Why Silicon Valley is so hot on nuclear energy and what it means for the industry
The Vogtle nuclear power plant is located in Burke County, near Waynesboro, Georgia in USA. Each of the two existing units have a Westinghouse pressurized water reactor (PWR), with a General Electric turbine and electric generator, producing approximately 2,400 MW of electricity. Two Westinghouse made AP 1000 reactors are under construction here.
Pallava Bagla | Corbis News | Getty Images
Venture capitalists in Silicon Valley and other tech hubs are investing money in nuclear energy for the first time in history. That’s changing its trajectory and pace of innovation.
“There’s not been a resurgence of nuclear power, ever, since its heyday in the late 1970s,” Ray Rothrock, a longtime venture capitalist who has personal investments in 10 nuclear startups, told CNBC.
Now, that’s changing. “I have never seen this kind of investment before. Ever.”
Jacob DeWitte, CEO of micro-reactor startup Oklo, says the landscape has changed dramatically since he started raising money in 2014, when he was a part of the Y Combinator startup incubator.
“More investors are interested, more investors are excited by the space, and they’re getting smarter to do the diligence and know what to do here — which is good,” DeWitte told CNBC.
This surge of private investment will be a positive for the industry, agrees John Parsons, an economist and lecturer at MIT.
“I think having fresh perspectives is really good,” Parsons told CNBC. Nuclear energy is “a very complex science, and it’s been supported by the federal government and at these national labs. And so that’s a very small circle of people. And when you broaden that circle, you get a lot of new minds, different thinking, a variety of experiments.”
In any industry, there can be a “groupthink” or “narrowness” in the way things are done over time, Parsons said. With private investment in the space, “there will be out-of-the-box thinking,” he said. “Maybe that out-of-the-box thinking doesn’t produce anything useful. Maybe it turns out that the old designs are the best. But I think it’s really wonderful to have the variety of takes.”
Not everyone is so optimistic that the recent influx of venture dollars will lead to progress.
“Investors have often invested in stupid things that didn’t work,” Naomi Oreskes, a professor of the history of science at Harvard University, told CNBC. “Because the reality is that in a 75-year history of this technology, it has never been profitable in a market-based system.” If investors are putting money into nuclear now, that’s because they think they can make money, and “I can only think they believe they will make money because they think that there’s a big opportunity to have the federal government pick up a big part of the tab,” Oreskes said.
Pitchbook’s private investment data for nuclear technology data includes both fusion and fission.
Chart courtesy Pitchbook.
Nuclear investment by the numbers
From 2015 to 2021, total venture capital deal flow in the United States increased 54% in terms of deals closed and 294% by dollar value, according to data compiled by private capital market research firm Pitchbook for CNBC. In that same time, climate investing deal flow in the United States jumped by 214% in terms of volume and 1,348% by dollar value.
In the nuclear space, investment rose even faster — 325% by volume and 3,642% by dollar value, according to Pitchbook.
Some of the rapid pace of increase in investment in the nuclear sector is explained by its starting point — virtually zero.
“This is still pretty small compared to the private investments in renewables,” like wind and solar, for example, said David Schlissel, director of resource planning analysis at the Institute for Energy Economics and Financial Analysis, a market research firm.
The venture market slowed overall in 2022, and nuclear investment is no exception. Concerns about the war in Ukraine, inflation, a wave of layoffs and murmurs of a recession have made investors nervous in the public markets and private alike.
Pitchbook includes companies developing technologies to mitigate or adapt to climate change in this category. Examples include renewable energy generation, long duration energy storage, the electrification of transportation, agricultural innovations, industrial process improvements, and mining technologies.
Chart courtesy Pitchbook
“At the beginning of the year, we were looking at a much different financial paradigm for nuclear startups seeking funding. Now, following a war, and inflationary related forces, the fundraising market is just not what it was earlier and that is challenging for everyone seeking funding and support, nuclear or otherwise,” Brett Rampal, a nuclear energy expert who evaluates investment opportunities and consults for nuclear startups, told CNBC.
More than $300 billion poured into the venture capital industry in 2021. Rothrock expects to see more like $160 billion in 2022.
