LFTRs, a Disruptive Technology; Guest Post by Fred Moreno

This is a letter written to me and Robert Hargraves, which I obtained permission to share on my blog.  I have edited it a little:

Dear Robert:

Thanks for your book Thorium Energy Cheaper than Coal which I have just completed.  Besides providing a further education on the topic, in reading the first page reviews, I saw one by Meredith Angwin which caused a distant memory to light up... I found her email address and we have struck up a conversation of shared interests.

I was motivated to write after reading your appendix with the paper that again retraces the history of LWRs and the evolution of the latest generation systems from Westinghouse et al.  Their investment causes them to have little interest in any new technology that may detract from their established history and embedded corporate strategic heading.  As you know, this is common in companies/industries that grow long in tooth.

Disruptive Technologies

If you are not aware of the work of Clayton Christensen at the Harvard Business School, you should review his work on "disruptive innovation" in light of the Westinghouse strategy and disruptive characteristics created by LFTR.  In short, Christensen showed through research that markets change need, and differing needs cause changes in buyer preference which old suppliers can not adjust to meet. So they die.  He started with disk drives, and broadened his research.

Some examples:

In disk drives, for years the driver was lower cost per megabyte which meant huge disk drives.  I am

sure you remember the refrigerator size drives, lined up in rows, that serviced IBM 360's at computer centers to which we brought stacks of punch cards.  Mini-computers (DEC VAX being most notable example) could be put in a closet so that small hard disk drives were preferred despite much higher $/MB cost.  Small size was more important.  The 8 inch Winchester and then 5 inch Winchester drives emerged, and a whole new industry of disk drive companies thrived.  Interestingly, IBM did not make the transition, and the 8 inch guys could not transition to 5 inch who could not transition to 3 inch shock hardened units for lap tops.  Once established, the established players could not match the cost structure and demands of the next smaller step.

Research showed this happened in the past again and again. American clipper ships were unsurpassed in ability to sail around the Horn at low cost with high reliability. Steam ships were unreliable, expensive, and exploded.  But clipper ships could not navigate rivers and canals, and it was on the Mississippi River and elsewhere that steamships found a solid footing and matured to eventually take over.  Number of clipper ship companies that made the transition:  zero.

Earthmoving was dominated by huge steam shovels.  Figure of merit: dollars per cubic yard of soil moved.  Bigger was better.  Until the post WWII housing boom when somebody cobbled together a small hydraulic powered scoop that fitted on the back of a Ford rubber tire ag tractor and was driven by the agricultural power take off coupling.  It was a kludge, but for cutting trenches around tract houses, it beat hand work by miles.  Time goes on, and hydraulic backhoes have become huge and dominant in earth moving.  Survivors from the steam shovel days: a couple that now make huge drag lines for open pit mining.

Avant Loader in Sweden

Bigger seems better, until it isn't

You see the pattern is clear in the context of LFTR: The proposed GEN III huge "modular" LWRs are derelicts of the past.  They must be bypassed because the market demands something with different requirements - mass production, easily shipped and quickly erected at smaller, easier to find sites, economy from production line manufacture instead of economies of scale, and all the other benefits you know so well.

So as you pursue your quest for LFTR, and given your bully pulpit, I suggest you incorporate the lessons of "disruptive innovation" to show that costs, risks, performance, and other benefits arise from adaptation to the changes in market demand.   "Disruptive innovation" needs to be a primary strategic element of LFTR commercialization attracting a new generation of business entrepreneurs not bound to the views of the past.  It is a message that rings strongly with the venture capital set, all of whom have carefully read Christensen's work.   It needs to be part of the LFTR equation.

Sincerely,

Fred Moreno, a retired Yankee Techie now resident on the SW coastline of Western Australia

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 I worked with the author, Fred Moreno, at Acurex in the 70s.  Moreno has a BSME from University of California and an MSME from Stanford University. He retired from his position as Chief Operating Officer and Executive Vice President of Silicon Valley technology company. The company made robotic systems for use in the semiconductor manufacturing business.  Moreno now lives in Australia.