Funding New Nuclear Technology (and There’s A Lot of It)

Under the somewhat alarming title, How Startups Can Save Nuclear Tech, Fortune writer Katie Fehrenbacher offers a survey of, well, startups promoting nuclear technology.

Fortune finds this interesting for reasons that have become obvious to anyone who has looked at recent energy policy:

But four years after the infamous accident [that is, Fukushima], environmentalists, nuclear advocates, and researchers are now looking at nuclear tech as an almost necessary way to generate power without carbon emissions that, if used correctly, could be crucial to help the world avoid the worst of global warming. And unlike with solar and wind, nuclear reactors generate power around the clock.

The article zeroes in on the investor community, which, even if your primary interest is new nuclear technology, drives that technology to market. It makes sense for Fortune to spin the nuclear diamond to this particular facet – it’s the magazine’s bailiwick – and provides a unique perspective.

Last month, beneath the high-vaulted ceilings of the sleek offices of Founders Fund, a venture capital firm that backed Facebook, Airbnb and SpaceX, sits a small group of these passionate nuclear evangelists.

Does nuclear energy fit the so-called sharing economy? Maybe not, but the SpaceX connection is interesting – it suggests a taste for counterintuitive thinking, in nuclear energy terms favoring alternatives to light water reactors and even fission.

Last Summer, Founders Fund invested a small $2 million seed round into an early stage nuclear startup calledTransatomic Power. Founded in 2011 by MIT nuclear scientists Leslie Dewan and Mark Massie, Transatomic Power is working on a nuclear reactor that uses molten salt and nuclear waste as a power source. While molten salt nuclear reactor tech is decades old, Dewan and Massie are using new designs and materials.

A bit about the venture capitalist Ray Rothrock:

Some of Rothrock’s nuclear ambitions are poured into a stealthy startup, Tri Alpa Energy, that is working on nuclear fusion (nuclear fission is what’s used in today’s reactors). Years ago Venrock backed Tri Alpha Energy, and the company now also has the financial support of the Russian government (through the nanotech company Rusnano), Microsoft co-founder Paul Allen, and Goldman Sachs. Rothrock is Tri Alpa Energy’s chairman.

Tri Alp[h]a is new to me and I guess new in general – it doesn’t have a Web site yet – that must be the stealthy part.

There’s more, including Helion Energy (fusion), UPower (small reactors), TerraPower (used fuel as fuel) and NuScale (small reactors). The focus remains largely but not totally on investment. Well worth a read – both for a reminder of how lively the nuclear technology scene is and for this presumption that is driving (some of) the investment.

A recent disturbing report predicts that despite a colossal number of new solar panels and wind turbines over the next quarter century, the planet will still face dangerous rising temperatures. Basically even if these widely embraced clean energy technologies are put on overdrive, we’re still probably screwed.

Indeed.

Fluor Invests in NuScale

You know, it’s kind of sad that no one is willing to invest in nuclear energy anymore. Wait, what? NuScale Power celebrated the news of its company-saving $30 million investment from Fluor Corp. Thursday morning with a press conference in Washington, D.C. Fluor is a design, engineering and construction company involved with some 20 plants in the 70s and 80s, but it has not held interest in a nuclear energy company until now. Fluor, which has deep roots in the nuclear industry, is betting big on small-scale nuclear energy with its NuScale investment. "It's become a serious contender in the last decade or so," John Hopkins, [Fluor’s group president in charge of new ventures], said. And that brings us to NuScale, which had run into some dark days – maybe not as dark as, say, Solyndra, but dire enough : Earlier this year, the Securities Exchange Commission filed an action against NuScale's lead investor, The Michael Kenwood Group. The firm "misap...

Wednesday Update

From NEI’s Japan micro-site: NRC, Industry Concur on Many Post-Fukushima Actions Industry/Regulatory/Political Issues • There is a “great deal of alignment” between the U.S. Nuclear Regulatory Commission and the industry on initial steps to take at America’s nuclear energy facilities in response to the nuclear accident in Japan, Charles Pardee, the chief operating officer of Exelon Generation Co., said at an agency briefing today. The briefing gave stakeholders an opportunity to discuss staff recommendations for near-term actions the agency may take at U.S. facilities. PowerPoint slides from the meeting are on the NRC website. • The International Atomic Energy Agency board has approved a plan that calls for inspectors to evaluate reactor safety at nuclear energy facilities every three years. Governments may opt out of having their country’s facilities inspected. Also approved were plans to maintain a rapid response team of experts ready to assist facility operators recoverin...

Nuclear Utility Moves Up in Credit Ratings, Bank is "Comfortable with Nuclear Strategy"

Some positive signs that nuclear utilities can continue to receive positive ratings even while they finance new nuclear plants for the first time in decades: Wells Fargo upgrades SCANA to Outperform from Market Perform Wells analyst says, "YTD, SCG shares have underperformed the Regulated Electrics (total return +2% vs. +9%). Shares trade at 11.3X our 10E EPS, a modest discount to the peer group median of 11.8X. We view the valuation as attractive given a comparatively constructive regulatory environment and potential for above-average long-term EPS growth prospects ... Comfortable with Nuclear Strategy. SCG plans to participate in the development of two regulated nuclear units at a cost of $6.3B, raising legitimate concerns regarding financing and construction. We have carefully considered the risks and are comfortable with SCG’s strategy based on a highly constructive political & regulatory environment, manageable financing needs stretched out over 10 years, strong partners...

NEI Nuclear Notes

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