“I’m sure that some funds that pull back may never come back,” Rothrock said. But most investors who are putting money into a nuclear company understands that it will not be a quick investment, Rothrock told CNBC. “Entrepreneurs and investors at the level we are talking for nuclear are playing the long game, they have to. These projects will take time to mature and to generate real cash flows.”
Also, the Inflation Reduction Act that President Joe Biden signed into law in August, which includes $369 billion in funding to help combat climate change, has given nuclear investors a very significant positive signal, Rampal told CNBC.
“The IRA investment and production tax credits are not nuclear specific credits, they’re clean energy credits that nuclear is now considered a part of, and that sends a real important message to people and investors that would consider this space,” Rampal said. Similarly important, the European Union voted in July to keep some specific uses of nuclear energy (and natural gas) in its taxonomy of sustainable sources of energy in some circumstances, according to Rampal.
Total venture capital deal activity, according to Pitchbook data, for the last five years.
Chart courtesy Pitchbook.
The VC approach to nuclear
The nuclear power industry in the United States launched as a government project after the U.S. built the first atomic bombs during World War II. In 1951, a nuclear reactor produced electricity for the first time in Idaho at the National Reactor Testing Station, which would become the Idaho National Laboratory.
In the 1960s and 1970s, large conglomerates constructed big nuclear power plants, and those projects often ran over budget. “As a consequence, most of the utilities that undertook nuclear projects suffered ratings downgrades—sometimes several downgrades—during the construction phase,” according to a 2011 report from the Congressional Budget Office. Also, the Three Mile Island accident in 1979 raised public fears about safety and put a damper on construction.
Nuclear power generation in the United States peaked in 2012 with 104 operating reactors, according to the U.S. Energy Information Administration.
However, in recent years, private investors and venture capitalists have been putting money into nuclear startups, driven by a newfound sense of urgency to respond to climate change, as nuclear energy releases no greenhouse gases. There’s also the allure of funding underdog companies with huge upside.
The venture capital model is based on big bets — venture capitalists spread their money across many companies. Most are expected to fail or maybe break even, but if one or two companies get enormous, they more than cover the cost of all those losses. This is the investing model that built Silicon Valley stalwarts like Apple, Google and Tesla.
Some venture capitalists are especially excited about fusion. It’s the type of nuclear energy that powers stars, and it generates no long-lasting radioactive waste — but so far, it’s proven fiendishly difficult to create a lasting fusion reaction on Earth and impossible to generate enough energy for commercial generation.
“It’s far better than nuclear fission,” investor Vinod Khosla told CNBC in October. “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 isn’t the only one. The private fusion industry has seen almost $5 billion in investment, according to the Fusion Industry Association, and more than half of that has been since since the second quarter of 2021, Andrew Holland, CEO of the association, told CNBC.
Installation of one of the giant 300-tonne magnets that will be used to confine the fusion reaction during the construction of the International Thermonuclear Experimental Reactor (ITER) on the Cadarache site on September 15, 2021.
Jean-marie Hosatte | Gamma-rapho | Getty Images
Others are excited about new advances in nuclear fission, the more traditional type of nuclear power based on breaking atomic nuclei apart, like DCVC founder Zachary Bogue, who invested in micro-nuclear reactor company Oklo.
“Advanced nuclear fission is a quintessential deep-tech venture capital problem,” Bogue told CNBC in September. 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 capital’s recent focus on software and consumer tech, they’ll still bring a faster and more agile approach than the old-line nuclear industry.
Take micro-reactors.
“These are going to be very expensive at first. But the goal is to find something that is a product that’s much more flexible, can go on to the grid in many more different places and serve different functions, and go off grid also,” explained MIT’s Parsons.
Similarly, fusion startups say they will generate energy much faster than government research projects like ITER, which has already been in progress since 2007.
This quick-turn approach to investment is spurring experimentation. New generations of nuclear reactors will have different sizes, different coolants and different fuels, explained Matt Crozat, senior director of policy development at the Nuclear Energy Institute. Some reactors are being designed for companies or communities in isolated areas, for example. Others are being made to operate at high temperatures for industrial processes, Crozat told CNBC.
