Atomic Opportunities

Investing in the Nuclear Renaissance

Atomic Opportunities
Written by

Drew Wandzilak

Published on

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10 min

Imagine powering an entire city with a lump of material small enough to fit in the palm of your hand. This is not science fiction but the reality of nuclear fission—where splitting a single atom releases immense energy. This principle has the potential to revolutionize our energy systems, offering a cleaner, more efficient alternative to fossil fuels. But what does the journey of nuclear energy from theory to global energy source look like, and what does its future hold?

Background

The Mechanics of Nuclear Fission: Unleashing Atomic Power

Nuclear fission is a process in which the nucleus of an atom splits into two or more smaller nuclei, accompanied by the release of a significant amount of energy. This process starts when a neutron collides with the nucleus of a fissile atom, such as uranium-235 or plutonium-239, absorbing the neutron and becoming unstable. This instability causes the nucleus to split, releasing additional neutrons and a tremendous amount of energy in the form of heat and radiation.

The additional neutrons released can then trigger fission in nearby fissile atoms, creating a chain reaction. In a controlled environment, such as a nuclear reactor, this chain reaction is regulated to ensure it proceeds at a steady rate, releasing energy in a manageable and sustained manner. The heat generated through fission is used to produce steam, which drives turbines connected to generators, ultimately producing electricity.

The efficiency of nuclear fission comes from the immense energy released by the strong nuclear forces holding the nucleus together, which is far greater than the energy released from chemical reactions such as the burning of fossil fuels. This makes nuclear fission a potent source of energy, able to generate large amounts of electricity from relatively small amounts of fuel, without producing carbon emissions.

The Unmatched Efficiency of Nuclear Power: A Clean Energy Giant

Harnessing nuclear energy demands complex engineering and the construction of power plants. However, once operational, their efficiency is unparalleled. Consider these facts:

    • A nuclear power plant can produce over 57,000 megawatt-hours (MWh) per acre, dwarfing solar’s 200 MWh per acre and natural gas’s 1,000 MWh per acre.
    • A single nuclear reactor can supply electricity to over a million homes, maintaining over 90% uptime.
    • Our existing nuclear fleet offers the most cost-effective baseload electricity at approximately $30 per MWh.
    • Since nuclear energy generation does not involve burning hydrocarbons, it operates without emitting carbon dioxide, making it a powerhouse of clean energy.
Webinar
Atomic Opportunities: Investing in the Nuclear Renaissance

Presenters
Laura Bordewieck Rippy
Laura Bordewieck Rippy

Managing Partner, US Strategic Tech Fund

Pete Mathias
Pete Mathias

Partner, US Strategic Tech Fund

Drew Wandzilak
Drew Wandzilak

Associate, US Strategic Tech Fund

Brian Berzin
Brian Berzin

Co-Founder & CEO, Thea Energy

Yasir Arafat
Yasir Arafat

Co-Founder & CTO, Aalo Atomics

Julia van der Colff
Julia van der Colff

Senior Associate, Decisive Point

Jon Guidroz
Jon Guidroz

Former Chief Strategy Officer, Energy & Resources, Microsoft

Darrin Wizst
Darrin Wizst

Senior Partner

History of Nuclear Energy

Nuclear energy’s journey in the U.S. encapsulates a transformation from military innovation to a beacon of civilian power generation, challenged by societal apprehensions and environmental concerns.

Nuclear’s Origin Story: A Dual-edged Sword

Initially, nuclear fission’s monumental debut was marked by the atomic bombings in Japan during World War II, casting a long shadow over its potential. The subsequent “atoms for peace” initiative in the 1950s pivoted this formidable force towards civilian use, heralding an era of optimism with the launch of the first commercial power plant in Pennsylvania in 1958. This period was characterized by ambitious promises of boundless and affordable energy, even flirting with futuristic concepts like nuclear-powered cars.

Achievements Amidst Controversy

Despite the promising start, nuclear energy’s development was not without its controversies. A significant setback came from a hydrogen bomb test in the mid-1950s by the U.S. military, which inadvertently exposed inhabitants of the South Pacific and a Japanese fishing crew to harmful radiation levels. This incident, alongside the nuclear arms race of the Cold War, fertilized the ground for anti-nuclear sentiments, culminating in widespread protests.

