Advanced nuclear energy primed for private investment

Nuclear energy primed for private investment

Rod Adams’ marvelous Atomic Insights blog published an article in February titled “Advanced nuclear energy systems are ready for investors who seek ground floor opportunities,” that asked an important question: “How do we match the ingenuity and enthusiasm of atomic innovators with the large magnitude financing sources needed to advance the field so it can become a major success story?”

These thoughts reflect Mr. Adams’ ruminations following the conclusion of the 5th annual Advanced Reactor Technical Summit, hosted by the Nuclear Infrastructure Council.  It seemed that difficulty obtaining financing had been identified as a hindrance to those groups working to develop new nuclear technologies, causing some aspiring entrants to slow down efforts and others to drop out entirely.

Although there were no clear successes yet, the field nontheless was maturing and Mr. Adams opined that it was “ripe for investors willing to side-step conventional wisdom so that they can be in at the ground floor.” Taking the metaphor even further, Adams wrote, “In my opinion, the foundation and basement level investors have completed enough of their tasks to declare that the remainder of the structure is ready for construction.”

Recognizing that investing in nuclear remained too risky for “widows, orphans or near term retirement funds,” Mr. Adams nevertheless wrote that there were some “impressive opportunities available for those with a greater appetite for risk or who understand the importance of long term, patient investing.” Clearly, the addressable energy markets where advanced nuclear could sell into are enormous, as the demand for energy is growing all around the world, which provides plenty of opportunity for numerous contenders within a universe of potential suppliers of new technologies that was limited in size.

At the same time as Mr. Adams was developing this line of thinking, Valerie Gardner, the TIA principal keeping an eye on the climate crisis and working to determine how investors should respond, was returning from a series of conferences that had stimulated similar lines of thought for her. The first was the Financial Times’ Climate Finance Conference, held in New York City, where an audience of several hundred institutional investors gathered to discuss the state of climate investing. Strikingly, there was a clear recognition in the group that most were finding a dearth of really viable, exciting clean energy investments. Everyone there was motivated and trying to figure out how to invest in meaningful climate solutions yet finding the availability of large-scale investments lacking. Instead, there were only smaller individual projects, such as wind and solar projects, that were seeking construction funding but which didn’t enable larger amounts of capital to be deployed.

Ms. Gardner had also just attended the 3rd Annual Advanced Nuclear Summit & Showcase in Washington, D.C., which had brought together most all of the young, ambitious entrepreneurs working to develop advanced nuclear technologies to discuss the challenges that they faced getting their designs to market. There were dozens of ventures represented at this event as well as members of the Department of Energy, the Nuclear Regulatory Commission and various pronuclear non-profits such as Third Way and ClearPath. But it was very clear to Valerie that, apart from herself, there were no investors at the meeting. A good chunk of the panel discussion held covered the problems  posed to the growing sector because there was a dearth of capital available to fund their growth.

It was immediate clear to Valerie that she was straddling two very distinct communities that needed to be introduced to one another. On one side, motivated investors controlling billions of dollars were desperately seeking viable climate investments. On the other side, reams of brilliant entrepreneurs were working to solve the climate crisis with technologies and were desperately seeking financing to build their oeprations.  It seemed like there could be a way to solve both problems at once but it wasn’t clear how to get that to happen.

Ms. Gardner began to noodle on the problem, recognizing that virtually all of the then participating advanced nuclear companies were small, not-yet-public start-ups and what they needed was venture capital. Venture capital was not interested in investing in those types of ventures. Plus, the only investors who could afford to invest in venture capital were extraordinary wealthy individuals and institutions. Those with more modest amounts of capital to invest could not afford to participate, no matter how motivated they were to invest in advanced nuclear innovation. This made it “difficult for people with modest resources but significant professional understanding of the opportunities to make strategic, long term, focused investments in the field,” as urged by Mr. Adams.

Fortunately, at the end of his article, Mr. Adams exhorted anyone in his audience to reach out to him “with thoughts about developing mechanisms for investors with moderate resources and long time horizons to focus part of the portfolio in this potentially high payoff field.”  So, we’re thrilled to report that Valerie has now connected with Mr. Adams to discuss her thoughts about launching a fund to invest in advanced nuclear and bridging the two communities for the betterment of climate and our future.

Please stay tuned for updates on our progress.