Fiona Reilly

Managing Director

FiRe Energy

July 15, 2021

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Ep 323: Fiona Reilly - Managing Director, FiRE Energy
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Bret Kugelmass
We're here today on Titans of Nuclear with Fiona Reilly, who's the Managing Director of FiRe Energy, and one of the project development experts of the United Kingdom. Fiona, thank you so much for coming on the show.

Fiona Reilly
Thanks, Bret. I'm not sure where you got that title from.

Bret Kugelmass
Well, let's get started. We'd love to just kind of learn about your background and how you got into the sector and all these new experiences that you had early on. Tell us first, where are you from?

Fiona Reilly
I'm from Lancashire in the northwest of England, so very close to the nuclear industry. And I grew up there with three older brothers and stayed there till I was 18. I went to university, did law and went to law school in Chester, and then went back to Manchester do a Master's degree in International Business Law, qualified as a solicitor and-

Bret Kugelmass
What's a solicitor for our American audience?

Fiona Reilly
Oh, good point. Because, yeah, going through customs into America is like, you can't say the word solicitor. An advocate, a lawyer, qualified lawyer.

Bret Kugelmass
Did you have a specific type of law that you knew you wanted to practice? And did that change over the course of your studies or early career?

Fiona Reilly
I knew I wanted to get into commercial law, but I hadn't really thought about it much further than that. As you'll see as we talk about my career, I'm always wanting to take an opportunity. Yeah, let's dive in, let's see what happens. So I qualified and then a job opened up at GEC Alsthom, as they were then, and I went to work for them in Leicester. They did defense work and nuclear work and baggage handling systems. We did all the baggage handling systems at Heathrow and stuff.

Bret Kugelmass
And is that because that's somewhat defense related? Is that part of the thing? Or is that just they're a mechanical company, so they know how to move around heavy objects?

Fiona Reilly
The latter. When I was working there, they had one of the most advanced robotic arms to go into a nuclear power station to collect the waste so they could package it for waste disposal. And you went into the hire where this robotic arm was - do not touch anything, because you might break something - but yeah, this really cool kit being operated by these guys so you could see how it was going to work in reality. It was good.

Bret Kugelmass
That was your first introduction to nuclear and what nuclear power was all about?

Fiona Reilly
Exactly. I worked on a couple of disputes that we had with clients. And then Sizewell B was coming up to its first outage, so I went to work at Sizewell B on-site as the Commercial Manager for joint venture of Alstom and Framatome.

Bret Kugelmass
And what type of plant was Sizewell B?

Fiona Reilly
It's PWR.

Bret Kugelmass
And that's the only PWR that's operating in the UK?

Fiona Reilly
Yeah, yeah.

Bret Kugelmass
So then the outage is like, there might be some unique issues with the outages of being the only PWR as opposed to what the industry have historically been more familiar with, which are these gas reactors, right?

Fiona Reilly
Yeah, exactly. And it was the first time I had come across Westinghouse and how they're refueled and that kit that kind of bolted on to the side of the reactor building so the engineers are in and out. I got to go into the reactor building when they were refueling. Didn't tell my parents after I'd been in No, I'm not glowing in the dark. My meter recording two millisieverts, I'm fine.

Bret Kugelmass
It is a pretty incredible how, because you're in an environment where there was a lot of activated material, how low the doses actually are. It's amazing how they do it. But yeah, they've got it down to a science at this point.

Bret Kugelmass
What if you lost like a necklace or something? I'm always afraid, whenever I look over pools, because they let me bring the cameras into these facilities because of the whole media thing. But I just bring my phone, because the phone is as good quality as anything. So I'm constantly holding phones over reactors and it's my nightmare that I drop it.

Fiona Reilly
Oh, no, no, no, no. Oh, yeah, at that point, I'd say I knew very little about nuclear, so I'm asking all these questions. I'm like, why are there life rings on the side of the pool? They're like, Well, if somebody falls in, we've got to get them out. I was like, Oh, yeah. I was 24 at that age and this was my first time inside a nuclear power plant. And I get to go into the reactor building when they're refueling. It was pretty awesome.

Bret Kugelmass
Yeah, amazing. Well, water is also an amazing shield. I remember watching a YouTube video one time, and it was like, what happens if you were to jump inside of a nuclear pool, and they're like, you'd have to swim pretty far down to get any exposure.

Fiona Reilly
But one of the guys who was giving me the tour did say, Look, let me explain radioactivity to you and the effects of it and he said you would literally have to swim into the core of the reactor. And even then, you'd probably be there for a bit of time, but then you'd be fine. Okay.

Bret Kugelmass
At that time - that was pretty early on in your career - did you know that, I mean, did you latch on to nuclear at that point and say, Hey, this is something I think I could really kind of build a base of expertise in? Or were you still kind of dabbling with other options as well?

Fiona Reilly
I was dabbling with other options. And even when I went to Norton Rose. I was at Alstrom for two and a half, three years and I was dealing with these massive disputes as the enhanced solicitor and my boss - the team I worked with was fantastic and they're still friends to this day - and my boss was like, No, you deal with the dispute. We're not going to hire a law firm. You do it. And I was like, Okay.

Bret Kugelmass
Wait, before we move on from that actually, are any of these public? Can we talk about what types of disputes they were?

Fiona Reilly
Yeah, I mean, that's so old, that's so old now. The main one was around work on power plants in the UK, and delays and construction delays.

Bret Kugelmass
Always construction delay, I was hoping you'd say something like that. It's like, that's, everything. That's what drives cost. That's what drives the time. Everything is construction delays, like what's going on here? How can they not just fix this problem?

Fiona Reilly
Well, it's funny, because there were two massive disputes I dealt with, both lasting multiple years. There was the one at Alstom, and then I moved to Norton Rose, and Alstom said, Can we get Fiona back … to help us continue with this dispute? They were like, Yeah, okay.

