Nucleation Capital Backs Nuclearn in $10.5M Series A Round

Nuclearn founders Enhanced

Nucleation Capital is proud to announce its participation in NuclearN's second round of financing, its Series A, in which the company raised $10.5 million to accelerate the development a range of AI services aimed at the nuclear industry. This marks our second investment in NuclearN following our participation in their Seed round back in mid-2023.

The round was led by Blue Bear Capital, with participation from SJF Ventures and follow-on investments from existing investors AZ-VC and Nucleation Capital. The new funding will be used to advance development of Nuclearn's domain-specific AI solutions, increasing their offerings with new analytic and AI features that support operations, engineering, and regulatory compliance and accelerating market expansion.

NuclearN's solutions are already deployed in more than 65 reactors globally and the company is already profitable. This funding will therefore serve as a shot in the arm to accelerate the company's growth, just as AI is driving unprecedents demand for energy and existing nuclear power plants are being uprated, being restarted and being built. Nuclearn can help each plant improve its operational and capital cost bottom line and there is no end in sight to the benefits that may be realized through NuclearN's combination of nuclear operations data analytics and AI-optimizations.

Nuclearn's platform combines advanced AI with deep nuclear domain knowledge to automate complex workflows that typically require weeks of specialized personnel effort and support technicians in the field. Developed by founders with over 30 years of combined nuclear operations experience and trained on millions of specialized nuclear industry documents and diagrams, the technology understands not only what nuclear professionals need, but also the regulatory and safety context behind every decision. "We are extremely proud and pleased to continue to support this talented team and participate in the incredible work being done by NuclearN to improve nuclear power's safety, up-time performance and bottom line," said Valerie Gardner, Nucleation's managing partner.

Published by Nucleation Capital in Advanced Nuclear, Artificial Intelligence, Asset manager support, Brilliant thinkers, Energy abundance, Future of Energy, Investor activity, NEWS, Nuclear innovation, Nucleation communications, Portfolio Venture, US competitiveness, US technological leadership, Venture capital support for nuclear

June 11, 2025

World Bank lifts ban on funding nuclear energy ()

Ajay Banga, the World Bank president, announced that it would lift its decades-long ban on financing nuclear energy and “begin to re-enter the nuclear energy space” in partnership with the International Atomic Energy Agency. This policy shift is aimed at accelerating development of the low-emissions nuclear technology to meet surging electricity demand in the developing world.

Published by Nucleation Capital in Advanced Nuclear Customers, Asset manager support, Construction costs, Energy transition, Fission, Future of Energy, Government support, History-making, Investor activity, LINKS, Nuclear financing, Nuclear-inclusive energy policy, Politicians supporting nuclear, Solving climate, US technological leadership, Zero emission energy

May 25, 2025

Climate anomalies, ecologic disasters and climate uncertainties: All point to climate being worse than projected

Forest fires

Climate tipping effects may be kicking in

For those tracking the state of the climate, the report published by the BBC showing that tropical forests were being destroyed at the fastest recorded rate over the last year, was frightening, with the prospect of total forest dieback and "savannisation" of these areas is a growing risk.

Compounding the loss of old-growth tropical forests in 2024 (estimated to have covered an area as large as Ireland) and the release of their carbon stores, is the loss of the moisture and climate systems maintained by those forest ecosystems, which previously provided localized cooling effects, produced cloud cover and contributed to the atmospheric moisture necessary for rain. These had also helped to brighten the earth, thereby reflecting more of the sunlight that otherwise would cause heating. This moisture and water cycle activity gets destroyed along with the trees, plants and animal life. This climatic loss to broad areas may be having more of a negative feedback effective on the planet's overall warming than has previously been recognized.

Global Surface Temperature Change (published 2/3/25)

This news add yet more data to the alarming report published in February by Dr. James Hansen, Dr. Pushker Kharecha and a team of sixteen other climate scientists plainly titled "Global Warming Has Accelerated: Are the United Nations and the Public Well-Informed? In it, Dr. Hansen's team explains that global temperatures have leaped up more than a half degree (0.7°F or 0.4°C) over the last 2 years, with a total average temperature rise of +1.6°C relative to the temperature at the beginning of last century (the 1880-1920 average). This reflects a temperature rise over the +1.5°C (or 2.7°F) level that we set as our goal for maximum increase. As of the last year, we've already exceeded that level.

These increases have, according to Hansen, baffled Earth scientists, as the increase's magnitude was literally off the charts. There were multiple explanations presented as to what could have caused such a big increase. Declining aerosol pollution was seen as a key contributor, by reducing nuclei that aided cloud formation and thus reflection of sunlight, thereby effectively darkening earth and allowing more heat to be absorbed. These are very troubling and portentious changes that may, in fact, show that feedback effects are already accelerating the heating impacts of our CO2 emissions, such that they no longer follow a direct relationship.

Dr. Hansen's report received considerable criticism both because it departed scientifically from the mainstream's more conservative consensus of a lower rate of warming and climate "sensitivity," as determined by the IPCC, and because it called for "a complement to the IPCC approach" to "avoid handing young people a dire situation that is out of their control." In a response to some of that criticism, Drs. Hansen and Karecha decried the ad hoc opinions, ad hominem attacks and sense that the media has gravitated towards reporting the opinions of just a small handful of scientists, rather than covering the total community and range of analyses, including their own.

Dr. Anatassia Makarieva, an atmospheric physicist, responded to this debate with a substack post titled "On the scientific essense of Dr. James Hansen's recent appeal." In it she agreed with Drs. Hansen and Karecha that many scientists were understating the degree of climate forcing but also shared her sense that many of the climate models in use, including Dr. Hansen's, erroneously ignored the major role of the biosphere in the climate destabilization that we are now experiencing. Which may, she argued, partially explain why none of the models predicted the heat anomaly of the 2023 - 2024 time period. Dr. Makarieva writes:

Why is this [i.e. accurate climate models] so important? Unless external causes of this recent temperature anomaly are identified, we may be dealing with a self-reinforcing process — for example, of reduced cloud cover causing more warming, this warming causing even less clouds and so forth until something truly ugly happens to our planet. But, if so, such a process could be started by many factors and does not necessarily need CO₂ to kick off. For example, deforestation-induced reduction of evapotranspiration in the Amazon is associated with extreme heat events. This alone could trigger the warming that could then self-amplify via cloud (or some other) feedbacks.

