Spotlight: Terrestrial Energy Inc.

SMRs are a rapidly expanding field of interest in the modern nuclear industry, seeking to provide all the benefits of current nuclear energy, while dramatically reducing costs and construction times and taking advantage of modern factory construction logistics. There are dozens of companies that are active in this field such as Westinghouse, GE-Hitachi, TerraPower, NuScale, and Terrestrial Energy.

Recently I had the pleasure of chatting with Canon Bryan, the CFO of Terrestrial Energy Inc. and asked him a few questions about how Terrestrial Energy and the idea of how SMRs can work in modern society.

Sean: Hi Canon, thanks for taking the time to talk with me. I’d like to ask a few questions here for you that people who read my blog might be interested to know a little bit more about Terrestrial Energy. Can you explain what Terrestrial Energy is?

Canon: Terrestrial Energy is a Canadian corporation, specifically a Small to Medium Enterprise, developing and deploying Small Advanced nuclear power plants. Initially in North America, but eventually extending to the global market.

S: And how did TEI get started?

C: It started when the original co-founders all came together with a belief that at that particular time — in 2012 — circumstances created a market demand for something new — specifically for low-cost, low-emission energy. We all felt that we could do something about it with our combined fields of expertise. For example, I’m a finance professional, but two of us had more technical backgrounds that didn’t overlap completely and we all agreed that we could make a successful business if we were right about the market.

S: So what kind of response has Terrestrial Energy gotten from public or private opinion?

C: The response we have received so far has been very positive actually. For example, in the current issue of the MIT Technology Review, which is one of the world’s most respected technical journals, they released their annual 10 Breakthrough Technologies. This year, the list was actually curated by Bill Gates, and it talks about the technologies that he feels are things that should be considered the most important fields of research and progress of the year. In that list, he mentioned the growth of the SMR research and development field and Terrestrial Energy was specifically mention as a leader in that field. Naturally, we were quite pleased to see that. But alongside that, our response from our industrial constituencies, not just in the nuclear industry, has been very positive.

Terrestrial Energy has not engaged in a meaningful way with the general public, however, so we haven’t had much of a response yet. We are not quite ready to engage with the general public yet. They are not yet our constituency. But they will be in the future, of course, when deployment begins. There are some small outreach initiatives that we do, but it is quite preliminary. So far we have been focused on the pre-licensing and our initial customer base, which is electric utility companies in North America primarily.

S: Just in that perfect zone to fly under the radar of people that might be against nuclear power huh? Anyways, tangential to being noticed by those in the industry or in interested industries, what makes Terrestrial Energy unique among the other SMR start-ups?

C: Well primarily what makes our reactor unique is that it’s a high-temperature reactor. It is one of the so-called Generation IV designs. There is currently only one commercial Gen IV reactor in operation and it is in Russia. Our design is specifically a molten salt style reactor. While there are other molten salt reactor designs that are being pursued — one of them by Bill Gates incidentally but it is very different from ours — one of the distinguishing factors is that our system uses standard uranium fuel melted into a liquid molten salt coolant. It sounds very exotic when I say that it is a liquid fuel but it’s really not. This type of standard uranium has been in use making reactor fuel for several decades.

You could also say we have the distinction of having a reactor which is operating in the thermal spectrum. We also are not focused on breeding fuel. Some of the other SMR designs are so called breeder reactors which actually, as a really simplified explanation, make more fuel than they consume by breeding plutonium for themselves to use to make energy. But this tends to add complexity to the reactor so our system does not do this. It’s interesting in a way that we distinguish ourselves by being a system which uses many of the materials and supply chains that already exist, which gives the design a high level of technological and market readiness. It is the high temperature and the liquid fuel design that offer us the most advantages.

S: Speaking of those advantages, do you think that there are any kind of opportunities for Terrestrial Energy to operate in Alberta specifically?

C: I think the molten salt reactor has huge potential in Alberta because of its attributes. Namely, it is: low cost, low carbon, small, scalable and high temperature. It fits perfectly with so many industrial applications in Alberta. The obvious one would be the oil sands.You could use the heat for steam production for Steam Assisted Gravity Drainage production of oil. And you can do it carbon free, unlike how it currently is produced. This would give Alberta a way of de-carbonizing this aspect of the oil sands production.

Alberta also has coal still being used for energy, so that could be replaced by these smaller systems, which would also be an engine of decarbonization for the electric power system. Any industrial facilities that are being operated in Alberta, guaranteed that they are using either coal or natural gas. So, Alberta has a lot to gain from this technology, but I don’t think there has been any evidence that Alberta, either the private sector or public sector is interested in engaging with this technology development yet.

S: Yeah I think not since the talks with SNC Lavalin, or maybe it was still AECL back then. Between 2003-2011 there were talks of putting a CANDU up in Peace River to help power and decarbonize the Oil sands.

C: The Alberta petroleum industry has engaged with the nuclear innovation sector but, there hasn’t been any follow-through or commercial transactions, so they might be paying some lip service to this technology for whatever reason, but there hasn’t been anything final.

S: In kind of the same vein, I don’t know how much you keep up with Alberta news, but in January there was a big news story about a made in Alberta Propane/Propylene splitter that was built in Edmonton for installation at a new plant being built in fort Saskatchewan. Given that Alberta has the ability to produce large scale metal structures like that, do you think there is potential for Terrestrial Energy to maybe put in a bid to have your reactor factory built in Alberta, or to license out construction to Alberta based companies to take advantage of those capabilities?