Environmental Opposition and Disasters

The environmental movement of the 1960s and 1970s, galvanized by seminal works like Rachel Carson’s Silent Spring, began to scrutinize nuclear energy critically. Opposition to projects like the proposed Bodega Bay nuclear power plant exemplified the burgeoning anti-nuclear stance within environmental circles, eventually influencing organizations like the Sierra Club to reverse their pro-nuclear positions.

The reputation of nuclear energy suffered significantly from the incidents at Three Mile Island, Chernobyl, and Fukushima. These events, often magnified by media portrayal, fostered a disproportionate fear of nuclear energy, despite the actual risks and consequences being relatively contained. For instance, the Three Mile Island incident resulted in no fatalities and minimal radiation exposure, yet is frequently mischaracterized as a disaster.

Barriers/Risks: Perceptions and Reality

The anti-nuclear movement has effectively cast a shadow over nuclear energy’s potential, advocating for the shutdown of plants and instilling a deep-seated fear of nuclear technology. This opposition has overlooked the comparative safety of nuclear energy, especially when analyzed alongside other energy industries. Misunderstandings surrounding the actual impact of nuclear accidents have further entrenched skepticism, despite nuclear’s record of safety and its low environmental footprint compared to fossil fuels.

Nuclear energy in the U.S. has traversed a complex path, marked by groundbreaking technological advances and significant societal challenges. The promise of clean, efficient, and abundant energy remains. But overcoming the barriers erected by historical events, misconceptions, and anti-nuclear sentiment is crucial for its future. As we look ahead, the dialogue around nuclear energy continues to evolve, reflecting a nuanced understanding of its role in addressing climate change and meeting global energy demands.

Geopolitical Context

Strategic Power: Nuclear’s Role in Energy Independence and Global Influence

In the geopolitical arena, nuclear energy emerges as a linchpin for national energy independence and security, offering a strategic advantage to countries that harness its power. Energy independence, a critical component of national sovereignty, is significantly bolstered by nuclear power.

Unlike fossil fuels, which are often concentrated in geopolitically unstable regions, nuclear fuel can be sourced more diversely. This diversification mitigates the vulnerability associated with reliance on foreign energy supplies, shielding economies from the volatility of international oil and gas markets. The ability to produce a substantial portion of a nation’s energy needs domestically through nuclear power diminishes the leverage that oil-rich states might wield, promoting a more balanced and secure global energy landscape.

The intersection of nuclear energy development with national security cannot be overstated. A robust nuclear energy program not only supplies a steady stream of electricity but also underpins a country’s strategic capabilities in nonproliferation and defense. The technological and scientific expertise developed through civilian nuclear energy programs contributes to the broader security apparatus, enhancing a nation’s ability to navigate the matrix of international relations and security challenges. It also provides the foundation for a sophisticated understanding of nuclear technologies, which is vital for both the peaceful uses of nuclear energy and the effective management of nuclear nonproliferation treaties.

In this context, nuclear energy is not just an element of a nation’s energy strategy. It’s a cornerstone of its geopolitical strategy, strengthening its independence, fortifying its security posture, and enhancing its standing on the global stage.

Reigniting America’s Nuclear Ambition: Overcoming Stagnation to Challenge Global Rivals

Despite being the world’s largest producer of nuclear energy, the U.S. has seen its civilian nuclear infrastructure stagnate since the late 20th century. This stagnation contrasts sharply with Russia’s consistent progress and China’s ambitious expansion plans. Russia not only continues to enhance its nuclear capabilities but also exports reactors globally. Meanwhile, China is aggressively investing in civilian nuclear technology, aiming to build 24 new nuclear power plants by 2030, which would surpass the U.S. in terms of modern reactor fleet size.

The U.S.’s decline in nuclear development is attributed to a lack of political will, rather than a shortage of technical or financial resources. Historical incidents like the Three Mile Island accident have contributed to public and political apprehension towards nuclear energy, further exacerbated by complex environmental review and permitting processes. This hesitance has allowed both Russia and China to forge ahead in adopting advanced nuclear technologies, such as Small Modular Reactors (SMRs) and generation-four reactors, more rapidly than the U.S.

