"Bret Kugelmass  
We're here today on Titans of Nuclear with Michel Berthelemy who is an old friend from many years ago when we actually got to meet people in person. And actually, you know what, before we even get going, we were talking about the topic of small modular reactors and the financing of economics even back then. You had a great impression on me, which has carried through for hundreds of episodes since. So, it's a real pleasure to have you on the show today.

Michel Berthélemy  
Well, thank you very much, Bret, I'm very happy to be here today. Good to see you again.

Bret Kugelmass  
Yes, absolutely. Okay. So, before we get into the topic at hand, SMR financing and economics and the future of its technology, we'd love to learn about you. Tell me - where'd you grow up and how did you get into the energy sector?

Michel Berthélemy  
Okay, thanks. Well, as you can guess, I'm French. I grew up in the Paris suburb and then went to study economics at university. My father was an economist, so that was a very natural track for me.

Bret Kugelmass  
What did your dad focus on?

Michel Berthélemy  
He focused on development economics, initially for quite a general track, and then I wanted to do energy and climate change economics. So essentially, I started with some interest in climate change and then, you know what happened next is that I somehow ended up by mistake, or by chance, in a nuclear state.

Bret Kugelmass  
I don't think it's so much by chance. I think it has to do with physics and the actual reality of studying climate and seeing where it takes you. And yes, nuclear tends to be the endpoint.

Michel Berthélemy  
It's all about chance, because you might know by now that there are very few economies that really take a hard look at us at nuclear. So, I guess I was lucky enough that I was offered to do a PhD on the economics of nuclear power. I guess this is where the chance element can come into play.

Bret Kugelmass  
And then tell me about that PhD specifically. Were there specific data sets you were looking through? Is the PhD in France the same as a PhD in the US? Do you have a dissertation? Do you have to write papers? How does it all work?

Michel Berthélemy  
It's a bit different. First, the good thing is that it's shorter. We usually have to do it within three years, and otherwise, they kick us out nowadays. But at the same time, it's a bit more challenging. In the US, you will usually have some coursework and then gradually move into your dissertation and in France, we have to jump right into it. One of the challenges, when you look at nuclear power economics - and I'm sure we'll come back to that later - is, sometimes the data are not always very good, especially when you get historical data. And if you try to track back the cost of nuclear power plants in the 60s and 70s, it starts quickly to become a bit challenging and you end up looking at apples and oranges. Those are sort of the things we looked at.

Bret Kugelmass  
Let's double click on that for a second, that apples and oranges. Is it so different because there were different physical implementations that were required? Or is it just different because of things around money? And how people borrowed money and how people spent money at the time? What are the key differences?

Michel Berthélemy  
No, you're seeing that all very generic to the economy, the fact that you had an economy that went through quite a change during this period which started at high inflation in 70s and 80s, comparing $1 in 1960 to 1990. That's a bit tricky, especially for a very specific industry.

Bret Kugelmass  
You're saying it's not as simple as just adjusting for inflation and that there's actually more to it?

Michel Berthélemy  
Yeah, just bit more to it. And then, of course, the other challenge is that the scope of contracts evolve, and some types of contracts are a bit messy and so all of that means that knowing exactly what was the cost of what can be can be changed. Well, we eventually get there.

Bret Kugelmass  
So, you're sorting through some of this data, you're getting your PhD in it. Was there a certain thesis that was cementing in your mind at this time about what the industry looked like and some of the challenges that faced? And, what you were thinking back then, has it changed to what you work on today?

Michel Berthélemy  
No, I think one of the things I've gone through my PhD, and I have a lot of friends that are in academia and have great respect for people in academia, but for topics such as nuclear, at some point, you really need to understand really what industry is. If you're… or looking at it from far away, it's very easy to do things that look good on paper, but you're, in fact, quite far away from reality. And I guess, with this drive, that's what led me to going into a career that was proceeding with this industry and labs worker. Without going through all of my resume, I worked with a French Atomic Energy Commission for a few years and then now with the OECD Nuclear Energy Agency.

Bret Kugelmass  
The French scientific research institute that you're referring to, that's the CEA. Is that right?

