🤖 This week on BitBuilders - tl;dr:

• Last Energy is revolutionizing nuclear power with 20MW micro-modular plants that can be manufactured and assembled in 3 months, thanks to innovative construction technology
• Their innovative approach: using existing technology but redesigning for manufacturability and scale
• First deployment coming to Wales in 2027 with four units serving both industrial customers and data centers
• The future of nuclear might be in private infrastructure financing, not government funding
• Modular construction and standard components from oil & gas industry enable rapid deployment
• Air cooling system eliminates need for water sources, enabling universal siting

It wasn't actually a technology problem, but it was more of a delivery and business model problem. And that's something that is easy to solve. It should be easy to solve. We don't need to reinvent this old technology. We just need to repackage it in a way that it can be delivered and solve the economic challenges and the time challenges.

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The Nuclear Renaissance and Construction Technology

When Brett Kugelmass, founder of Last Energy, took what was supposed to be a year off after selling his drone company, he didn't expect to stumble upon what might be the key to unlocking nuclear energy's potential. In conversations with Stanford professors about climate change solutions, he kept hearing a recurring theme: "If only nuclear..." It was this hesitant acknowledgment that led him down a path that would eventually challenge the entire nuclear power industry's approach to building and deploying reactors.

The fundamental insight? The nuclear industry doesn't have a technology problem - it has a delivery problem. Traditional nuclear plants have become bigger, more complex, and consequently, more expensive and time-consuming to build. The last nuclear power plant that came online in the United States, Vogel 1 and 2, cost upwards of $30 billion and took over a decade to complete. Similar stories can be found across Europe with projects like Hinkley Point C. These megaprojects have become so complex that they require specialized construction equipment - like "Big Carl," the world's largest crane, built specifically for nuclear construction projects.

This trend toward gigantism in nuclear power plant construction has created a self-reinforcing cycle of complexity and cost escalation. As plants got bigger, they required more bespoke components, which led to longer construction times and higher costs, which in turn made new projects rarer and more complex. This cycle has effectively stalled the industry's growth and innovation for decades.

A Different Approach to Nuclear Construction

Last Energy's solution is radical in its simplicity: instead of building gigawatt-scale plants, they've designed a micro-modular nuclear power plant that outputs just 20 megawatts. This dramatic reduction in size enables a completely different approach to construction and deployment. Their plants are built from roughly 40 modules that can fit on standard flatbed trucks, leveraging modular construction tech in a controlled factory environment, and assembled on-site in approximately three months

This approach represents a fundamental shift in how nuclear power plants are built. Traditional nuclear construction involves extensive on-site work, with components being assembled and tested in place. This leads to significant schedule and cost risks, as weather, labor availability, and other local factors can impact construction progress. Last Energy's modular approach moves most of the critical work into a controlled factory environment, where quality can be better managed and schedules more reliably maintained.

The technical innovations don't stop at modularity. Last Energy has made several critical design decisions that fundamentally change how their plants can be deployed. One of the most significant is their use of air cooling instead of water cooling. Traditional nuclear plants require access to large bodies of water for cooling, which limits where they can be built. By using air cooling, Last Energy's plants can be built anywhere, though with a small efficiency penalty that they've deemed worthwhile for the flexibility it provides.

They've also reimagined the civil engineering requirements. Instead of the massive concrete pads typical in nuclear construction, they use steel piling, significantly reducing the complexity and time required for site preparation. This approach not only speeds construction but also reduces costs and environmental impact.

The Supply Chain Revolution in Construction Tech

Perhaps the most transformative aspect of Last Energy's approach is their rethinking of the nuclear supply chain. Traditional nuclear plants require highly specialized components that are often only produced by a handful of suppliers worldwide, while Last Energy’s design relies on modular construction tech to simplify sourcing. This limited supply chain creates both cost and schedule risks, as delays or issues with any single supplier can impact the entire project.

Last Energy has designed their plants to use standard components from the oil and gas industry wherever possible. This means they can source most components from multiple suppliers who are already producing these parts at scale. When you're buying pumps, seals, and other components that are produced in the hundreds or thousands per year, rather than one-off specialized parts, you get the benefits of competition, established quality control processes, and proven reliability data.

This approach also helps with regulatory approval. When using components with extensive operating histories in other industrial applications, there's a wealth of reliability data available to support safety cases. This contrasts sharply with new nuclear technologies that often need to generate this data from scratch through extensive testing programs.

The Business Model Innovation

Last Energy's business model innovation might be even more important than their technical innovations. Instead of selling reactors or power plants, they're selling electricity through Power Purchase Agreements (PPAs) - a model pioneered by the renewables industry. This means customers don't need to worry about the complexities of nuclear power plant ownership and operation; they simply buy the power they need.

