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Mikal Bøe

Founder and CEO


December 19, 2022

Ep 374: Mikal Bøe - Founder and CEO, CORE POWER
00:00 / 01:04
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If you enjoy this Titans of Nuclear episode, listen to our interviews with Lou Qualls (Molten Salt Reactors, Technical Director, Oak Ridge National Labs), Robert Hargraves (Co-Founder, ThorCon), and Thomas Jam Pederson (Co-Founder, Copenhagen Atomics.)

Bret Kugelmass [00:00:26] We're here today with Mikal Bøe, who is the founder and CEO of CORE POWER. Thank you so much for coming to the office. Happy to have you here.

Mikal Bøe [00:00:31] Pleasure to be here, Bret.

Bret Kugelmass [00:00:32] Yeah. So, as we love to do on Titans of Nuclear, I would love to get to know you as an individual before we get into the work that you're doing today. So, please start us off with where were you born and what was it like growing up?

Mikal Bøe [00:00:43] Well, I'm from Norway originally, and you know, was born in Norway, grew up in Norway until we moved to England when I was a teenager. I grew up in London, so I think of London as my home.

Bret Kugelmass [00:00:54] And why did your parents come to Norway or move from Norway to London?

Mikal Bøe [00:00:57] So, it was my father had a job in the city. And, you know, we moved over as a family and the family moved back. And I stayed, went to college, started my first business, got married, had children...

Bret Kugelmass [00:01:07] Wow, okay. You're racing way too fast! What did you end up studying in college?

Mikal Bøe [00:01:12] So, I studied performing arts to start with.

Bret Kugelmass [00:01:15] Okay, great.

Mikal Bøe [00:01:16] And then I went off and did an MBA realizing that performing arts was never going to...

Bret Kugelmass [00:01:20] Pay the bills.

Mikal Bøe [00:01:21] It was going to be too much fun and too little money. So, I did an MBA and then started my first company back in the 19... mid-1990s, 96, 97.

Bret Kugelmass [00:01:33] And what was that first company?

Mikal Bøe [00:01:35] So, that was for shipping. So, we started the dot com for the shipping industry, the first of the dot coms. That was when Yahoo! was a small company. So, we were really, you know, early at that stage. And it's still actually one of the few last surviving dot com companies for shipping.

Bret Kugelmass [00:01:50] Amazing. And what were some of the influences on your life leading up to that point that gave you that entrepreneurial spirit?

Mikal Bøe [00:01:57] Well, so my father was an engineer and my mother was a teacher. And, you know, we grew up, you know, in a time when, you know, Norway was... Actually now we think of Norway as one of the richest countries in the world. When I was little, it was one of the poorest countries in Europe.

Bret Kugelmass [00:02:15] And this is all just because of the oil boom?

Mikal Bøe [00:02:16] All because the oil boom.

Bret Kugelmass [00:02:17] And was your father in that type of engineering?

Mikal Bøe [00:02:20] So, he was in shipping. So, he was an engineer working in shipping.

Bret Kugelmass [00:02:23] Shipping runs through the family for you.

Mikal Bøe [00:02:25] Absolutely. And that's what we do. Norwegians, we're either in energy or shipping. That's kind of it. So I ended up working in shipping myself when I came out of college and, you know, had my first job back in the early nineties, you know, working for one of the big tanker organizations.

Bret Kugelmass [00:02:42] What did you do for them?

Mikal Bøe [00:02:43] So, I was selling market intelligence information on risk management, and I was quite interested in the risk management side of this business because shipping is one of those... markets where, you know, everything changes all the time. You know, the amount of risk that a shipping company faces, you know, out at sea and in the market. There's nothing like pretty much any other industry out there.

Bret Kugelmass [00:03:10] And what are the big risks? Is it risk of delay of shipment? Risk that the ship won't even make it there? What are the risks that are trying to most commonly be modeled in the shipping industry?

Mikal Bøe [00:03:21] I would say, Bret, that it's probably the most... one of the most if not the most competitive and unregulated industries in the world.

Bret Kugelmass [00:03:31] Wow.

Mikal Bøe [00:03:32] So it is a dog eat dog market. You know, it's never been a team sport. It's every man to himself. And you're basically trading for cargoes that make up global trade on a daily basis. So, you know, long term investments in technology and then trading the variability in the market's on top of those investments in, you know, a completely deregulated, completely global and, you know, entirely international market, you know, you're competing with people from all over the world doing, you know, with completely different standards than the ones that you might have set for yourself.

Bret Kugelmass [00:04:12] You're competing to do what? To get some good from point A to point B? So what's... But then tie me back to the risks specifically that are worth being modeled than the industry. Is it just risk of a commodity price changing before you get something from A to B?

Mikal Bøe [00:04:29] So, you know, I actually came into the... came into the business working with risk management. I spent about 30 years working risk management in shipping before I started CORE POWER. And it's predominantly... it's a technology risk and counterparty risk market. So, you know, the investments in technology that you make are large capital expenditures and they tend to be... They tend to be risks that you don't necessarily get paid for. So you go in and you spend a lot of money on investing in good quality technology and maintenance of that technology, ships and machinery, etc.. Even terminals. And there's always somebody out there who can do it cheaper and not necessarily better but certainly do it cheaper. So you have this constant market risk. You have counterparty risk because the number of counterparties that you're dealing with that are not in your jurisdiction. But, you know, from somewhere else in the world.