Michel Berthélemy  
Yes.

Bret Kugelmass  
And what do they do? Tell me a little bit about what they do? And why hire an economist?

Michel Berthélemy  
That's a good question. In fact, I think, if I compare them to the National Labs, you have some, of course, I am some very good colleagues, some good friends in National Labs, because historically, the French CEA was a bit different, because it had a broader scope to supporting French government in energy planning. That meant that, quite naturally, they quickly put a team of economists that has carried on for a couple of decades now. And that's essentially why we were working. One of the things also specific to CEA - and that the name doesn't relate - is the fact that it works together, nowadays, on both nuclear and other low carbon technologies, so a strong focus on photovoltaic, on batteries, on hydrogen. What was also interesting and exciting was working and looking at integration of different technologies. I guess what was the challenge of such a position is that, you end up as an economist in the world of engineers and you don't speak the same language. You don't see things from the same perspective. And so, quite quickly, the job is, as much as being good as an economist and being good as delivering your work, so that the people that make decisions, who tend to come from engineering background, can relate to it, and it can be useful in terms of orienting R&D decisions in nuclear or zero carbon.

Bret Kugelmass  
Can you give me a specific example, maybe where you might have an insight as an economist that the engineers would not have had, because they look at things totally differently, and then you try to communicate that to them and there's some learning that has to happen?

Michel Berthélemy  
Sure. There's one more generic example, it wasn't specific to CEA. I have colleagues that do cost engineering. They have a spreadsheet and look at the cost and you have the cost of the different components. You essentially end up trying to understand what is the cost of building a nuclear power plant. An economist, what is very important for me is that cost is one thing, prices and costs can differ. And to understand really what the cost of something is, you need to understand what are the incentives, what are the different international, industrial, organizational settings, and really, you really need to have this lens of these economy principles to understand what, at the end, is going to be the economics and the value of given technologies. And not just to the cost engineering, which you need to do, but it won't be enough to really understand the economics of business.

Bret Kugelmass  
Something you just said there really struck me: price is not the same as cost. And I feel like this is a debate that I have with renewables journalists, where they look at a PPA and they seem to say, Well, solar is cheaper on this PPA that I'm looking at here, that's the price. Therefore, that's the only thing that we like. Let's drop all other low carbon technologies. Clearly, there's one contract that shows it's cheaper. And let's just drop everything else, because we've already found our winning low cost, clean energy source. But that's really frustrating, because obviously, that's not how it works. Did you come across that at CEA, when you were looking across the spectrum of technologies? And did you guys ever form a comprehensive paradigm?

Michel Berthélemy  
I come across it on the on the day to day basis, I would almost say. We are trying to get the message across, but we find that this is something, in particular for a number of policymakers, that you keep constantly reminding them of, because otherwise, there is indeed this short term view where something might look very attractive on an individual basis, but if you take a system view, you end up realizing that things are very different. You probably have heard us saying before, from the work we've done over the years, that we need to not only think in terms of the… because that often can come across as very attractive in this PPA, as you mentioned, but we think about the system cost and things can be very different than a technology that might not appear as very competitive on a practical basis, where in a system with different technologies may have different constraints, a physical constraint that, as economists, we're aware of things can be different.

Bret Kugelmass  
Yeah. And when you were working at CEA, are there any tools that you have at your disposal to help in the modeling? What does it look like in terms of tools and technologies that you can use to input data and make calculations? Are there any behind the scenes platforms that you guys can input this data into?

Michel Berthélemy  
Not really, I mean, this is nothing that can break them in-

Bret Kugelmass  
-just spreadsheets, mostly, then probably.

Michel Berthélemy  
Yeah, at the end of the day we talk about expanded spreadsheets. And sometimes having simple models, and the same in nuclear engineering, also has a lot of value. And of course, we need to back it up with a more comprehensive model. This is a long way you can go with some simple spreadsheets.

Bret Kugelmass  
And then so, what prompted the change from CEA to the OECD NEA? What led to that shift in your career?

