Nov 6, 2018

Ep 113: Seth Grae - Chief Executive Officer, LightBridge

Chief Executive Officer
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Show notes

1 - Path to Nuclear Through Law

Bret Kugelmass: How did you get into the nuclear space?

Seth Grae: While in law school, Seth Grae decided he was going to pro bono represent an actual dissident or refusenik in the Soviet Union as part of a final class paper. Through help from people at the State Department and NGO’s, Grae identified a guy who designed the guidance systems for Soviet cruise missile and nuclear submarines. With the support of a major law firm, he went to Russia and filed a brief on his behalf with other American lawyers. This was the first time Grae met American and Russian nuclear engineers and learn about the field. Since he was fascinated by nuclear, he began to gravitate toward high technology international transfer and nuclear, including export control. Going through that experience early on in Grae’s career was very entrepreneurial. In 1984, a neutronics expert named Alvin Radkowski met with his former professor, deciding to go back to a thorium idea for fuel to help spread nuclear power internationally while reducing the chances of making a nuclear weapon. Radkowski asked Grae if he would help him as a lawyer with the thorium fuels. Grae met a nuclear engineer who had the idea for making a thorium fuel that would work in existing reactors, instead of modifying the reactor to take the fuel idea. This eventually became Lightbridge.

2 - Formation of Lightbridge

Bret Kugelmass: What did you do next with the thorium fuel idea?

Seth Grae: Seth Grae formed Lightbridge initially with Andrew Mushakov, who is currently the executive vice president in charge of nuclear operations at Lightbridge. Develop a new nuclear fuel is a lot less expensive than developing a whole new kind of reactor, but it is still very expensive for a startup company. They had to come up with a way of making tens of millions of dollars. In 2007, they had an idea for a company that should exist in the world that didn’t that could produce a lot of revenue. There was no company on Earth that could guide a country that never had reactors how to get one. The big entities, like the International Atomic Energy Agency (IAEA) couldn’t do it and the big companies like GE and Westinghouse didn’t have a business unit that could do it. Through a very strong advisory board connection, Grae and his team talked about the idea for a nuclear power program with the United Arab Emirates (UAE). The government of UAE and Abu Dhabi hired them to write the nuclear power plan for the UAE. Before the UAE contract, it had been over 30 years since a country that had never had reactors decided to get them and actually built them, which was China. Grae decided to take Lightbridge to NASDAQ to be publicly traded to provide a means for his investors to buy liquid stock in the company.

3 - Proliferation Risks of Nuclear Fuel

Bret Kugelmass: How have you taken an out-of-the-box approach across multiple aspects of Lightbridge?

Seth Grae: Dan Magraw has been on the Lightbridge Board of Directors since the beginning. He gives Lightbridge the only leading environmental policy figure on the board of directors of a nuclear energy company. Lightbridge ensures that they are transparent by being publicly traded. So few purely nuclear companies are publicly traded and publish all their financials. Lightbridge also focuses on transparency by putting a patent on their nuclear fuel design. A group of nuclear scientists and engineers at Virginia Commonwealth University (VCU) wrote a peer-reviewed article showing how, of all the nuclear technologies looked at for nuclear power and nuclear fuels in existing reactors, only one could not be usable by would-be proliferators: Lightbridge. This result would not have been possible if Lightbridge had protected their design with trade secrets. When uranium is enriched to make traditional fuel, one isotope is taken out of uranium that can’t be used to make bombs and making the fuel a higher percentage of the isotope, uranium-235 that can make bombs. Uranium-235 is about 0.7% in mined uranium and fuel is usually enriched up to 4.95%. A bomb can be made with enrichment over 90%. When the reactors are refueling and used fuel is being taken out of the reactor, some of the uranium-238 becomes plutonium-239 which is a weapons-usable isotope. The plutonium can be extracted. To make a bomb from fuel that comes out of a commercial reactor has not been done and would be an expensive and difficult process. The Lightbridge fuel reduces the amount of plutonium-239 by burning it as it’s created to make power and mixing it with other substances that make it unable to make a bomb.

4 - Nuclear Economics and Safety

Bret Kugelmass: At what point did you decide to go down the path of developing a fuel technology?

Seth Grae: Lightbridge thought their idea had great safety benefits. It reached back to things the U.S. government had down decades earlier in what was called delta phase, metal fuels. These ideas were brought back in an advanced way that no one had done before to not have another Fukushima. The meltdown at Fukushima in March 2011 was traumatic from a business standpoint in losing four billion dollar facilities and the way it was portrayed as a disaster where no one got hurt and no one died. Not long after Fukushima, the collapse in nuclear gas prices destroyed nuclear in the merchant plants and deregulated markets. The combination of these two events invigorated Seth Grae and Lightbridge to have technology that could solve these problems for existing reactors and new ones that get built. Jim Malone came to Lightbridge from Exelon, who was the largest buyer of nuclear fuel in the United States. Lightbridge wanted to solve five problems. They wanted to dramatically improve the economics of existing reactors, more than the industry imagined they could. Lightbridge also wanted to dramatically improve the safety of the already safest industry in the United States. Safety could capture the public’s imagination by lowering the fuel temperature by 1000 degrees Celsius. Coping is the time the operators of the reactor have to deal with an accident or off-normal accident and lower temperatures buys the operators more time.

5 - Load Following and Life Extension in Nuclear

Bret Kugelmass: How did you find a way to cool the decay heat over time?