Bret Kugelmass [00:05:29] I see. So you're talking about... When you talk about risk, you're talking about the part of shipping that is selling ships or building terminals, not necessarily getting goods from point A to point B.

Mikal Bøe [00:05:38] No, the whole thing.

Bret Kugelmass [00:05:38] The whole thing. Okay.

Mikal Bøe [00:05:39] Yeah, literally it pervades the whole thing. I mean, if you look at what's happened to the Americans or the US shipping industry, it's, you know, it's a shadow of its former self.

Bret Kugelmass [00:05:47] Yeah. Why is that?

[00:05:48] It's been out-competed by the rest of the world. You know, you've got high regulatory barriers around the American shipping industry. You've got high costs that come from the way that things have been set up here. And you've got a government that's not necessarily supportive of that industry in the way that you find in other places. It's not the appreciated if you like. The value of the industry isn't so appreciated. So it's kind of lost its allure, but it's, you know, it's the same that's happened... Same happened here as it's happened in Europe. You know, we've kind of lost that competitive advantage to Asia. It started with the Japanese, then it was the Koreans and now it's the Chinese. And then we'll see what happens next. But it's predicated on this idea that, you know, or rather this fact, not an idea, this fact that the technology that we use today in shipping is the same as what we used 110 years ago. It's just ships are bigger, but they're the same, you know, nothing... So imagine if we had cars... Driving around in cars in Washington, DC today that were literally pretty much exactly the same as they were in the 1930's.

Bret Kugelmass [00:06:43] I mean, isn't that kind of the case? Up until the electric cars, we've had mostly internal combustion engine cars for 100 years. And is there anything wrong with that? Because I assume on ships, the engines keep getting better and better to run the ships, too. Right. So then is there a need for innovation in ships?

Mikal Bøe [00:06:59] Well, so what happens with this is that the competitive advantage that you get from investing in good technology, you know, well-built ships, ships that are well maintained, that are built to a high standard, is eroded because you can always find somewhere that will do it cheaper. And it's a race to zero. It's a race to the bottom. So quality becomes a secondary consideration. The environment becomes a secondary consideration. And it's extremely difficult to compete in a market where, you know, apart from in the US shipping industry, which is regulated, which is a closed market and outside companies can't compete here. But then it becomes smaller and smaller as time goes by.

Bret Kugelmass [00:07:43] And so what happens then? Just, I guess different countries become good at different parts of the technology stack. Some become the shipbuilders, some become the ship software maintainers, some become the risk management companies. Is that how then it works? And just kind of different countries based on whatever their industries are, just take on a different part of the shipping industry?

Mikal Bøe [00:08:05] I think what we've seen, Bret, over the last 20 years is we've seen China becoming the predominant player in this. You know, you've got a huge amount of new shipyards that are being put up. You've got very cheap labor operating under pretty appalling conditions most of the time with cheap steel, with, you know, cheap designs, sort of, you know, designed in a hurry, built in a hurry type designs and then operated by large Chinese companies who fed the enormous influx of commodities and goods into China. So, China's been a big factor in this. But of course, it started with the Japanese, then the Koreans, and then now the Chinese. Now the Japanese are starting to find themselves in a situation that, you know, similar to the situation that the US and Europe found itself in sort of 20 years ago, which was, you know, the competition is getting too heavy. It's not about competing for quality, it's about competing for price. And you can always, you know, you can continue down that route and eventually you're going to have to you know, your standards are going to have to, you know, have to be compromised. So, I think, you know, this is the exciting thing about the shipping industry is that, you know, it is 85% of global trade. You know, it is an incredibly vital component of everything that we do. I mean, you know, what you wear, what you have in your house, what you come in touch with every single day, has some sort of ocean transportation component in it.

Bret Kugelmass [00:09:27] You know, it's amazing.

Mikal Bøe [00:09:28] The trousers, corn flakes that you eat in the morning or shoes that you wear. You know, there's something in the house or the apartment...

Bret Kugelmass [00:09:35] It's truly amazing, and I've heard the same thing said about energy, and obviously that makes sense. So let's tie these two together. When did you decide to change your focus from strictly the shipping industry to becoming part of the energy industry?

Mikal Bøe [00:09:46] Well, let's see. So, I was working as Chief Risk Officer for a reasonably large dock-listed shipping company in New York and also in Singapore. And it was around about the sort of mid 20's... So around about 2015, 2016, when it became quite clear that decarbonization of the shipping industry was going to become a real thing. And we'd all looked at it and thought surely not, I mean, of all things, why? Why would you... Why would you stop? Why would you stop global trade? Why would you... You know global trade is driven by the big diesel engine. It's the beating heart of global trade. Why would you stop that? And you see the International Maritime Organization, which is the UN Agency for Maritime Regulation, see the member states, they're pushing very hard for this drive to zero in an industry that basically is the waste management stream of the global oil industry. Remember that ships burn the stuff that's left over...

Bret Kugelmass [00:10:45] The bunker oil.

Mikal Bøe [00:10:46] Yeah, the bunker fuel. That's right. The stuff that's left over at the end of the refining process. So we are sort of, you know, waste to energy. Right. But it's happening and it's being pushed harder and harder and harder. And these limits are being set for 2030, 40 and 50 where the industry said, "Well, you got to get to zero." Well, you know, these ships, Bret, are huge.