Whether or not we have permanent self-reinforcing amplification happening with the climate now is being debated, partially thanks to new voices like Dr. Makarieva's, entering the field. What is clear, however, is that the fewer clouds, aerosols, snow cover, sea ice and also more invisible sources of water vapor (such produced by tropical forests and other natural ecosystems) the darker the earth is and the more sunlight gets through and heats the ground, the oceans and the air. This heating further impacts existing vegetation, ice sheets, permafrost and bodies of water negatively, which then also contribute more CO2, more fires, and further darkening of earth's surface. Earth's climate has been in a state of equilibrium for eons. Given what is happening with the climate now, it appears that it is leaving that state of equilibrium.

According to some reports, the Earth has "dimmed" by 0.5% in the past 25 years. We've known this and scientists have been able to track decreases in sea ice at the poles, a major factor in global warming. We're now seeing the climate effects of reductions in aerosols (due to the shipping industry trying to clean up their act and emit less aerosols), and we're seeing reduced cloud cover. The bottom line is that even just looking at cloud feedbacks, the more the climate warms, the fewer the clouds. The fewer the clouds, the more the planet warms. This feedback loop is enough to take us into very dangerous territory. Which is yet another reason why we want to prevent the loss of tropical forests, not just because of the CO₂ impacts but because of the cloud and water vapor impacts. This feedback loop could explain why the rate of heating of the planet has increased beyond what was expected, even by scientists like Zeke Hausfather and James Hansen.

Dr. Hansen continues to urge immediate action and has proposed that "a multitude of actions are required within less than a decade to reduce and even reverse Earth’s energy imbalance for the sake of minimizing the enormous ongoing geoengineering of the planet; specifically, we will need to cool the planet to avoid consequences for young people that all people would find unconscionable."

References:

BBC, Tropical forests destroyed at fastest recorded rate last year, by Mark Poynting and Esme Stallard, May 20, 2025.

Columbia University, Climate Science, Awareness and Solutions, "Global Warming Has Accelerated: Are the United Nations and the Public Well-Informed?, published in Taylor & Francis, February 3, 2025 by James E. Hansen, Pushker Kharecha, Makiko Sato, George Tselioudis, Joseph Kelly, Susanne E. Bauer, Reto Ruedy, Eunbi Jeong, Qinjian Jin, Eric Rignot, Isabella Velicogna, Mark R. Schoeberl, Karina von Schuckmann, Joshua Amponsem, Junji Cao, Anton Keskinen, Jing Li, and Anni Pokela

Biotic Regulation and Biotic Pump Substack, "On the scientific essense of Dr. James Hansen's recent appeal." by Dr. Anatassia Makarieva, an atmospheric physicist, May 19, 2025.

September 22, 2024

Big Banks Agree to Finance Nuclear

Fourteen of the world's largest banks and financial institutions, including Bank of America, Citi, Parabas, Morgan Stanley, Goldman Sachs and Abu Dhabi Commercial Bank, are pledging to increase their financial support and backing for nuclear energy. This announcement was made at an event held in New York City during Climate Week, in a long-awaited recognition by these financial institutions that the nuclear sector has a critical role to play in the transition to low-carbon energy and provided direct support of COP28's pledged goal of a global tripling of nuclear power.

The announcement occurred at a gathering in the Rockefeller Center, which brought together heads of state, ministers, and top executives from the nuclear and finance sectors. John Podesta, White House climate policy adviser, introduced the sesion by saying, “Our mission is clear: to ensure nuclear energy plays its role in building a sustainable, secure future. If we work together, we can make nuclear a cornerstone of our climate strategy.”

The banks did not commit to any specific funding but their pledge is an acknowledgement that the availability of funding is critical in the transition to low-carbon energy. In particular, high financing costs have been an obstacle to the construction of new plants and lack of availability of funding interest contributed to the decline in new projects for most of the last four decades. with the majority of the world's reactors built in the 1970s and 1980s.

We believe that this new bank pledge is a reflection of the demand inflection point that nuclear is experiencing, with increasing customer interest demonstrating the value that nuclear has for both reliable energy and carbon-free energy. Banks are increasingly aware that, rather than being controversial, nuclear power is becoming increasingly popular, especially for those fully committed to decarbonization.

Bank of America has already begun to recommend nuclear investments for its clientel, having previously issued its "Nuclear Necessity" report. It will naturally follow, then, that BofA and other banks that have done their homework, will be willing to provide direct lending, project finance and investment banking support to utilities and other nuclear companies looking to deploy new nuclear generation.

This announcement should help to shift attitudes at other international and multilateral agencies, such as the World Bank and IMF, which still do not provide any finance to nuclear projects. What is becoming increasingly clear is that there is virtually no scenario in which the world can achieve carbon neutrality by 2050 without nuclear power, according to the UN’s Intergovernmental Panel on Climate Change. These banks have heard that message and are ready to deal.

[Read more at the below sources.]

Sources

Financial Times, World’s biggest banks pledge support for nuclear power, by Lee Harris and Malcolm Moore, September 22, 2024

World Economic Forum, Center for Energy & Materials, World's biggest banks back nuclear power, and other top energy stories, Roberto Bocco, updated Oct. 9, 2024.

Environmental Energy Leader, 14 Major Banks Pledge Support to Triple Nuclear Capacity by 2050: Leading financial institutions unite to accelerate global nuclear energy expansion, September 24, 2024.

Published by Nucleation Capital in Asset manager support, Capital reallocation, Carbon emissions, Central bank support, Energy abundance, Energy transition, International support for nuclear, LINKS, Solving climate

June 4, 2024

Fossil fuels lose market share when electricity is done right

By Rod Adams, Managing Partner

Screen shot 2021 05 26 at 5.22.09 pm

Mined hydrocarbons, also known as fossil fuels, have been the foundation of modern industrial society for several centuries. But most parts of society don't depend on the specific action of burning hydrocarbon fuels. People need and want the heat that the combustion reaction produces and the services provided using machinery designed to convert heat into motion.

