{ "docId": "019dd923-622c-750b-8b98-333f2fdb39d6", "docSlug": "7c592f478795", "documentTitle": "Oklo Inc. (OKLO)", "authorId": "53_Kerrisdale_Capital", "authorName": "Kerrisdale Capital", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2024-11-01 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 14, "pageCount": 26, "prevPage": 13, "nextPage": 15, "slideType": "villain_critique", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 12, "notes": "The slide uses a quote from an industry competitor to reinforce the argument that Oklo's cost estimates are unrealistic.", "elementsJson": [ "paragraph", "quote_block" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-333f2fdb39d6/14", "deckHref": "/decks/019dd923-622c-750b-8b98-333f2fdb39d6", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-333f2fdb39d6.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-333f2fdb39d6#slide-14", "components": [ { "bbox": null, "kind": "callout", "text": "None of this changes the fact that Oklo's cost estimate for the initial core of fuel for their reactor design is too low by a factor of 5x or more.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0f20-71ed-bdde-52bbbdffaa93", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "HALEU fuel cost: $7,000 / kg", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd953-0f20-71ed-bdde-58afdf83f186", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.115, "w": 0.78, "x": 0.118, "y": 0.145 }, "kind": "paragraph", "text": "With such scant detail on the breakdown of plant costs, we focused our research on Oklo's assumption for fuel which Oklo states, \"[d]oes not assume Oklo recycles fuel for internal supply. Assumes all fuel is newly fabricated HALEU purchased from a third-party supplier at a cost of $7,000 / kg.\" This is a particularly important claim. Unlike large, conventional, nuclear power plants, where plant costs far outweigh that of fuel, the economics of a 15-50 MWe Aurora powerhouse are extremely sensitive to assumed fuel costs.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0be2d5eb-660b-4b24-bcb5-71a2272bf65b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.155, "w": 0.78, "x": 0.118, "y": 0.435 }, "kind": "paragraph", "text": "According to multiple industry experts, a far more reasonable estimate for fully fabricated HALEU would be between $30,000 - $40,000 / kg, 3x-6x higher than what Oklo has assumed. This range is broadly consistent with an estimate of $32,600 / kg for 19.75% enriched uranium from public policy think tank, Third Way. It is also consistent with a December 2023 figure from the Nuclear Innovation Alliance (a non-profit nuclear energy think tank) which estimated the cost for HALEU in metallic form at $25,725 / kg. Note, neither of these estimates include the cost to fully fabricate raw enriched uranium into fuel elements, like pellets or rods.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "95076c20-113f-4f47-bf9e-ef779c4ec147", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.155, "w": 0.78, "x": 0.118, "y": 0.265 }, "kind": "paragraph", "text": "The illustrative economics for an Aurora 15 MWe unit, for example, anticipates $33m in initial fuel cost ($7,000 / kg X 4,750 kg initial load) which is higher than the $24m for construction of a NOAK plant itself (p.44). Oklo's \"illustrative unit economics\" rests heavily on assumed costs for fuel which doesn't exist commercially at scale in the US and likely won't for another decade. This is encapsulated in the damning quote from the former NRC Commissioner who believes that Oklo is simply making up its fuel cost number. Tellingly, on a slide that includes footnotes for many other key assumptions, there is zero justification for the basis of Oklo's fuel cost assumption.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a08eb7d9-d219-46ad-96a4-41f047c02cc4", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.035, "w": 0.78, "x": 0.118, "y": 0.915 }, "kind": "paragraph", "text": "So, what happens to capital costs, IRRs, and LCOE when fuel costs that are low by \"5x or more\" are replaced with a figure more closely tied to reality? Below we compare Oklo's provided", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "b35b378a-a5de-4179-aa1a-86554180d243", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.135, "w": 0.78, "x": 0.118, "y": 0.605 }, "kind": "paragraph", "text": "A nuclear fuel supply expert we asked to independently estimate HALEU costs stated fabrication itself might cost over $10,000 / kg (based on an IAEA study in 2010 which found the cost of test reactor fuel fabrication can range from $10,000 to $30,000 per kg). For the avoidance of doubt, Oklo claims fuel recycling capabilities (which won't exist until the 2030s and for which there is no domestic market, see: risk factor 19) will lower fuel costs by over 80% (p.15) but its $7,000 / kg fuel cost assumption is clearly stated as being for \"newly fabricated HALEU\", not recycled spent fuel.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "cb94a70f-53a3-49a1-b1f4-304f3d52d3db", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.035, "w": 0.78, "x": 0.118, "y": 0.093 }, "kind": "paragraph", "text": "to a US Energy Information Administration case study which determined an NOAK facility with six 80 MW SMR modules would cost $8,936 / kW (p.67).", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f1df8b18-61f3-478d-81b0-e6c2abdceebb", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.135, "w": 0.61, "x": 0.205, "y": 0.775 }, "kind": "quote", "text": "\"The [national research] labs have a terrible track record of successfully executing on building things, and I know INL is trying to demonstrate value by picking a couple vendors, getting something built, and proving that they are good at working with industry and getting something useful accomplished. They have a history of announcing that they will have a reactor built by such-and-such date, and then never actually building anything at all (NGNP / VHTR, Marvel). None of this changes the fact that Oklo's cost estimate for the initial core of fuel for their reactor design is too low by a factor of 5x or more.\"", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "50a040db-2a15-42d2-9bfc-ea7ce70d35d2", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "The [national research] labs have a terrible track record of successfully executing on building things, and I know INL is trying to demonstrate value by picking a couple vendors, getting something built, and proving that they are good at working with industry and getting something useful accomplished. They have a history of announcing that they will have a reactor built by such-and-such date, and then never actually building anything at all (NGNP / VHTR, Marvel). None of this changes the fact that Oklo's cost estimate for the initial core of fuel for their reactor design is too low by a factor of 5x or more. — Executive at an SMR competitor", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-0f20-71ed-bdde-55aa1dd2d28c", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Villain slide", "slug": "villain-slide", "agent": null, "layer": "slide", "matchId": "66a8faed-89e7-4dae-b68d-b48d41e04b58", "evidence": "The slide discusses Oklo's unrealistic fuel cost assumptions, highlighting the discrepancy with industry estimates.", "confidence": 0.9 } ], "frameworks": [], "arcBeats": [ { "to": 17, "from": 5, "beatId": "c67ecd24-b26a-42ac-ba29-3231edfb3db6", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Monster", "beatSlug": "overcoming-monster-the-monster", "evidence": "The document presents various challenges facing Oklo's business model, including regulatory and deployment timelines, cost overruns, and reliability issues.", "position": 0, "confidence": 0.8, "parentBeatName": "Hook", "parentBeatSlug": "hook" } ], "loops": [ { "to": 17, "from": 5, "name": "Cost Of Inaction", "slug": "27-cost-of-inaction", "bestFor": "Urgent budget requests, compliance, risk mitigation", "matchId": "f9431516-147b-457d-af7e-a1bb0fe4f9e4", "evidence": "The document presents various challenges facing Oklo's business model and industry challenges.", "position": 0, "objective": "What are the consequences of Oklo's overly optimistic timelines and business model?", "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point", "confidence": 0.7, "description": "Quantify what happens if the audience does nothing" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }