April 14, 2022

Ep 356: His Excellency Mohamed Al Hammadi - Managing Director and Chief Executive Officer, Emirates Nuclear Energy Corporation

CEO, Managing Director
Emirates Nuclear Energy Corporation
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Show notes

Disclaimer [00:01:02] When this episode was recorded, Barakah Unit 2 was not yet operational as was mentioned in the episode. It has since been declared commercially operational. Enjoy the show.

Bret Kugelmass [00:01:12] So we are here today on Titans of Nuclear with His Excellency Mohamed Al Hammadi, who is the CEO of the Emirates Nuclear Energy Corporation. Welcome to our show.

Mohamed Al Hammadi [00:01:23] Thank you for having me.

Bret Kugelmass [00:01:25] Before we get into some of the amazing accomplishments that we've seen in your country, and I mean, for the nuclear world, this is the best, getting all these reactors up and running. Before we get to that, we'd love to just learn a little bit about you as an individual. Maybe you could tell us where you were born and how you got interested in the sector.

Mohamed Al Hammadi [00:01:45] I was born in Abu Dhabi, and I did my schooling at the University of Florida. I did my bachelor's in Electrical Engineering at the same school. I did also a Master's in Engineering Management. And from there I've worked in the utility sector for over 20 years now, mainly on projects of utility projects.

Bret Kugelmass [00:02:07] And if I may, why engineering out of all of the disciplines in the world.

Mohamed Al Hammadi [00:02:13] Specifically, electrical engineering. Actually, when I was a young kid, I broke my father's radio and I could not fix it. And that was the one of the reasons I got to study. I remember I did my own first rain detector in Abu Dhabi because it doesn't rain much here. It was a nice toy to play with with my nephews. I've taken that device all the way to the university level to an electronics lab to discover it, understand the math and science behind it. And from there, I've now enjoyed the engineering sector. When I was almost about to graduate I came for an internship back home and worked in the oil and gas sector over summertime. Then I discovered that I would do something other than the operation and maintenance of oil and gas facilities. I would rather go do something on projects, more on the engineering side. And that's when I did my Master's Degree in Engineering Management, which is half engineering, half management of technological projects. If you asked me if I expected to land and run a nuclear project, no.

Bret Kugelmass [00:03:19] Well, tell me about some of that early experience, that exposure to the utility sector. What were some of the early jobs that you had, some of the early challenges that you had to overcome?

Mohamed Al Hammadi [00:03:30] Yeah, actually, I was lucky. When I joined, the sector in Abu Dhabi was completely restructured. So that was 1998; I joined them in 1999 where the whole sector was restructured so there was clarity of roles on responsibility, on the generation, transmission, distribution. And that was the early part of it. So having a master's degree helped me understand the strategic reasons behind it and the economics and all that, so I was able to engage. But I was unsatisfied, actually. I wanted to be an engineer. So I went to the field. I used to do cable jointing, I used to work in commissioning of substations...

Bret Kugelmass [00:04:06] Okay, so real physical work, not just engineering, but like you're in the field actually doing the applied engineering.

Mohamed Al Hammadi [00:04:13] Yep, yep, yep. And I actually enjoyed that because to be able to understand the challenges of the operation and maintenance and the fields of the projects, it gives you an edge, it gives you an understanding. When you ask somebody to do a project, a contractor, or at least you can know the specifics on what they will do and what are the challenges, what's difficult, and what's easy to do. So you cannot move a big 50 ton crate around; theoretically I will do that if I didn't do the field experience. I did spend, by the way, almost a year plus in the field, testing, commissioning. I remember we used to do cable shutdowns in the middle of the night. Our shifts are from 12:00 in the evening until like 6:00 in the morning just to overcome the people that were there sleeping, so we don't have any disruption. And I enjoyed that. It was a nice experience.

Bret Kugelmass [00:05:05] Tell me about how engineering best practices are translated around the world. When it comes to the facilities that you're working on, are these... And I'm not saying the nuclear ones yet, I'm saying earlier in your career, are these still international projects where construction and engineering teams internationally come together, or is there a domestic industry that specializes in this as well?