The growing importance of electricity

Most energy use cases can be supplied by alternative sources of heat and mechanical motion, but non-emitting alternatives such as wind and solar have been constrained by temporal and geographic availability. By themselves, they are not as flexible or as deliverable as hydrocarbons. The electrical grid, however, enables a wide variety of non-fossil fuel alternatives (think wind, solar and nuclear) to deliver controllable heat and motion almost anywhere at almost any time.

When electricity is a) clean, b) abundant, c) reliable and d) cost competitive, it can often win in the markets for services provided by burning hydrocarbons. All four criteria are important. But electricity isn't a fossil fuel replacement, and thus cleaner, if is produced using fossil fuel power.

Currently, 60% of U.S. electricity is still produced by burning fossil fuels because they have generally been reasonably available and affordably priced. We are now producing most all of our own fossil fuels with enhanced U.S. production but we shouldn't forget those worrying times when the lack of availability and high prices of fossil fuels have threatened the rest of the economy.

Using electricity to replace fossil fuels requires continued reductions in the use of fossil fuels in the electricity sector, and substantial increases in the total amount of electricity produced. Some calculate that electricity production needs to more than triple to enable an energy transition away from fossil fuel dependence.

Several power sources have proven their ability to take significant shares of electricity production from fossil fuels. These include hydropower, nuclear power (from fission) and wind and solar power. Hydro power (essentially falling water) is a well proven way to generate electricity, but due to geographic and environmental constraints it has not grown in the US since 1970. Its production fluctuates with varying precipitation but remains close to 6% of electricity supply. We shall consider the remaining options.

Fission

All nuclear power used today comes from the fission of atoms. When it was initially developed and booming, nuclear energy quickly captured about 20% of the electricity market. Initially discovered in late 1942, fission entered the commercial market in 1957 and grew to 2300 terrawatt hours per year (TWh/yr) of primary energy production by 2000.

Eventually, due to aggressive political opposition, poor project cost and schedule performance, growing regulatory uncertainties – from both state public utility commissions and federal safety regulators – and flat electricity market growth combined to reduce and then halt new nuclear power plant orders by 1978. This was bad enough but, during the 1970s and 1980s, there were a significant number of project cancellations after major expenses had already been incurred. The new nuclear plant construction industry atrophied, nevertheless, ongoing plant operations and services continued to improve, and nuclear capacity factors grew and resulted in upratings on plant generation capability.

Memories of financial losses and periodic abundance of low priced hydrocarbons have helped to delay or derail attempts to revive the nuclear plant construction industry until now.

Wind and solar

Stimulated by Renewable Portfolio Standards, federal production and/or investment tax credits, similar pieces of legislation at state and local levels and tens of billions of dollars in investments appropriated as part of the Recovery Act of 2009, wind and solar have grown rapidly since 2000 to capture about 15% of the US electricity market. Sustained investments and growing markets enabled the supplier (mostly Chinese) and installation industries to achieve economical scale and substantial manufacturing cost reductions. Advocates for wind and solar have lauded these price reductions and have argued that, because these costs are so low, wind and solar are going to be able to grow to replace all of fossil fuel demand.

Unfortunately, the evidence surrounding the growth of renewables show that they are growing rapidly but not even keeping up with the rate of growth of energy demand. Additionally, they are not replacing fossil fuels, which plants are also growing as a function of being needed to supplant the intermittency and low capacity factors of both wind and solar.

The energy transition that we need to achieve has a far greater chance of success in a future where nuclear and renewable energy sources both grow to their potential instead of the historical either-or growth pattern shown to the right.

That binary alternative energy history of growing either nuclear or wind and solar has given us a history of doing very little to reduce fossil fuel consumption or its inherently associated pollution and greenhouse gas production. The graph below shows U.S. historical energy usage and the shifting patterns of growth of coal, natural gas, nuclear, wind and solar.

US historical energy production displaying coal, gas, nuclear, wind and solar This graph leaves out oil because it provides only 1 percent of electricity generation (though it is largely used in sectors like transportation and heating that are not yet seeing much impact from competition with alternative sources delivered to end users via electricity). It also leaves out geothermal because its production is barely visible in the graph. What's clear from this image is that wind and solar have helped enable the growth of natural gas, at the expense of coal usage but they have not caused a net decline in the total amount of fossil fuel use, just a marked shift in type.

Multiple tools needed

Transitioning our energy system from fossil fuel dominance to a system producing far less pollution while retaining the availability and abundance that provides prosperity is a difficult task requiring a full set of tools, including nuclear, wind and solar.

Using available tools to their fullest extent requires application of enabling policies, relying on experience of what has worked and what has failed to work. The undeniable success of the wind and solar build out offers lessons that can be applied to new nuclear as an energy source that is as clean and as safe as wind and solar.

Government policies

It is immensely encouraging to see that there is growing political support and action in this direction. Congresses over the last decade have managed to pass several major pieces of legislation supportive of nuclear energy with overwhelming bipartisan majorities. The parties have even engaged in positive competition boosting support to new nuclear energy. Most recently, the Biden Administrative launched the Nuclear Power Project Management and Delivery working group, an expert group empowered to accelerate the approval, construction and deployment of both traditional and advanced nuclear power. This is just the most recent initiative, yet it goes further than any prior administration, and reflects growing public support for the deployment of nuclear power to reduce carbon emissions and continued reliance on fossil fuels.

Internationally, the progress has been equally as impressive. At COP 28 in the UAE this past winter, the US joined with nearly every other nuclear-powered nation in a pledge to triple nuclear energy capacity by 2050, even as the entire conference itself agreed to "transition away from fossil fuels."

Investors and innovators

Along with the government enablers, private sector investors and innovators are applying lessons from the early rise (and then stagnation) of nuclear energy and from the accelerating rise of wind and solar. Nuclear energy sources, now both advanced fission and multiple approaches to fusion, are being developed in a wide variety of sizes, shapes and operating temperatures designed to fit the needs of a much larger universe of potential customers.

