:57The second layer of that cake is that we're reconstituting Cold War capabilities that the nation needs.
06:04We announced in the third quarter of this year over $3 billion in new contracts that are in that area, and it's around defense fuels.
06:12National security enrichment is a way to think about that.
06:15We're about to run out of depleted uranium that we need for the weapons stockpile and for other things, armor and for penetration systems.
06:25So that's kind of the second layer of the cake on the government system side.
06:29And then the third one relates to Matt's question about Pele, which is where you've got the government developing an interest in new domains of application for nuclear power and propulsion.
06:40So you see terrestrial micro-reactors that we just talked about, but there's also a huge amount of interest in nuclear power for space, for propulsion, for one thing.
06:50As this lunar space becomes contested, we're going to need nuclear systems there.
06:54And if we are to settle the moon and Mars, we absolutely have to have nuclear surface power.
06:59And so NASA is pursuing, for example, lunar power, a nuclear power source for a lunar base.
07:05And so we're seeing the expression of interest, expressions of interest for nuclear all over the place.
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