Mohamed Al Hammadi [00:05:29] So on the higher side of voltage, which is the higher side of the grid, that's yes, we have international companies from Japan, Germany, the U.S. and other parts of the world who work on the engineering and also contractors who come and do the job, because these are very specialized jobs when it comes to higher voltage work. So I got that exposure; I really enjoyed the early parts of my career, as I said. I remember we did testing of the commissioning of power plants not far away from the Barakah, the nuclear power plant. I remember we did that commissioning, it took us six weeks. One of the young German engineers who was working from Germany came to Abu Dhabi to spend the time. It was good to learn from them, practical engineering. And also I was able to apply my theoretical knowledge from engineering. So it was a good much to learn and to grow. And I'm very privileged to have that opportunity. And now I don't call an engineer an engineer until they've been to the fields. They have to earn their scars on their back.

Bret Kugelmass [00:06:27] Yeah, yeah, absolutely. Okay, so as time went on, how did your role evolve? What types of projects did you start getting involved in that led all the way up to Barakah?

Mohamed Al Hammadi [00:06:39] So initially I was given one of the remote projects, like in the middle of the desert, to go and do a connection between villages of overhead lines and cabling and substations and all that. I was involved in the design part of it, the scoping of it, the tendering of it, the construction of it, and the testing, commissioning, all the way to handover. So that gave me an exposure of being able to manage a project with a small team. Also international contractors, I worked with them in an a very complex, technical field. And being in the field, that was always like the build up of my career. Then I was shifted to being given more challenging, more difficult jobs.

Mohamed Al Hammadi [00:07:21] I remember once we had to build ten substations, distribution transmission substations across the Emirate of Abu Dhabi. Ten of them in one go. And I remember that company, the contractor was Hyundai. And the Koreans came to the UAE and did a complex project, being involved to coordinate and manage and view engineering documents and all that. And it was a build up in my career. And then I was given actually the running of the departments of Water and Electricity, also projects. I was promoted to run that team. Also, I was younger at that time. I had 60 engineers reporting to me with the two departments, Water and Electricity. So I was responsible for roughly around 300 projects with a couple of billions to be spent to managed. So it became from project management, program management to portfolio management, so managing a portfolio of projects. And that was, you know, my master's degree kind of specialty, but I wanted to really apply that in my career.

Bret Kugelmass [00:08:27] How was that? When you first had to take on a portfolio with hundreds of projects, how did you have to change as an individual in terms of how you thought about resources or risks or how you even spend your own time and what you focus on?

Mohamed Al Hammadi [00:08:43] I got interested on the generation side and actually in the business development case. I joined a company called Mubadala, one of the big investment companies here in the UAE. And there I joined them to develop business cases to build nuclear power plants, gas plants and other energy sources. They got me a nice exposure in the private sector on the business development, the financial side. Then after that I got a job at the federal government to come and run a utility with generation, transmission, distribution, revenue collection of around 250,000 customers. And that was also a big challenge for me. But that was part of the learning in that process. And at that job, actually, that was in 2006, we were looking at the nuclear... Not just specifically nuclear, we were looking at the energy mix and what can we do to diversify the energy mix for the country and create like a diversified portfolio of energy running... generate electricity based on gas, on renewable. And we were looking at nuclear; is it possible, is it worth investing in? And now I'm in this chair. I've been running this job for almost 12 years and we have our power plant operation now, the first one.

Bret Kugelmass [00:10:03] Well, you skipped over a little part there.

Mohamed Al Hammadi [00:10:06] Yes, go ahead.

Bret Kugelmass [00:10:08] I'd love to hear if you can take me back to the time... You already answered the question I was going to ask, which is, how did you get exposed to nuclear? But can you now take me back to that moment where the country is actually considering and debating and maybe give me both sides of the argument? And how was it decided that nuclear would become an essential part of the power mix?

Mohamed Al Hammadi [00:10:29] So we were actually technology agnostic, so we didn't have any technology, specifically. These are the economics, these are the terms, you know, we need something to be clean in the mix, we need something that is economically viable and will provide secure and reliable sources of electricity for decades to come. And that's actually also, we launched the renewable in that time. The renewable kilowatt hour cost was around 40 cents around that time. Now it's 1.6 cents, which is much cheaper than it used to be. Oil prices were like a $100 dollars a barrel, so it was also on the higher side. And gas also; that was also an issue that we need to diversify and also increase. And the demand of electricity, by the way, at that time... I remember specifically because I used to run a federal government utility, which deals with those dynamics of energy prices and all that. We didn't have enough capacity and we needed to build more plants. We had actually double digit electricity demand. And as of today, electricity demand continues to grow.

Bret Kugelmass [00:11:41] Moving into the future as well, is there more projected growth?