The term small modular reactor (SMR) has entered the lexicon and been the subject of much discussion within the small community of people that focus on energy. We like to think of the term as meaning smaller, manufactured reactors and believe it should be viewed as covering a market sector as broad and impactful as the terms PC or AI. We also assert that the world has successfully been using SMRs since the 1950s, but strategic and political considerations restricted their use to military applications, such as for powering submarines.

Some SMRs are designed to be small enough to be fully produced inside factories and delivered as complete units. These are often called micro or very small reactors. Many of these will be able to operate for a decade or more without needing new fuel, giving them capabilities that are unobtainable by fossil fuel generators.

Other SMRs are designed to allow various components and systems to be manufactured, fabricated and assembled in factories and then shipped to sites where the parts can be connected into a complete power plant. These are often being designed to reduce or avoid the mega-project risk that has plagued very large nuclear plants.

Some vendors are focusing on producing reactors as heat sources; letting others design and build systems that will either use the heat directly or as the driver for an energy conversion system that produces electricity. There are designs that focus on producing very high temperature heat and others that focus on improving the fuel cycle to make better use of the energy content of natural actinides like uranium and thorium.

Outside of reactor vendors there are emerging suppliers for waste handling, supportive IT and AI systems, improved displays and simulators, better ways to engage with communities and regulators and an emerging group of companies focused on developing nuclear projects. New business models are being developed to better fit a market that is no longer dominated by vertically integrated monopoly utilities.

The opportunities associated with renewed growth in nuclear are enormous and the variety of solutions is almost overwhelming. As someone who believes in the enormous prospects for nuclear power and as a managing partner in Nucleation Capital,, I spend my days focusing on understanding the teams, the improvements, the markets, the obstacles, the mitigations, the political situation and all of the other complexities associated with successfully deploy a new generation of advanced energy technologies to help change the direction of one of the largest segments of the world's economy. We are now in our third year of operations and continuing to assemble a portfolio of investments in companies in this sector with outsized growth potential.

Broadening Participation by Investors into Venture Capital

At Nucleation Capital, we believe a successful energy transition can only be accomplished when attacked with a complete range of the best available tools. This includes advanced nuclear. Plenty of other investors are focusing on wind and solar; we see new nuclear as an under-appreciated sector whose immense value is just beginning to be recognized, so we are focused on investing into this sector and providing access for more investors to participate.

Though some large, public companies will benefit from nuclear energy growth, most of them are widely diversified conglomerates whose nuclear divisions are a relatively small portion of the company. A number of them are working on SMRs of their own. These ventures can usually be accessed through the public markets. We focus our efforts on the younger, smaller and emerging ventures that are targeting nuclear energy innovations and which are raising venture capital to finance their development and growth. By targeting the energy buyers in various niches with products that can compete head-to-head with fossil fuels, they have enormous growth opportunities given the urgency with which the world needs to transition to carbon-free energy sources.

Nucleation Capital is an open-ended fund that has almost unlimited capacity to include new investors (at almost any capital level) that recognize the potential and want to gain investment exposure to this sector. We bring expertise to this sector to synthesize the complexities and make the investment choices for our investors. If this interests you, please make contact to find out how you might prosper with us.

Published by Rod Adams in Advanced Nuclear, Asset manager support, Carbon emissions, Electrification, Energy abundance, Energy transition, Fission, Fossil fuels, Future of Energy, Government support, NEWS, Nuclear competitiveness, Venture capital support for nuclear

May 4, 2024

Rod Adams: Investing in the Future of Energy

Rodney Adams, Managing Partner, Nucleation Capital, had the honor of speaking with Amy Rotman of 121 Mining, at their New York event on May 4th, 2024. For more information about the event, which connects mining companies with investors, see the 121 Mining website. Please click the arrow below to watch Rod's conversation.

Published by Rod Adams in Advanced Nuclear, Asset manager support, Biden-Harris Administration, Energy transition, Fission, Future of Energy, Investor activity, NEWS, Nuclear competitiveness, Nuclear financing, Uranium mining & Fuel resources, Venture capital support for nuclear

January 4, 2024

Dr. Hansen warning humanity to get its act together, deploy renewables and nuclear

Dr. James Hansen's year-end update contains an admonishment right in the title, "A Miracle Will Occur" Is Not Sensible Climate Policy." Those who have followed his work and his typically well-tempered writing will recognize this as a very strong indictment of what we've not done to date to address climate change. This is, for this mild-mannered scientist, the equivalent of "Hey Guys, Get your S _ _ T together!"

Dr. Hansen proceeds to call "bunk" on the assertions from both the COP 28 Chairman and the UN Secretary General who imply that the goal of keeping temperature rise to below 1.5°C is still feasible. According to Dr. Hansen, the already banked warming will take us beyond 2.0°C "if policy is limited to emission reductions and plausible CO2 removal." In other words, he makes it clear that this is now merely wishful thinking and does not reflect a realistic understanding of the way that emissions released create future warming, which he calls "Global Warming in the Pipeline" and describes in the linked paper.

The only realistic approach is to take true climate analysis that is informed by knowledge of the warming "forcing" effects and to use that to drive decisions about policy options. If we can possibly use the next several years to define and commence more effective policies and courses of action, then there is a modicum of a chance that we can still save the future for our young people. If this isn't a bomb of an alarm, it would be hard to say what else would be, especially because the IPCC has made it very clear that major ecosystems, starting with coral reefs and then, therefore, all marine life, will be threatened with substantial (90%) collapse by 1.5°C and with 100% by 2°C.

Unfortunately, climate science is complicated and most people don't have a good understanding of the "human-made forcings that are driving Earth's climate away from the relatively stable climate of the Holocene (approximately the past 10,000 years.)" Even if they could grasp the implications about climate science from the graphs that Dr. Hansen and his team provide, very few are even reading Hansen's work. These graphs are very scary but clearly they are not being used as the basis for policy discussions by either politicians, government agencies (like the EPA), or by leading environmental groups and that is likely the primary reason why many people are still arguing about renewables versus nuclear power, thinking they have a certain luxury of time, rather than saying "Renewables and nuclear, YES!"