Bret Kugelmass
Norton Rose is a law firm, specifically?

Fiona Reilly
Yeah. So Norton Rose Fulbright as they are now, for your American colleagues, because we were married for the Americans. And by that dispute, and I disputed out with at Norton Rose in the nuclear industry that lasted five years. Both were around these concept of alliancing agreements, and let's all work together, and let's find solutions to this. Unfortunately, in doing that, the teams on both sides would kind of go, Oh, we can ignore the contract. And all these changes that were happening and they weren't being recorded properly. Then, when you came to this dispute, it became much more complicated, because where's the paperwork, where are the records? So, although I think there are great benefits of alliancing and partnering and people sharing risk and KPIs, etc., you've got to still administer the contract.

Bret Kugelmass
Alliancing is a style of development, just like design build, or EPC managed, right? And then there's just like this alliancing concept, which is almost like a coalition, where a bunch of organizations come together and share responsibility. But I guess what you're saying is, unless you're crystal clear whose responsibility is what it's going to lead to problems down the road.

Fiona Reilly
Yeah, I'm trying to explain to people, that doesn't mean that when you're on site, you've got to be antagonistic butting heads, but you just got to be clear in your communications and they couldn't quite get the difference. And so it led to a bigger dispute in the end.

Bret Kugelmass
And that might - I might be preempting this - but, your experiences with the alliancing and just kind of throughout the industry, does it seem like maybe the whole thing should be vertically integrated where there's one company providing a turnkey solution from start to beginning in order to avoid some of these issues? Or is that too much for one company to handle?

Fiona Reilly
It's way too much for one company to handle. We've seen where they've looked at vendor financing on projects, and the technology vendor also becomes shareholder in the development company. It's just way too much for these companies. Even trying to be an EPC solution is just financially difficult. Which is why, in the UK, we're looking at funding mechanisms where government can take some of the risks that are extreme risks, not the day to day risks that companies should be able to manage, but if it's an extreme risk, if something happens. Because, otherwise, you just put these companies out of business. I mean, look where Westinghouse ended up with NuGen. And I mean, thankfully, Westinghouse survived that, and they've come back stronger, but it's a really difficult place for them to be.

Bret Kugelmass
And is this a function of the size of the project? Is this model, like a vertically integrated model, possible for very small project, maybe like a micro reactor or something like that? Does it change, or is it just the nature of a project is such that you need to pull in these disparate skills, and it's just too much for one company to handle?

Fiona Reilly
I think the challenge comes if you want financing, whether it's government financing, or private financing, where's that coming from? Is it there for the financiers? Who's taking responsibility? Who's managing things properly? If you've got an integrated entity with various parties kind of in that integrated entity, how does that work? And what was the joint venture agreement? You're always going to have some responsibility sitting with each company. So in some ways, it's easier to keep it cleaner. But equally, I don't agree with contracts where you've got so many subcontractors that then you've got one company trying to integrate them all and pull them all together, because that, again from a programming point of view, just seems to be a nightmare to me.

Bret Kugelmass
Then are there other mechanisms that you've seen work well? I mean, is there something where it's like the companies are all individual, they've all got their defined responsibilities, but maybe there's some sort of profit-sharing incentive? Does that work?

Fiona Reilly
Yeah, I think that does work. I think risk sharing has to go with the profit sharing. That way people can manage their own risk. They can they can own the issues, the risks that they can take responsibility for, and they've got the financial backing to take responsibility for, because that ultimately is at the back of all these things, isn't it, of how big is your company and how much risk can you take? Unfortunately, where we've seen some of the big contractors, they just try and push everything down supply chain. And that doesn't work, because the small guys at the bottom just can't take the risk. You just put them out of business. You've got to find a way where the risk sharing is throughout the structure, and people take appropriate risk for their size.

Bret Kugelmass
Got it. So you're learning all these lessons. First at GEC Alsthom, then at Norton Rose Fulbright. What came next for you?

Fiona Reilly
I'd been at Norton Rose then for 15 years, set up their nuclear practice, became Global Head of Nuclear, became a partner. I was looking around the market and one of my contacts at PwC said, Hey, if we create a job for you, would you come and work for as a lawyer? Possibly. So there were many discussions and talking to Richard celebrate to turn the corner and back. I went to work for PwC.

Bret Kugelmass
What did they want? What was their big initiative that they went to go pull the best of the best from Norton Rose, the nuclear, to come to them. That's a big poach. That's not a small deal. But what was the job?

Fiona Reilly
The job was to head up nuclear globally for their capital projects team.

Bret Kugelmass
Wow. And PwC, I mean, we think of them as like a big four accounting firm, but I know that they do consulting. What's capital projects? Where do they get involved and what's their role?

Fiona Reilly
The capital projects is the deals and how the money comes into the project. How you structure the deals, how you get money into them, what's the appropriate cost of capital. Other people may build financial models. It's very much that how'd you get this working? What's the liaison with governments? How'd you get it? Whether governments give concession agreements or governments provide frameworks so that projects can be built within those frameworks, all those different aspects.

Bret Kugelmass
Who's the client - and not a specific name - but what category? Is it the vendor? Is it the EPC? Is it the government? Who's the client at PwC in these cases?

Fiona Reilly
It depends, quite often it is the development company, or the company that's looking to build the asset. Quite often it can be government. They continue, I know, to work for the UK government on some of their nuclear deals.

Bret Kugelmass
And the development company, when it comes to these large scale projects, what is the development company? Is it a joint venture between two other big companies where they've kind of limited the risk to that joint venture? Is it a financial institution exclusively? What is the developer,

Fiona Reilly
The developer is usually a special purpose vehicle, so a company set up purely to build this asset. And if we could get financing right in nuclear, we would have limited recourse or limited recourse to the shareholders. You've got to shareholders buying shares in that company. In an non-nuclear project you might have some recourse to the shareholders, but basically everything sits within that company, and you don't have recourse to shareholders.