This model, combined with the smaller scale of their plants, opens up access to private infrastructure financing - something that has been largely unavailable to nuclear projects in the past. With capital costs under $100 million per plant, these projects become accessible to private infrastructure investors, reducing dependence on government funding and subsidies.

This financing innovation is crucial because it changes the fundamental economics of nuclear power deployment. Traditional nuclear projects, with their multi-billion dollar price tags, require government backing and often face significant public scrutiny over cost overruns. By bringing projects into a scale that private investors are comfortable with, Last Energy can potentially deploy plants much more rapidly and with less political risk.

The Regulatory Challenge and Future Prospects for Construction Technology

Last Energy's go-to-market strategy has been notably objective and data-driven. Rather than defaulting to their home market in the United States, they evaluated 50 countries across 75 factors to identify the most promising initial markets. This analysis led them to focus on Europe, particularly the UK, Romania, and Poland, where energy prices are higher, regulatory environments are more enabling, and there's strong government and public support for nuclear power.

Their first announced project, in South Wales, will consist of four 20MW units serving both industrial customers and data centers. This project exemplifies their target market: customers who need reliable, 24/7 baseload power and are willing to pay a premium for it. The combination of industrial heat users and data centers creates a diverse customer base that can fully utilize the plants' capabilities.

The project also demonstrates the flexibility of their approach. By serving multiple customers with different needs - some requiring process heat, others just electricity - they can maximize the utility of each plant. This kind of flexibility is crucial for making smaller nuclear plants economically viable.

The Regulatory Challenge and Future Prospects

The regulatory environment remains a crucial factor in nuclear power deployment. Last Energy has been engaging with regulators like the UK's Office for Nuclear Regulation since 2021, taking a proactive approach to ensure their design meets and exceeds requirements. Their emphasis on using proven pressurized water reactor technology, rather than developing entirely new reactor designs, helps streamline the regulatory process.

This regulatory strategy is another example of their pragmatic approach. While many new nuclear companies are developing advanced reactor designs using new fuels like HALEU (High-Assay Low-Enriched Uranium) or novel cooling systems, Last Energy has chosen to stick with proven technology. This means they can leverage existing fuel supply chains and regulatory frameworks, rather than waiting for new ones to be developed.

Looking ahead, the U.S. market may become more attractive as regulatory reforms are discussed and major customers like hyperscale data center operators create demand for reliable, clean baseload power. The potential for regulatory reform under future administrations could further improve the market environment for nuclear power in the United States.

The US market presents unique challenges and opportunities. While energy prices have historically been too low to justify nuclear investment, the growing demand for clean, reliable power from data centers and other industrial users is changing the equation. The US also has advantages that could make it an attractive market in the future, including a robust nuclear supply chain and experienced workforce.

The Future of Nuclear Construction Tech

One of the most interesting aspects of Last Energy's approach is their perspective on construction and operations. Rather than requiring specialized nuclear construction expertise, they prefer to work with contractors who have experience building offshore drilling platforms and other industrial facilities. Their design philosophy emphasizes simplicity and standardization, making it possible for conventional construction teams to assemble their plants efficiently.

This approach to construction represents a significant departure from traditional nuclear projects. Instead of treating nuclear construction as a unique discipline requiring specialized knowledge, they've designed their plants to be assembled using standard industrial construction techniques. This not only reduces costs but also makes it easier to scale up deployment by leveraging existing construction capability.

Similarly, their approach to operations leverages modern instrumentation and controls, eliminating the need for traditional control rooms and reducing operational complexity. This represents a significant departure from the analog operations common in existing nuclear plants. Their plants are designed to operate with minimal human intervention, more like modern industrial facilities than traditional nuclear plants.

Last Energy's approach points to a potential future where nuclear power plants are treated more like standard industrial facilities than unique megaprojects. This could lead to a fundamental transformation of the nuclear industry, from one dominated by government-funded megaprojects to one where private companies deploy standardized, factory-built plants to serve specific industrial needs.

This transformation could have far-reaching implications for the energy transition. By making nuclear power more accessible and easier to deploy, it could provide a crucial tool for decarbonizing industrial processes and data centers - applications where intermittent renewables struggle to meet the need for constant, reliable power.

Key Learnings:

• The nuclear industry's challenges are primarily about delivery and business models, not technology
• Small, standardized designs can leverage existing supply chains and construction expertise
• Private infrastructure financing can replace government funding for appropriately sized projects
• Success in nuclear power requires rethinking traditional approaches to construction and operations

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