Bret Kugelmass [00:11:06] Yeah.

Mikal Bøe [00:11:06] I mean, you're talking about 400 meter long ships that, you know, carry hundreds of thousands of tons of cargo.

Bret Kugelmass [00:11:12] Yeah. It's amazing.

Mikal Bøe [00:11:13] It's very difficult to imagine how you were not going to run an efficient energy system on board those.

Bret Kugelmass [00:11:17] Can I ask a silly question before we get to the solution that I think everyone knows that we're getting to? Let me just ask a silly question first. The shipping industry used to be powered, totally renewable, right, through wind. Right. That was... The original ship propulsion technology was sails. How come that never evolved to just make like giant sails or some other type of like, wind... I mean, there's plenty of wind out in the ocean, right? So, how come... Or like directed wind funnel energy, I mean, how come that science never advanced? Because you figure, "Yeah, they got a lot of wind out there and it started off that way.." That someone would invent some sort of new sail technology.

Mikal Bøe [00:11:56] Well, there's no such thing as a silly question, isn't it, Bret? You know, but to be fair, until steamships and the big diesel engine came along, we didn't have globalization. You had some... You had some international trade on small wooden ships. I mean, you look at the biggest sailing ships in the world as they were in the 1870s. And you know, they're smaller than yachts these days, right. So you'd move a few hundred, maybe a few thousand tons of cargo around very slowly, and you'd have to sit and wait for the wind to turn in order to be able to leave the harbor. Now, with the dawn of the steam engine and the diesel engine came after that, you know, you then had this opportunity to keep goods moving and you could then start, you know, properly exporting from one country to the other countries that were exporting raw materials to places where you'd started adding value to them. You know, steel industry started coming through... The Industrial Revolution. You started seeing a lot of movement of coal for energy. And, you know, we're digging coal in our own backyard before then... Now, we'd start importing it. We had grain transportation. You had the transportation of, you know, durable consumer goods as the container shipping industry started coming through in the 1970s. So, you know, it enabled a huge amount of innovation and it gave us globalization. If we stop that, you'd have to say, "Right. Globalization is over." You know, small wooden ships that bob on the top of the sea with big sails. Yeah, fine. But if we've got a 400,000 ton ship carrying iron ore from one part of the planet to another, you know, no matter how much wind you put, it's not going to go very far.

Bret Kugelmass [00:13:35] Okay, great. So then you probably need something a little bit more power dense. That's what brought us to fuels. And now to the next generation, so tell us about that. Tell us about how nuclear gets applied to the shipping industry now.

Mikal Bøe [00:13:47] So there's two sides to this. And what we were talking about earlier on was just this idea that, you know, as the industry's sort of competitiveness drives the costs, there's a race to zero. It becomes very difficult to be competitive. So we need to find new way to be competitive. And that comes from innovation. That comes from a new way of doing things, the same as when we went from sail to steam and from steam to diesel. Something else has to happen, and it's being driven by this global community's wish to go to zero. So if you're going to have zero emission vessels, well, you're going to have to abandon combustion. If you're going to abandon combustion, what have you got left? What can you do? There has to be a nuclear component in it. So... I think the way we see it, Bret, you know, we don't see a hundred thousand trips out there with the reactors on board. Certainly not for propulsion. I don't think that's really the way that this is going to go. I think we're going to see a sort of bifurcation. You know, the very largest ships out there could benefit enormously from nuclear propulsion.

Bret Kugelmass [00:14:55] How many cargo ships are out there in the world?

Mikal Bøe [00:14:57] About 100,000.

Bret Kugelmass [00:14:58] 100,000 that do like... What I would think of, like shipping containers.

Mikal Bøe [00:15:01] Yeah and bulk cargo, dry bulk cargoes, liquid bulk cargoes and then break bulk, you know, things like cars and trucks, etc.. And then you have containers.

Bret Kugelmass [00:15:10] And what is the history of nuclear power in the shipping industry? Because there had been prototypes, experiments, full ships that have done this before? Tell me about that.

Mikal Bøe [00:15:19] Well, you know, so the... all the reactors operating in the world or have operated in the world today, you know, more than half of them have been at sea.

Bret Kugelmass [00:15:26] Yeah. Like submarines.

Mikal Bøe [00:15:27] Submarines, you know, naval vessels. But it's a very different thing. You know, we can't use naval technology in civilian shipping. It's inappropriate. It just doesn't... It's not fit for purpose. It's good for the Navy. It's not good for the civilian industry. And the examples we've seen of commercial vessels or demonstration vessels, there was one here in the US back in the 1950s and sixties called The Savannah... She's moored in Baltimore's, she's a beautiful ship. The Atoms for Peace ship. She was... But she was a demonstration of you know what nuclear could do as a civilian industry rather than as a weapons industry. And, you know, in order to move this reactor around the world and show the people, they had to put it on a ship. So they created this beautiful ship... But she wasn't really a commercial ship. She wasn't meant to make money.

Bret Kugelmass [00:16:15] But how come it didn't catch on, then? If obviously the technology works at sea, the submarines have it. And they had this... They had the idea back then. What stopped it from maturing?