Bret Kugelmass
What does recourse mean in this context?

Fiona Reilly
If something goes wrong, if you've got delays, who's going to pay for the cost of delays, etc. Into that special purpose vehicle, you get your shareholders, you might get government concession contracts, you would also get the financing coming into that vehicle. And quite often that vehicle will be the entity that sells the electricity, or at least has agreements to sell the electricity to third parties. It's the core of the company that builds the asset.

Bret Kugelmass
Who works for that company before the money comes in - before we can get all the project equity, the project finance, the government, whatever it is. Where's the operational budget for that entity coming in the earliest stages?

Fiona Reilly
In the early stages, it comes from the initial shareholders who put equity in. In the UK, we've seen EDF-

Bret Kugelmass
Okay, so like a big utility. Would it be EDF as the utility or EDF as the vendor?

Fiona Reilly
Neither, EDF is the shareholder. And this is where it becomes quite complicated. Like if you look at Wylfa, which unfortunately isn't currently going ahead, you had Hitachi as the shareholder, Hitachi as the technical provider and the technology provider, the different parts of the Hitachi group taking the different roles. And you need them to almost keep an understanding of what their role is, so that it doesn't all become blurred and merged, because otherwise the financiers start saying, Hey, when they start looking at the projects, how's this working? Why is your technology company getting involved with your shareholders. They should be kept separate. They have different governments, they have different responsibilities from keeping some of that clean.

Bret Kugelmass
Yep. And the reason I'm asking is because part of our mandate is to encourage more nuclear development worldwide. And we want to see more non-nuclear familiar entities, but entities that have a lot of money, come in and become development companies. Why not? Why shouldn't any big, energy-intensive company that maybe hasn't thought about nuclear for the last 30 years, why shouldn't they come in and sponsor the original capital that might go into a development company to start getting deals going? What are your thoughts on that? Who can we reach out to across the world? And how would we, let's say we got in front of their executive board. How do we tell them to do it? How do we tell them to allocate some money to set up an SPV? And where should that money come from?

Fiona Reilly
Okay, there are a million questions. Starting with the initial point, yes, I completely agree that non-nuclear companies need to invest. This is part of net-zero obligations, meeting the net-zero obligation. And it's really interesting that you've got some of the big oil and gas companies now looking at nuclear, and beginning to say, Hey, how do we do this? You've also got the-

Bret Kugelmass
Have any made public proclamations about that, or do we know who's doing that?

Fiona Reilly
I know some of them who do that.

Bret Kugelmass
Okay, just you. Okay, we'll keep that secret, keep that hush hush off the podcast.

Fiona Reilly
You've also got the philanthropists like Bill Gates and people like that coming in and saying, if we're going to get to net-zero, we're going to meet our country's commitments, we have to look at nuclear as part of the solution. Not the complete solution, nobody's saying it's complete solution, but having integrated systems where you're integrating renewables and nuclear and making them work together, because nuclear is one of the lowest carbon technologies, right? It makes complete sense.

Bret Kugelmass
I love this, I like the idea that philanthropists are interested, but I just want corporations. I want there to be a business drive behind it so we can like use the market force to push this forward. I want steel companies.

Fiona Reilly
I want the finance industry.

Bret Kugelmass
Okay. Yeah.

Fiona Reilly
And I'm just doing some work through, one of my roles is to set on the Generation IV International Forum as a UK representative, and I co-chair the economic modeling working group. I got together a task force of largely financiers, but also some government agencies and a few, I've got like, one of the representatives from Bloomberg on their, which is an interesting one, and we are looking at making nuclear an investable asset class and addressing ESGs. ESGs are data collection and accounting metrics, which any company who wants to borrow money from the private sector needs to report against these ESGs.

Bret Kugelmass
ESG stands for environmental, social and governance, right? These are the feel-good things that companies should do.

Fiona Reilly
They are. Now, the challenge we've had is there hasn't been a single set of metrics. Every financial institution has set their own metrics and a lot of the answers comes on the environmental stage. But actually, if you start looking at the full range of ESG, I think becomes way more interesting, because the World Economic Forum did a consultation last year to recommend a list of ESGs. They reported on that consultation -it was done by the Big Four accounting firms coming together or saying what they thought the ESGs should be - and in the governance box, you've got, is your company run properly? Is it established properly? Do you have a diverse board? Are you paying your people properly? In the planet section, you've not only got greenhouse gas emissions, but pollutants, land use, water use.

Bret Kugelmass
Ooh, interesting.

Fiona Reilly
And how you deal with your waste? And of course, nuclear, we have waste, but we deal with that, whereas other energy technologies aren't the same way.

Bret Kugelmass
Yeah, exactly. And I should mention, hardly any waste. Like we're talking like three orders of magnitude less waste than the next closest energy source.

Fiona Reilly
Yeah, yeah. We pre-fund that, and we manage it. We have so much experience in dealing with that.

Bret Kugelmass
I know, I don't understand, how does nuclear - I mean, maybe this is what you're getting to - but how does nuclear not get extra credit for that? If there was a ranking score tabulation, who's the most ESG? I'd say that, Okay, fine, maybe you don't make it the baseline that everyone has to account for every atom of waste, but if you do, you should get an A plus, you know?

Fiona Reilly
This is the thing, it's not- when financial institutions look at the ESGs, it's not a pass or fail. It's like, Oh, you've got nuclear waste, you clearly fail. But sadly - and we've seen this with some of the work going on around taxonomies - it's like, Oh, nuclear's got nuclear waste, so we can't put it in taxonomy. The EU being a classic example of where that debates going on. And in fact, it's like no. If you look at it against ESGs, we actually manage and mitigate our waste. What you should be doing is making sure that everybody manages and mitigates it's waste. And we're beginning to, the solar industry, doing a lot of that and pre-funding some of their waste and beginning to manage it. But it's taken a while to get there. And the wind industry is still got to catch up on some of this stuff. We need to assess projects individually. We also need to assess them across their whole lifecycle, and throughout their supply chain. Because if you've got unethical mining to create, to gather one of the components of your supply chain, that should be reported on, because child mining still exists in this world and we need to get rid of it. It's a really important issue that needs to be addressed through the ESGs. And we shouldn't focus on waste and how bad is your particular view of this waste? It's like, what is the factor in this? How much waste do we got? How bad is it? I mean, a lot of nuclear waste, come on, man. It's so low.

