Part 3 of 4 Parts (Please read Parts 1 and 2 first)
In recent years, private investors and venture capitalists have been putting their money into nuclear startups. They seem to driven by a newfound sense of urgency to respond to climate changes. Although nuclear power plants do not release greenhouse gases as they operate, a lot of carbon dioxide is release when they are constructed and when their fuel is processed and transported. Venture capitalists are also attracted by the opportunity to fund underdog companies with a huge upside.
The venture capital model is based on big bets. Venture capitalists spread their money across many companies. Most of these startups are expected to fail or, at most, break even. However, if one or two companies grow to an enormous size, the funders will more than cover the costs of all losses. This is the investing model that supported the rise of Silicon Valley giants such as Apple, Google and Tesla.
Some venture capitalists are especially excited about the possibility of nuclear fusion as a power source. It is, after all, the process that fuels all the stars in the sky. It also, for the most part, generates no long-lasting radioactive waste. However, some of the proposed types of fuel such as deuterium and tritium can produce neutrons which will brittle metal components and make them mildly radioactive over time. It has been extremely difficult to create a lasting fusion reaction on Earth. The generation of net energy from a fusion reaction has just been accomplished after seventy years of research. There is still a long way to go to develop a fusion reactor which can produce enough steady energy for commercial applications.
Vinod Khosla is a venture capitalist. He said that, “It’s far better than nuclear fission. It’s far better than coal and fossil fuels for sure. But it’s not ready. And we need to get it ready and build it.”
Khosla is not the only venture capitalist interested in nuclear fusion. The private fusion industry has received almost five billion dollars of funding, according to the Fusion Industry Association (FIA). More than half of that has been since the second quarter of 2021 said Andrew Holland, CEO of the FIA.
Others are excited about new advances in nuclear fission. Fission is the more traditional type of nuclear power that is based on breaking atomic nuclei apart.
Zachary Bogue is the DCVC founder. He has invested in the micro-nuclear reactor company Oklo. He said, “Advanced nuclear fission is a quintessential deep-tech venture capital problem. There is technical and regulatory risk, but if those problems are solved, there are just massive-scale returns ... all of those elements are a perfect recipe for venture capital.”
While these bets seem expensive and risky compared with venture capitals recent focus on software and consumer technology, they will still bring a faster and more agile approach than the old-line nuclear industry. Most of the nuclear fission power reactors operating these days are approaching the end of their originally licensed life spans.
Please read Part 4 next