Seth Grae: Dumping heat through metal, which has thermal conductivity, transfers heat faster and better than the current fuel. Lightbridge wanted their fuel to be used anywhere in the world without any worry about anyone using a nuclear weapons program. The current technology is fantastic in that area, but Lightbridge is leaps and bounds better. Reactors are particularly bad at load following; they are good when they are run at a constant rate. Load following is suddenly an important thing because of renewables which only provide power at a certain time of day. The current fuel has uranium pellets stacked up inside a tube. When the power is turned on or power increases, the pellets swell and can even crack the tube. Lightbridge doesn’t have pellets inside a tube. Lightbridge also aims to extend the life of the reactors beyond what they have already run. If the reactors make a lot more money and producing more power with Lightbridge fuel, there is an economic case for keeping the reactor going as opposed to losing money. Physical changes can also help plants run longer. In license renewal, Nuclear Regulatory Commission (NRC) looks at whether the pressure vessel can operate for another 20 years safety. The pressure vessel is the first line of defense if there is an accident, but gets brittle over time and gets stressed every time a reactor is turned off and on again. By having a fuel that lasts a lot longer between refueling, the pressure vessel is depressurized and re-pressurized a lot less. The vessel also goes through irradiation and thermal cycles.

6 - Collaboration Between Lightbridge and Utilities

Bret Kugelmass: What was the design process like for Lightbridge fuel?

Seth Grae: Lightbridge had an initial concept based on what the U.S. had done decades earlier and other countries had started to run with some metal fuel ideas for different applications. The U.S. never stopped developing and using metal fuel technology, but they didn’t transfer it into the commercial sector. Lightbridge has scooped up experts who worked at National Labs, who have the world-leading expertise in metal fuel. New kinds of reactors will take a very long time to deploy, so until that time comes, the current fleet needs to keep operating. With Jim Malone’s help, Seth Grae and Lightbridge wanted to meet the huge problems of the industry after Fukushima and collapsing gas prices. Four buyers - Exelon, Duke, Dominion, and Southern Company - dominate as utilities and nuclear owners and operators and collectively have half the nuclear power plants in the U.S. They have every kind of reactor, fuel supplier, fuel chains, and NRC licensing. With Jim Malone’s help, Lightbridge formed the Nuclear Utility Fuel Advisory Board (NUFAB) which consists of the heads of nuclear fuel of Exelon, Duke, Dominion, and Southern Company. The group gets together and, from a design point of view, looks at how to solve problems and use it in their reactors, without changing anything in the nuclear reactor. The utilities submitted a document to the NRC expressing their interest and asking the NRC to begin to prepare license applications. Fuel manufacturers showed interest because the utilities showed interest. Lightbridge negotiated a fantastic deal with Framatome who brought everything needed to finish the commercial design, license it with the NRC, manufacture it in America, and sell it in domestic and export markets.

7 - Innovation in the Nuclear Space

Bret Kugelmass: Tell me about what you provide to Framatome.

Seth Grae: There has never been a truly differentiated product in nuclear fuel for the existing reactors. The ability to have a differentiated product that’s not a commodity that brings dramatic improvement and benefits is the goal of Lightbridge. The United States Department of Energy (DOE) has been there during the life of the project and is taking steps to lift up American innovation to have America come back in nuclear power, not just domestically, but globally. The DOE started late in the Obama administration looking into something that became funding grants to help companies. The U.S. government has done something similar in 2006 for launching rockets and satellites and started funding companies in 2008. At the time, the Russians were dominating the multi-billion dollar global industry. Ten years later, Russia is out of the commercial satellite launch industry internationally and SpaceX and others, who have better technology that got funded by the American government, crushed them. In nuclear, the government is not the customer. NuScale is designing a fantastic advanced reactor that runs with light water reactor fuel and is the world leader on small modular reactors (SMR). The DOE is disproportionately highly funding NuScale because it funds the whole advanced reactor industry in the U.S. and can help NuScale get a first customer at Idaho National Laboratory with UAMPS (Utah Associated Municipal Power Supply). Lightbridge started with the customer.

8 - Lightbridge Commercialization Process

Bret Kugelmass: What are the next steps toward final commercialization of Lightbridge’s product?

Seth Grae: In the coming months, Lightbridge is going to see how the government funding applications go and announce their first major contract with a major utility to put skin in the game. The fuel is going into the lead test rod assembly program in 2021 and is announcing, with the DOE and the National Labs, a research reactor test program that will start in 2020 that will feed samples going into the TREAT reactor. Lightbridge is going to make four meter-long rods that will be put together into one commercial-length rod that will have different zones up and down the rod. It will be put inside an actual commercial reactor in the U.S. to see how the four different areas do in parallel with the 2020 tests in the research reactors. This combination of data will give comfort to the utilities that it provides a benefit to the reactors and to the Nuclear Regulatory Commission (NRC) that they have the data they need to license it. The fuel will also go into the fuel pool, travel into the core, provide power, and be irradiated by the assemblies around it. The fuel will be taken back out to the spent fuel pool providing commercial experience and approvals. A whole assembly will go in 2023 or 2024 as part of the lead test assembly program, per a letter of intent from a major utility. In 2027 or 2028, Seth Grae anticipates full commercialization. Fossil fuels causes air pollution and climate change, but people give it a market because it is easy to extract. An independent study by Siemens showed that Lightbridge is going to destroy fossil fuels in the marketplace though base load power. The cheapest way to make massive base load power it to switch a reactor to Lightbridge fuel. It will be way cheaper than coal, natural gas, and renewables with the best non-proliferation on the planet. Nuclear at its worst is safer than coal at its worst. The United Arab Emirates (UAE) will be the next country to start up nuclear reactors in the world and is meeting and exceeding the highest standard in the world. Without growth in nuclear power, the world won’t meet climate, air pollution, or energy goals. Lightbridge can provide this growth without building the reactors, but instead getting more power out of the existing ones and justifying the case to build new reactors.

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