Mikal Bøe [00:16:26] So, I think what's happened is that we've only really had access to or we've only really had one technology that we could conceive of using at sea, which is the, you know, pressurized low water reactors, pressurized water reactors, naval reactors, effectively. And there's a massive barrier. There's a regulatory and legislative barrier to the civilian industries, commercial shipping industry, using naval reactor technology because it's the domain of the Navy. And you know that part rightly so. They don't want to share that with anybody. They run on high enriched uranium. Very high...

Bret Kugelmass [00:16:59] The naval ships or the naval submarines used high enriched uranium? Right. Okay. So that's out.

Mikal Bøe [00:17:04] So that's totally off. So now you're going to use low enriched uranium in these reactors, which is perfectly feasible. But then you've got a refueling cycle, which is every 18 to 24 months.

Bret Kugelmass [00:17:13] And what's wrong with that?

Mikal Bøe [00:17:14] So by extension, what you would have is you'd have vessels having to be refueled either at very... A lot of refueling stations around the world, but the infrastructure would have to be built out full or you'd have to do it in ports. And now you've got nonproliferation and you've got... You know, you've got security issues and all these sort of things with, you know, refueling a reactor in a commercial port. The second thing, which I think is key, is that all of these pressurized reactor systems require an emergency planning zone around them that are by extension quite large.

Bret Kugelmass [00:17:48] And why is that different for non pressurized reactors?

Mikal Bøe [00:17:51] Because in a non pressurized reactor you have the, in theory at least, you have the possibility of shrinking that EPZ down to the boundary of the vessel. If you've got a low source term and you've got an ambient pressure reactor, you could then contain that reactor, you know, on board a vessel and not have the EPZ extend beyond the boundary. And that changes the liability regime around it...

Bret Kugelmass [00:18:16] Though I'm not quite following the logic there. What does that have to do with pressurized technology? To me, my understanding is irrespective of how you split the atom, you are left with a certain amount of radioactive material. They actinides or fission products. That's every single technology. So, you have the source term there. And then the emergency planning zone, as far as I understand it, is about in an emergency, the movement of that source term. And so there are different types of emergencies that might get created. Some of them might have to do with the pressure, but most of them, as far as I understand from a licensing perspective, don't have to do with pressure. It's a matter of what if someone attacks your equipment? Whether you are high pressure system or low pressure system, you have a collection of radionuclides and the thing that attacked your system could spread that same source term out an equal distance, whether or not it was a pressurized reactor versus a non pressurized reactor.

Mikal Bøe [00:19:24] So with pressurized reactors, of course you have the potential for the formation of a plume. So if you have water cooled reactors with a high pressure steam inside, you have that potential formation of a plume that you can contain that. But, you know, the... But the rules or regulations I see today is set that emergency planning zone at a certain size around.

Bret Kugelmass [00:19:41] But why would another technology not have a plume?

Mikal Bøe [00:19:44] If you have a non pressurized reactor and you have no formation of any hydrogen from water that's cooling that reactor or any... any high pressurized gas that's in there, then even if you have a leak, you will not have... It will not have a plume that would come from that system.

Bret Kugelmass [00:20:04] Hmm. Maybe we'll come back to that because I do want to hear more about the launch of your technology. So, tell us what your solution is.

Mikal Bøe [00:20:09] So we've been working with literally looking across the whole spectrum of different types of technologies that are out there and seeing which ones are the ones that can meet these key criteria for maritime. And the key criteria for us to be able to use this in maritime, and this we're talking propulsion now, which of course, has other the challenges too, not least export control, but also for use in floating nuclear that can... you can use to create synthetic fuels for the industry of ports around the world. The three criteria that we've identified together with the industry that need to be met in order for this to succeed, is that we need, first of all, to be able to create a system that has an emergency planning zone that is small enough for us to be able to shrink the liability around moving these reactors in and out of ports and moving up and down waterways. Because an emergency planning zone that extends into a port or a port city, it's basically a public... an unlimited public liability that no commercial civilian shipping company would be able to or even be allowed to take on. So, you know, this is why this naval technology, for the most part, you know, has a nation standing behind it and you know, that's the guarantee. The second one is that we have to be able to make these reactors affordable. So we have to go from that. You know, I think like so many people who have come on this podcast before, probably said, you know, you need to go from a sort of project to a product. We need to be able to manufacture these reactors in a way. So you have to have the manufacturability, the modularity and the manufacturability. I think you guys are working on this too, you know, to be able to do this and it has to be small enough then to be able to fit and give the right kind of power. And the last thing is, I would like to see us running very long fuel cycles. So the idea that we don't have to stop reactors and refuel them in ports around the world, but rather have reactors that can function for a very long time without refueling, potentially with inline refueling, so that you're topping up at full power rather than stopping and taking and replacing the fuel. It gives that potential for a sort of upfront CapEx on the energy system that lasts for the lifetime of a ship, which is usually between 20 and 30 years.

Bret Kugelmass [00:22:52] Okay. And so this led you to which technology?

