Going Nuclear
Are we ready to embrace nuclear power once again?
Anticipating trends or discussing shifts in an industry is part of venture investing as some of the best start-up investments occur at inflection points. The energy industry, specifically as it relates to electricity, has undergone a green revival as companies rushed toward renewable generation. Despite advances in renewable generation, the electric grid still requires a source of baseload power unaffected by shifting weather patterns.
Imagine creating a constant source of power independent of fossil fuels and weather patterns. A power source capable of building generation plants as small as cargo containers or large enough to power cities.
Over the past year we have noticed an increase in discussions surrounding nuclear power. Advancements in renewable energy have sparked more conversations exploring options for a completely non-carbon based electric generation market. Although nuclear power is considered a non-carbon source of electricity, it still has a few challenges to overcome.
The average nuclear power plant generates about 25-40 tons of nuclear waste per year and to date no country has a well-defined waste management process. Last year I published a review of Daniel Poneman’s book “Double Jeopardy” in which he debates the trade-off between embracing nuclear power and management of nuclear waste. He proposes several ideas to continue the conversation but indicates a short-term fix will be difficult.
During the past few years nuclear power was rarely mentioned by politicians but the White House is slowly turning the spotlight back onto the nuclear industry. The fiscal 2022 federal budget increased funding for nuclear energy by 50% and indicated the existing 94 US reactors are “absolutely essential”. After years of being ignored, nuclear power may be starting to gain more traction.
Why Now
Renewable energy technology has become a significant area of focus for venture capital funds as several have been raised to specifically support emerging renewable ideas. The influx of capital has advanced areas such as battery technology, wind and solar, but efficient long-term energy storage remains elusive. Without a storage solution, solar and wind energy will continue to be challenged by unpredictable weather patterns.
Existing renewable energy technology is also incapable of fulfilling our electric power demand. A consistent baseload power source remains necessary, especially for maintenance of the electric power grid at the ideal 60 hertz. Fossil fuels have been the foundation of electricity for years but as more countries push toward non-carbon electricity, nuclear power is quickly emerging as the non-carbon option.
Industry In Transition
The nuclear power industry is undergoing global changes as several countries recently announced plans for additional nuclear plant construction while others such as Germany, Switzerland, and Spain are shutting all their reactors.
Venture capital investments may be too small for nuclear facilities, but the industry is in transition. Anytime an industry encounters a period of transition it prompts an increase in innovation, which is the point where venture investments have the largest impact. We believe additional opportunities will emerge to invest across the nuclear power start-up sector so are adding it to our industry watchlist.
Angel Bootcamp Announcement
For those in the Houston area on March 24th, the Houston Angel Network is hosting an Angel Investor Bookcamp. We have recruited Gordon Daugherty, co-founder of Capital Factory, to lead the discussion. It is structured to be informative for those new to angel investing and provide an option to further engage with the Houston start-up ecosystem.