Michel Berthélemy  
Oh, it was quite a natural transition for me. In part, because some activity at CEA had already been building relationship engagement with the work of NEA, and always had a drive for going more into the policy space, which is very much where NEA sits, providing evidence to member countries. And I think, though, by large in a way, we're very much in a one of the key places that we have that has the global view on this complex issue facing the future of nuclear. I think it's very much true for economics, but it's also true for my colleagues in different fields…

Bret Kugelmass  
The people there - had you just met them at conferences, or had you collaborated on papers with them? How do you - I guess, just to help people understand how people move around within the nuclear sector, can you give us a sense of what that-

Michel Berthélemy  
Sure, basically, I went from one side to the table to the other one. We have a number of expert group, we have working parties, and I was graduating I was involved with them, which essentially because I was interested in work.

Bret Kugelmass  
So these are all people you had worked with and collaborated with before and now are just working on the other side as you say. What specific topics did you have the opportunity to delve deeper into after you transitioned?

Michel Berthélemy  
Well, another topic that's interesting, which is exciting about NEA, we really are a broad view on the economics of nuclear power. We branch from the financing issues, to the cost of large, small reactors, thinking in terms of the future of the nuclear fuel cycle. And, again, I, in particular about my division, we deal with nuclear technology development and economics. So, part of the exciting thing as a job is that you continue doing economics, … and that remain firmly grounded with the reality of the nuclear sector.

Bret Kugelmass  
And how do you do that? How do you ground yourself with the reality of the nuclear sector? Is it just by taking meetings with people in industry? Or do you get access to their cost data somehow? How do you maintain that strong relationship to reality?

Michel Berthélemy  
I mean, of course in a way, …  where we had the cost of things and we have one factory project report we do with the IAEA, where every five years, we ask other countries, but of course, of different technologies. But it's very much a bit like, what we're doing today, it's building relationships with the industry in the sector… So, it's also part of that.

Bret Kugelmass  
Tell me about the different aspects that you focus on. You touched a little bit about them just a second ago, but I'd love to go deeper. I'd love to actually look at, what are some of the financing challenges associated with nuclear? And how does that change as you go smaller?

Michel Berthélemy  
Sure. One of the big reports we published last year as I arrived at NEA was on opportunity for cost reduction for nuclear. It's a big topic in the in the industry, but strangely enough, it's something we are not focused on at NEA for about 20 years. The last report was about the same data was 20 years ago. So, it was long overdue for us to take a deep dive to this issue. It was a very interesting exercise, but it's tad complex, because the more you look at the new cross sector, the more things can become complex quickly. And really, what we did there was try to take a step back and try to build on some of the key drivers into a few key priorities. A key finding from that piece of work is that really there were a lot of things that happened with first-of-a-kind reactors that were very specific to the context, where this project was built. And as much as some of the project has been changes, the good news is that we have actually quite well identified, listened, and that critical case that, if we implement them - and by the way, for both large and small, and we can come back to that later - there is a clear pathway for significant cost reduction for nuclear. For NEA members, that's really, I think one of the key policy issues was policymakers out there, they see the cost of the …  project, and they were getting very worried. There was this huge issue about risk perception for nuclear today, which, often more than cost, is really what is sort of slowing down decisions for the new economy.

Bret Kugelmass  
You're saying, is it the perception of nuclear across many dimensions or the perception of nuclear cost is the problem?

Michel Berthélemy  
The nuclear cost.

Bret Kugelmass  
Yes. Okay. So, the perception of nuclear cost is actually more damaging than the nuclear costs in some respect, in terms of governments offering their support, and I don't even mean financial support, just like endorsing new nuclear development. Is that right?

Michel Berthélemy  
Yes. Yes.

Bret Kugelmass  
That sounds about right. Okay, so I can just fully understand. Your organization, what you do, is you collect this information, both on what's happened historically, what's happening now across the world, offer some suggestions. This information goes to countries, countries themselves, and then the country - and these are the OECD countries-

Michel Berthélemy  
The NEA countries, the members are somewhat different.

Bret Kugelmass  
Okay, so yeah, there's a little bit of, you can be part of the NEA, but not part of the OECD or something.

Michel Berthélemy  
The other way around.

