Nuclear Market Maps: Nuclear Fission Supply Chain and Small Modular Reactors
In the previous instalment of our series on Nuclear energy, we set out the reasons to be excited about the Nuclear Renaissance, as well as the obstacles that stand in its way. In part 3, we dive deeper into the nuclear fission market.
Some of the most ambitious and mission-driven entrepreneurs I know are working on nuclear power. The Silicon Valley playbooks of rapid iteration, customer focus and cross-disciplinary teams are increasing the learning rate of the entire nuclear sector.
The greatest area of focus is on the fission reactors themselves. Dozens of startups, scale-ups, government-backed initiatives and public companies are working on making them safer, cheaper, cleaner and faster to deploy. This is the cohort of Small Modular Reactors (SMR), which is a catch-all term for nuclear fission generators that produce less than 300MW of electrical power (although some produce a bit more!).
Small Modular Reactors
Progress is accelerating in the SMR space. The Nuclear Regulatory Commission in the USA certified the first Small Modular Reactor design in January 2023 (NuScale) and issued its first construction permit for a non-light water design in December 2023 (Kairos Power). Last month, Oklo completed the environmental compliance process and can now begin site characterisation for its first-of-a-kind reactor in Idaho. Similarly, this month Aalo Atomics received permission to pursue DOE authorisation for its experimental reactor at the Idaho National Laboratory. In the UK, Last Energy has made progress on a site in South Wales, and several governments across Europe - including Sweden, the UK, the Czech Republic and others - are in the process of selecting partners to build SMRs.
We have built a market map of all the key movers and shakers in the Small Modular Reactor ecosystem globally. We have charted them based on power output and coolant.
The first bucket of companies includes all the Light Water Reactors. They are deemed legacy designs since they are part of nuclear’s third generation of reactors, the nomenclature for designs built since the 1990s. Many such reactors are in operation today and they are well understood. They tend to use low-enriched uranium, which is much more available than the high-assay-enriched uranium used in some more modern reactor designs. Companies like Last Energy are using a third generation design since the regulators have approved such systems before, and so it could help them get to market faster. The designs being built by the large, incumbent players like Rolls-Royce and Westinghouse are all third generation.
The following three market segments are fourth generation reactors. Only two such reactors are operating today at grid-scale, one in China and one in Russia. These designs are much safer, with passive safety systems that physically prevent meltdowns or severe accidents. They are much more fuel efficient, and some produce less long-lasting nuclear waste. We have grouped the market segments by coolant, but in reality there are many nuances and differences of each company’s design.
We have also created a second market map which captures the broader ecosystem of nuclear fission value-chain constituents. This map is focused on VC-backed startups only. It is surprising how small this community is! Nonetheless, some of the companies on this map are doing incredibly interesting work.
For example, some startups are working on turning nuclear waste into valuable fuel. We discussed the size of the nuclear waste problem in Part 2 of our series: it is a trillion dollar, multi-century long liability. We already have the technology to turn this waste into a safe and positive resource, we just need to commercial it.
Some reactor companies are using transuranic waste as a fuel input, for example Transmutex and Oklo. Curio Energy is taking waste and valorizing it into fuel for reactor players. Companies like Zeno Power are building Radioisotope Power Systems. These are like nuclear batteries take parts of the nuclear waste stream - isotopes like Strontium-90 and Americium-241, for example - and harness their radioactive decay as a source of thermal energy. We have also been using radioisotope power systems in space for decades, but Zeno Power is making them cheaper and mass manufacturable.
Another interesting trend is modularisation beyond the reactor. As we highlighted in Part 1 of our series, the Messmer Plan in 1970s France saw the successful buildout of dozens of nuclear reactors by combining three key ingredients: urgent need, government subsidy, and, most critically, standardisation of design. It is our belief that standardisation is the watchword of rapid deployment in the nuclear sector. Companies like Blue Energy are doing great work on this front. They have thought laterally about how to standardise and modularise everything outside of the nuclear reactor by leveraging existing shipyard and wind turbine infrastructure, bringing down the time and cost of the nuclear renaissance once any small modular reactor designs are approved. Likewise with Prodigy Clean Energy.
Finally, of course AI is playing an important role. The operating cost of the US nuclear fleet today is $24billion per year. The US Nuclear Regulatory Commission’s annual licensing fee is $6million per reactor, and thousands of pages of documents must be filed every year for those reactors that are already built and producing power. The filings required for new reactors hoping to be approved are exhausting. Companies like Everstar, Atomic Canyon and NuclearN are leveraging large language models to breakdown the administrative burden of nuclear compliance. We would love to see more software plays in the nuclear sector, particularly in areas like security, maintenance and control systems.
“To cap our energy ambitions is to commit to permanent scarcity.” Benjamin Reinhardt.
I truly believe that the energy transition is about more than just cleaning up our energy supply. Throughout history, great steps forward have required great effort and energy. The very word, “breakthrough,” implies the use of exceptional force. We don’t just need clean energy, we need abundant clean energy.
We have enough hot, radioactive rocks to power humanity with fission energy until almost the heat death of our sun. We have no doubt that some of companies above will be the catalysts for a safe, clean nuclear breakthrough. It is our view that we are living in a Nuclear Renaissance, and that the historic bottlenecks to progress are being uncorked right now.