For his part, Dr. Hansen doesn't make it as easy as he could for those with less expertise in climate science. He spends a lot of effort discussing two major climate forcings: greenhouse gases (GHGs) and aerosols (fine airborne particles), which in fact have opposing forcings. But then goes into detail on many other related forcings. This level of detail may provide a more scientifically accurate picture of what is going on but it makes for much sparser readership. Clearly, there are many different kinds of feedback loops, including how the aerosols impact cloud formation, albedo effects and also the way the ocean absorbs a considerable amount of the warming that is happening to our climate. It's important that he understands these effects but it takes considerable sifting work to get to the point that what it all adds up to is that there is much more warming that has occurred than what we are actually now experiencing, so in fact, the effect of warming will be accelerate and we're now seeing this.

Even for those of us who finding climate science fascinating, this 14-page paper is incredibly dense and gets relatively badly bogged down with details on things like cloud forcings, albedo changes, reviewing differences between expected temperatures and real world measurements, catching up with a 40-year old mystery having to do with the last glacial maximum and describing the impacts of an "experiment" that occurred when the International Maritime Organization limited sulfur content in ship fuel and the variability introduced by El Nino and La Nina events. The bottom line of quite extensive discussion that few will wade through, is that global warming is now accelerating. This is very important but definitely buried. The key graphic of the whole paper depicts this acceleration.

On page 7, we finally get to the implications of global warming acceleration. As shown in the above graph, were the warming happening at a steady rate, we'd be on the green dotted line. Instead, we are veering off into the yellow zone of accelerated warming, which means that we'll "exceed the 1.5°C mark within the next few months and reach a level far above 1.5C by May 2024."

Hansen, while recognizing that there could be some up and down based upon El Nino and La Nina effects, believes that the baked in energy imbalance already "in the pipeline" means that it does not serve anybody's interests to "wait a decade to declare that the 1.5°C limit has been breached." In summary, Hansen argues that, "unless purposeful actions are taken to reduce our present extraordinary planetary energy imbalance," the 2°C global warming limit will also be breached.

By its very nature of having a delayed, baked-in response, human-made climate change makes this an intergenerational issue. What we have done in the past is already having consequences but what we do today and going forward will mostly impact the next generation for better or worse.

To his credit, Hansen dives yet again into Climate Policy, unlike most other scientists. This has been long been a huge source of frustration for him and you can almost see him stomping on his own hat, in his anger and impatience with the political processes that have thwarted action. First he reviews just what makes solving cilmate extra hard, starting with the fact that the principal source of GHGs is fossil fuels, which are in his words "extremely beneficial to humanity." They have raised starndards of living worldwide and still provide 80% of the world's energy. "Fossil fuels are readily available, so the world will not give up their benefits without equal or better alternatives." Because of this conundrum, we are near a point of no return, where extreme consequences can spiral out of humanity's control.

Dr. Hansen has been a first-hand witness to humanity's failure to act over the last 35 years or so and his exasperation with that and his desperation to communicate to those in power about our increasingly limited options is abundantly clear. He's been advising governments around the world on possible approaches with little of the urgent response that is warranted. He delves into some of these details but then finally hones on in the three actions that are required to successfully address climate and achieve the bright future we desire for our children.

The first is a near-global carbon tax or fee. It is the sine qua non required to address the "tragedy of the commons" problem" wherein fossil fuels waste products can be dumpted in the atmosphere for free. There can be a range of approaches, yet something that penalizes those dumping GHGs is required to be enacted globally. A corollary to a carbon fee is a "clean energy portfolio standard," with government policies that are far more supportive of nuclear power.

The second major policy requirement, is the need for the West to cooperate with and support the clean energy needs of emerging and developing nations. There are economic imbalances with developed nations having caused the past emissions but emerging nations increasingly being the driver of future emissions:

The clear need is to replace the world’s huge fossil fuel energy system with clean energies,
which likely would include a combination of “renewables” and nuclear power. Even if the
renewables provide most of the energy, engineering and economic analyses indicate that
global nuclear power probably needs to increase by a factor of 2-4 to provide baseload power
to complement intermittent renewable energy, especially given growing demands of China,
India and other emerging economies. The scale of China’s energy needs makes it feasible to drive down the costs of renewables and nuclear power below the cost of fossil fuels.

Lastly, Dr. Hansen proposes that "a multitude of actions are required within less than a decade to reduce and even reverse Earth’s energy imbalance for the sake of minimizing the enormous ongoing geoengineering of the planet; specifically, we will need to cool the planet to avoid consequences for young people that all people would find unconscionable."

References:

"A Miracle Will Occur" is Not Sensible Climate Policy, by James Hansen, Pushker Kharecha, Makiko Sato, Columbia University, Earth Insitute's Climate Science & Solutions, December 7, 2023.

Columbia University, Climate Science, Awareness and Solutions Newsletter, "Groundhog Day. Another Gobsmackingly Bananas Month. What’s Up?, sent on January 4, 2024 from the same team.

"Dire Warnings from Dr. Hansen and Team, by Valerie Gardner, Nucleation Capital, Dec. 22, 2023.

November 16, 2023

Investors are turning bullish on nuclear

After years of disinterest, energy security concerns and the push for net zero are leading investors to bet on nuclear power. The fact that the world has not managed to meaningfully reduce emissions—despite commitments from most every country and billions spent on renewables—has made it clear that more dramatic action is needed.

Many of those trying to gauge investor interest look at spot Uranium prices, believing that these are a barometer for investor interest in nuclear. The fact that the spot price rose 55% between January and October speak loudly about the shifting sentiments and prospects for nuclear power.

According to Cameco's website, the world's largest publicly traded uranium company, “Ongoing geopolitical events coupled with the global focus on the climate crisis have created what we believe are transformative tailwinds for the nuclear power industry, from both a demand and supply perspective.” Not surprisingly, Uranium spot prices stood at $74.38 per pound at the end of October, based on month-end prices published by nuclear research companies UxC and TradeTech, up from just $18 in October 2016 and $47.68 at the end of 2022. According to Morningstar, nuclear related exchange traded funds were the best performing ETFs, with Sprott Uraniaum Miners ETF (URNM) gaining 13% over the summer.