Bret Kugelmass  
Okay, so this information goes to people in the Ministry of Energy or Ministry of Industry or something like that, and then they can inform their decisions. But does any of this information make its way back to industry itself in order to help them figure out what to build and how to build? Or are we assuming they've got that covered from the commercial side and now it's just a matter of making countries, the governments, more open to the advances that industry is bringing forward?

Michel Berthélemy  
That's a very good point. At the NEA, our member countries, or countries that defense. And so, this is all that we serve, first and foremost. But at the same time, I think we all understand that, to do our job well, we need to speak to industry, and they are quite a bit of our work that, indeed, in the policy space, we need to share the results with these folks in industry. So, this clearly, when we do our roadshow with a report, we tend to stop at the different board and that would include engagement with industry, with civil society. And also - and I guess this is the one which was a bit more challenging - sort of breaking a bit of the nuclear circle and trying to bring some of these facts outside the usual suspects.

Bret Kugelmass  
And who needs to hear these outside of the nuclear circle? Is it mostly like financiers? Like people who do project financing for heavy industry or heavy energy projects? Or are there other stakeholders?

Michel Berthélemy  
Yes, yes, some of it is the finance community. There is an energy analyst world and the policy words, which are not in energy policy that are not in charge of nuclear. And sometimes also, within government, you might have an Office of Nuclear Energy, and then you're gonna have all the parts of your big machine, for which it's also useful to engage with them, because it will be part of the decision-making process and usually, this is what we also try.

Bret Kugelmass  
Do you end up capturing a unique perspective on which member countries are taking nuclear more seriously or are more interested, just by the frequency of their communication, or how many people download your reports? Do you have a sense of where nuclear seems more promising across the world?

Michel Berthélemy  
No, I think that's what is also quite interesting with this job is that you have an observation, position and security, how can I say, as a sort of outpost, to sense this movement, this policy shift, also trying to capture a bit some of the weak signals that carry those away some changes in policy direction for some of our countries. And, in fact, I think since joining the NEA a couple of years ago, there are a few things where we start seeing a shift, the number of countries that were sort of delaying decisions for nuclear new builds that are now bringing it back into the preset agenda. Partly because the fight against climate change will become more and more important. And we also see a shift in technology. So, clearly won't surprise you if I say that discussion about small modular reactors are getting more and more momentum within our member countries and, of course, important to keep a close eye.

Bret Kugelmass  
Okay, so that's another question I have for you. Let's say a member country asks you, Hey, should we go SMR? Or should we go traditional reactor? I understand - we can walk through some of the advantages, and especially your report - some very clear advantages of SMRs. But what's the next part of that conversation? When they ask, Hey, we're thinking about bringing nuclear into our energy infrastructure for climate reasons, for energy security reasons. We have this big technology decision to go with. Do we go with the big reactors or do we go SMRs? When they ask you, Okay, you have all this information on SMRs, but how real is it? What do you respond to them?

Michel Berthélemy  
It's a tricky one. I think what we would say is that - we are not like everybody else - we acknowledge the fact that SMRs have seen an earlier stage of development. There are a bit further back in the innovation pipeline. But what we can see is there is a trend and there are concrete projects, and service investment are being made in these technologies. One thing we can say also is that a number of SMR vendors are also approaching the licensing and deployment strategy in a way which is making sure that some of the lessons are being done from the less successful project I was mentioning before. I know that things, at the end of the day, everyone has to make their own call and judgment, but I think bringing a summary of this key facts then, hopefully, helps policymakers make a decision.

Bret Kugelmass  
And what's the timeline that we're looking at? Are there any member countries that say, We want nuclear technology, but we want it now. The other energy technologies are saying we can deliver 2-gigawatt scale wind farm within three years if we want. Nuclear keeps telling us we have to spend two years siting, then two years financing, then two years procurement, then five years construction. What about that time factor? Is anyone promising, Hey, if you ""Country A"" ordered it and were serious about it, we could deliver it in the next three years.