C: Anything is possible. If there is industrial capability, which is not true of every place in the world, many places do not have the ability to produce these types of facilities at the scale and quality that are needed. But if Alberta has the capabilities, I suppose it could be done. However there seem to be political constraints that are manufactured to prevent any of that from happening right now.

S: That actually leads to my next question which is what do you think the biggest roadblocks for commercialization of Terrestrial Energy’s molten salt reactor are?

C: For Terrestrial Energy as a company I think that there is more than one way to look at it. You can look at it in terms of time frames or in terms of single company vs the sector as a whole. But for Terrestrial Energy in the short to medium term, the biggest challenge is always going to be capital. There is a regulatory system that is very effective in Canada, and very robust. So far it is working reasonably well for Terrestrial Energy. We were the first ones to start the official pre-licensing review process here in Canada. We successfully completed that first stage of the process in late 2017 and we have since started the second and final phase and are moving through that. So regulatory risks have so far haven’t seemed to be a rate limiter.

But then you are faced with technology risks, which all I can say is that as a company and as a project we are managing that risk assiduously. Our design is a straightforward design. It is much simpler than a traditional nuclear power plant design so that gives us some encouragement that we will not face the technology risk that is a show stopper for so much other innovation in this field. Then there is political risk, which is very difficult to measure. It is unpredictable, you never know when it might come up. All I can say is that we are trying to anticipate about what the opposition might be and mitigate it. Going back to what I was saying earlier, we will eventually try to appeal to a broader audience by talking about what we are trying to do, and why it would be good for your community and society at large. We have to be able to tell a narrative that is going to connect with people and capture their imagination.

Those are really the short term risks. In long term we are interested in expanding across the world, which is a very different kind of challenge. Once we’ve proven that we can finance the construction of the first commercial power plant, the capital risk will go down. Because now we would have a proof point, an actual physical facility that is doing what we said it would do. Industry will look towards that and invest in that. The challenges would then change, and we would be more focused on delivering civilian nuclear energy to people that don’t have it yet. There are about 30 countries that currently have nuclear energy, but there are 60 countries that are interested in getting nuclear energy that don’t have it. And it is not a trivial process to go from a non-nuclear nation to a nuclear powered nation. That is a risk. But that is ultimately a market need that could be met with our design. We can help these nations to get the power they need and the technology they need.

S: Yeah I can see that being a good path to take. So one last question before I let you get back to work. To kind of get people more excited about nuclear energy, what is your favourite potential application for your company’s design in the future?

C: Well the benefits of a low cost, low carbon, small, scalable, high temperature system is that it opens a lot of possibilities that other power systems don’t have. Some current power systems like fossil fuels tick 4/5 of those boxes, but nothing other than our system, and some of the other advanced nuclear systems, hit all 5 of those criteria, which has never happened before in history. So there are a lot of interesting things you can do with that combination, like making hydrogen, which the world is very interested in as a possible clean fuel. But a pure hydrogen economy is pretty far in the future as it requires a large amount infrastructure alterations so lets just put it aside for a bit. The other thing you can do is you can sequester carbon either from the air or a smokestack or other sources. Now it takes an awful lot of power to to that, but nuclear energy can provide an awful lot of power, so we can create pure carbon by removing it from the atmosphere. If we mix that pure carbon with pure hydrogen, we can actually make gasoline.

When you have the power source that is low cost, low carbon, and high temperature, you can make the carbon and the hydrogen completely carbon free and smash them together to make the gasoline. And there is no carbon being released anywhere in the process. And I should also point out that is would actually be cleaner than the gasoline we currently have because it doesn’t have all the impurities in it like sulfur and nitrogen oxides or anything that is normally in petroleum products other than carbon and hydrogen. I actually call this carbon negative because you drastically reduce, or remove, the carbon emissions associated with transporting the fuels to where they are needed, along with the carbon costs of extracting and refining the fuels.

The trick now, because all these processes are proven, is putting it all together and making the flowchart that is economical. That is one of the things being worked on right now. Proving the economics of these processes. Now some people are saying that the electrification of the transport industry is going to come around and save our bacon, but as a 15 year energy analyst, someone who has looked into this deeply, I don’t think that is realistic. I think the rapid electrification of the transport industry is unlikely, and that would be a nice way of putting it. It will happen eventually, but not soon enough. So there has to be a bridge solution that will take us from the near future, mid 2020s-2030s, to the late 2070s, 2080s and 2100 or so, when we can finally say that all our transport systems are totally electric. And some day, we will be able to say that all our electric cars and trains and ships and airplanes are all charged from zero carbon electrical sources, but that is many decades away.

There has to be a bridge solution and I think that this is a pretty good one. I think the economics are there, but it’s just a matter of proving them to a level of confidence that a major financial institution will be willing to invest. Plus, as a potential boon for Alberta getting into this process and field of technology, most of the current petroleum infrastructure that is in place would be able to be used with no major changes. So it would be important to get the petroleum industry on board with this kind of technology, but I doubt that will be difficult, as it is a way to improve return on their infrastructure investments. The only thing that would go down in this case would be carbon emissions and who doesn’t want that?

S: I completely agree. Thank you for taking the time to talk with me and best of luck with the last stage of the licensing process. I’ve got my fingers crossed for you!