Back in May, Bank of America’s Research Investment Committee (RIC) forecast a 20 to 40% upside on uranium and nuclear power after a decade of underinvestment. Bank of America published its research findings in a report called "The Nuclear Necessity" and pointed out that global demand for nuclear had grown with 60 new reactors being built, 100 more approved and plans for old reactors to be refurbished, adding to the positive investor sentiment.

The entire global economy is, in fact, poised to move into a new period of increased interest in building nuclear, premised upon macroeconomic forces that include "resource nationalism, energy security, war and inflation." According to Jared Woodard, Bank of America's Investment and ETF Strategist, "Every analyst I spoke to was bullish on prospects for nuclear power as a technology that's clean and meets the kinds of goals that so many policymakers are eager to hit in terms of reducing emissions."

Both sides of the political spectrum see the beneifts of nuclear, progressives like the low emissions and highly reliable capacity of nuclear for addressing climate change and conservatives like the national and energy security aspects. [Aside: What's been working in the U.S. Congress is that both Democrats and Republicans vote in support of bills that both protect existing and help next-generation nuclear power using voice votes. Pronuclear bills have been passed with bipartisan majorities in every administration since Barack Obama's, with the Biden Administration doing the most good to level the playing field for nuclear. Virtually every elected official supports nuclear but progressives still find it harder to explain their support to their constituents. Less so with Republicans.]

Read more at Reuters Investors are turning bullish on nuclear, by Paul Day, November 16, 2023.

Reuters, Best and Worst Performing ETFs in August, by Valerio Baselli, September 15, 2023.

Published by Nucleation Capital in Asset manager support, Capital reallocation, Carbon emissions, Climate policy, Corporate decarbonization, Energy abundance, International support for nuclear, Investor activity, LINKS, Nuclear competitiveness, Nuclear financing, Nuclear innovation, Private companies, Public companies, Solving climate, Zero emission energy

November 3, 2023

Spain’s business lobby seeks nuclear extension

Spain's top business lobby groups called for extending the use of the country's nuclear plants, a move that was first proposed by the conservative People's Party (PP) and which became a hot issue during the recent electoral campaign. Spain's current government, led by acting Prime Minister Pedro Sanchez, nevertheless plans to start closing Spain's nuclear reactor fleet starting in 2027.

"Ideological positions should not prevent us from recognising the need to extend the useful life of power plants already installed, which guarantee the stability of the system," said Manuel Perez-Sala, chairman of business lobby Circulo de Empresarios, which says its members include 230 business leaders and top managers.

Nevertheless, the coalition deal between centre-left parties seeking to form a government confirmed "the orderly and progressive dismantling" of nuclear reactors starting in 2027. Teresa Riberta, Acting Energy Minister, has apparnetly subscribed to the false narratives spread by renewable advocates like Mark Z. Jacobson, and mistakenly accept the faulty and unsubstantiated notion that advanced economies can replace fossil fuel power plants with intermittent sources wind and solar.

This situation is much like the one faced by California Governor Newsom, in which energy experts from academia, industry and the state, called for the continuation of power from Diablo Canyon but the progressive left, comprising environmental groups and ideologic advocates for fossil fuels and renewables, called for the closure of Diablo Canyon. Governor Newsom was able to understand how ideologic concepts based on false assumptions will not keep California's lights on make the right call to save Diablo Canyon's 24x7 always on power. Newsom was able to get the majority Democratic California legislature to pass legislation to extend the life of Diablo Canyon.

Facts do matter and the erroneous assumptions spread about renewables' capabilities are apparent by virtue of the failure of the world to reduce emissions at all, despite enormous growth of wind and solar. We will be watching this situation develop in light of the world's failure to meaningfully reduce global emissions.

Read more at Reuters Spain's business lobby calls for extension of nuclear power, November 3, 2023.

Published by Nucleation Capital in Asset manager support, Carbon emissions, Climate policy, Corporate decarbonization, Energy abundance, Government support, International support for nuclear, LINKS, Politicians supporting nuclear, Private companies, Public companies, Solving climate, Zero emission energy

October 22, 2023

Parnassus Versus Green Century: A Contrast in Styles

By Valerie Gardner, Managing Partner

June, July and August of 2023 were the three hottest months the Earth has ever seen by such a large margin, it left climate scientists agog. Climate disasters are abounding apace, with the U.S. hit by 23 large-scale disasters, a record-breaking year already. In Pakistan, extreme rainfall and flooding affected 33 million people, killing more than 1,700, displacing more than 8 million and causing damage estimated at over $30 billion, not counting the estimated 2.2% loss to the country's gross domestic product. North America and even Hawaii were ravaged by intense forest fires, with record acreage subsumed, scorching towns like Hahaina, killing hundreds, and forcing evacuations in areas of the northeast, northwest and Hawaiian islands once seen as refuges from the expected heat. Decades of increasingly severe drought, now complicated by shortages and war, have displaced millions in Iraq and other regions of the Middle East and the bad climate news is just getting worse, adding to the cacophony of alarm bells being rung by scientists in almost every field. In this context, when it is clear that we humans are not coming close to winning this fight, it's illuminating to contrast how two competing sustainable investment groups have chosen to address their obligation to invest "sustainably."

As we reported back in May, Parnassus Investments, a leading sustainable investment fund, issued a stunning press release in which they announced the removal of their negative investment screen on nuclear power along with a positive outlook for its role in reducing emissions.

In a succinct six paragraphs, Parnassus explained the basis for this momentous decision that reversed a policy in place for the entire 39 years of their existence. While it is not issuing an absolute commitment to invest in nuclear equity, the statement showed that Parnassus’s Sustainability team had thoroughly researched the issue of nuclear power and were sufficiently convinced that nuclear could be an important contributor to helping the world decarbonize to change their minds and finally include nuclear in the universe of investment prospects.