Michel Berthélemy  
Well, that doesn't happen very often. And what I can say is I think we all, most of us are familiar with the IAEA Milestones Approach for developing nuclear infrastructure projects. And if anyone is coming to me with a plan to build a nuclear power plant in two years, I would just suggest that they make sure that they are understood in order of the Milestones and of what was planned. And I think, also the point is understanding that when you build nuclear, you need to think about it like an infrastructure project and something that is going to bring decade-long benefits for your country and you have to approach it with that view, and I think, also those that are serious about nuclear, eventually, what am I doing?

Bret Kugelmass  
So, that's for newcomer countries. What's to stop an existing nuclear country, let's say Romania or something, from just saying, Hey, listen, we know nuclear, we've got this, we've had nuclear for a while, we know how to run it. I think they even have heavy water, so they get that. They get a lot of interest, they understand it. What's to stop them from saying, Hey, show us how we can do this in three years, just like any other heavy industrial facility. Do you think it's possible for an existing nuclear country?

Michel Berthélemy  
Probably not. The question is, how can you speed things up a little bit? Because in particular, look at how much nuclear will be required for us to be on track with our climate objectives. But one of the key things that we see is that we're going to ramp up nuclear. Clearly, thinking about timelines, which allow us to deploy nuclear faster is not something we will go against, but at the same time, as I just said, at the end of the day, you need to go back to IAEA Milestones Approach and, even for a country that has existing nuclear, licensing takes time. Preparatory work for sites takes time and there's no real shortcut. Often, if you try to take shortcuts, you end up having much more delays later, down the road.

Bret Kugelmass  
Out of the key economic drivers that you guys identified for small modular reactors - I'm going to list off a few - I was hoping that you could maybe tell me which one you think is the most important. Or let's say that your models are more most sensitive to, let's say. So, design simplification, standardization, modularization, and factory-based construction - out of those three, which do you think is the most important?

Michel Berthélemy  
One is parts of making the report is that they are all interlinked, starting by not answering your question-

Bret Kugelmass  
-classic economist.

Michel Berthélemy  
It makes the point that you need to look at this holistically. And part of the partnership with SMRs is combining these different drivers that together can have a significant impact. Now, having said that, I'll try to answer your question a bit more specifically. I mean, design simplification is one that can really go a long way, because probably this is where all the ripple effects on the all the drivers starts. So, we are having an integrated design, smaller, different safety case. This is one that allows to fully unlock the benefits of this as well.

Bret Kugelmass  
Yeah, I tend to think you're right. We have an expression in engineering called ""keep it simple, stupid"" and I bring that up non-stop. I mean, having actually- I think anyone who has actually built things in the past, it's one thing to do things on paper. When you actually build things at the end of the day, your overarching driver in terms of how much things will cost, how long it will take, it's just simplification.

Michel Berthélemy  
This is a marginal statement point, keep it simple and don't change it. One of the things you see that's an issue about engineering and changes to a structure. And this is something that could happen to SMRs very much, so as to be aware of it.

Bret Kugelmass  
Yeah, good luck telling any engineer that ever. You need like a whip and chains to prevent engineers from making changes to their design up until the last minute. Other value props of the SMRs I'd like to touch upon when it comes to the financing, time to market, systems cost benefits. Could you maybe just share some some thoughts there, as well?

Michel Berthélemy  
Yes. Time to market, I think is an interesting one, which we rarely discuss. But you were talking to me earlier about countries that may be eager. They want nuclear, but they want it in five years, not in 15 years. And I think, eventually, once you have it pass the demonstration stage, SMR some extent for country that have some nuclear structure is one technology that could accelerate this time to market and for investors that have to make decisions, that really can change. Just the fact that we'll look at nuclear precisely, or otherwise…

Bret Kugelmass  
Yeah, that's something I found too, when talking to, we have this other podcast where we talk mostly - called the Energy Impact - where we talk mostly to just project finance people in general, and this is outside, it's in the energy sector, but outside of nuclear, just to try to get a more well-rounded perspective. And that's something that I think is important about what you just said, that them even being willing to have the conversation depends on a certain expectation about when this project is going to be. And then there are other things that depend on having some clarity around the financing. So, it becomes this feedback cycle where you have to have a real project you're talking about, and a realistic times timescale to start putting the pieces together that enable the project to be built. That seems to me like another, there's a catch-22 of the nuclear industry that they found themselves caught in with these 10-year development horizons. It's one thing to make the model work out on paper where you can actually pay for it for 10 years, but then there's that human element of like, who's going to seriously start working on something that's 10 years out?