Mikal Bøe [00:22:55] So then we looked through pretty much everything that's out there. And we came down to the conclusion that the two ones that really meet these criteria, there are those that could potentially meet this as well, but the ones that meet them the best is the molten salt reactor. And, of course, there are different types of molten salt reactor designs out there as well. And the second one is the heat pipe... micro heat pipe reactor, which we think is a very interesting potential to do this. It's sort of more like a sort of battery type thing rather than just a reactor. The molten salt reactor is one that we thought was or we still think is probably the one that has the ultimate solution for this. But in looking at then who's developing molten salt reactors, who's looking at different types of designs and what they're doing... You know, it's you get down to the second set of criteria that we haven't talked about, but which I'll bring up now. The second set of criteria is really if you're going to do this, I mean, the most important thing is that there is a feasibility in execution. Can they actually be built? Are the guys that are building these things... Do they have the facilities? Do they have the people? Do they have the skills? And do they have that awesome financial firepower behind them that you need in order to get to a point where you can not just demonstrate but commercialize this technology? And I think that's the big issue for Gen4 reactors today is, you know, it's getting the investments in behind the technology, which is driven by a customer base that, you know, actually has demand and offtake possibilities for this technology and getting them interested and excited in this on the basis that, you know, they can see quite clearly that, yes, the team that's building this has the capability and they have the support and the financial firepower to be able to actually do it. Because I think all of these reactors will work somehow. They will all function if you build them, but you know which ones are actually going to get built? So we've chosen then to work with, you know, certain select parties. And, you know, we're very pleased with the way things are going.

Bret Kugelmass [00:25:05] So which select parties meet that criteria?

Mikal Bøe [00:25:08] So we're on the team with TerraPower and Southern Company to develop the molten chloride fast reactor, and we've chosen that for two reasons. One is that the molten chloride fast reactor, which no one's ever built before. So it's, you know, it's a technology risk right there. But, you know, the fact that it's a molten salt reactor without a moderator, tends to be a graphite moderator, enables us to avoid that issue of exchanging that moderator... every six, seven years. Again, a big issue for the reliability and the sort of maintainability of a marine system. So if we can get the molten chloride fast reactor to function properly, and we can get it to work as a long term, reliable machine, then, you know, it is, you know, potentially the ultimate solution for the shipping industry.

Bret Kugelmass [00:25:54] And so you said you started to work with TerraPower. So what's the division of responsibilities between your company and their company?

Mikal Bøe [00:26:01] So, you know, it's a team effort. So we operate under this risk reduction award that was issued by the Department of Energy under the... advanced reactor demonstration program. And the Risk Reduction Award is really there to eliminate some of the key risks that sit in developing this type of technology, you know, corrosion and erosion, thermal hydraulics, etc., which we need to be done. I mean, there's still a long way to go. Now, there's three companies in this group. It's TerraPower, it's Southern Company and it's CORE POWER. And we all have, we all bring something to the table. TerraPower, of course, are the reactor designers and the builders of this technology... Phenomenal capability. Southern Company are the ones that have, you know, the nuclear operating experience, that bring the licensing and regulatory side of it, as well as the operational side of it. And we are bringing, if you like, the market. We're bringing the customer demand for this and bringing that manufacturability, the capability and manufacturability of these systems for a larger market. And that focus is not on propulsion, that focus is then on floating nuclear. So if we can demonstrate that we can make these reactors work in a marine environment, which is a dynamic environment, it's pitching, it's rolling to an extent. Then, you know, we're creating a reactor system that would also be perfectly happy on land, so if it works at sea, it works on land, but not necessarily the other way around. So if we can demonstrate this as a floating reactor system where you're basically taking the idea that you're manufacturing reactors in an environment either in or near to a shipyard, a shipyard that is specifically set out to build floating nuclear power stations. You know, we could create a manufactured floating nuclear power station product that instead of having a workforce of thousands of people that are moving from project site to project site, they're not staying in the same place and building the same machines all over, you know, again and again. So we can then float them out to where they need them...

Bret Kugelmass [00:28:05] So is that what you guys do? You take the core technology that TerraPower is building for their land machines and you're adapting it? And are you custom designing a ship that goes around it as well?

Mikal Bøe [00:28:16] So we're custom designing the floating nuclear power stations around that. So we're not focusing on the ships. That's something that could come later on. Remember, we have something called the International Trade in Arms Regulation, ITAR, that sits here in the United States, part of the US munitions list where naval nuclear propulsion is an item and it's not an exportable product at this point. So ITAR stands in the way of us being able to promote this as a propulsion product. Unless of course it's entirely a US fleet operating in U.S. waters, which is perfectly possible and we could potentially get to that. But at this point, we're focusing then on getting these reactors out on a floating path. So you have, if you like, mobile power stations that you can manufacture in one place and then move to a static place or a site where they would sit feeding, you know, coastal industry, feeding power to the floating systems that would desalinate water and create green hydrogen so they could... synthetic fuels, etc.. That would either feed land based transportation or ocean transportation. Or they could be used as part of an energy system where you load following for offshore wind, for example, in front of a land based energy system.

Bret Kugelmass [00:29:32] But I guess maybe I'm still having trouble understanding what exactly is your product? What does it look like? It's a power plant wrapped around TerraPower's core that goes on a ship?

Mikal Bøe [00:29:43] We think of it more like in a modular fashion. So the power plant itself, the power station itself, it's a... So I mean, I wish I could show you here, but, you know, we have several designs. One of them is a... what's called a spa design. So it's a circular hull with a skirt underneath it that is very, very stable hydro statically. And it's perfect for places like the US Gulf, the Atlantic and other places used in the offshore oil and gas industry a lot. And it is a phenomenally stable and large scale steel structure. And we would then... We then, looking at how we could then fit the reactor, the reactors themselves, you know, pre-manufactured into these in a modular fashion. So in a sense, they're manufactured separately. So we're not building the power station around the reactor, but rather building that power station, that floating power station, with all of its power conversion systems, turbine technology and its electrical systems, and then having the reactors then fitted to that. But, you know, in these specialized shipyards, that we're looking to establish.