Bret Kugelmass
Yes, I know. Well, I mean, my personal take on the nuclear waste is that all of it can go in landfills, including the high-level waste, but that's another, looking to address that in another conversation.

Fiona Reilly
Well I don't want to all of it in a landfill, because one, I want us to recycle it.

Bret Kugelmass
Okay. Yes. Okay. Touché, touché. Yes. It has a lot of potential. You're right.

Fiona Reilly
I am doing some work on medical isotopes to the NIH, which is another half of the Nuclear Industry Association.

Bret Kugelmass
Yeah, can we just lay that out for the audience, because you're over the place, you're involved in a lot of stuff. You're a very prominent voice in nuclear UK. Can we just kind of actually, just real quick, run through the different titles that you're currently involved in?

Fiona Reilly
Currently, I am Energy Director of FiRe Energy and I've got some contracts through that, which is pretty cool in some places, including fusion. I'm a Non Executive Director of Ansaldo Nuclear. I'm now on the strategy board of the Nuclear Industry Association and I sit on the Generation IV International Forum. Previously, I did things like I chaired a working group for the UK government on small reactors and etc.

Bret Kugelmass
Amazing. Okay, sorry, back to where we were.

Fiona Reilly
I only realized recently, having been involved in nuclear for 25 years, some of our medical isotopes can come from waste.

Bret Kugelmass
Oh, my God. Yeah. That's interesting, right. What you're saying is you can pick through, we've got like a smorgasbord of isotopes of all shapes and sizes in normal commercial nuclear waste. And some of those happened to be the same ones that in medical research reactors, they're creating intentionally for medicine, for saving, I think something like a billion lives. Like 1 billion have been saved with medical nuclear. Some of those are just sitting in the waste, so you're saying you can pick them out essentially?

Fiona Reilly
Yeah, I mean, some of them we'll need to create through research reactors, some we'll needs to create through different processes, but some comes from the waste. So why are we throwing this stuff away? Why are we burying? it? It makes no sense. We need to look at this as a proper commercial proposition. If we were a big corporate, we'd be saying, hold on, there are assets over here.

Bret Kugelmass
Can we brainstorm on that for a second? It seems to me, because of the legal landscape in the US, it's actually just pretty tricky to get, even if you wanted to, it's pretty tricky to get a hold of it. I'm wondering if that's different in the UK. And if there is an entrepreneurial opportunity here, where a company could be formed and say, Listen, you all guys think of your nuclear waste as a liability, we see it as an asset. We will pay you even a little bit to take it off your hands, bring it to a facility, and then we are going to create these magical commercial properties out of things that you can only create from radio isotopes. Is that possible, legally, in the UK?

Fiona Reilly
The problem at the moment is we have a ban on reprocessing and recycling. We need to get past that. We used to, we used to reprocess.

Bret Kugelmass
Why is that banned? I don't understand. Why would someone put that in place?

Fiona Reilly
Well, I think America did it first. And of course, America has done it.

Bret Kugelmass
We're not the smartest. Okay, I get it, I get it. We're not the smartest.

Fiona Reilly
We sold you our nuclear technology. Well, you look at the 123 Agreements the US put in place with the UAE, stopping them doing enrichment and reprocessing. This has been around the proliferation risk, but instead of saying, Let's manage the proliferation risk, and get these assets, we're just like, Oh, let's burn everything.

Bret Kugelmass
Right, because if what you're worried about is the proliferation aspect of reprocessing, just ban that part. Just say you can't separate these isotopes or, you know what, if you are a facility that does this, you're going to be in a country that we like, and you're going to have some inspectors there full time. And there's going to be no funny business. It's not like you can just get away with this stuff. You're talking about, if anyone wants to do funny business, it'd be like 10 years and $10 billion to even develop the thing that pulled out the dangerous stuff. It's not like they could sneak it in.

Fiona Reilly
No, but also, every nuclear facility has nuclear police on it and have different levels of protection. And we have huge processes and procedures to make sure everything is so safe. It's like the safest industry in the world. I don't see why, unless somebody can tell me differently, we can't put in place processes and procedures and, as you say, having inspectors and put security in place and protect these isotopes to deal with a proliferation risk, but still get the benefit out of the waste.

Bret Kugelmass
Yeah. Is there a, what legally has to happen to overturn that ban? What do you guys have? You have a - sorry, I don't actually know your legal system. Do you have a, I know you have laws, but do you have like a constitution?

Fiona Reilly
No, no constitution. We have laws, but I think the first thing is we need a policy change. That's a government policy.

Bret Kugelmass
Can that be something that, I know you've got BEIS, the Department of BEIS. Is that something they can just, an executive at BEIS can say this is a policy or do they have to run it by Parliament first?

Fiona Reilly
They'd have to consult, they'd have to look at changing the rules. There was some work going on on this, as there is in other countries, but we need to make sure we've done a full consultation. Keep it open, transparent and then yes, once it's gone to ministers, it can then get changed. We'll need a ministerial policy.

Bret Kugelmass
So probably to make all this happen, you probably still need a commercial entity with that commercial juice to push everything and make it happen, right?

Fiona Reilly
I think the thing we need even before that an education of the people.

Bret Kugelmass
Yeah. When you said people, do you mean everyone in the whole country, or just enough of the people in the right places to get informed?

Fiona Reilly
The people in the right places.