Michel Berthélemy  
Yeah, I mean, don't get me wrong. You have countries that still have long-term planning and are able to make the decisions, but there are a lot of parts of the electricity markets that just operate in a very different way these days, and that's important. You have to bring a product that meets what the market needs and wants, and clearly the target market is one of the key features that has really changed the way some utilities consider a new category.

Bret Kugelmass  
Yeah, especially if we're talking about selling direct to industry. Have you looked at that at all about how that changes, how it works both ways? How SMRs change the conversation about nuclear selling to industry, and also about how selling to industry changes the considerations of SMRs?

Michel Berthélemy  
Are you asking about nuclear heat?

Bret Kugelmass  
It could be heat, or energy direct to industry.

Michel Berthélemy  
Oh direct, right. I think that the point about nuclear heat - let's start with nuclear and industrial heat application. I'm an economist, but I guess being stuck with nuclear for so long, you end up being interested in the history of the industry. You probably know as much as me, if not better, is that you know, the conversation about industrial heat from nuclear power plant has been going on for quite a few decades. So, this is nothing new. But at the same time, we need to come to terms with that has not always been professional. I think some of the hopes, a few decades away, did not materialize. Now, is this going to change significantly with SMRs? I think it could, in some parts of the world. There are a number of countries who are starting to have much more serious conversations about this. In particular, some industries for which you operate, guys would be in a capacity manager to see 100 megawatt, and you know that you have carbon pricing coming around the corner, and you're gonna make decisions in the next 5, 10 years, but eventually shifting to low carbon technology, and then with SMRs, that can start this conversation. At the same time, I think one thing we need to be careful about, and I will try to go SMR and Akiko is it's a very different business to be in the business of selling heat, and particularly if you're boss, the business of selling heat and electricity, and really finding the right contractual framework to organize that with parties that have different expectations, different needs. Often, it has been quite a complex issue. And so, it's not only the technology is an only the sort of short-term demand need, but is also finding contractual arrangement that can make it an interesting, attractive proposition for these industrial uses.

Bret Kugelmass  
Within the OECD countries, is there a large amount of diversity in thought about how they think about nuclear and how they want to establish nuclear moving forward? Or are the OECD countries generally on the same page? Here are the IAEA guidelines. Here's how we think about safety. Here's how we think about the potential of different reactor types. Or are there some that are like, No, the US is doing it all wrong, and we're doing it better. Or others that are like, No, Argentina is doing it all wrong, and we're doing it better. Are the OECD countries mostly aligned in terms of like thinking and process on nuclear?

Michel Berthélemy  
Here, my answer will be is that, since one year to get any member countries membership being slightly different. This is a rich convergence. And that's one of the key reasons why we're here is to build consensus and political endurance across the country. Now, having said that, anyone around will know that there are very different perspectives on nuclear. Some of my members never had nuclear, some had nuclear in the past and are fading out. So, we know we really have a big diversity regarding the use of nuclear, but the important thing is that doesn't stop us from doing the work we do and, at the end of the day, what we bring forward is evidence and it's independence, where we hope that it is viable for all member countries. Whether they have or don't have nuclear.

Bret Kugelmass  
Okay, that was part one of a part two of a two-part question. You ready? So, now I want to hear, you're saying, okay, the NEA helps reach consensus for these countries. What about the other countries that aren't part of the OECD? I'm assuming Russia and China are not part of the OECD.

Michel Berthélemy  
Russia actually is one of the countries, which is an exemption and why I was making this point. Russia has been a member country since 2015, or 2016.

Bret Kugelmass  
Okay. All right. So, Russia is part of the crew. What about China? China stands apart, I'm sure, right?

Michel Berthélemy  
Yes, I think it's fair to say.