Mohamed Al Hammadi [00:11:45] Actually, in the last decade we had double digits, but now we have a single digit, but still high compared to other countries like Europe, the U.S. and some places it's even minus when it comes to growth. Here we are still growing. Still the demand for electricity is growing. And actually, if you look even globally today, electricity demand by 2050 will increase by 50%. And that's something we'll talk about maybe in a bit. But going to that moment when we selected the nuclear, we actually did a white paper on it. Actually, it's available publicly online. It was published in April 2008, talking about, "This is the electricity demand we need, and this is the thinking. If we build nuclear power plants, we are committed to the high standards of nuclear safety, security and preparation." Those were all the fundamentals of our program. So how do we make electricity in a clean, safe and reliable manner? And nuclear did meet all the checklists for the economics of it, and we decided to build four units.

Bret Kugelmass [00:12:48] It's amazing. And this must have been... I mean, is this the largest infrastructure project in your region? I mean, it's got to be one of the biggest, right?

Mohamed Al Hammadi [00:12:56] In UAE history, yes. This is the biggest industrial project that the government has ever taken.

Bret Kugelmass [00:13:01] So that shows something about people's confidence in you, to have you run this. I mean, that's a pretty incredible honor.

Mohamed Al Hammadi [00:13:09] Yes. I've enjoyed the journey. And today we are 3,000 people strong, by the way, in the program. So I'm not alone. So we have a highly qualified nuclear women and men in the fields. And some of them are certified Senior Reactor Operators who are running the plant as we speak right now, making the power plant run safely at 100% power.

Bret Kugelmass [00:13:30] I mean, it's an incredible success story, once again, not just for your country, but I think for the entire nuclear industry. You guys have proven something, that nuclear can get its momentum back. But were there times along the way in these last 12 years where you thought maybe this project won't be able to finish? Was there any doubt at any point, maybe even due to forces outside of your control?

Mohamed Al Hammadi [00:13:52] No, we didn't have any doubts. I think the government support has been... From the early days of the project, there was a clear policy issued, 2008, as I mentioned, published, actually, by the Minister of Foreign Affairs. And we did follow it through in a very pragmatic, very systematic approach. And we had a lot of support from the international companies, countries. The U.S. also has been a partner in many, many parts of the business. Laws were issued immediately after the policy paper, paving the way for the nuclear program. There was a law establishing the regulator and also enticing that it's illegal to enrich or reprocess uranium in the UAE. So all the commitments were done. The government has signed agreements with countries like the U.S., France and other countries. The IAEA also has been very instrumental in supporting us and developing the program. I remember in the early days, I attended a couple of workshops at the IAEA and what they call the milestone document for developing the nuclear program. It has like 19 areas. We took that, we adopted a road map of the UAE. Going back to my background, running projects, we did translate that to 1,000 plus activities for the next 100 years. And we start with the project managers. It's taken that discipline for us to develop our program.

Bret Kugelmass [00:15:16] That's amazing. Actually, I have two questions. First is, I want to hear, from your perspective, what was the most difficult component of the whole project? Was it the government to government agreements? Was it the engineering? Was it the people management? What was the hardest part?

Mohamed Al Hammadi [00:15:36] Mega projects have multifaceted challenges, and you have to program manage them, portfolio, manage them and project manage them on a day to day basis. So these are at a very high level. So specifically was getting the talent and development of human capital talent, that was also challenging, and will continue for decades to come because you need highly qualified, highly disciplined people who can work on those facilities. And we realized this from our lessons learned from other countries who developed their programs and were very advanced. We went and we checked whomever reach the excellence level. We took it, we learned from them, and we took it and went up a notch from the standards here in the UAE. I remember we developed something very theoretical, like a pipeline people would be put in. They spend a couple of years, they graduate from bachelor's, they go to master's, and then they go to Ph.D. And some of them will go from bachelor's to, even ahead of bachelor, they will go to technical school and be qualified as operators and local operators. I remember we were sitting in a room in 2009 and 2010 imagining senior reactors graduating, that was my dream. And I know we have tens of them now graduating, being given a license by the regulator. And I'm very proud to say one of the young women, female engineers, she took Unit 2 critical, and she is a Certified Shift Manager at Barakah. As I'm speaking about this, there are butterflies in my stomach, with this achievement. If you ask me what is the ultimate achievement? This is the achievement, actually, than the steel and concrete.

Bret Kugelmass [00:17:07] Building the human pipeline.

Mohamed Al Hammadi [00:17:08] Yeah, yeah. I see them now with confidence and the nuclear safety culture and the rigor and threeway communication and the discipline that they have in them. It's amazing to see that happening.