Bret Kugelmass [00:30:53] And... But does TerraPower have to redesign their core technology to fit in your application? How big is their standard power block? How much power does it create?

Mikal Bøe [00:31:06] So, it's still early stage, right? So, we're still in the risk reduction awards parts of this. So that's still to be determined. But we could get this up to I mean, I think, you know, the sort of the standard large design version of this machine would be 720 megawatt thermal.

Bret Kugelmass [00:31:22] Okay. So you're going to build... And so that's your concept then. You're going to take their 720 megawatt thermal reactor core, and then you are going to build something around that to create power on the ocean.

Mikal Bøe [00:31:35] Yeah.

Bret Kugelmass [00:31:35] Okay. And then that's your part of the product, is you build that system that integrates into their standard core. But they've got to get it to you somehow, right. So they're shipping... Where are they producing their core?

Mikal Bøe [00:31:47] So, the concept here, Bret, is that we would produce these two in the same place.

Bret Kugelmass [00:31:53] Okay, so you're teaming up with TerraPower to create a new manufacturing facility that is going to make both their core and also your balance of plant, for lack of a better term, that goes around it, that is an ocean worthy structure, and then you're going to drag it, float it, move it to whatever your customer is.

Mikal Bøe [00:32:16] That's the concept.

Bret Kugelmass [00:32:17] And when? Give me the what... the when and how much question everyone always wants to know. So when would the first one be built and operational and how much is it going to cost?

Mikal Bøe [00:32:27] It's difficult to answer those questions, actually, because we don't know. But I'd say that the earliest that we could possibly do this is in the mid 2030s. You know, we need to be able to demonstrate that technology works, we need to be able to demonstrate that it works, you know, in the floating environment. We need to be able to demonstrate to the licensing authorities that this is the right kind of approach to this and that they would be happier for us to do this. That's not a trivial matter. And then if we can start demonstrating this in the early to mid thirties, not to the full commercial scale, but in a small scale system, I think we can start getting these out there in sometime in the 2030s. I mean, if we have a full scale one out by 2040, I'd be very pleased. How much is going to cost? You know, that's, a lot of that is guesswork at this point. But we've looked, rather than the actual costs of everything, we've looked at the comparative costs between building a similar sized power station on land in the way that you would do with large construction project, lots of concrete, lots of people, etc.. You know, we've looked at the efficiencies of doing this in the shipyards and we've got a number of large shipyards as our shareholders and, you know, who help us with understanding what their various processes are, etc.. And we've looked at all of the various component processing, creating these power stations the same way that you would do ships. You know, you don't build one and then you start on the other, you start with one, you move that portion to the next part of the shipyard, then you start again with that. So you're constantly building. So you could potentially build nine at the same time, but slightly just behind each other. So I think we can get the cost of construction down to less than 50% of what the standard cost is today. And we can get the time of construction down substantially as well...

Bret Kugelmass [00:34:19] 2040 for the first commercial scale one seems pretty far out and it seems like a pretty high price to pay for the technology decisions that you've made about the potential plume or whatever it was or the long fueling cycle. Why not build something that could be built in just three or four years and just get something up and running and sacrifice maybe some of your initial criteria, not have it last 20 years, but have it refuel every two years. I mean, normal plants refuel every two weeks. So like, why not lean up on some of your initial criteria just to get a product out the door faster?

Mikal Bøe [00:34:53] Well, I mean, you know, that's the beauty of doing it this way. I mean, we're all contributing towards, if you like, a sort of an ultimate solution, we think, for a sustainable energy system. But each one of these components can be used in many different ways. So that floating power plant that we're designing, it's not designed specifically for this technology, but it's designed with that technology in mind. So you could potentially put a BWR or a high temperature gas reactor or whatever you wanted on this. I mean, that's really up to the operators.

Bret Kugelmass [00:35:25] But why not make that the original plant? Since your company's primary IP is not the reactor core and you've got a business to run, right? And you've got this grand vision about, you know, decarbonizing global transportation, energy, which I love. I think that's just an amazing vision to work towards. So like, kudos to you and your team, but why not just take whatever the most off the shelf reactor is right now, whatever the Russians are doing with their icebreakers, the KLT 40S or whatever it is.... Why not just start with that, you know, get them to build you... Or not the Russians, but someone who can build whatever they built for the KLT, you know, hire Westinghouse, hire GE, hire Babcock and Wilcox, BWXC, sorry, hire someone who can just make the simplest... Hire the Argentineans who have an SMR, you know, it's like... and then just put that on some sort of metal skirt platform that you're talking about and just get something going, you know, get the first ten, you know, up and running in the next three or four years and just put them in not every application, but an application that works.