Bret Kugelmass
Yeah, that's how I feel, too. Sometimes when people say education, they're like, We can't do this until everyone loves nuclear. And I'm like, You're not gonna get everyone to like it. Some people don't even like Beanie Babies, it's like, come on.

Fiona Reilly
We have a lot of people in this country who do like nuclear, and they used to it. They live near nuclear power plants and they recognize the jobs and the social and economic development that comes to a region from having a nuclear power plant. It's really interesting. It's not the general public that I mean I'd want educated, but more of the people in Whitehall, in our civil service, and then more of the Ministers to understand. I was talking to some MPs recently, and I was pointing out some of the challenges with some of the renewables technologies and again, saying, we need renewables. I am not advocating to so we don't, but we need to address these issues. And they're like, Why has nobody told us about this? Why is nobody-

Bret Kugelmass
They've got good marketing.

Fiona Reilly
Yeah. And we need to get better at- It's really interesting. When I put the tacticals together on the GIF, one of the comments that came from the group was, when you write this report, Fi, can you please not be apologetic like the nuclear industry often is? Can you be positive? Because this has to be used by our boards and our internal processes to try and change some of this stuff. It's gotta be positive. It’s not gotta be so positive, that it's unreal, but it's got to be realistic.

Bret Kugelmass
I know. I mean, I think you used the right word, unapologetic. And I think, if the nuclear industry wants to get better, they just have to look at the industries that are successful and not apply their own like little scientific judgment as to what they think is proper psychology and marketing. You're not psychologists, you're not marketing. Go to the industries that have hired the best people to do this. The renewables industry clearly has the best branding people, so go there, hire them and do what they say.

Fiona Reilly
It fascinates me the number of people I come across that are like, my background in this, but I know the answer to this thing over here. Okay, you must have educated yourself, you might have been involved along the way in different things, but that's so far from where you started, are you sure you really understand that? Because I'm the first one to say- I was having a conversation with some of the researchers and clinicians in medical isotopes. And I was like, Okay, guys, stop. You've completely lost me. I haven't a clue what you're talking about. This radioisotope, this one? Okay. That's the basics. Would be really helpful if we produce the list for you, and how you produce them and what they're used for? I was like, Oh, my God. that would be great. I wouldn't even know where to start. It's that ability to know what you know and know what you don't know. And bring the right people in, ask the right questions. Get the right people involved.

Bret Kugelmass
I mean, that's why I always advocate for more true entrepreneurs getting into the space. Not big old companies saying that they're trying to be innovative, but new fresh blood, because that's what I've seen work in other sectors. The people who are true entrepreneurs, what they do is exactly what you just said. They don't need to know everything. They need to know what they know, what they don't, how to hire, and what they know and what they don't, and then how to hire someone else next to them. That's what a good entrepreneur does and that's what we need more of in the nuclear sector.

Fiona Reilly
And we also need more strategy. It frustrates me that the industry is very good at saying, Government needs to tell us what to do. And government's very good at saying, Hold on, you're the industry, you need to tell us what to do. You compare it with the wind industry in the UK. They said, Here's our five year plan, here's our 10-year plan. This is where we want to be in five years, this is where we want to be in 10 years. To do that, we need X, Y, Z and we need A and B from government. Government, can you give us A and B if we can find Z, Y, and Z? We're not very good in the nuclear industry and setting up those straplines and set up our ambition and saying, We need 60 gigawatts of new nuclear in the UK to get to net-zero. How are we going to do it? What do we need from government to get there? What are the building blocks? There's too much, Aw, government needs to tell us what to do.

Bret Kugelmass
Yeah, I know. I know. And I think partially, not to belabor this point too much, I think partially is because of, if you just look at the nuclear history, there used to be more commercial entities, and then they kind of died off or went out of the way for whatever reasons. Then everything became about getting government grants. The people left in the nuclear industry are people who are scientists and researchers, and people who get grants, and they're used to that behavior, that type of interaction with government. I think literally, over the last 40 years, the DNA of the nuclear industry has fundamentally changed from commercial to grant-seeking organizations.

Fiona Reilly
I think there's a little bit of that. I also think we need to understand how to work better with government. These are strategic assets, no matter whether you've got the laws that are ... very much, you've got to have US entities owning, or owning majority shares, or where we are in the UK, which not quite that position, but there are still strategic assets that are key to our electricity system, but they do have risks associated with them and need to be managed properly. Therefore, we need to work with governments to say, what do we need from government and what can the private sector provide? And how do we meld those two things to get to where we need to be? We're not very good at that. And I think we need some policy changes. We need some drive. We need some ambition. Drive and ambition is going to come from the private sector, not government. The policy changes and the frameworks have to come from government, and how do you get those two things to the same point at the same time to allow us to move these projects forward? And how do we then bring in the finance industry?

Bret Kugelmass
Okay, so let's circle back a little bit there. Tell me about your transition. Actually, just in the interest of completeness, was there any big capstone to your work at PwC that you wanted to highlight? And then I want to hear about the transition to your own practice?

Fiona Reilly
There were some pretty cool deals at PwC. I'm not sure how much I can talk about them. I mean, at Norton Rose, I worked on the Barakah project, which is pretty cool. Spent a lot of time flying to the UAE. PwC actually worked on Barakah in a slightly different role. I left there because they said, Would I go into comment to go work for a non-nuclear company and run this development company under a private equity business? I went to meet the family who are the principal who ran the family private equity business, and he said, Well, why don't you come and work with me instead? So I moved over, and that allowed me to then become a non exec of the Nuclear Industry Association and do the work for government as well inside. And that was to build a cable from Iceland to the UK to bring in Hydro and geothermal power to the UK.

Bret Kugelmass
Electric cable.

Fiona Reilly
Yeah. A huge electric cable.

Bret Kugelmass
Like a billion dollar electric cable.