Bret Kugelmass [00:17:21] Everyone's in awe, like everyone is in awe of seeing these units come online. I mean, I joined the nuclear industry just four or five years ago, and I remember hearing, "Oh, they might get finished soon, but we're not sure." You never know until you turn them on. And just to see them come online is just... I mean, everyone around the world is cheering for your success because it shows that it can be done. It can be done everywhere. Tell me more about the selection of the number of units, why you chose four units, and the technology and which country was to contribute which piece of the technology. How did you decide all that?

Mohamed Al Hammadi [00:18:02] Okay, if I may, before I start that, also, I would like to maybe segway again on the human capital. So, imagine the country doesn't have nuclear capabilities or know how and knowledge. To manage nuclear projects, it needs a disciplined rigor also. So I remember, the first was around early 2009, before even awarding the contract to the contractor. So I had my senior team. I hired a couple of nuclear experts from the U.S. and other countries, but I wanted the Emirati guys, my colleagues, myself included, at least understanding nuclear physics before we signed a contract in this industry. I do remember one of the best places to go is MIT. So we spoke to MIT and they organized a course for us to go and join them. And then we spent three weeks in Boston. It was in summer time; we enjoyed the weather. I thought Boston is always like, but it's too cold in wintertime. And we learned the nuclear physics, what's a k factor, how a chain reaction starts, how a reactor works at the early days so we were able to manage and lead with something, the technology that we understood. So we did spend that three weeks and it was really, really worth it. And even the guys who were hired later after that from the oil and gas and other industrial sectors, we made sure they at least spent three weeks understanding the equipment.

Mohamed Al Hammadi [00:19:22] But now we have guys with real degrees, bachelor's and master's degrees in real science. So maybe I'm the older generation in that workforce. Now back to your question, why did we select four units? We did the load demand management and what was the gap? The gap was around like five units plus to build with the double digit growth we had planned. We had a plan by 2020; we'll reach 40 gigawatts and now we are below that. But the four units today will suffice from a from a demand side, a point of view. Why four not two, by the way? That's a very important question. For a new country, a new nation to develop a nuclear program, you need at least four units to satisfy enough revenue and cash flow to support the industry, R&D, human capital development, also the regulator fees and all that. So if we built two it would be an anemic program; building four creates a very healthy program and also brings the kilowatt hour cost to a reasonable cost, and creates enough industry that can be sustainable. We've seen countries who had less than four, had two units, and their program is difficult to sustain and it's difficult to manage. So we are very proud that we made the right choice.

Mohamed Al Hammadi [00:20:40] And again, we always learn from other people, other countries. For example, what's the firewall between the regulator and the utility? And you need to have one. And then that has to be completely separable, and they can't compete and it has to be independent and fully empowered and authorized. This is the case in the UAE now. The regulator reports to the highest authority in the government with no commercial interests. So that gives them the empowerment. That is something the U.S. model has adopted and other countries do not do that. So we've taken that and implemented that in the UAE. There's a lot, a lot I could talk to you about on what we've learned from others and best practices that we've managed to implement. One of the advantages we have here in the UAE, we are used to bringing international companies and multiculturals to make them work on one single site, one single project.

Bret Kugelmass [00:21:29] Yes, I want to hear about that.

Mohamed Al Hammadi [00:21:31] And we have great success. We are able, we are trained to run with multiculturals. As a young kid, we had in our neighborhood people from India, from all over the world. So this is the DNA of the UAE. Our power plant, our company has 50 nationalities. Our country has over 200 nationalities in the UAE, living in peace and enjoying life and working to high standards and producing, you know, very effective people in the country. So on that aspect, we are able to adopt and adapt and excel, I would say, in many sectors. And also the leadership of the nation always prides the nation to be number one in whatever we do, and that's something we take to heart. And the industry actually takes to heart also, because the journey to excellence is an infinite journey, and we have to constantly keep improving and reinventing our procedure, people, processes, programs in a consistent and systematic manner.

Bret Kugelmass [00:22:37] And how did you choose the technology and the vendor?

Mohamed Al Hammadi [00:22:41] So what we did was also very pragmatic. We looked at who are the companies who have the performing power plants to the international standards. We looked to other countries who are able to meet the threshold, the cutoff line of having the technology, the expertise, the operation and it's also transferable to other country. And the bottom line, who delivered in the last five years or ten years of experience? And that was very, very important. Another also very important factor we had is we needed a sister plant too. Whomever built a power plant in the UAE has to build another in their home country, then build in the UAE. And this is a lesson learned also from projects that were happening around that time. And that was also a very wise decision we've made to replicate and be able to adapt to the UAE. The temperature is different than the UAE, and some other parameters...