“It really is expanding the range of what nuclear can mean,” Crozat said. Many won’t succeed, but time and the market will figure out what’s needed and what’s possible, he said.
Because venture investors are hungry for returns, this also spurs nuclear startups to chase interim revenue streams as they’re getting their big-bet technology up and running.
For example, Bill Gates‘ nuclear innovation company TerraPower is working on a demonstration of its advanced reactor in Wyoming in collaboration with the U.S. Department of Energy, but in the meantime is using its capacity to produce isotopes that are also used in medical research and treatments. Advanced nuclear company Kairos Power is developing the capacity to produce salt for molten salt reactors, both for itself and to sell to other companies.
‘A long history of broken promises’
But critics say venture capitalists are ignoring the troubled history of nuclear power as a business.
“Investors have forgotten or are ignoring the lessons from earlier generations of nuclear plants which cost 2 to 3 times as much to build and took years longer than was promised by the vendors,” Schlissel told CNBC. For instance, a project to put two new reactors on the Vogtle power plant in Georgia was originally estimated to be $14 billion and ended up costing more than $34 billion and taking six years longer to complete than expected, he said.
15 November 2022, Egypt, Scharm El Scheich: A nuclear symbol is displayed at a pavilion of the International Atomic Energy Agency IAEA at the UN Climate Summit COP27. Photo: Christophe Gateau/dpa
Picture Alliance | Picture Alliance | Getty Images
Harvard’s Oreskes says the nuclear industry is a “technology with a long history of broken promises,” and she is skeptical of the sudden investor interest.
“If you were my daughter, and you had a boyfriend that had made repeated promises to you over months, years, decades, constantly breaking them, I would say, ‘Do you really want to be with this guy?'”
She’s not categorically anti-nuclear, and supports the continued operation of nuclear power plants that already exist. But she’s particularly skeptical of fusion, which has been promised to be “just around the corner” for decades, and says this new round of investments in fusion “doesn’t pass the laugh test.”
Ultimately, the new crop of nuclear startups has to figure out how to create nuclear energy in a cost-competitive way, or nothing else matters, says Rothrock.
“More money means more startups and to me that means more shots on goal (improving odds of success),” he told CNBC.
“The issue in nuclear is economics. Plants are complicated and take a while to build. Some of these new startups are tackling those issues making them more simple and thus cheaper. No one will buy an expensive power plant, especially a nuclear plant. Economics drives it all.”
The International Maritime Organization, a UN agency which regulates maritime transport, has voted to implement a global cap on carbon emissions from ocean shipping and a penalty on entities that exceed that limit.
After a weeklong meeting of the Marine Environment Protection Committee of the IMO and decades of talks, countries have voted to implement binding carbon reduction targets including a gradually-reducing cap on emissions and associated penalties for exceeding that cap.
Previously, the IMO made another significant environmental move when it transitioned the entire shipping industry to lower-sulfur fuels in 2020, moving towards improving a longstanding issue with large ships outputting extremely high levels of sulfur dioxide emissions, which harm human health and cause acid rain.
Today’s agreement makes the shipping industry the first sector to agree on an internationally mandated target to reduce emissions along with a global carbon price.
The agreement includes standards for greenhouse gas intensity from maritime shipping fuels, with those standards starting in 2028 and reducing through 2035. The end goal is to reach net-zero emissions in shipping by 2050.
Companies that exceed the carbon limits set by the standard will have to pay either $100 or $380 per excess ton of emissions, depending on how much they exceed limits by. These numbers are roughly in line with the commonly-accepted social cost of carbon, which is an attempt to set the equivalent cost borne by society by every ton of carbon pollution.
Money from these penalties will be put into a fund that will reward lower-emissions ships, research into cleaner fuels, and support nations that are vulnerable to climate change.
That means that this agreement represents a global “carbon price” – an attempt to make polluters pay the costs that they shift onto everyone else by polluting.
Why carbon prices matter
The necessity of a carbon price has long been acknowledged by virtually every economist. In economic terms, pollution is called a “negative externality,” where a certain action imposes costs on a party that isn’t responsible for the action itself. That action can be thought of as a subsidy – it’s a cost imposed by the polluter that isn’t being paid by the polluter, but rather by everyone else.