Bret Kugelmass  
And I guess what I'm asking about them, is there anything that they're doing differently that we can learn from them? Or that they can learn from us in terms of their approach? I mean, I know they're building a lot. That's one thing that's interesting. Another thing is they've got a big diversity of reactors. They've even got small modular reactors, kind of, like on ships and experimental stuff. How do we look at China and think about maybe we should be doing more aggressively or a little bit better? Is it a race? How do you think about the China show?

Michel Berthélemy  
I'm going to say, which will not be in the video, it's a bit sensitive, for NEA to discuss China, in part because as you pointed towards, there are some sensitivities with some of our members. Now, going back to answer your questions, if you give me a couple of seconds to think about a diplomatic answer. What can I say about China?

Bret Kugelmass  
And we can skip it if it's too sensitive. We're not looking to get anyone in trouble here.

Michel Berthélemy  
Yeah, just skip it.

Bret Kugelmass  
That's fine. I want to talk about licensing in general. And see how licensing may impact the costs of plants. One thing that I've found that is very frustrating for me, kind of looking at this whole thing on the outside and getting to talk with vendors and getting to talk with current regulators, former regulators, everyone's like - even though it maybe doesn't get brought up that much - everyone's pretty frustrated with the licensing and the regulations. As I see it, the vendors are frustrated that it costs too much and takes too long. Even the regulators are frustrated that they can't perform faster and cheaper. I mean, how many times do we hear transformation? They know they want to change, it's hard to blame them, but they know they want to change. There must be some structural issues there that are hard to get past. It seems that it drives up cost and uncertainty which might scare away financiers as well. And then, okay, so sorry, I'll get to a point I promise. SMRs. A lot of regulators say that they've got this rated risk approach, where it has, how I interpret that, similar to aviation, whereas if it's like literally a smaller aircraft, or there are less people on board, they literally have a different set of requirements, than the big 747s, if you're just a two-person Cessna, and you've got your own plane, there are two different risk envelopes. Two different ways to regulate. While the nuclear industry says that they've got rated risk, quote, unquote, it seems that, at the end of the day, no matter what it's still costs you like $500 million to get a license. What's going on there, and how do we change that?

Michel Berthélemy  
Okay, this conversation in North America regarding the licensing process, and the cost associated with that, maybe it's not present in all the NEA members. But for what concerns North America, clearly we see that this law of, we often refer to them as startup, they're not quite startups anymore. It is one moving closer, closer to licensing and it's clear that the licensing costs can be a big, big hurdle that can stop the effort to move towards licensing. Having said that, we very much respect the independence of your authority. I don't think it's necessary for NEA to take a position on that. What I can say however, is - again, going back to the report I was telling you about some time ago - when we look at safety, there is indeed this belief that the plant being more safe means the plants are going to be more expensive. And I think at some point we really need to break this ID and find really great mods that have to find winning solutions, where they are more safe and also cheaper. And also, to some extent that, as much as it's for the industry that has to do at the cost, at some point, the sector authority is aware of the implication on the decision of cost, and is willing to work or collaborate, I should say, with industry to find where the solution can be found to reduce costs. And in fact, in this very report, we had an interesting case study that is not always, well normally was about a project that hasn't been successful for construction, but were quite successful in this field that was with our project in the UK with supporting reactors. And they really had this extensive process that lasted maybe 12, 18 months, where they collaborated with ONR and they managed to identify quite significant cost reductions by going to engage. And one of the key findings from that is, maybe up to 10 rules, but at the end of the day, having leadership from both sides of the table to say, Let's do that, and let's collaborate on this, we respect the central authority's independent. But we don't want to be driving your cost at the same time and identifying the winning solution. We see it can be done, and so my hope is that we will learn and that moving forward, we can get it correct.

Bret Kugelmass  
Yeah, so you're saying we have to learn from our mistakes, you're saying essentially.

Michel Berthélemy  
What I'm saying is, we can learn from projects that face difficulties, but also good lessons learned from project that haven't and have been built. And this is a project that hasn't been successful on that form, but it was very successful in terms of reinventing or defining new ways to offer industry and regulators to work.

Bret Kugelmass  
I'm gonna switch gears for a second. Does the NEA take any of the information and data that we've collected about how important nuclear energy is for climate and find a way to get that into the broader, like the IPCC studies, for instance. Is there any work done to make sure that when these extremely broadly read reports model the contributions of nuclear that they've got their best information in there?