Bret Kugelmass [00:23:37] The ultimate cooling, your final cooling loop is different is what you're saying.

Mohamed Al Hammadi [00:23:41] Definitely. You have to adapt. Also frequency is different from the country of origin, 50 Hz and 60 Hz, and these can be reengineered.

Bret Kugelmass [00:23:47] Does that trickle down throughout the entire plant? Does that mean every motor has to be on a different frequency throughout the whole plant, or is there somewhere that's an interface between the grid and the rest of the plant equipment?

Mohamed Al Hammadi [00:23:58] We did the whole adaption of the power plant, because you have component, equipment that you need from the market in the future. Not even beside the experience of a plant, you need some equipment that can be available and sourced regionally and locally. So what we did actually, I personally insisted and that was also accepted by my colleague engineers that even if a window is there, don't move it around, because if you move a window, you move a pipe, you move a cable, you move a wall, and it's a cascading effect. So with these things we said, "Okay, if it's there, don't change it. But if it's required because of the engineering requirements, because of temperature, weather, the basic engineering requirements, we have to adapt it." And we've done it in a way that we have, I would say, we have a beautiful plant, very soundly engineered at Barakah, and as of today, running, very, very nicely.

Bret Kugelmass [00:24:52] So the lesson that I'm learning from this is that when it comes to reducing project risk, when copying off of a sister plant or a reference plant, the more important thing to hold constant is the physical configuration rather than the heat and mass balance or your process variables. It's actually, you want to make sure that things are physically in the same place as they've already been built. Is that right?

Mohamed Al Hammadi [00:25:20] Yeah, yeah. Whatever has been designed today has been designed over the last 40 years, and they've been optimized in a way to make this power plant safe and reliable and to the highest standards. And these are Gen III Plus reactors and they are very safe. And that's why we have managed to be able to replicate those reactors here in the UAE. Again, adapting them to the UAE environment, definitely. So that impacts some of the cooling, intake or cooling pumps, condensers, these were upgraded and upscaled to meet the temperature here in the UAE.

Bret Kugelmass [00:25:54] Yes. Tell me about the region as a whole. What makes your country special in that you were able to have the foresight to conceive this project ten years ago and the discipline to hold through in such a steady and process driven manner, and then also the success to see it turn on. Is there something about the UAE that it was perfect for you to become the leader in nuclear technology in the region?

Mohamed Al Hammadi [00:26:23] So I talk specifically on the UAE side. So our leadership is very visionary here in the country and the discipline of getting things done in a systematic approach is part of the DNA of the country. And also, we had the big why, why we are building nuclear power plants. And that has been, and will continue to be, to make economical, safe, reliable electricity. Those were the basic principles for building it. And I said earlier, we were technology agnostic, and these principles will never change, and they will continue to be there. If you look today as the gas prices are fluctuating, if you look at other commodities are fluctuating, if you look at nuclear power plants and you run the economics over 60 years, actually they run steady enough and actually they also run against inflation. Sometimes the tariff over years even comes down because they are capital intensive. And when it comes to operation as payroll and some maintenance jobs and our fuel cost, it is very, very small compared to the bigger investment. And this is something also we've realized and learned from the U.S. plants and other plants. As long as you run them, maintain and properly run them, those assets will provide an abundance of safe, clean, reliable electricity.

Bret Kugelmass [00:27:47] What is the the kilowatt hour price that you guys were targeting and what did you hit now that you see the units come online?

Mohamed Al Hammadi [00:27:54] Based on the financial model we estimated, it was in 2008, 2009 and 2010, we are on. We are on budget, and that's something I'm very proud to say compared to other projects. Our nuclear program also was delivered relatively on time. That's something also we are very, very proud of. So we've hit our marks and I'm very happy to see that. And as you said, these power plants, these assets, once you switch them on, then you can realize the value for money. And we are meeting our ROI and are very happy to be in this and witnessing this reality.

Bret Kugelmass [00:28:30] Amazing. And are there plans to build more now that you've achieved the milestone of actual operation? Does that mean that you can start having a conversation about the next four units?

