Lightbridge CEO & President Seth Grae Interview
On February 10th Seth Grae, the President and CEO of Lightbridge, graciously took some time to discuss details about his company, which is designing and commercializing a new type of nuclear fuel. In the interview, reproduced below, we discussed the merits of Lightbridge’s fuel, the work that Lightbridge has already done to commercialize the fuel, utility interest in Lightbridge fuel, and how Lightbridge envisions its role in the nuclear fuel industry in the US and abroad. I learned a lot while performing the interview, and I thank Seth Grae for taking the time to answer my questions.
Me: So first, explain to my readers who you are and what your company Lightbridge does?
Seth: Lightbridge is developing a way to make an impact in dealing with climate change and energy problems... soon enough... so it matters for the world. And we are doing that by developing and commercializing a new type of nuclear fuel that will work in the existing reactors as well as new reactors that are built, and this fuel will address key issues that face the nuclear power industry: it will improve the economics of nuclear power, and it will improve the safety of nuclear power.
It will improve the economics by giving a power uprate to the reactors, so they sell more electricity. It will improve the economics by giving a longer fuel cycle to the reactors, so they sell electricity on days they otherwise would have been shut down. It will improve the economics by saving on the costs of the outages themselves, which are expensive, by having fewer outages needed. And it will improve economics where carbon credits are available as under the US Clean Power Plan for non-carbon dioxide emitting energy production. And the fuel will improve the safety of reactors by having a fuel that runs at much cooler temperatures in the reactor. That in a design basis loss-of-coolant accident would not reach temperatures that would generate explosive hydrogen gas.
And we are also putting together and executing on a program to commercialize the fuel. We put together a world class team of nuclear engineers as well as policy and regulatory experts and we invented this nuclear fuel technology. We’ve patented the design of the Lightbridge metallic fuel. We’ve also designed the method of manufacturing the fuel. We hold those as trade secrets that we will patent. We’ve contracted with BWXT, formerly the Babcox and Wilcox company, and with Canadian Nuclear Laboratories to manufacture fuel samples. We’ve already produced fuel samples with partners in Russia, and tested the fuel in a research reactor in Russia. And now the fuel samples that will be made with Canadian Nuclear Labs or BWXT will be tested in the Halden Research Reactor in Norway operated by IFE, the Institute for Energy Technology in Norway, under commercial reactor conditions--the same water temperature, water pressure, water chemistry, as a commercial PWR. That fuel will go into post-irradiation examination both at Halden and nearby in Studsvik in Sweden. The NRC itself as well as many industry leaders like GE do much of their testing at Halden and at Studsvik. This data will go back after post-irradiation examination to Lightbridge and to the utilities that are advising us that comprise the Nuclear Utility Fuel Advisory Board. Exelon, Duke, Dominion, and Southern Company, which last year wrote to the NRC, asking the NRC to prepare to receive a license application in 2017 for lead-test assemblies of Lightbridge fuel in a US PWR as soon as 2020. We are also in negotiations with the major nuclear fuel manufacturing companies. And, in the end, Lightbridge will be a licensing company where we will license our technology to the companies that make nuclear fuel, they will sell the fuel to utilities, who will be paying a royalty each time on our intellectual property. So that is the thrust of what we do as a company. We also do some consulting services to bring in revenue to help pay for the fuel development and commercialization program, but our focus is on the nuclear fuel technology.
ME: Okay, thanks. That answered a lot of question I prepared. So with the safety case are these fuels considered accident-tolerant fuels, or is that something else?
Seth: Generally, the term accident-tolerant fuels refers to silicon-carbide fuels in a project the DOE is working on with a silicon-carbide cladding but still the same exact fuel in a sense of the uranium-dioxide pellets inside that tube, and it’s really just a change to the cladding.
Seth: What we are doing at Lightbridge is a much more substantive change. It is a solid metallic rod, and we think the safety characteristics go well beyond what would normally be considered under the term accident-tolerant. We think that the Lightbridge fuel will be proved to have enhanced safety characteristics beyond accident-tolerant fuel. So, yes in a sense, this is accident-tolerant fuel, but we think it is even better. And accident-tolerant fuel under the silicon-carbide type cladding we believe will have an economic penalty. It will not be as transparent to neutrons as the current zirconium alloy cladding in current nuclear fuel is, and will have a bit of an economic penalty to nuclear fuel, and will in a sense make nuclear more expensive, whereas Lightbridge fuel now not only brings more enhanced safety but better economics.
Me: I saw on your website you have three different versions of your uranium fuel. You have LTB17-1024, which I guess is an uprate of 10% but you get a 24 month refueling period, and then you have the 1718 and 3018. So, why would a utility choose for example the 1024 over the 1718 fuel?
