We are excited to share this Special Edition featuring Julie Kozeracki, Acting Chief Investment Officer for the U.S. Department of Energy’s Office of Energy Dominance Financing (EDF), for a wide-ranging look at the effort to accelerate nuclear power deployment in the U.S. Julie previously served as a Senior Advisor to the office under the Biden Administration and as a Principal with Boston Consulting Group. EDF has over $250 billion in loan authority available to help deploy high-impact energy infrastructure projects. We were thrilled to hear Julie’s latest insights on EDF’s activities, recent announcements, and the opportunities and challenges ahead for nuclear development in the U.S.
In our conversation, we discuss the renewed push to accelerate nuclear power in the U.S. and the increasingly important role of EDF. Julie shares her perspective on nuclear’s bipartisan appeal and its ability to support affordability, reliability, energy security, and lower emissions. We explore how EDF’s approach has evolved, including its expanded financing authorities and increased focus on nuclear, as well as the Administration’s goals of having 10 large reactors with complete designs under construction by 2030 and adding 5 GW of uprates to the existing nuclear fleet.
We examine the economics and financing of new nuclear, including EDF’s $17.5 billion program to procure long-lead items for 10 AP1000 reactors and the benefits of standardization, supply-chain investment, and accelerating project timelines. Julie discusses growing interest from utilities and independent power producers, lessons learned from Vogtle Units 3 and 4, and why she believes the risk profile for future AP1000 projects is fundamentally different. We also explore how investors and equity analysts view new nuclear projects and how federal financing, investment tax credits, improved risk sharing, and hyperscaler power purchase agreements could help address concerns around cost and risk. Julie shares her perspective on the different approaches of regulated utilities and IPPs, the potential for build-own-transfer structures, and how growing power demand from AI and data centers could create new opportunities for nuclear development.
We discuss the significant near-term opportunity to increase generation from the existing nuclear fleet through power uprates and life extensions, including the potential to extend reactors from 60 to 80 years of operation and potentially longer. More broadly, Julie discusses the importance of baseload and dispatchable generation as electricity demand grows, changing attitudes toward nuclear at the federal, state, and local levels, and the role of existing nuclear sites in supporting future development. We close by discussing what will be required to execute at scale, including strengthening the domestic nuclear supply chain, investing in advanced manufacturing and technologies, and developing the skilled workforce of welders, pipefitters, electricians, and other trades needed to support a new generation of nuclear projects. It was a fascinating discussion and we look forward to staying in touch with Julie.
To start the show, Mike Bradley highlighted that markets remain focused on interest rates and inflation. Wednesday’s PCE inflation report came in below expectations, with headline PCE at ~3.4% and core PCE at ~3.0%, helping push interest rates modestly lower and equity markets higher. Mike noted that while another Fed rate hike this year may still be on the table, the softer reading could reduce expectations for further increases.
Turning to oil markets, Mike noted that oil prices have declined ~$8–$10/bbl over the past two weeks as crude flows through the Strait of Hormuz have increased and Saudi Arabia’s East-West Pipeline has resumed operations at ~3–4mmbpd. He also discussed the potential for a U.S. diesel export ban and highlighted lower diesel prices as an important factor in easing inflation concerns and improving broader economic sentiment. Veriten Managing Director Nick Morriss also joined the discussion and peppered in his nuclear and power questions and perspectives.