Mohamed Al Hammadi [00:28:42] If I can take you back ten years ago, we were on this challenge. We're looking at it this like, you know, it's a big job that we have personally, myself, my team, undertaken. Seeing today, we've accomplished it, so the future is brighter. And now we say, "And what's next?" And I will talk about that in a bit. But to your point, specifically, those units now meet our baseload demand and by 2025 we will achieve 25% electricity, once we have four reactors up and running. That will avoid emitting, by the way, 22 million tons of CO2 on an annual basis, by the way. And this is comparing it to 2014 car emissions, now cars emit less carbon, it will be around 3.2 million cars off the road. And we have around 3 million, roughly around 3 million cars in the UAE. So we are offsetting our transportation sector annually by those four reactors. It's amazing, it's amazing. And actually, just to put it also in perspective, for the Emirate of Abu Dhabi, this is going to reduce our carbon emissions per kilowatt gram almost 50% by 2025.

Bret Kugelmass [00:29:54] And does the country already have electric vehicle transition plans in place, and will that increase the total demand of electricity in the country as well?

Mohamed Al Hammadi [00:30:04] If I can take... I have my own theory as a critical engineer, so I enjoy this. It's like, I have nothing to... I think about life and this is what I think about, so. So electrification is happening as I'm sure we are aware. The electricity demand is growing dramatically, globally. We have over around a billion people that don't have electricity today. They need electricity and they will definitely use electricity. If you talk about myself and yourself over the last ten years, our electrical consumption has increased. We have now, I think, a couple of the gadgets that you have now that you didn't have ten years ago. Multiples of them are supercomputers; they consume electricity. There is cloud computing happening; there is a lot of dependence now on the digital world that we are living in and that consumes a lot of electricity. There are a lot of industries also coming up that also need more electrical, specifically, not just combustion engines and just oil and gas. So there is demand, and there is increased electricity. And I do see the future as bright for the industry and there is a future of growth.

Mohamed Al Hammadi [00:31:11] One thing also, by the way, we did not think about. We thought, by the way, you will see in our white paper if we have the time to read it, it talks about the carbon credit down the road. We were actually talking about carbon taxes at that time, 2008. Today the carbon credit is there and green certificates are coming up. ESG is is coming and the private sector, actually, they have the tools in hand now to buy green electricity. And one of the companies that buys all our electricity, that signed our PPA, it put an auction a couple of months ago for our nuclear electricity and also renewable. And I was surprised there was a lot of demand for it. And I was called by steel factory friends. The CEO was calling saying, "How can I buy it?" I went, "I don't sell it. You have to go to the Emirates Water Electricity Company. There is an auction, you could go and buy it from there." And they did buy it. Oil and gas company came and bought roughly 90% of our electricity.

Bret Kugelmass [00:32:05] What are the PPA prices that they're buying it for?

Mohamed Al Hammadi [00:32:09] There's an auction per megawatt. If you buy that megawatt, you get the carbon, you get the green certificates. I don't have the price on me right now, but it has been done as an auction. It's like beyond a tariff that is paid. And they are buying it, those companies are buying it for opportunities. Now, if you've seen the EU now, put nuclear as part of the green taxonomy. Companies, as you know, they want to be part of the 2050 target of zero carbon and that's something that nuclear is one of the key enablers for that.

Bret Kugelmass [00:32:48] And I want to still talk about future growth a little bit more. Okay, so we know that electricity is increasing and now your neighbors can also see the success that you've had. Are people asking you to export electricity, maybe there to neighboring countries as well? Is that possible, that you could build extra plants even in your country and run wires throughout the region? Is that on the table?

Mohamed Al Hammadi [00:33:13] Yeah, for example today, specifically to your question, the four units today, it meets the UAE demand. However, the GCC grid, the Gulf Countries Grid is interconnected. It was connected almost eight years plus ago. And there's an exchange capacity between UAE and Saudi Arabia and the region, it's around 1,000 plus megawatts. So there is room for exchange of power. But the challenge we have is all of us need the electricity in summer and we barely need it for wintertime. But that opens the opportunity for export to Europe, and that's something that is, I know... Europe and also you have the daily time.

Bret Kugelmass [00:33:52] And do your plants do load following at all, or no?

Mohamed Al Hammadi [00:33:56] Currently we build the units for baseload and that's what we need them for, actually, because the UAE grid, we have gas and gas could switch on and off, which is very dynamic and nuclear is coming as the baseload. I wish we had hydro; it doesn't rain much here, but you know nuclear is giving us that baseload comparative to hydro plants.

