Google commits to buying power generated by nuclear-energy startup Kairos Power

It’s not real funding, it’s a power purchase agreement from something that may never be built! No different from Microsoft’s previous fusion power purchase agreement. The Goog may as well announce they’ve reserved office space in a building to be built on Proxima Centauri B.

Just tech virtue signalling: Google/Microsoft trade the impression that they’re relevant leaders for some legitimacy for a blue sky startup.

A power purchase agreement is critical to getting investment. The US aviation industry is wouldn’t exist if not for the UK and French governments making a purchase agreement for planes at the start of WW2

It's funny how many people think getting investments is as easy as just asking a bank or VC for money. If you want anything substantial besides scraps of angel/friends and family rounds, you need to prove your product first.

Getting Google in line as a customer is absolutely huge for Kairos.

The B-17 was developed in 1936 and initial orders were placed in 1938. The government bought hundreds of Douglas B-18 bombers before 1940.

Uhh . . . source on that claim?

> it’s a power purchase agreement from something that may never be built! No different from Microsoft’s previous fusion power purchase agreement

A frequent complaint from utilities has been AI companies refusing to sign PPAs. They want the option of picking up and leaving if someone else offers a better deal down the road, leaving the utility stuck with overbuilt infrastructure costs.

> virtue signalling

This term has lost whatever meaning it ever had if we're using it to refer to binding contracts.

This isn’t a binding contract like Elon Musk agreeing to buy Twitter. Google may be bound in some way to buy power from a future unbuilt powerplant that doesn’t yet exist in prototype form. If Kairos fizzles, more likely than not, can Google seek damages? Will Microsoft seek damages from their binding contract when Helios isn’t grinding out fusion gigawatts in 2028 as promised?

Which claim? Regarding investments, from the world bank, "The pricing mechanism [a component of a PPA] is the primary mechanism for allocating revenue and market risk in respect of the project between the public and private sectors and is central to the private project proponent’s and its lenders’ assessment of the commercial viability and bankability of the project."

I believe Jigar Shah, the director of the Loan Programs Office at DoE, also talked about the importance of PPAs in attracting outside investment in his book Creating Climate Wealth: Unlocking the Impact Economy

https://ppp.worldbank.org/public-private-partnership/sector/...

Again we’re not talking about an agreement to built a wind farm or solar or a big LNG turbine. A bank sees a PPA for any of those and knows if it cuts a check, it’ll happen with high probability. These tech PPAs are not much more than mutual handwaving by comparison.

This is a very far cry from the claim, which is that the American aviation industry would not exist were it not for some orders by Britain and France.

That one is hard to support, given that the American aviation industry was the first such industry, anywhere, and was doing quite well for itself prior to the outbreak of the war.

Did the orders help? Um. Yes? I mean they stopped paying for the planes after Lend-Lease so, mixed bag there, there was a war on and all. But I don't see how the gulf between "Without Britain and France paying for a few planes before the war started" and "$50 Billion in materiel provided free of charge with most of the debt written off and most of the production destroyed in combat" gets bridged. I'm calling shenanigans.

This is de-risking the other way. It allows the energy companies to build their infrastructure without worries that they will get undercut by a competitor and be stuck with overbuilt infrastructure and no one to sell to.

Without that commitment, the investment doesn't get made into the new power generation. Margins in that industry are much lower than in tech.

Why would they fissile? Nuclear is solved.

All depends on the $/MWh figure.

Look to NuScales near collapse last autumn for a recent nuclear power example:

  NuScale has a more credible contract with the Carbon Free Power Project (“CFPP”) for the Utah Associated Municipal Power Systems (“UAMPS”). CFPP participants have been supportive of the project despite contracted energy prices that never seem to stop rising, from $55/MWh in 2016, to $89/MWh at the start of this year. What many have missed is that NuScale has been given till around January 2024 to raise project commitments to 80% or 370 MWe, from the existing 26% or 120 MWe, or risk termination. Crucially, when the participants agreed to this timeline, they were assured refunds for project costs if it were terminated, which creates an incentive for them to drop out. We are three months to the deadline and subscriptions have not moved an inch.

https://iceberg-research.com/2023/10/19/nuscale-power-smr-a-...