Externalities distort a market because they allow certain companies to get away with cheaper costs than they should otherwise have. And a carbon price is an attempt to properly price that externality, to internalize it to the polluter in question, so that they are no longer being subsidized by everyone else’s lungs. This also incentivizes carbon reductions, because if you can make something more cleanly, you can make it more cheaply.
Many people have suggested implementing a carbon price, including former republican leadership (before the party forgot literally everything about how economics works), but political leadership has been hesitant to do what’s needed because it fears the inevitable political backlash driven by well-funded propaganda entities in the oil industry.
For that reason, most carbon pricing schemes have focused on industrial processes, rather than consumer goods. This is currently happening in Canada, which recently (unwisely) retreated from its consumer carbon price but still maintains a price on the largest polluters in the oil industry.
But until today’s agreement by the IMO, there had been no global agreement of the same in any industry. There are single-country carbon prices, and international agreements between certain countries or subnational entities, often in the form of “cap-and-trade” agreements which implement penalties, and where companies that reduce emissions earn credits that they can then sell to companies that exceed limits (California has a similar program in partnership with with Quebec), but no previous global carbon price in any industry.
Carbon prices opposed by enemies of life on Earth
Unsurprisingly, entities that favor destruction of life on Earth, such as the oil industry and those representing it (Saudi Arabia, Russia, and the bought-and-paid oil stooge who is illegally squatting in the US Oval Office), opposed these measures, claiming they would be “unworkable.”
Meanwhile, island nations whose entire existence is threatened by climate change (along with the ~2 billion people who will have to relocate by the end of the century due to rising seas) correctly said that the move isn’t strong enough, and that even stronger action is needed to avoid the worse effects of climate change.
The island nations’ position is backed by science, the oil companies’ position is not.
While these new standards are historic and need to be lauded as the first agreement of their kind, there is still more work to be done and incentives that need to be offered to ensure that greener technologies are available to help fulfill the targets. Jesse Fahnestock, Director of Decarbonisation at the Global Maritime Forum, said:
While the targets are a step forward, they will need to be improved if they are to drive the rapid fuel shift that will enable the maritime sector to reach net zero by 2050. While we applaud the progress made, meeting the targets will require immediate and decisive investments in green fuel technology and infrastructure. The IMO will have opportunities to make these regulations more impactful over time, and national and regional policies also need to prioritise scalable e-fuels and the infrastructure needed for long-term decarbonisation.
One potential solution could be IMO’s “green corridors,” attempts to establish net-zero-emission shipping routes well in advance of the IMO’s 2050 net-zero target.
And, of course, this is only one industry, and one with a relatively low contribution to global emissions. While the vast majority of global goods are shipped over the ocean, it’s still responsible for only around 3% of global emissions. To see the large emissions reductions we need to avoid the worst effects of climate change, other more-polluting sectors – like automotive, agriculture (specifically animal agriculture), construction and heating – all could use their own carbon price to help add a forcing factor to drive down their emissions.
Lets hope that the IMO’s move sets that example, and we see more of these industries doing the right thing going forward (and ignoring those enemies of life on Earth listed above).
The agreement still has to go through a final step of approval on October, but this looks likely to happen.
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In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss the new Tesla Cybertruck RWD, more tariff mayhem, Lucid buying Nikola, and more.
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It’s that time of year again, time for events across the country to show off electric vehicles at Drive Electric Earth Month.
Drive Electric Earth Month is an offshoot of Drive Electric Week, a long-running annual tradition hosting meetups mostly in the US, but also occasionally in other countries. It started as Drive Electric Earth Day, but since not every event can happen on the same day, they went ahead and extended it to encompass “Earth Month” events that happen across the month of April. It’s all organized by Plug In America, the Sierra Club, the Electric Vehicle Association, EV Hybrid Noire, and Drive Electric USA.
Events consist of general Earth Day-style community celebrations, EV Ride & Drives where you can test drive several EVs in one place, and opportunities to talk to EV owners and ask them questions about what it’s like to live with an EV, away from the pressure of a dealership.