Bret Kugelmass [00:34:17] I guess what I'm trying to explore... To me, it's so rare and so wonderful to see a country execute on time, on budget, with gigawatt scale facilities, because to me this is part of the vision for what the whole world needs to do. So I'm trying to imagine all of the justifications that you could have to say, "Let's do four more units. Then let's do 12 units." Because your expertise is the most valuable resource I think that we have on the planet right now in the nuclear sector. So I want to see the engine keep turning and turning and turning so it becomes easy for other people to do it around the world by watching exactly what you do and seeing just how much the prices can decline with more and more units. So I guess I'll put it back on you. What would justify building out more units right now?

Mohamed Al Hammadi [00:35:10] Mainly it's all subject to demand of electricity, and that's something which once it's kind of evaluated, and that's what we're going to be doing, and what are the economics moving forward. And as one of the producers of electricity myself, I want to build more, but that's something that will depend on the electricity demand and the growth and the country's demand. And by the way also, one thing we've done going back to the project management, program management, the site we built, the basic infrastructure, intake, discharge pipes under the ground, we designed them to take 3 to 4 more units at the same site as Barakah.

Bret Kugelmass [00:35:51] Amazing, at the same site. Amazing.

Mohamed Al Hammadi [00:35:52] Yeah, yeah. Because we did the math. If we do the earlier infrastructure, we spend like, let's say, $100 million. And for these basic infrastructures, we will save almost a billion doing it after commissioning Unit 1, because once you put the pipeline underground you can't go and dig under them, you have to go around the site. So we did this basic investment. I do also thank the leadership of the government and the board of directors also to allow such kind of investment.

Bret Kugelmass [00:36:23] It's going to be very smart in the future.

Mohamed Al Hammadi [00:36:26] Yep. I agree.

Bret Kugelmass [00:36:27] And that would also make it one of the biggest facilities in the world to produce electricity, anywhere for all types of electricity, if you added more units. It's already one of the biggest, right?

Mohamed Al Hammadi [00:36:37] The four units? No, there are bigger sites or similar sites.

Bret Kugelmass [00:36:40] But if you added three more, it might be the biggest, or no?

Mohamed Al Hammadi [00:36:42] Three? Maybe four. But looking at the current site we have right now and the current demand, I think four for the time being is good enough for us as a baseload. And as I said, these are great investments that will pay dividends for decades to come. For having now the first one operational, the second one has been tested. Now, we did all the PAT testing, by the way, for Unit 2, and great success. We were also very happy with the progress with Unit 2. One thing also we've learned, by the way, to your questions earlier, building four units gives you also that learning curve from Unit 1 to 3 to 4.

Bret Kugelmass [00:37:26] I'm sure it's only going to get easier from here on, yeah.

Mohamed Al Hammadi [00:37:28] Yeah. And also even from costs, our numbers, Unit 3 and 4 were built by 50% less people compared to Unit 1 and 2. And also the number and the quality of work...

Bret Kugelmass [00:37:40] Can I ask about that? Can we dig that out a little bit more? The 50% of people who were not needed anymore, what roles were those? Where was the access in the original projects that you were able to cut?

Mohamed Al Hammadi [00:37:52] So actually, mainly it's construction, construction labor. Before we had to have many people do the same job. Once you do it once or twice, it becomes easier for the people who trained do it more simply. But also, we've learned new methods. I think we got some... in the UAE, some cranes and some utilization of movement of material and some logistics, we've learned from other projects that we have implemented at Barakah. It saved us a lot of money. One of them, actually, movement of sand, movement of dirt to backfill the site. So we managed to take the sand from the sea, dredged, and utilized it back to certain areas of the site, because of experience where we do a lot of dredging in the region, that was applied. So there were a lot of tools and methodologies that we utilized from our industries to Barakah. And going back to lessons learned, it's typical once you learn from the first to the second to the third, you become much more qualified. Even with testing and commissioning, I'm seeing now that Unit 2, the team is hands on and they are much more knowledgeable compared to Unit 1, and that's something we are very proud of. The young managers who got involved in commissioning Unit 1, they are coming into Unit 2 more senior, much more hands, and much more engaged in learning. And that's something I'm very proud to see at Barakah.

Bret Kugelmass [00:39:16] That's awesome. Shifting gears for a second, what about new technologies, specifically SMRs? It's funny to ask you this because you just had success on the big reactors, which I think we need thousands of the big reactors around the world, but there seems to also be a case for the small reactors, maybe putting them direct next to industry applications as well. Have you looked at this at all, either out of personal or professional curiosity?