Fiona Reilly
Two billion, yeah. That's cool. We couldn't get the two governments at the same point at the same time. I was there for two and a half years and then, I've learned that private equity and government don't necessarily work well together, because private actually wants things to happen really quickly, and governments don't. It's a real challenge to get some of these projects off board, and it's the same in nuclear as it is with big cables as it is with anything particular where you've got multiple governments involved.

Bret Kugelmass
Is this just a function of general government bureaucracy, or is this related to the size of the project? If it were an undersea cable that was only $50 million instead of $2 billion, could it have got done faster? Or is there just like a fixed time period that you can't get past?

Fiona Reilly
The problem was we didn't fit within any already created policy, so we were trying to change the policy to get the project to fit within a policy that wasn't designed for a cable project.

Bret Kugelmass
Do you think SMRs are the same story, that they don't fit into a policy and then a new policy needs to be created? Or you think it's workable under the existing framework?

Fiona Reilly
No, I think SMRs are very much backed by government and they've made clear statements about wanting to develop small reactors, both light water and then moving into advanced reactors. And then, if they're ambitious, then look at fusion. We have one of the world's leading fusion company, we've got other fusion companies that are, some of them have been in existence for quite a few years. There's a roadmap, which the NIA drafted, which went from large reactors, plus small lightwater to advanced reactors to fusion and what that could look like. I had an interesting discussion this week with somebody from government about, Well, if we crack fusion, does that mean we no longer need fusion? I said, No, you need them both because they could potentially do slightly different things and particularly - my engineering knowledge is limited, but my understanding is - fusion is generally going to be a bigger plant. You're still gonna need the small reactors to go into some pretty cool places that other reactors can't go, fusion reactors can't go. I think we need to look at our system much more holistically and work out and pour our systems around the world to work out where renewables are appropriate, where small reactors are appropriate, and where large reactors are appropriate.

Bret Kugelmass
Yeah, I think that's, at first glance, that seems like a good way to characterize why SMRs would still be necessary in the world with fusion. I've got a few others, but we'll keep that for another conversation, as well. But I think that's a pretty good first point there. Okay, so then at FiRe Energy, what's the main driving imperative behind your work there?

Fiona Reilly
Do cool stuff.

Bret Kugelmass
Okay, yeah. That's literally what I was gonna ask next is, what kind of stuff do you want to work on? Where do you put yourself out there to get involved in projects? What types of forums, what types of places, what type of companies are you talking to?

Fiona Reilly
I'm a consultant to a company which is Madano. I've worked with them for the last couple of years, and then I'm helping on a fusion project. I've helped with a technology park, I've helped with some government thinking around financing.

Bret Kugelmass
Tell me about technology park. What's a technology park?

Fiona Reilly
Westinghouse in the UK has a site called Springfield where their-

Bret Kugelmass
Their fuel production facility.

Fiona Reilly
They are, but they have an awful lot of space on that site to do other stuff. They looked at the site and said, Look, this is a nuclear licensed site, we are a licensee, we're an operator. Who wants to come and build stuff on our site? I was looking at some of that and how that could work with some government principles. They've now got that set up. It's been set up for a couple years now and they are looking for projects to want to come and build on their site.

Bret Kugelmass
Amazing, amazing. I love the concept of technology parks in general. I like the idea of National Labs in general. I think if you put a lot of smart people together- I think I especially like technology parks, because if you put a lot of discrete different technologies and projects that all have this commercial benefit, there's a lot of mixing and mashing of ideas, seeing how you can work together. Oh, let me run over to that company that specializes in advanced manufacturing. Just let me ask them a few questions. I'm gonna take that guy out to lunch who specializes in the fuel cycle. Let me figure out what's going on there. And when you're able to bring a lot of people together, and then, of course, the park itself needs electricity. Right. Then maybe that's the first customer for a new type of power plant. I think there's a lot of, I hate to use the word synergies, but I think there are. I think these types of establishments should be encouraged. Is the is the government behind technology parks? Is that like the government also helps out in some way or no?

Fiona Reilly
Yeah, for Westinghouse, they are potentially grants available, government grants, for if it's R&D activities or things like that. The other technology park we've got in the UK, which had some exciting news last week, is the fusion park at Culham.

Bret Kugelmass
I think I saw something news about that, what's going on there?

Fiona Reilly
General fusion, which is the Canadian fusion company which Jeff Bezos invests in is going to build its prototype in Culham, in Oxford. Again, it's the energies of ideas and having people around and being able to- UKAEA is the world's leading fusion project at the moment. There's a lot of money going into the private sector, so how can those two entities help each other? How can the UK work with other entities to help develop fusion quicker? All those ideas you were talking about is sharing information? What about this? Have you thought about this? How's this work? Yeah, there's lots of good stuff happening around technology parks, we've got other technology parks looking at hydrogen. We've got some in the northeast looking at a mix of bringing in energy, different energy ideas to one technology park. Again, it's how do you - I was gonna say fuse, but that's really bad - how do you bring together all those activities and make the best space for them and create hubs of excellence where also you then have the socioeconomic development that sits around it? And you've got people working in those areas and it brings people to those areas which, of course, pushes up jobs and pushes up salaries and then creates greater infrastructure around them and really helps with what we call the levelling up agenda in the UK.

Bret Kugelmass
Tell me more about the levelling up agenda, because I know the UK, like the US, has had some, let's say, geographically neglected areas because of shifts in industry. Is there a geographic focus to some of this work where we can help some of the communities that maybe kind of get left behind from the shutting down of coal or steel or other industries?