Moreover, the U.S. faces a significant challenge in securing supplies of high-assay, low-enriched uranium (HALEU) — essential for more efficient nuclear reactors —  with Russia dominating the commercial supply. Efforts by the Biden administration to revitalize the U.S. nuclear sector and reduce greenhouse gas emissions signal a potential shift towards re-embracing nuclear power. However, the path to regaining leadership in nuclear technology and ensuring energy independence requires a concerted effort to support innovation, streamline regulatory processes, and significantly increase investment in nuclear infrastructure.

Learn More About the U.S. Strategic Tech Fund

We are seeing strong interest in our U.S. Strategic Tech Fund. If interested, we recommend securing a spot promptly.

Invest in technologies vital to U.S. national interests in a portfolio of ~15-20 venture investments made over ~12-18 months — diversified by stage, sector, geography, lead investor.

Max Accredited Investor Limit: 249

Revolutionizing Clean Energy: The Dawn of Advanced Nuclear Technologies

Next-Gen Reactors: Smarter, Smaller, Safer

The future of nuclear energy is bright, with advanced reactors at the forefront. These next-generation reactors, including Small Modular Reactors (SMRs) and microreactors, promise enhanced safety, greater efficiency, and reduced environmental impact. Designed to be built in factories and assembled on-site, SMRs offer flexibility in location and scalability that traditional reactors cannot match. Innovations in reactor design also aim to utilize passive safety systems, minimizing the risk of accidents.

Building the Future: Streamlining Nuclear Construction

The shift towards modular construction methods in nuclear reactor design is set to revolutionize the industry. By allowing components or entire reactors to be mass produced and then shipped to their final location, nuclear energy can become both more scalable and cost effective. This approach significantly reduces construction times and financial risks, making nuclear power more accessible and appealing to a broader range of markets and countries.

Fueling Innovation: The Shift to High-Performance Nuclear Materials

Research and development in nuclear fuel technology are yielding safer and more efficient options. Advanced fuels, such as accident-tolerant fuels (ATF) and High-Assay Low-Enriched Uranium (HALEU), offer the promise of higher burn-up rates, increased safety margins, and reduced nuclear waste. These innovations not only make nuclear reactors more efficient but also significantly enhance their safety profile, addressing one of the public’s key concerns about nuclear energy.

The future of nuclear energy hinges on embracing these technological advances. By developing advanced reactors; adopting scalable manufacturing practices; and utilizing safer, more efficient fuels, the nuclear industry can overcome historical challenges and position itself as a reliable option for sustainable energy.

Fueling Innovation: Venture Capital and Nuclear Energy

The nuclear energy sector’s leap in venture capital attention indicates a growing recognition of its critical role in addressing geopolitical concerns, energy independence, and climate change. Notable numbers:

    • Between 2015 and 2021, venture capital investment in the U.S. surged, with a 54% increase in the number of deals and a 294% rise in their dollar value.
    • During this period, investments in climate-related ventures saw an even more significant boost, with a 214% increase in volume and a 1,348% jump in dollar value.
    • Notably, the nuclear sector outpaced these trends, experiencing a staggering 325% growth in investment volume and a 3,642% escalation in dollar value.

Nuclear power, with its zero greenhouse gas emissions during operation, presents a compelling solution for reducing carbon footprints at a scale to meet global climate goals. Strong legislation has helped bolster its attractiveness. The Bipartisan Infrastructure Law allocates $3.2 billion for modular and advanced nuclear reactors, while the Department of Energy’s Loan Programs Office earmarks $11 billion for advanced reactors and their supply chains. The landmark Inflation Reduction Act includes $700 million for the HALEU Availability Program, aiming to develop a non-Russian source of high-assay, low-enriched uranium. The IRA also introduced an exceptionally generous $15 per megawatt-hour production tax credit, designed to ensure the competitiveness of the current nuclear fleet against gas and renewables. It also provides a substantial investment tax credit to encourage the construction of new nuclear plants.