Mohamed Al Hammadi [00:39:43] Yes, yes, we are all involved and we are also following up with industry of what's happening. So one thing also, now we have the capabilities of assessing and looking at... we have the nuclear experts, we have nuclear capabilities in the country, and that gives us the edge now to be able to evaluate and vet designs of different sizes. So we are involved and we are looking at different technologies of reactors. Also, we are looking at the future of coupling it with hydrogen. There are a lot of opportunities and billions of dollars, that now opens doors for us. Ten years ago, I don't think we would evaluate it and would study it and theoretically we'd keep studying and evaluating. Now we have the practical know how and expertise. But what does it take to get it done and what does it take to be part of those success stories? I myself, I sit in a capacity advisory role to TerraPower, and I've been there over a couple of years now, and I'm also looking to... They've started the ground, kind of the bore drills in the west of the U.S. and they got the funding from the U.S. The first prototype will be built soon, hopefully, and that would be a good testimony that those small modular reactors can be built. And when I say small, I call them small, they are 250...

Bret Kugelmass [00:41:09] Yeah, those are big ones. What about much smaller ones? Have you looked at all of that? And also, what is the goal? Like from your organization, as you look at new technologies, is there a specific goal in mind? Is it for industrial application? Is it just for investment purposes? What is the goal?

Mohamed Al Hammadi [00:41:28] Again, I would say what I said earlier, we are technology agnostic, so we are not in love with any designs today. And there are multiple designs that are happening right now and are in the early stages of it. So we are reviewing, we are watching, we are looking at what is the commercial viability. And that's something which is very important for these. And also what could be replicated can produced in mass at higher volume of production because the more higher volume of production you do, the more that you could bring the cost down. And these now, the targets are all over the place when it comes to target of capital cost. There's a lot of great ideas and some of those reactors are fantastic ideas to be able to implement. And again, I personally have seen the TerraPower, I've visited even the labs to see that metal goes from liquid to solid, also at room temperature for metal. It's amazing. I'm really, really proud to be involved in such projects and we have young managers who are doing their Ph.D's and master's degrees. They're also being sprinkled over the world now, learning and studying and becoming experts in this field, so whenever is the right time, we will definitely seize the moment of being part of these new industries.

Bret Kugelmass [00:42:44] And so since you're technology agnostic, let's put aside the nuclear technology for a second. Are there characteristics of a power plant, besides just low cost of electricity, that if you were to say, "Here are your design criteria," to a nuclear development company, what would those characteristics be that you think fill a need around the world, just giving your global vision?

Mohamed Al Hammadi [00:43:08] Number one would be it could be built and the materials available, when it comes to the current life run. And a lot of good special alloys are there. Second is definitely to be able be replicated in an ideal manner. I think also the export control or the safeguard is an important factor to have this for civilian purposes. So these would be my guidelines in terms of the cost of the kilowatt hour factor. These make it commercially viable.

Bret Kugelmass [00:43:46] Excellent. Well, as we wrap up here today, I'd love to just hear your vision for the future in general. Just take a global perspective and tell us what's important. Given all of your experience and everything that you've learned about the energy sector and the nuclear sector, give us your message to how people should just be thinking about energy in the future.

Mohamed Al Hammadi [00:44:09] First of all, as I mentioned earlier, electrification will continue to grow and that will generate a lot of opportunities for many sectors, nuclear is one of them. Secondly, here in the UAE, we have now the power plants, the first two and two more to come, and the operation. We are looking forward for companies to come here and set up shop in Abu Dhabi and to be part of this industry and operation and maintenance and improvement of sustainably running this power plant. So I invite all companies globally to come here to Abu Dhabi and join us. The nuclear industry is a small industry and we want to be part of that industry and would like companies to come and set up shop here in Abu Dhabi. And lastly, the vision for the future, we've now put out like a road map also like we did for the program ten years ago, we did one for R&D to specifically operate and maintain our power plants safely, securely and with high availability. And that team is working to enable us to do that, working with international labs, in the U.S. and other countries. And also looking at other factors, you know this cross-pollination with other sectors like agriculture, healthcare, aerospace. These are other industries also that I look forward to seeing grow here in the UAE. Opportunities in healthcare is abundant when it comes to radiation management and radiation health. So the future has to be 10X, maybe for us, and to grow this industry.

Bret Kugelmass [00:45:41] Mohamed Al Hammadi, thank you so much for joining us. This has been just amazing talking to you. I'll just wrap up again by saying what you guys have pulled off is incredible. It is an inspiration to the whole world and actually shows the world that there is a nuclear path towards global decarbonization. So thank you again.

Mohamed Al Hammadi [00:46:01] Thank you, sir. I really appreciate your time. And it was wonderful today, I really enjoyed it. Thank you so much.

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