Mikal Bøe [00:36:31] That could well happen, Bret. That could well happen. You know, look, I think we have to approach the way that we build a business in this area. No one's ever done this before. So we have to approach the way we build a business in this, taking pretty much everything into account. And I've got a fondness for working backwards. Now, our ultimate aim here is if we can do this, is that we can get reactors out as propulsion units on large ships. So the... back to the propulsion part of this, you know, out of the 100,000 ships that we're talking about, about 7,000 of them consume 50% of all the fuels in the world. So, you're not talking about that many. It's not a very large portion of the fleet that would basically cut emissions in half and substantially change the competitiveness of our industry. I think if we work, you know, sort of one step forward at the time in whatever is the easiest way and whatever the easiest win is for each step that we take and we move forward in that way we'll end up going down routes that and avenues that are not going to get us to the target. I like to think of the big prize here which is that new, exciting, never done before technology solving these massive problems that we have in our shipping industry and the loss of other industries as well. And then rather think backwards from that. So if we then through those steps start going forwards again and said, well, "What can we use with each... What can we do with each one of these component parts?" Small power stations that are built in shipyards, large power stations, medium power stations, whatever, other floating concepts, all of that can be used for different technologies with different vendors, with different jurisdictions, etcetera, etcetera. But absolutely. But I think the way to get there is not to pick one and go for it, because we end up going down this cul de sac of developing that system. And that's it. That's how this industry needs to work. You know, you find a solution, you go for it. That's it. That's the direction you go. We've got our eyes on a big prize here, which could be a very long term. It could be something that we achieved long after I've gone.

Bret Kugelmass [00:38:44] But you said it out loud first, not me. But doesn't that scare investors? Doesn't that scare employees? Like, how do you create the momentum to sustain your company and raise the capital when the first product is going to be almost 20... Like the first commercial product will be almost 20 years from now. Like, I guess that's the... I mean, once again, I can't tell you how happy I am there are people like you in the world that are, you know, trying to take, you know, bite off these, like, huge projects and really just important problems. But it just makes me so nervous any time someone in the nuclear industry is willing to wait ten years to see their product come to market, because to me, ten years might as well be never, because, yes, you might be trading off some risks, but you're taking on just like the every day, you know, capitalization of your company risks and motivation of the employees risks. How do you deal with that?

Mikal Bøe [00:39:43] So it's interesting, you know, because when you think of investors in companies like ours and yours and other companies out there, you tend to think of venture capitalists, you tend to think of the sort of professional investors that are looking for a short term return. We have never spoken to a venture capital firm. We don't have any venture capital investors in our company. Our company is invested in by those that effectively will form the order book in the future. So this is the shipping industry. We've got large household names from the shipping industry, shipbuilding industry, big industrial corporations that make their living off the shipping industry, investing in us because they have a different outlook on these things. They don't think about the return over the next three or four or five years. They think in terms of... well, they obviously do... But, you know, in terms of when they're investing in us, they think about, you know, the next step beyond that. I mean, let me give you an example. So, the vast majority of all shipping companies in the world are family owned companies, and they passed from generation to generation in an extremely slow manner. Some person started this company 100 years ago. It's been passed to the son or the daughter, and it's going to continue happening for generations. And when the handover happens... it comes with a brief job description. And that job description has just two items on it. And the first one is, don't lose the money. And the second one is, make sure that by the time it's your turn to hand over the reins of this empire, that we're future ready. So make sure that you've gotten into the emerging technologies and emerging markets that we need to be able to be in so that, you know, in 20, 30, 40 years time when this company passes over to the next generation, you know, we can do this. That long term thinking, that extreme conservatism that so many people are afraid of is actually a fantastic benefit to firms like us because, you know, we've got these, you know, billionaire families that are saying, look, we understand this is going to be the solution, because what else is it going to be? Is somebody going to come up with some magic thing that's going to... that's going to drive this forward... Transportation, ocean transportation, global trade? It's not going to go away. It's going to continue to grow. And it's going to be an extremely important part of the global economy. And these guys are the guys who sell it. So I think that's... we approach that differently and that works really well. I mean, we just literally closed, you know, the third round of funding now... record amount of time, record short amount of time, I should say. Sorry. And we brought in some unbelievably large cap companies into our entire company.

Bret Kugelmass [00:42:36] And how much did you raise and how much do you need to raise?

Mikal Bøe [00:42:39] We raised 100 million.

Bret Kugelmass [00:42:40] We raise 100 million...?

Mikal Bøe [00:42:41] In this last round.

Bret Kugelmass [00:42:43] Great. And what does that 100 million get you to? What's the next milestone?

Mikal Bøe [00:42:47] So that, I think, gets us to the back end of this molten chloride reactor experiment that, you know, we're in the DOE program with TerraPower and Southern Company. It enables us to stand up to all of the obligations that we have to fund our part of that and to continue to expand our system around it. And then obviously, the studies on manufacturability, the investments in the kind of teams and engineering capabilities that we need to be able to create these designs, to bring these designs forward, to start doing testing on some of these designs, start doing some of that maritime regulatory work that's required to do this, that will.... That's all fed by this. It's certainly not the end of it. But, you know, I'm very confident having being able to do this. You know, we're a four year old company, right. You know, and we've gone from... We've gone from what was effectively a, you know, a crazy idea on an airplane to where we are today. And we just raised $100 million. And I think we can continue to do that because the spread of the investors in this round is not like somebody has come in and put in 90 of the 100. I mean, there's a lot of big companies who come in and, you know, taking a chunk of it with the idea that they would come in and follow that money and support us as we reach milestones, as we develop this business.