The sector’s innovation is not limited to energy generation alone. Startups are exploring versatile applications of nuclear technology, including medical research and industrial processes, thereby diversifying potential revenue streams and enhancing investment appeal. This multifaceted approach, combined with the venture capital industry’s willingness to support deep-tech challenges, positions nuclear energy startups as compelling option for sustainable, reliable power solutions.

Trailblazers of the Atomic Age: Three Companies to Watch

Aalo Atomics

Aalo Atomics is a startup focusing on the commercialization of small, technologically advanced nuclear fission reactors. Their mission is to provide nuclear energy at a cost low enough (targeting 3¢ / kWh) to meet the majority of the world’s clean energy demands while ensuring safety. The company is scaling up the reactor design from the DOE’s MARVEL program, a historic advancement in advanced reactor technology (CNBC).

X-Energy (Alumni Ventures portfolio company)

X-energy specializes in nuclear reactor and fuel design engineering, focusing on a Generation IV high-temperature, gas-cooled, pebble-bed nuclear reactor, the Xe-100. This innovative design aims for a compact, simpler, and safer alternative to traditional nuclear reactors. Originating from ideas proposed in 1944, the Xe-100 reactor targets a 200 MWt output, translating to roughly 76 MWe. Its unique spherical fuel element, or “pebble,” incorporates the tristructural isotropic (TRISO) particle fuel design, using 20% enriched Uranium, to extend refueling intervals. TRISO fuel significantly reduces the risk of nuclear meltdowns, enhancing safety.

Oklo

Oklo is developing next-generation fission reactors to produce abundant, affordable, clean energy at a global scale. The company is starting with the Aurora, which can produce up to 15 MW of power and operate for 10 years or longer before refueling. Oklo’s fast reactors incorporate safety features and can recycle waste. The company made history with the first advanced reactor site use permit, winning access to recycled fuel, and submitting the first-ever advanced reactor combined license application.

Learn More About the U.S. Strategic Tech Fund

We are seeing strong interest in our U.S. Strategic Tech Fund. If interested, we recommend securing a spot promptly.

Invest in technologies vital to U.S. national interests in a portfolio of ~15-20 venture investments made over ~12-18 months — diversified by stage, sector, geography, lead investor.

Max Accredited Investor Limit: 249

Nuclear Power: A Safe, Resilient Energy Source

Nuclear energy, with its ability to power millions of homes from a small amount of fuel, stands at the cusp of transforming global energy systems. This potential comes from nuclear fission’s immense efficiency and minimal carbon emissions, outstripping alternatives like solar and natural gas in output per acre. Despite its controversial history, from its militaristic origins to environmental debates, nuclear power has proven to be a safe and resilient energy source. Challenges from historical accidents and the anti-nuclear movement have skewed public perception, yet the industry’s safety record and environmental benefits remain unmatched.

The geopolitical significance of nuclear energy cannot be overstated, offering energy independence and global influence. However, the U.S. faces competition from nations like Russia and China, requiring a reinvigorated approach to nuclear technology and infrastructure investment.

The advent of advanced nuclear technologies — including SMRs and high-performance fuels —  promises a new era of safer, more efficient, and scalable nuclear power. Embracing these innovations is essential for securing a sustainable energy future, positioning nuclear energy as a cornerstone in the fight against climate change and a beacon for clean, abundant power.

Webinar
Atomic Opportunities: Investing in the Nuclear Renaissance

Presenters
Laura Bordewieck Rippy
Laura Bordewieck Rippy

Managing Partner, US Strategic Tech Fund

Pete Mathias
Pete Mathias

Partner, US Strategic Tech Fund

Drew Wandzilak
Drew Wandzilak

Associate, US Strategic Tech Fund

Brian Berzin
Brian Berzin

Co-Founder & CEO, Thea Energy

Yasir Arafat
Yasir Arafat

Co-Founder & CTO, Aalo Atomics

Julia van der Colff
Julia van der Colff

Senior Associate, Decisive Point

Jon Guidroz
Jon Guidroz

Former Chief Strategy Officer, Energy & Resources, Microsoft

Darrin Wizst
Darrin Wizst

Senior Partner

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