Michel Berthélemy  
Well, if, like me, you read bits of the IPCC report, but not 1,000 pages, you will find that typically some of our reports find a way into the IPCC as a source of independent evidence for this field that supports natural, that is the case. At the same time, and I think, this probably another conversation that would be interesting to have is the fact that identifying what is the potential for nuclear towards climate objectives is a very complex field, where a lot of it is not going to be what's coming out of the model, but it's also going to be what goes into the mind of the modeler. What are his or her beliefs towards nuclear? And so, there are a lot of factors that come into play that can really drive some of these scenarios towards decarbonisation. And I think one of the things, it's fair to say, is the rule of the modeling was very cautious to make sure that sometimes make sure that you don't have too optimistic views about nuclear, whereas when it comes to other technology, they're quite happy to take a moonshot and say, Thank you, it's going to grow exponentially.

Bret Kugelmass  
Yeah, what's up with that? It drives me crazy how, whenever I see nuclear's contributions in any of these reports, it's like the most grounded, pessimistic cautious conservative data that I've ever seen. And I see it, I see all the data. And then when it's the renewables, it's the most optimistic, and they'll even be like, oh, we're assuming some fantasy technology will be developed that, helps storage or something. How is this possible?

Michel Berthélemy  
I think the other day, we come across a report and I think you need that something that is ""yet to be invented technology"" and they are happy not to have nuclear and to have yet-to-be-invented technologies. And then the problem is, obviously, when the thing comes out, it ends up being distorting all of the ways. And that means, this is really one of the issues, because then the policymakers of course, look at this body of work. That very much influences views you can have on nuclear power and other technologies, so I think, for us, that we clearly see it as a key agenda item. I think this is one where NEA has a contribution to make.

Bret Kugelmass  
I'm glad that that's where you guys can help out, because it just drives me crazy. It's hard to have an argument with even like very intelligent people that maybe you don't have an hour, two hours of their time to explain some of the shortcomings. Going back to our early conversation: systems costs. If I don't have two hours to explain the systems cost, and someone just shows me the headline, they don't even show me the real paper. They just show me a journalist who wrote something about the paper, and they don't even read that article, they just show me the headline of that article. And then it's like, well, how do you counteract that message, when they're like, Oh, we'll be fine, clearly renewables just have it underway. I don't know, I'm just always frustrated by that.

Michel Berthélemy  
One of the things is that, nuclear is a very serious industry, but by nature the nuclear industry is conservative, I would say. But when it comes to informing policymakers in terms of decisions they have to make when it comes to climate change, we clearly see the gap between a view that is conservative with respect to nuclear, but sometimes it's very optimistic, not to say more about new technologies, including yet-to-be-invented technologies. Sometimes you can find it offensive, because the model of bioenergy or whatever you want, and you don't really know what's behind it, and that's always a big mistake.

Bret Kugelmass  
As we wrap up here today, maybe you can just kind of leave us with, if you were to look forward 15 years from now, and everyone read your papers and took them to heart and implemented them across government policy, across industry, what does the world look like?

Michel Berthélemy  
Well, I think it would be a world where public perception towards nuclear will change a lot? We are clearly not there yet, but we are in a situation where it's very hard to have rational discussion about nuclear. So, I think first and foremost, it will be a world where we'll be able to have rational discussion about nuclear and it will be a word where, probably, it's this issue of system costs and other considerations. When I finally found the ways to policymakers, and you want to have to explain it to them, every time you have, you have to expand, there's a complexity of these issues. It would probably be a world where it goes beyond nuclear. It's a world where we put much more focus on infrastructure, on resilience, sustainability, I may say. Really, I think, a positive scenario or likely scenario is probably one that you really need to relate to, to a society that is much more resilient, positive, inclusive, and by the way, these are keys, policy focus areas for OECD. It goes way beyond NEA and it's very much part of the global picture.

Bret Kugelmass  
Michel, thank you so much for joining us on Titans of Nuclear.

Michel Berthélemy  
Thank you. And I hope to see you again too."