We regard this milestone decision as an impressive example of science and fact-based ESG leadership, reflecting actual changes in the nuclear industry over the last few decades as well as the utter catastrophe we are facing, if we don't find better ways to reduce emissions from our energy usage. Similarly, around that same time, Bank of America Securities analysts released their first "BUY" recommendation for nuclear power in nearly four decades. In BofAS's highly detailed report, titled "The Nuclear Necessity,” a team of five analysts explained why they were "bullish on nuclear power" and laid out both the case for and the methods by which investors should start increasing their exposure to nuclear equities and uranium. This event, we noted was yet another milestone.

Nevertheless, on August 30th, writing in a publication called ESG Clarity, Leslie Samuelrich, the CEO of Green Century Funds, another investment fund which considers itself a leader in sustainable investing, issued her pushback in the form of doubts. Ms Samuelrich wrote: "Even though I knew for months that an ESG firm was thinking about removing its exclusion on nuclear power producers, I was taken aback when I read their press release. Why would they revert their position and turn to nuclear when investing in renewable energy has grown so dramatically?"

Ms. Samuelrich then proceeds to trot out five dog-eared paragraphs containing the standard litany of antinuclear arguments (Safety, Cost, Timing, Emissions and Waste) which, like figures in a wax museum, reflected views so frozen in time, no amount of new data or climate rationale could have had any effect. She makes no reference to nuclear's improved safety performance, nor any mention of new designs nor the accelerating customer interest in them. The stark contrast between the perspectives laid out by these competing sustainability-focused investment firms offers an excellent opportunity to compare the styles and seriousness of their approaches to their ESG investment missions.

Parnassus Investments

Parnassus Investments was founded in 1984 to provide socially-responsible investments. Headquartered in San Francisco, they now have 70 employees and about $42 billion in assets under management (as of Sept. 30, 2023). This is a serious investment firm with an impressive $600 million in AUM per employee.

Reflecting Parnassus’s seriousness is the Climate Action Plan that the firm adopted in December 2022. This Plan established a goal of net-zero emissions in all their funds by 2050, in alignment with the Paris Agreement. This document and commitment demonstrate that Parnassus understands this key point: it is not enough to avoid fossil fuels; society also has to figure out where all the future clean power that we need will come from. It's the long-term "rubber meets the road" reality check. Parnassus's statement that they will now include nuclear in their investment universe to support the transition to a low-carbon economy reflects their deep thinking about this urgent reality.

We imagine that it must have been a difficult decision for the Parnassus team. But they displayed the intellectual honesty to take a deep, critical look at the landscape for where we will produce our clean energy and, like many of us, found the calculations around deployment of renewables did not add up. It is never easy to have to change one's mind. Never easy to reverse course. With respect to nuclear—which evokes so much knee-jerk prejudice and emotion—even being open to an objective evaluation is difficult. Many members of the antinuclear community see it as such a betrayal, they'll question your motives. What ultimately forces objective people to look more closely at nuclear is the fact and increasing certainty that we cannot meet our climate and energy goals without it. Parnassus demonstrated both analytical clarity and courage in their decision to abandon their negative screen and allow nuclear back into the universe of possible equities—without a thought of abandoning their commitment to rigorously evaluate each prospective candidate for its adherence to high ESG performance metrics.

Although in 1984, Parnassus was also concerned about the safety and cost issues involved with nuclear power, they have since learned that nuclear is a critical source of low-carbon power whose benefits include both safety and a stability. They've also recognized that, over the years, tighter regulations have led to improved designs and operating performance. Additionally, they were pleased to find that the new generation of nuclear technology being developed now offers both higher safety and lower costs. The Parnassus investment team, led by Marian Macindoe, Head of ESG Stewardship, has clearly done a deep dive into today's more diverse nuclear industry, where a broader menu of options are being developed, and believes that "nuclear energy will be an essential source of fuel in the transition to the renewable sources required to support a low-carbon economy . . . and a reasonable choice." This reflects considerable research and learning. We applaud the extremely professional work this team has done.

Green Century Funds

Green Century Funds, founded in 1991 by a "group of environmental and public health nonprofits," has nearly $1 billion in assets under management as of June 30, 2023. Green Century’s Registered Investment Advisor, Green Century Capital Management (GCCM), has 13 employees, six of whom provide investment advisory or research work (as of GCCM's most recent ADV) about $86 million in AUM per employee. Any profits from their investment advisory operations go to Paradigm Partners, a holding company owned by the founding entities, predominantly NGOs affiliated with Ralph Nader's Public Interest Research Group — Mass PIRG, NJ PIRG Citizen Lobby, Conn PIRG, CA PIRG, Washington State PIRG, Missouri PIRG Citizen Org, Colorado PIRG, PIRGIM Public Interest Lobby, and Fund for the Public Interest. These are all advocacy groups. None are scientific or investment experts.

Green Century's stated mission conforms to an advocacy model: to help people save for their future without compromising their values and to help investors "keep their money out of the most irresponsible industries." In other words, Green Century Fund applies a simplified, reductive view that merely screens out investments that don't meet their "values" — i.e. no fossil fuel, tobacco, nuclear and conventional weapons, nuclear energy, genetically modified organisms (GMOs) and other industries "whose core business threatens the environment and public health." Green Century specifically does not aspire to invest into companies that will enable a sustainable future. They also have not published a "Climate Action Plan," from what we could see, so they have made no specific commitment to decarbonizing their fund. We were curious as to what they do invest in.