Fiona Reilly
Yeah, definitely. For the nuclear industry, there's a group called the North West Nuclear Arc, which is looking at the northwest of the UK, and also Wales, and how that can work as a community and develop wider nuclear projects. But the levelling up agenda is basically the Midlands and the north of England and making sure we can deal with those areas that have been neglected in the past and we've had lots of unemployment or really low wages, which impacts people's lives. How do we take some of the- there's a lot of wealth generated in the southeast around London where we've got the financial institutions and the city and everything else. How do you spread this out across some of the country as far as possible? Because London is probably always going to be the banking center. The government's need UK Infrastructure Bank has been set up in Leeds as part of this pulling things out of London. But what else can we do for the country? How do we bring back manufacturing and engineering? We've got some great manufacturing and engineering companies, but some of our manufacturing capability has been neglected over the last few years and we need to really look at that and consider how government and industry can work together again to bring manufacturing back to the UK. And I think small reactors play a big part of that, because if we're looking at building factories where you can literally build reactors that can almost plug and play, that's where I think we need to be going as an industry and start producing products, rather than having long construction on-site manufacture, which comes with all the cost overruns and the delays.

Bret Kugelmass
I love it. I mean, that is the promise of SMRs, right? And if you can set up the factory in those historically neglected regions to get more good- I mean, I can just only imagine if you're going to be pumping out little nuclear factories, little nuclear plants coming out of the factory, how many good pipe welding jobs is that, or pipefitting and welding and electrical work? I mean, I could just imagine hundreds if not thousands of- I mean, call them blue collar jobs, maybe, but these are well paying, these are good paying jobs. You got to do it right. They're skilled trade labor. I mean, this is good stuff. I mean, this is the type of thing that, not just the UK, but any government has got to be thinking about, and then the benefit isn't just the jobs - it would be worth it, maybe just for that - but the benefit is what comes out of clean- well, first of all, cheap energy, clean energy, clean water, everything you ever want. I mean, it's like the perfect solution. All I want to do is shout in the years of anyone who will listen. Like, come on, let's do this.

Fiona Reilly
Let's build!

Bret Kugelmass
Yeah, let's build, let's build, right? That should be- that should be, goddamnit, that's the slogan. That's the slogan of the new nuclear industry, Let's Build.

Fiona Reilly
Let's get on with it. But it's also playing to regions where school kids may not have aspirations of going to university, but they can have apprenticeships and they can do on-the-job learning. Or you could do a mix of university and apprenticeship. You're giving people the opportunities. My view has always been you can't force people to take opportunities, but if you give people opportunities, then that's all you should have to do. Because people should want to go and take those opportunities and better themselves and do more and add to society. As you say, then you've got the bigger impacts of clean energy and net-zero, we're meeting our NDCs.

Bret Kugelmass
Tell me, when it comes to building, when it comes to new nuclear development, what do we see in the UK landscape and when does project financing - that's something I've always wanted to ask you - when is the right time for project finance to get involved? What stage of the development cycle? What needs to be established? Does a company need to have a license? Does it need to have land? When do you start having the conversations with the capital that'll come in?

Fiona Reilly
You start having the conversation during the very early development phases. I think if you're doing it right, the finance community isn't going to commit until you've got certain things in place, but at least they're engaged and they can see things are moving and they can see things are progressing. I've heard some people in the industry say, Oh, no, it's too early phase to bring these guys in. It's like, it's not too early to have those conversations and to plant the idea, because they've got their own processes to go through. They've got to set it up entirely and move this through their own systems. For me, there's always been this concept of financial flows, which is when the big money comes in, and you're ready to put spades in the ground. But there are questions as to what financial clauses, and historically, it means you've got all your permits or your licenses. You've obviously got your land, you know what you're building, you know what your construction program is. You should know what your design is. But historically, some projects haven't known what their design is, and it's gone wrong, you should know-

Bret Kugelmass
They have trouble sometimes, yeah.

Fiona Reilly
You need to set up your decommissioning program, because you need to start thinking about what that looks like and having a plan in place and then putting decommissioning fund in place. And it's making sure everything's in place so that you are ready to put back that spade in the ground to start construction.

Bret Kugelmass
Yep. And then how does it maybe shift a little bit with something like these micro reactors? I mean, I've seen it's like 50 companies in the US that are nuclear startups, quote, unquote. Some of them are micro reactors, one, two megawatts, 10 megawatts, whatever it is. Do you see a path that's a little faster and easier with them? I think they still have to build stuff, they probably still have to lay a foundation and do something. But does it just, in my opinion, the licensing part should go relatively quickly for these reactors, because the energy is lower, the risk is lower. I know it doesn't always work that way, but I think it should. Let's imagine a world where there is a true graded risk approach and you can get a fast track license for a smaller reactor. What are the next stages, then - maybe you don't have the license yet, but you think you'll have it within a couple of years - what are the next stages then to kickstart an actual project?

Fiona Reilly
Getting your license is probably one of the last thing you do because you need to understand your construction process to understand, so that can feed into the license. And the difference between licensing here and licensing in the US is you have different licenses for different phases of the project. We don't. We have a nuclear site license. You need to be able to show one of our regulators that where you're going to put this has- and you don't have to, say, have an operator in place from day one, which has been a misunderstanding from some people. But you do need to know how you're going to build up and operate it, how you're going to get that capability to operate. How are you going to show it over and over that you are compliant? Because, although we have one license, there are various hold points within that license where RNR can stop the project and say, Hold on guys, you haven't got this quite right. You need to, we need to check that you've got concrete properly set and laid properly. So for us, getting your license is one of those final things that almost comes just for financial close with all your parenting and all your construction contracts, huge number of contracts. And then including all your financing contracts and how well the financing fits together.

Bret Kugelmass
You put the financing contracts first and then you get the license?

Fiona Reilly
No, no, no, to get your license just before you sign all your contracts, including your finances and contracts.

Bret Kugelmass
I see, so you time it so it's all happening about the same time?

Fiona Reilly
Yeah. So the night when deals close is the night when everybody's working through the night and doing amendments, where can we close this project? Can we get all the money? I mean, it's a bit like buying a house. Can we get all the money available so we can start this thing tomorrow?