Yeah, its not much I agree. But it is an agreement the company can wave that they at least have future buyers for their non-existing power generators if they were to build them!

> isn’t a binding contract

It absolutely is. Don’t know the details. But there is usually a minimum purchase guarantee by the buyer.

> If Kairos fizzles, more likely than not, can Google seek damages

Probably. Though collecting might be difficult.

> Will Microsoft seek damages from their binding contract when Helios isn’t grinding out fusion gigawatts in 2028 as promised?

Damages, no. Concessions? Probably.

The B-18 Bolo was already obsolete by 1940. Too heavy. Too slow. Range was too short. They were relegated to ASW work.

The B-17, on the other hand, ably earned her nickname, the "Queen of the Skies."

And the belief that you will actually be able to deliver it. Try it. Go try to pitch Google a $/MWh figure that undercuts what they’re offered here and see how far you get.

True. But those orders supported the american aviation industry.

Also the DC-3 / C-47 had its first flight in 1935. With over 10,000 built it showed the US aircraft industry was strong before WW2.

https://en.wikipedia.org/wiki/Douglas_DC-3

Yep. Exactly.

Do you think a weaker but more accurate claim would be :

"The US aircraft industry was considerably helped by French and British orders for World War II."

IIRC Nuscale was supposed to be doing a demo SMR project in Idaho until the costs blew out and nobody wanted to pay for the new costs. So we’ll see what comes of this.

This seems circular.

"No one will invest in PPAs for nuclear because there isn't interest."

"These PPAs in nuclear don't represent real interest because they're made with the understanding that the actual product will never develop."

You're assuming your preferred conclusion and inventing a corporate conspiracy to support it.

The claim that there would be no US aviation industry without British/French orders in WWII, which given US production for our OWN Armed Forces is a flat-out absurd thing to claim. France was overrun in 1940 and the RAF only used a few American designs compared with their own.

> This term has lost whatever meaning it ever had if we're using it to refer to binding contracts.

If a technological solution is optimistic and remains vaporware possibly forever, then it maybe "virtue signaling" is if there more nonfunctional desire for it that outstrips practical or economic utility. A better term would be "vaporware" when there is less social puritanism involved, and I don't think coal or nuclear signal anything of redeemable greenwashing value compared to cheaper renewables combined with PES and distributed grid storage.

Insurance and regulatory hurdles are far higher than contracts selling future electricity customer purchase agreements and likely to doom almost all new nuclear projects in the US as they have for the past 50 years. I don't see why an amoral customer would care about the specific source power as long as it's cheapest, but even a socially-conscious customer would probably be okay with renewables if and when they are generally the cheapest option. Perhaps there are a handful of specific datacenter locations and requirements in particular areas that would be better suited to geothermal or nuclear.

It's worth noting that only several years earlier, the US aircraft industry was almost completely killed by the Wright's patents and licensing practices.

The UK, France (especially), Italy, and others were way ahead of the US until the Feds made the Wrights share their patents to support production of arms for WW I. This led to the rise of far more innovative competitors in aircraft design and production: Curtiss, Martin, Lockheed, Boeing, etc., which rapidly eclipsed the Wright company's fossilized and already obsolete technology. (Note that Wright was soon more or less forced to merge with Curtiss...)

Money talks. Signing the PPA is a legally binding contract to buy the power, so the power companies will them be willing to build the plant, knowing that there's guaranteed demand. Without the PPA, there's no guaranteed demand, and the powerplant won't get built.

Legally binding is a nebulous concept when you're some of the world's richest companies with legal departments multiple times larger than the entire staff of the companies you're 'legally bound' with.

An agreement to buy enough power for a lightbulb from a plant generating from unicorn farts is meaningless.

