A growing number of
nuclear startups are trying to solve the world’s most pressing problem.
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.
The report was understandably bearish on big growth in nuclear
power. Following the tragic earthquake and accompanying meltdown of the nuclear
reactors in Fukushima, Japan in 2011, new nuclear reactor construction has been
largely halted in many countries. Public fear over safety, especially following
such incidents, has long hampered the industry, and led to it being the sort of
black sheep of clean power.But four years after the infamous accident,
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.
Tapping into this emerging sentiment is a new wave of
entrepreneurs and investors, many in Silicon Valley, who are passionate about
how tech innovation can lift the industry out of its nuclear stalemate.
The new guard are working within a nuclear industry that is
stuck in the regulatory and financing patterns of old. Big conglomerates
dominate and career nuclear execs are the norm. But the lack of interest in new
tech and new ideas are in sharp contrast to the high stakes of averting
planetary catastrophe. 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. They are supposed to appear on a panel about nuclear
energy that I’m moderating, but they’re actually far more interesting to listen
to just chatting on their own.
There’s a spread of wine and cheese in one corner, and around
the room are windows big enough to see the San Francisco Bay in the background.
The wooden door into the office is so preposterously large that you can’t help
but instinctively feel what they seem to be implying: We do big things. At one
point, the firm adopted the motto “we wanted flying cars, instead we got 140
characters,” as a sort of dismissal of the preoccupation among many Silicon
Valley investors with the next hot consumer app. 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.
Dewan, who looks a bit like actress Amy Adams, is one of the
clear leaders of this growing movement of nuclear entrepreneurs. The nuclear
policy advocates in the room refer to her as “their secret weapon” that they
use in meetings on Capital Hill to inspire and make connections. She’s young,
well-spoken and doesn’t fit the profile of the typical nuclear industry exec.
She and the senior statesman in the room, venture capital icon Ray Rothrock,
take turns interrupting each other to answer questions about the hurdles that
face startups in the nuclear sector. Unlike Dewan, Rothrock fits the physical
description of the typical nuclear exec, but he’s actually anything but.
Rothrock’s been a venture capitalist for over two decades. He
backed Sun Microsystems early on, launched the Internet investing practice for
VC firm Venrock in the early 90’s, and later formed the company’s energy
investing practice. He also started his career as a nuclear engineer in the
late 80’s and early 90’s before getting the investing itch.
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.
Nuclear
tech renaissance? Dewan and Rothrock say nuclear
tech is undergoing a period of rare entrepreneurial innovation. Rothrock says
that compared to when he was in school, there are many more students today
working on nuclear tech projects because of pressing climate change.
They cite figures of 55 nuclear startups with a total of $1.6
billion in funding. Rothrock says people don’t believe him when he says there’s
that many startups working on nuclear technology. But those numbers are tiny
compared to how many on-demand delivery startups, or mobile photo sharing
startups, there are with millions of dollars from venture capitalists.
Founders Fund partner Scott Nolan, who made the investment in
Transatomic Power, compares the nuclear entrepreneurial tech movement to what’s
been happening in aerospace with young disruptor SpaceX and others. Nolan was
an early employee at SpaceX and helped develop the propulsion systems used on
the Falcon 1 and Falcon 9 rockets and the Dragon spacecraft.
Investors beyond Venrock and Founders Fund are starting to take
notice. Last month the head of Silicon Valley accelerator Y Combinator, Sam
Altman, said he was joining the boards of two
nuclear startups. Helion Energy, which is building a magnet-based fusion
reactor, and UPower,which has designed a small modular
fission reactor, unusually went through the Y Combinator program.Then there’s
young nuclear fusion startup General Fusion, which is backed by Canadian
venture capitalists Chrysalix Venture Capital, Amazon CEO Jeff Bezos, and the
Canadian government. The company hopes to have a working prototype of its
fusion reactor this year and an operating reactor in 2020. Bill Gates has
backed a nuclear startup called TerraPower, which was a spin off from the
intellectual property incubator Intellectual Ventures. The company is working
on a technology called a traveling wave nuclear reactor, which uses nuclear
waste as a power source. There’s also NuScale Power, which has been working on
small, modular water reactors. Instead of the massive 1 gigawatt nuclear power
generators that are in use today, NuScale Power makes a smaller 50 megawatt one
(1,000 megawatts make 1 gigawatt).
Many of these nuclear startups, like Transatomic Power and
TerraPower, are trying to address the issue of nuclear waste with their new
reactor designs. That’s because the problem of what to do with the radioactive
byproduct that results after a reactor has used up its fuel, is both
complicated and important for the future of the nuclear industry.
Barriers
to nuclear innovation Despite the dozens of nuclear
startups these days, the sector is far from welcoming to entrepreneurs.
Combining the difficulties of the startup world with the difficulties of
nuclear technology is a colossal endeavor.
Nuclear technology can take decades to move from the lab into
commercialization. Many nuclear startups don’t even give commercialization
estimates because it can be so many years away. That makes it difficult for
investors to back because they don’t know when they can expect a return.
The traditional nuclear industry also requires billions of
dollars to get nuclear reactors built. The first nuclear
plant under construction in the U.S. in decades, in Georgia, is
estimated to cost $14 billion, and is now over budget and behind schedule.
Access to funding will plague all of the nuclear startups. NuScale Power faced
a funding crunch and sold a majority ownership to Texas energy services company
Fluor. But the biggest barrier for a nuclear startup could be regulation. It
can take years to wade through the regulatory process of the U.S. Nuclear
Regulatory Commission.
The NRC was born out of the Atomic Energy Commission of the
1940s, and its history is tied with nuclear arms proliferation and the
military. It’s a closed, enforcing regulatory body and not equipped to deal
with building relationships with entrepreneurs. Rothrock has been advocating
for an entirely new federal nuclear agency that would operate like the federal
Food and Drug Administration. When pharmaceutical companies submit drugs for
approval with the FDA they have to meet certain milestones with their studies
and prove that it works. Rothrock thinks an ‘FDA for nuclear’ could create the
same predictable milestones for nuclear reactors and enable entrepreneurs and
startups to get their new reactor technologies off the ground much more
quickly. If Rothrock and Dewan can help deliver changes in the nuclear tech
industry, it could help open up this much neglected sector to some of the
brightest and passionate young minds. Instead of flocking to Silicon Valley to
create mobile apps, maybe the top students will turn to nuclear, like Dewan
did. And if the U.S. nuclear industry doesn’t change, many of these innovations
will be commercialized overseas. China’s appetite for any new power generation
tech is voracious. Russia is also particularly interested in new nuclear power.
Dewan and Rothrock have an important mission. With climate change looming on
the horizon, nuclear technology could be the planet’s best hope.
CITATION FROM FORTUNE : http://goo.gl/vioiO3