Bret Kugelmass
Amazing. And then what is - I think I was alluding to this question before. It's a big curiosity of mine in terms of setting up these SPVs, these development entities that are really going to be the ones pushing to build - Let's Build, remember our slogan. The money that's involved, though, it seems to me, just to line up all of these contracts, the EPC contracts, the financing agreements, it seems to me that there's probably - and you should know, I mean, you're the lawyer - there's probably, I don't know, like a half million dollars in legal fees. Am I in the right ballpark? Is it more, is it less? And where and how do we get enough confidence in the bank to get that money in the bank to get those things started so that when the license comes through, everything's ready to go.

Fiona Reilly
The problem is, you need that initial investor who can pay for that development phase.

Bret Kugelmass
Okay, so that's really step number one. Find somebody who's willing to- Am I right in the ballpark, in terms of what the fees are? I'm off.

Fiona Reilly
Yeah. I mean, I think the cheapest you could get through a full development phase including lawyers' fees, consultants' fees, banks' and lawyers' fees, because you pay their fees as well as your own and getting all your permits and licenses, you're probably at half a billion pounds.

Bret Kugelmass
Half a billion, so you're saying 500 million. And that's for a gigawatt scale reactor, you're not saying for one of these baby reactors would still be that, right?

Fiona Reilly
Any reactor.

Bret Kugelmass
But then that precludes anyone from ever developing an SMR, right. Because you can never pay back $500 million if your project is only $100 million project.

Fiona Reilly
That's why you've got to start looking at these things and saying, What's the right size and how are we building it? The argument with micro reactors that I heard other people talk about is, you're not then looking to build a reactor that's going to go on the grid. You don't need to pay your costs to the national grid to connect to the grid, potentially. You don't need some of the permits that go with that. So what are you going to build your micro reactor to do? Is it going to be with a hospital? Is it going to be with a school? Is it going to be- how do you get public acceptance for that type of principal, which we've not historically had? How do you get government policy to line up with that type of principal? There's a lot of work that goes into these statements. I mean, I think it is pretty well known that Hitachi on Wylfa didn't get-

Bret Kugelmass
Like two billion or something. Yeah, I didn't get it. I know. But to me that see, that doesn't make any sense. And I'm trying to, that's what we're trying to do. I think part of this podcast is trying to discover how do we break out of this? How do we make it feel like a wind project? And I think maybe that's where I got that number from, maybe a million bucks goes into the early development costs, let's say for a 50-megawatt, a few wind turbines go up or something. How do we get nuclear to feel a lot more like that? And let's put aside the nuclear license and the fees associated with that for a second, but still account for all of the other development fees, like lawyers and project finance and stuff. Is it possible that any of that money can be contingent on close of the deal, or does all that have to be paid up front?

Fiona Reilly
There are some costs you're going to have to- if you look at normal reactors and look at building a normal reactor, you've got early lead items that need to be paid for. There's talk with the regulated asset base model that we've been looking at in the UK as to whether- one of the advantages of the regulated asset base concept is you can start servicing your financing through the construction period. You don't have to wait for the plant to be operational, which obviously massively reduces the cost of capital, because you're not accumulating interest. There is an argument that you could possibly move that forward slightly and start the regulated asset base somewhere through the development phase, rather than waiting to the end of the development phase. That will require certainty of design and certainty of knowledge that you're going to get to financial climates to put some of this stuff in place. It won't be day one, but it might be two, three years down the line rather. Now, the figure I got from the finance community - because I did ask this question - of what the costs, the development costs, for a wind farm were with 30 million. Okay, so that big of, what's the differential? There's quite a lot of the money that goes into the nuclear licensing. There's a lot of money that goes into planning and getting public acceptance. Wind farms still have to get public acceptance, but it doesn't seem to take as long, doesn't seem to have the same challenges to it, actually get it offshore. There are lots of these things that you can start chipping away at on nuclear licensing. One of the things - I love to talk, right, because there's a huge misconception about this - is everyone says, well, GDA can take three, four years, and then you could do nuclear site license. There is absolutely no legal requirement in this country to go through a generic design assessment. You can go straight into site licensing. Now, some of the things that are covered in the generic design assessment would then be covered in your site licensing process, but you can deal with it all at the same time and aim to get your site license in two years, potentially, if you've got to really set design. And the key to this is you've got your documentation in order. When you present it to the regulator, they can just look at it and say, Yep, we've got questions. The cost of this stuff goes up when you start having, or what do you mean by that? How does that work? Our regulator isn't prescriptive. They've got to understand the concepts of how it's being built and why it's being built, and how you're going to run the site and what your operator's going to look, and how all that stuff's gonna come together. You can reduce the cost of this stuff. That is some of stuff I advise on, is how to bring down some of those costs and try to avoid some of the pitfalls that we've seen on other projects. We're never going to get to the 30 million, but we might get to something lower than half a billion. We can definitely get lower in the pocket again. But you've also got to remember that the life of a nuclear plant is much, much, much longer than a wind farm.

Bret Kugelmass
Yeah, but a discount rate says that all that money in the end of life doesn't matter.

Fiona Reilly
I'm not sure about that. If you're getting government funding mechanisms or-

Bret Kugelmass
Yeah, if you have government funding, sorry, I was thinking strictly in the private sense. Okay, interesting. Alright. Well, we've done pretty well here, covered a lot of topics. Before we wrap up, is there anything else that you'd just kind of like to leave our audience with?

Fiona Reilly
I guess the big thing for me is how do we solve this ESG issue and make sure that companies in the nuclear sector and the other sectors are properly reporting against ESG and creating that balanced scorecard and stop some of the greenwashing. That, to me, is vital for meeting some of this ahead and to educate those who need to be educated, so they can understand where they can move things quicker, and get rid of some of the slow processes that we have that we do not need.

Bret Kugelmass
Alright. Fiona Reilly, thank you so much. Looking forward to seeing you hopefully sometime soon in person. Welcome to the club, Titans of Nuclear.

Fiona Reilly
Thanks, Bret. Take care.

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