If they happen to pull through, it’s a drop in the bucket of Google’s overall consumption. If they don’t, then there is no downside for Google. This is not an investment.

What are you talking about? If you have Google an offer to sell them $1 for $0.50 they will absolutely take it even if they 99% think you will flop. There is no downside.

> Legally binding is a nebulous concept when you're some of the world's richest companies

The flip side of being rich enough to hire good counsel is being rich enough to be worth going after. Were Google to renege on an agreement such as this, there would be a line of litigation financiers standing to buy the claim.

It was never a meaningful term. Almost everything anyone ever says is virtue signalling; the only difference is which virtues are being flaunted.

It can be a necessary step but also a weak gesture at the same time. It doesn't inspire confidence the way actual non-conditional spending does.

Originally it was a worthwhile term to examine distinctions between virtue communications that might be more matters of social negotiation and virtue communications that might be reflections of personal value investment.

Then in certain political usage it became a nihilistic drive-by dismissal for nullifying any kind of virtue accountability, whether sincerely invested or not, a challenge to the idea that there was any such thing as sincere virtue discourse.

CFPP was subsequently terminated.

https://news.ycombinator.com/item?id=38198136

In case it wasn't clear, my nihilism is that that political nihilism is itself a form of virtue signaling.

It's a first customer, and guaranteed revenue if the generation is able to be built and operated. It's huge for the nuclear startup company, and can be used to get the financing lined up.

Agreed that Google is taking on very little risk here, but it's still a good action and moves the space forward.

Yes, it gives them some firm future revenue numbers to work with. They can take this agreement and get financing to pay for the actual construction needed.

It would be circular if a single person was saying both of those.

Are the people you're talking to in support of the first quote?

I would expect them to say a lack of PPAs shows lack of confidence, or for them to barely care about the number of PPAs. Not to use it as evidence that there's no interest.

That extremely large and competent legal departments is going to tell you this:

"Taking this to court will cost you a bajillion dollars. And you'll lose. Cut the antics and pay them off."

All true. But that's the Great War, not the World War.

Also worth noting that it had been eleven years between the Wright brothers' first flight, and the outbreak of the Great War. By the time WWII was on the horizon, US aviation was a force to be reckoned with. By the end of WWII, it was about the size of all European aviation industry combined, but certainly not before.

To address the sibling comment as well, yes that's accurate as I understand history. The big benefit of the prewar orders was that it gave the US a head start on ramping up for war production, which was nonetheless a basket case for the first year or so after the US entered the war, just before 1942. Without that head start the entire timeline for winning the war would have been pushed back, I don't think it could have changed the outcome but the additional suffering would have been immense.

Unless it's not actually Google but some shell company Google is technically a customer of. But either way, I don't imagine the intent is to bail on the agreement.

> It’s not real funding, it’s a power purchase agreement from something that may never be built!

PPAs can be used as evidence of guaranteed revenue when raising funds in capital and debt markets.

That capital and debt is used to develop and deploy the technology.

Yes, the person I replied to was doing both, which is why I replied the way I did.

Oh, I think I misunderstood what you meant by "there isn't interest".

I thought the disputed claim was that companies don't make nuclear PPAs because of lack of interest. In that case those claims would combine into a very flawed argument, but pinewurst isn't saying that.

But if the actual meaning was that companies don't invest in the power plants needed to fulfill the nuclear PPAs because of lack of interest, then yes pinewurst was saying that, but that's not a circular argument anymore. "Nuclear PPAs don't represent real interest in power plants." and "There's negligible demand for nuclear PPAs for actual power because there isn't real interest in power plants." are compatible statements and not circular at all. The implication is simple: PPAs are a useless signal, and if you want to check for meaningful interest you need to check other signals. I don't know if I agree, but I think it's a reasonable position. And there's no 'conspiracy' needed.

Important to the customer, yes. Meaningless as an indication of Google’s commitment to clean energy.

Corporations too have survival and self-preservation instincts.