While the tech downturn rumbles on, investment in nuclear fusion remains strong — in 2021, over €2.7 billion was injected in this field alone. More recently, the UK Space Agency committed £2.9 million to have Rolls-Royce develop a nuclear reactor that could work on the Moon and power future settlements there.
Back on Earth, nuclear technology has a significant role to play in achieving global carbon neutrality and limiting global warming to 1.5°C. In its 2022 report, the International Atomic Energy Agency (IAEA) flagged its importance in improving multiple sectors including power, which is responsible for more than a third of global energy-related emissions.
The report stated: “With one of the lowest carbon footprints among low carbon technologies, 24/7 availability, and the ability to operate flexibly, nuclear power can make an important contribution to the stability and security of a fully decarbonised power system, and a good complement to renewable sources.”
In December, a major scientific breakthrough was made by the US Department of Energy and its National Nuclear Security Administration, who announced the achievement of nuclear fusion. This milestone opens the door to further advancements in national defence and the future of clean power.
When it comes to the latter, UK projects are working hard too — scientists at the Spherical Tokamak for Energy Production (STEP) project are developing a prototype plant, which they hope will create an unlimited supply of clean energy by 2040. In addition to that, the country has recently launched a competition for small modular nuclear reactors to power its energy transition.
Back to the present day, the energy crisis continues — in part due to Russia’s war in Ukraine. Governments are now looking to invest in new and innovation-led ways to power homes and businesses across their nations.
A new way of thinking
The innovative approach to creating technology and the ‘new way of thinking’ that is synonymous with startup culture makes it perfect to disrupt the age-old nuclear technology industry. But what exactly can startups offer when it comes to nuclear?
“The nuclear sector has evolved substantially over the past few years, with the next generation of startups transforming the way the industry works,” says Elisabeth Rizzotti, COO at London-based nuclear technology company Newcleo. The startup is working to generate safe, clean, and sustainable nuclear energy by developing Generation IV reactors — a technology internationally recognised as the next step in the evolution of nuclear power plants.
“Much like space exploration, the industry is moving away from being limited to research and what is received from government funding, to embracing an entrepreneurial spirit and showing an increased dynamism that is attracting significant amounts of private investment.”
So, what are some of the key terms surrounding nuclear? Here are four to aid your understanding:
- Nuclear fusion is a process where two light atomic nuclei combine to form a single heavier one, which releases massive amounts of energy.
- The 4th generation of nuclear fusion — an area often tackled by startups — encompasses a system of reactors and nuclear fuel cycle facilities, like fuel fabrication plants and reprocessing facilities. This system could manage the weaknesses often associated with nuclear power, such as poor fuel efficiency, accidents, and high costs.
- Nuclear fission is when a neutron hits a larger atom, forcing it to split into two smaller atoms. When each atom splits, a tremendous amount of energy is released. This reaction is used at all nuclear power plants.
- Small modular reactors (SMRs) are advanced nuclear reactors that have a power capacity of about one-third of the generating capacity of traditional nuclear power reactors.
Thriving in the sector
European startups flourishing in this industry include Danish company Seaborg Technologies, which has a mission to make nuclear energy generation inexpensive and sustainable. It has created compact molten salt reactors that it hopes will become one of the most sustainable sources of energy in the world. Last summer, Seaborg was chosen as a recipient of an EU innovation grant that saw 74 startups share €382 million in grants and/or equity investments. The sum for each startup was dependent on their needs, with a cap of €17.5 million.
Another startup to watch is Sweden-based LeadCold, which is developing a small nuclear reactor cooled by liquid lead. The startup hopes to have its first reactor ready for commercial use by 2030.
“Considering the unique features of the industry, we are looking for startups that can leverage on solid fundamentals and have assets to compete,” says Maria Cristina Odasso, Head of Business Analysis at LIFTT, an Italy-based VC that has raised over €58 million and invests heavily in nuclear startups. Its portfolio in this notoriously expensive sector includes Seaborg Technologies, LeadCold, Copenhagen Atomics, Moltex Energy and Newcleo, with the latter closing a €300 million equity raise last year and planning to raise £900 million more.