A cursory overview of Green Century's Equity Fund, the largest of its four mutual funds boasting $544 million in AUM, reveals the following Investment Categories and percentages of investments:

Software & Service 23% (52% of which is Microsoft)
Semiconductors 10% (52% of which was NVIDIA)
Media & Entertainment 8.2% (83% is Alphabet)
Pharmaceuticals & Biotech 7.3%
Financial Services 6.4% (26% is Mastercard)
Capital Goods 6.2% (20% is Caterpillar or Deere & Co.)
Food & Beverage 4.5% (57% is Coke and Pepsi)
Renewable Energy & Energy Efficiency 4.1% (90% is Tesla)
Healthcare 4.0%
Consumer Discretionary 3.7%
Equity REITs 3.0%
Insurance 2.9%
Household/Personal Products 2.7%
Consumer Services 2.5% (43% McDonald's)
Materials 2.5%
Tech Hardware & Equipment 2.5% (43% Cisco)
Transportation 2.0% (31% Union Pacific Corp)
Consumer Durables & Apparel 1.2% (58% Nike)
Banks 0.9%
Telecom .8% (98% Verizon)
Commercial & Prof. Services .5%
Consumer Staples .3% (54% Sysco Corp)
Automobiles .3% (Rivian is here at 17%)
Utilities .2%
Healthy Living 0.0%

There are several interesting things that pop out from our review. Of the top 9 listed investment categories, containing 70% of the total assets, five have a majority of capital concentrated in just one or two companies. Thus, by dollars, this fund is dominated by its investments in Microsoft, NVIDIA, Alphabet, Mastercard, and Tesla. While these are great companies, it is notable that all of them, without exception, require massive amounts of electricity for their success. Which means from a sustainability perspective, that they will need reliable, affordable and growing sources of clean electricity to remain profitable over time. Where will that come from?

In her written response to the Parnassus shift, Ms. Samuelrich pointedly asks "Why would [Parnassus] revert their position and turn to nuclear when investing in renewable energy has grown so dramatically?" Well, Ms. Samuelrich can easily find the answer to her question in her own firm's largest portfolio. It lacks meaningful investment in clean energy. Green Century claims to have put 4% of its assets into "Renewable Energy & Energy Efficiency." If that were true, one could imagine justifying that level, as the traditional Energy sector represents 4.7% of the market capitalization of the S&P 500 index [S&P 500 9/30/23 FactSheet]. A closer look, however, paints a different picture.

Of the 4% of assets designated as Renewable Energy & Energy Efficiency, 90% was actually invested in Tesla. Tesla is an electric car company, as everyone knows. Cars, even when electric, are neither a source of "renewable energy" nor do they produce "energy efficiency." But Green Century knows this because it has properly categorized Rivian, another electric car manufacturer, in the "Automobile" category. Yet, Green Century chose to put Tesla into the "Renewable Energy" category. Perhaps this is because Tesla acquired Solar City, and so has a small division that sells solar panels and battery walls. But Tesla’s 6/30/23 10-Q reports that “Energy Generation and Storage” produced less than 7% of Tesla's total revenue ($3.038 billion of total revenue of $48.256 billion) for the first six months of 2023.

Aside from Tesla, the amount of capital that Green Century has invested in Renewable Energy & Energy Efficiency is just 0.4%. These investments include five companies, of which Johnson Controls represents 60%. Johnson Controls provides HVAC systems, fire protection, and automated data information about energy use for many types of commercial buildings. They also service "90% of the world's top marine and oil and gas companies for all types of assets and facilities." In other words, a sizeable portion of their business derives from the oil and gas industry, conveniently ignored by Green Century. For argument's sake, we'll assume that Johnson is credibly working towards "energy efficiency" wherever they are but they are definitely not creating renewable energy.

The remaining .16% portion of Green Century's “Renewable Energy & Energy Efficiency” holdings is comprised of four investments: Acuity Brands, Itron, Ormat Technologies and First Solar. Acuity Brands markets smart lighting and building management solutions. Itron provides smart networks, software, services, meters and sensors to help manage energy and water. Acuity and Itron may contribute to energy efficiency, but neither produces renewable energy. Ormat Technologies claims to be a leader in providing "Green Power Plants" spanning geothermal power, solar power and "recovered" energy (i.e. storage). First Solar, the only US-based solar manufacturing company, claims to offer next-generation solar technologies, a high-performance, low-carbon alternative to conventional photovoltaic panels. At last, two companies that actually contribute to the creation of renewable energy! Yet the Green Century fund invests less than 0.12% of its total assets into these two companies. In contrast, Green Century has invested over 2.5% in Coke and Pepsi — more than twenty times the amount invested in renewable energy companies that Ms. Samuelrich claims are growing so quickly.

We are a bit "taken aback" by the choices made by Green Century, not only their degree of concentration in a few large cap companies but the misleading industry categorizations and failure to invest meaningfully in the lauded renewable energy companies working to clean our energy system. Ms. Samuelson argues that sustainable investors should support the renewable energy sector, so why isn't she, if she truly believes that "the world is set to add as much renewable power in the next five years as it did in the past 20?"

Samuelrich asks, "Why gamble with the environmental and public health risks of [nuclear], especially when renewable energy is cleaner and cost competitive?" The answer is clear to those who actually do the research and care about facts: because neither solar nor wind actually provide the reliable or climate resilient power that societies demand and need. Geothermal remains highly limited by geography. So, as we've witnessed, without a truly reliable source of clean energy, humanity will continue to demand reliable but dirty fossil fuels and emissions will keep growing—as they have continued to do, despite big increases in renewables. The only clean and firm source of power that can scale up with the speed we need it to, is nuclear. It's gotten a whole lot better over the last 40 years—in part due to the public's concerns about it's safety and increased regulatory scrutiny—and now a new slate of advanced designs with different sizes and features is emerging and buyers like Dow Chemical and Microsoft are leaning in.

We would urge all sustainable-minded investment groups not to take shortcuts and pander to aged ideologic tropes like Green Century, but instead examine today's facts and data carefully and think critically, as Parnassus did, about the real challenges around how we will produce the enormous and growing amounts of clean grid-scale, distributed and industrial-process heat power on which we all depend. Simply saying “no” to technologies you don't like may have been a justified approach three decades ago but it has not helped solve our true climate dilemma—meeting humanity's growing energy needs without impacting the climate. Until we make this transition, nothing is "sustainable." Nor will it enable one's investors to participate in the growth of a sector—like next-gen nuclear—that is increasingly being recognized by climate and energy experts as critical to our survival.

We are extremely glad that serious, research-focused investors, like Parnassus Investments and Bank of America Securities, are figuring this out and are willing to do the hard work, risk the bruises that may result from following the facts to where they sometimes inconveniently reside, and build the necessary technical capacity to both analyze and potentially invest in the advanced technologies and companies working hard to actually deliver a more sustainable future.

References