This month, there are currently 152 events registered across the US and 1 in Mexico (including one online webinar about things to consider when purchasing an EV).
Events have already started, with a smattering happening over the last week. One really neat one was the Asheville event, which showcased the resiliency of EVs in an area devastated by Hurricane Helene, which was made more severe by climate change. That event was attended by the Rivian R1T which famously got dragged 100 feet submerged in mud and came out running fine.
But the bulk of the events are coming up on the weekends of April 19-20th, and even moreso, the weekend of the 26-27th.
There are plenty of events in the big cities where you’d expect, but Plug In America wanted to highlight a few of the events in smaller places around the country. Here’s a sampling of upcoming events:
- Space Coast Drive Electric Earth Month Event at the American Muscle Car Museum in Melbourne, FL on April 19, 10am-2pm – EVs are the new muscle car of the 21st century, and this event has been one of the biggest ones nationally in previous years (with 47 vehicles registered already). The event is free, but the museum has a required donation for entry.
- EV Mississippi Spring Drive Electric Earth Day Event in Hattiesburg, MS on April 19, 10am-2pm – This one is happening at a PetSmart near a Tesla Supercharger, and is a combined EV/pet adoption event with food, pets, raffle prizes, test drives, and activities for all ages.
- Big Island EV – Cruise and Picnic in Waimea, HI on April 26, 10am-1pm – EV drivers will congregate in various places around the Big Island (Kona, Waimea, Waikoloa and Hilo), then drive up Saddle Road to the Gil Kahele Recreation Area on Mauna Kea for a potluck and a chance to talk about the experience of owning EVs on the Big Island.
- Santa Barbara Earth Day 2025 and Green Car Show in Santa Barbara, CA on April 26-27, 11am-8pm – This is part of Santa Barbara’s Earth Day celebration, which routinely attracts 30,000 participants and is one of the longest-running Earth Day celebrations on the planet. The Green Car Show includes ride & drives and an “Owners Corner” where owners can showcase their EVs and attendees can check them out and ask questions.
- Earth Day’25 – EV’s role in a sustainable future in Queretaro City, Mexico on April 26, 9am-4pm – The sole Mexican event, this is a combined in-person/online seminar at the Querétaro Institute of Technology.
- Norman Earth Day Festival in Norman, OK on April 27, 12-5pm – Another municipal Earth Day festival, with hands-on activities for kids to learn about the environment. A portion of the parking lot reserved for an EV car show for EV owners who pre-register to show off their vehicles.
- Oregon Electric Vehicle Association Test Drive & Information Expo in Portland, OR on April 27, 10am-4pm – This one is at Daimler Truck’s North American HQ, and will have several EVs for test drives, owner displays (including DIY gas-to-EV conversions), and keynote presentations by EV experts. They’ll even have a 1914 Detroit Electric EV available for test rides!
- And, we at Electrek want to give a shoutout to Rove’s EV Drive Days in Santa Ana 10am-3pm April 28 – ROVE is the company behind the “full-service” EV charging concept that we’ve talked about several times here on Electrek, and we like what they’re doing for EV charging. They’ve hosted a few community events, and this is their contribution to Earth Month.
Each event has a different assortment of activities (e.g. test drives won’t be available at every event, generally just the larger ones attended by local dealerships), so be sure to check the events page to see what the plan is for your local event.
These events have offered a great way to connect with owners and see the newest electric vehicle tech, and even get a chance to do test rides and drives in person. Attendees got to hear unfiltered information from actual owners about the benefits and trials of owning EVs, allowing for longer and more genuine (and often more knowledgeable) conversations than one might normally encounter at a dealership.
And if you’re an owner – you can show off your car and answer those questions for interested onlookers.
If you can’t make it to any of the physical events, there are also a few virtual events (go here and click “online events” at the top) including a webinar about programs to help you charge your EV at work, a virtual show and tell about EVs in middle America and an information session about potential career pathways related to e-mobility in Virginia.
To view all the events and see what’s happening in your area, you can check out the list of events or the events map. You can also sign up to volunteer at your local events, and if you plan to show off your electric car, you can RSVP on each event page and list the vehicle that you plan to show (or see what other vehicles have already registered).
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