Bret Kugelmass [00:44:08] And so tell me just a little bit more... with a little bit more granularity that $100 million, what are you conducting physical experiments? Are you funding licensing exercises? How do you spend that money to move forward? Head count? Where does it all go?

Mikal Bøe [00:44:22] Very large part of it, of course, goes into our cost share of the reactor development program.

Bret Kugelmass [00:44:29] And... Break that out for me. So you put money into this consortium with TerraPower and Southern and you own some part of the IP that comes out of it. Is that the idea?

Mikal Bøe [00:44:41] So the idea is that we share the ownership of the technology once it's built...

Bret Kugelmass [00:44:46] So you have a perpetual license to use it?

Mikal Bøe [00:44:48] Yeah.

Bret Kugelmass [00:44:49] Can you also re-license that technology?

Mikal Bøe [00:44:53] No, we would be a partner in, you know, the joint venture that would sit around this technology and that joint venture would be responsible for licensing. So we would probably be a, you know...

Bret Kugelmass [00:45:05] But that joint venture owns IP as well, it's not just a project entity to build something?

Mikal Bøe [00:45:14] Correct.

Bret Kugelmass [00:45:14] Okay, great.

Mikal Bøe [00:45:14] So a large portion of the money goes into our portion of the cost share and developing that technology. And then it's... and then there's sort of two big parts that come on the outside of that, which is really on the Marine side. One of them is that engineer... engineering and designing that we do. We have an in-house naval architecture studio that works with, you know, the shipyards that we have as shareholders and others, you know, to develop the designs of various floating solutions from very small to very large and everything in between and all of the component parts of that. Then there's a lot of engineering that goes in behind that. That's engineering design, a lot of it's testing, a lot of it's... It's the kinds of things that we do at this early stage. We haven't built anything yet that floats. And then the second part of it is really the regulatory side, because licensing and and regulation on the nuclear side, of course, we leave to the team. I mean, we've got Southern Company on our team there. You know, can't think of anyone better at doing that. And we certainly wouldn't want to get involved in that process within NRC, etc.. But on the maritime side, you know, we've got the US as a flag state, we've got the UK as a flag state, we've got Japan as a flag state. These are all members of the International Maritime Organization and at the International Energy Agency in Vienna there's collaboration between the IAEA and the IMO on what happens in the floating domain. There's many people talking about floating, but, you know, we're actually, you know, building... designing solutions for this. So making sure that we can support those... the agencies of those member states to be able to drive the right kind of rule changes and modernization of existing rules. I mean, there are rules that have been in place since the 1970s for floating, but they're kind of old, you know, they're a little out of date now. They don't really reference all the... all the latest rules and regulations in the IAEA and in the IMO and anywhere else for that matter. So we support them. We work through NGOs here and in Europe to make sure that we can support all the right kind of documentation, data and everything else that gets behind making sure that we have appropriate rules by the time we get to build these. And you know, my hope and aspiration is that new appropriate versions of these old rules are available for scrutiny at the IMO already in 25... 24, 25.

Bret Kugelmass [00:47:53] And tell me more about the nuclear licensing component. I know that's not going to be your domain, but do you have some estimate as to when that will be complete? So then you can start informing the rest of your business growth?

Mikal Bøe [00:48:04] No, not at this point.

Bret Kugelmass [00:48:06] Okay. Before the end of the decade or not until 2030s, do we think we'll have a nuclear license on that core part?

Mikal Bøe [00:48:12] We'd like to hope that this is a process that's already started. It's a process that, you know, I mean, every regulator that you go and speak to say, "Please come to us first, come to us at the beginning, come and talk to us from the start so we can understand what it is that you're doing." Rather than come towards the end and say, "Look, this is what we've built, can you take a look at it?" So I think that long term process with the primary regulator, which is likely to be here in the United States is something that's... discussions have been going on for some time, and they will continue to evolve into what is effectively a licensing process, but we're not there yet.

Bret Kugelmass [00:48:46] Okay, great. What else should we know about your business?

Mikal Bøe [00:48:51] We are a four year old business and we have set up here in Washington DC. So we're growing our presence in the American market. We have a small office here run by our trusted colleague Tony Houston, who's actually sitting in the room with us, and we're building a team here as we speak. We're going to be opening an office in Tokyo in the summer, probably in June. We'll see. But it's going to be May or June. And those are the three sort of centers that we're going to be working in. So we have a business that's split across marine engineering, naval architecture and regulation, client programs. You know, we've you know, not only are we building technology for this market, but we're also building a market for the technology. This demand from the global shipping industry and ocean transportation is not one that is identified easily. So we've been building, you know, specifically a client program for shipping companies and industrial companies and energy companies to come in and be part of this process. And it's going extremely well. Great.

Mikal Bøe [00:49:55] Yeah.

Bret Kugelmass [00:49:56] And any final words for our audience?

Mikal Bøe [00:49:58] Merry Christmas and a Happy New Year.

Bret Kugelmass [00:49:59] Merry Christmas and Happy New Year. Awesome. Well, thank you so much for coming in, telling us about your very exciting company. And where can people go to find more information, do you have a website or a URL we should share?

Mikal Bøe [00:50:11] Yeah.

Bret Kugelmass [00:50:11]

Mikal Bøe [00:50:12] So yeah, come and talk to us. Always happy to have discussions with anyone. Thank you.

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