Seth: Right, well the utilities are mostly interested in starting with the 10% uprate fuel--the 1024. This fuel will increase power output of a reactor by 10% and will extend the fuel cycle length from 18 months to 24 months. Whereas the 17% power uprate fuel will leave the reactor at the current 18-month cycle. And the utilities seem to prefer to take a 10% power uprate and lengthen the fuel cycle from 18 to 24 months rather than a 17% power uprate and keep the fuel cycle at 18 months. There’s much less cost and it is much quicker to switch to the 10% power uprate fuel and not do the changes to the plant that are required to go to the 17% uprate. And also there are advantages to being on a 24 month fuel cycle. First of all, it not only saves the costs of the outages, and makes revenue during the times there otherwise would have been outages if the reactor is running instead, but also it pegs the time of the refueling outage to the same [part of the] year rather than switching spring to fall spring to fall each outage. And it is a lot easier to plan hundreds of guest workers and millions of dollars of spending when you know it will be at the same time of year and to rationalize the supply chains. Also, when you have two or more reactors on the same site and they are on 18 month fuel cycles there come times when they both have to go through refueling outages in the same year. And that is something utilities will very much like to avoid. It is just not an easy thing to do. So going to 24 month fuel cycles and you could have one reactor on site that will always be refueled in the spring every other year and one that will always be refueled in the fall every other year. Or, it can be in the spring each year but in alternating years, or however way they want to do it. It is something that is easier for them to manage.
And the third variant is a 30% power uprate to new build reactors, and that is something that we think will be a particular interest in China where we are speaking with some companies, and some other countries, where they are looking to increase nuclear power quite dramatically, and being able to build three reactors and get the power of four is quite attractive. And also in China, and some countries, some of their sites are quite small, so being able to build three reactor and get the power of four is an interesting economic issue--it is a practical issue--there actually isn’t room for a fourth reactor on some of the sites.
ME: So it is a very big help to get an extra reactor and keep the sites at the current size when they can’t expand them. I see. So, with the 30% fuel is there any interest within the US? You mentioned that Southern Company was working with you, and I believe they have a new build currently. And also TVA has a new build, which is expected to finish in June. Is there any interest within the US reactor fleet for the 30% uprate fuel?
Seth: Not yet. The two reactors that Southern Company is building, the two reactors that Scana is building, and the one reactor that TVA is building are all well-under construction. As you just said, the one TVA will open in the next few months. And the two at Sorthern and the two by SCANA will open in the next few years. So those reactors are all well-under construction, and there are no other firm orders of reactors in the United States. When there are we think this design may be in play, but the US market for us is really a market of fueling the existing reactors. Work with nuclear fuel fabricating companies that currently sell to US reactors or want to sell to US reactors, they can manufacture Lightbridge fuel and sell it for the 99 operating existing reactors in the US. Plus it could be for those new reactor that are now under construction. They can switch to Lightbrigde fuel with a 10% uprate or a 17% uprate. But the 30% uprate is really more for China and for countries that don’t yet have a lot of reactors but will.
ME: On your website I saw that your market currently looks to be 127 GWe energy for your fuel. You mentioned China, is there anywhere else where you expect your to have your fuel in use?
Seth: We expect this fuel ultimately to be in use everywhere reactors are operating. Again, Lightbridge will not directly market to the utilities that operate reactors. We’re working with utilities that are helping us to develop and commercialize the fuel so that we know what we are commercializing will be something they’ll want to use. But they will buy their fuel from the big companies that make nuclear fuel today that will be able to make Lightbridge fuel. Those companies will sell the fuel to the utilities that run the reactors. And, in a sense Lightbridge has few direct customers in that it’s the companies that make nuclear fuel and the companies that will enter that business. But the many utilities around the world are the customers of those companies. So there is a lot of shipment of fresh nuclear fuel in the world. You see a lot of nuclear fuel made in the European market or certain places in Asia or the United States and shipped to wherever reactors operate, and that can work with Lightbridge fuel where it could be fabricated in existing plants and sent to reactors, or there can be new facilities built around the world that can make the fuel. Those need not be Lightbridge facilities. Those can be under license from us to big companies that currently make nuclear fuel or that enter that business.
ME: You might have already answered this question, but which fuel companies are you planning to work with or hope to work with?
Seth: Well, right now we’ve already worked in Russia with Rosatom entities and have made Lightbridge designed fuel in Russia and tested it in a research reactor in Russia. And our work in Russia is finished, but that went very well, and perhaps one day we will return to Russia. That is partly a political issue between the United States and Russia now whether it is a wise time to be doing some work in Russia. But we’ve had very good experiences in Russia. And we are under contract with both Canadian Nuclear Laboratories and BWXT, which is a large NYSE company formerly called Babcox & Wilcox as I mentioned before, and they can both make our fuel for the testing that will be in the Halden Reactor. And we’re in discussions with other large companies that make nuclear fuel that are well known in the industry and we expect to have news in the coming weeks relating to that.
ME: Do you want my readers to know anything else about your company, or how can they keep updated on what’s happening with Lightbridge?
SETH: Lightbridge is a publicly traded corporation on the NASDAQ stock exchange in New York. The ticker symbol is LTBR. And if your readers go to the Lightbridge website at ltbridge.com they will see updated information, but they could also sign up there for our email alerts and can receive emails from the company every time there is an update that we send out to people, which we do regularly. We had one this morning. There is also a Lightbridge Twitter feed that people might want to sign up to. We had a similar tweet this morning with a new investor presentation that we put on our website that people can look at and we sent out an email alert and a tweet. Just follow our Twitter feed or sign up for our email alerts and that is a great way to follow us. Or just follow Lightbridge as a publicly traded company on the websites that follow stocks.
ME: Thank you for talking with me today.
SETH: Well, it is a real pleasure talking with you. It was a real pleasure meeting you at the the Third Way Event. I was very happy to read what you put out.