“This includes a strong scientific base, the expertise and heritage of the team and management, intellectual property and technology know-how, and a network of key stakeholders.”
Odasso notes that there is currently an interesting trend of new projects and startups around the world encompassing the so-called ‘new nuclear’.
“There are several startups and industrial projects working around 4th generation nuclear fusion and on the SMR concept,” Odasso adds.
Regulations and knowledge sharing
Despite the potential that startups offer the nuclear industry, operating in this highly-regulated field is a huge challenge. Safety and security are the first priorities of the sector, with international regulatory requirements adding an additional layer of complexity.
As of March 2023, the IAEA has 176 member states, all of which must adhere to its comprehensive regulatory frameworks that ensure the safety of nuclear installations throughout their lifetime. Its safety standards and the code of conduct on the safety of research reactors lay out the international requirements and recommendations for developing regulatory systems, which inevitably create significant, but essential hurdles for startups to overcome.
“It is challenging,” admits Odasso. “From the beginning, resources and skills for the regulatory process must be planned and secured. Otherwise, the company will never leave the research world to start a concrete industrial project.”
Newcleo’s Rizzotti believes that governments and policymakers have a key role to play, particularly in terms of initiatives and policies that promote investment and growth in the sector, but so does education.
“Beyond regulations, this goes all the way through to schooling and STEM education as we look to build the next generation of nuclear talent,” she says.
Rizzotti emphasises that Newcleo takes a strong stance on knowledge transfer and looks to its more experienced team members to work alongside those newer to the industry to ensure that their expertise is merged with the latest approaches and practices.
While it will take time, she believes this is the best way to ensure a positive future for the nuclear industry — adding that the hurdles faced by the next generation working in nuclear won’t be fixed by just a single player, but from a collaborative approach across the entire industry.
A new offering
Startups are thriving in the challenging nuclear industry and creating innovative technology that is proving to be disruptive.
“The compact nature of SMRs is a long way from the large plants of the past, offering shorter and easier build times and much more achievable delivery plans,” says Rizzotti.
“For Newcleo, our key evolution rests on closing the fuel cycle with the use of mixed oxide (MOX) fuels, which utilise existing nuclear waste. This will decrease the environmental and financial cost of disposing of such waste, reduce proliferation risk, and avoid the need to mine for new nuclear fuel.”
While innovation ramps up for nuclear startups around the globe, so too does a new demand for expertise in the field. Skills shortages in tech globally have been widely discussed, and the nuclear sector is no different. While innovators and founders may have the ideas, a lack of experts could stunt growth.
“It is likely that our biggest challenges are yet to come, and probably will be in the form of clearing the regulatory hurdles for a type of technology that has not been built before, despite it being based on existing and proven technologies,” adds Rizzotti. “But we feel well-positioned to overcome them with the scientific talent, skills, business framework and financial set up that we have.”
New beginnings
The nuclear startup ecosystem is set to continue to evolve in 2023, with France-based nuclear fusion startup Renaissance Fusion already announcing a €15 million seed round this year, in addition to numerous similar announcements beyond Europe.
Odasso predicts that in 2023, we will see new startups emerging in both the fusion and fission market segments and a huge amount of funding from both private and public funding will be put in place.
Considering the latter, she expects to see significant improvement for some existing players in the next 18-24 months, who are consolidating their projects as key industrial players in the field of SMR.
For Newcleo, 2023 will see the startup expanding its global team even further, and hopefully securing the acquisition of sites in both the UK and France that will allow it to start fully setting up for the deployment of its technology and producing the necessary amounts of MOX fuel.
“The next decade will be fundamental for the future of energy security, independence, and the planet we live on. Clean, inexhaustible energy must become readily available,” concludes Rizzotti. “We are absolutely determined to do our part to make it happen.”