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November 1, 2024

Assessing the Election’s Impacts on Nuclear

By Valerie Gardner, Nucleation Capital Managing Partner

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Presidential elections are always important and this year's election is widely considered particularly critical and unusual.  There are vast differences of opinion on matters of great national importance—from voting rights and health policies to international relations and national security policies. Less well litigated is where these candidates stand on matters of energy security, the energy transition and future deployments of both traditional and advanced nuclear power. How will the differences in character, knowledge and respect for facts, science and experts play out on U.S. policies towards nuclear power?  Based upon various sources, it appears that the election will have a significant impact. For those still making up their minds, this summary assessment may help clarify how numerous pundits view these differences.

Summary

Nuclear energy has enjoyed enduring bipartisan support across both Democratic and Republican administrations for years now. The Congress has passed, with overwhelming bipartisan majorities, bills aimed at modernizing and accelerating commercialization of new nuclear.

Nevertheless, in 2024, the two presidential candidates bring potentially unconventional approaches that may differ from the standard positions of their respective parties. Republicans have long valued America's nuclear capacity and have seen the need for the US to maintain leadership to boost both national security and to expand our ability to export our technologies. They recognize that the U.S. needs to counter the geopolitical influence of adversaries like Russia and China which are offering to help developing nations with nuclear power as a means of increasing their influence within those countries.

Democrats have also, if more recently, come around to support nuclear. Both the Obama White House and the Biden Administration have provided broad support for the industry and particularly for the acceleration of next-generation nuclear technologies and American leadership in the energy transition. Front and center of their support is the recognition that nuclear power is a critical, differentiated component of a reliable, 24/7 low-carbon energy grid. They support its expansion primarily as a mechanism to meet growing energy needs and fortify grid reliability while reducing carbon emissions and addressing climate change, in tandem with renewables.

The question then of which candidate is more likely to support the continued acceleration of nuclear power is thus wrapped up with policies relating to energy security, fossil fuels, geopolitical competition with Russia and China, and support for addressing climate change. The Inflation Reduction Act passed in 2022 and signed by President Biden marked the Congress' single largest investment in the economy, energy security and climate change and is widely seen as the most important piece of climate legislation ever passed. It simultaneously rebuilds the U.S. industrial capabilities while incentivizing the growth of clean energy technologies including domestic nuclear power. It is already making an enormous and beneficial impact on the U.S. nuclear indsutry.

Kamala Harris, while possibly more progressive than Biden, has shown her support for Biden's approach to incentivizing the clean energy transition through the IRA, Biden's signature piece of climate legislation, which has received staunch support from industry. She is unlikely to make many if any changes to the IRA's clean energy technology-neutral Investment Tax Credits and Production Tax Credits or reduce the billions in loan guarantees available through the Loan Program Office, which have already stimulated significant investment in protecting and restarting existing reactors.

Because of Biden’s Infrastructure Investment & Jobs Act’s Civil Nuclear Credit program, California is proceeding with the relicensing of Diablo Canyon, Holtec has chosen to restart, rather than decommission, Michigan’s Palisades nuclear power plant, Constellation has inked a deal with Microsoft to restart Three Mile Island Unit 2, and NextEra Energy is actively considering the restart of Duane Arnold. Meanwhile, Google has signed a deal to buy power from advanced nuclear reactors being designed by Kairos Power and Amazon has signed a similar deal with X-energy, marking the first corporate purchases of next-generation nuclear, thanks to highly motivating tax and financing incentives available through the IRA and LPO.

Harris is clearly committed to addressing climate change. There is no evidence that she rejects the clean energy tech-agnostic approach developed during her term as Vice President, which levels the playing field for nuclear energy as a clean energy source. Harris recognizes the geopolitical importance of America's ability to compete with Russia to produce our own nuclear fuel supply and to provide nuclear technologies to developing nations seeking to build their clean energy capacity but wanting to remain free of Russian or Chinese influence.

In contrast, Donald Trump has repeatedly called climate change a "hoax," and/or a good thing and cares little about reducing U.S. or global emissions. He previously walked away from the Paris accord and would likely try to repeal, roll back or dilute the IRA. He's publicly allied himself with the fossil fuel industry and—in exchange for donations—has promised to roll back EPA regulations and help them "drill, drill, drill."

There is almost no doubt that Trump would step the U.S. away from its leadership role on climate and this time, that may mean reversing the U.S.'s pledge to triple the amount of nuclear power. This would seriously undermine both the U.S. nuclear industry's momentum to expand to meet growing demand as well as international progress. Given Trump’s overt courting of Putin, he may be disinclined to rebuild the U.S.'s nuclear fuel production capacity or seek to accelerate or support American efforts to build nuclear projects internationally in competition with Russia.

None of this would be good for nuclear power. Any potential efforts to rollback the IRA would slow restoration, development and deployment of reactors. Boosting the fossil fuel industry, whether through supporting expanded access to federal land or price manipulation to improve profitability would have severe impacts on the energy transition. Trump's recent acknowledgement that he didn't believe nuclear was safe also belies the stated "commitment" to nuclear energy expressed by his surrogates and gives considerable fodder to those who persist in opposing nuclear. His shoot-from-the-hip, truth-be-damned leadership style and embrace of conspiracy theorists, contrasts starkly with Harris' stated willingness to consult with scientific experts and even give those who disagree with her a seat at the table.

In sumary, Trump's likely propensity to undermine the IRA, oppose climate action and backtrack on US pledges to triple nuclear, his support for expanding fossil fuel production and his continued disdain for science and technical experts, poses extreme risks to the momentum generated within the nuclear sector over the last few years. Trump's ignorance of nuclear energy's exceptional safety performance make him unlikely to provide Oval Office leadership either to the industry or the NRC in support of the bipartisan ADVANCE Act, signed into law by Biden.

In contrast, a Harris Administration would likely remain on the current climate glideslope for leadership, technology-neutral funding and the U.S.'s nuclear tripling momentum as stimulated by the Biden Administration. It may be that a Harris Administration does not prioritize nuclear's growth or add billions in new accelerants as Biden has done, but she will not try to trash it. Having been briefed by senior energy advisors over the last four years about the importance of nuclear, she is well-informed and understands the importance of Biden's initiatives for addressing climate.

Based on this analysis, those who support an expansion of nuclear power and enduring progress towards transitioning away from fossil fuels should thus prefer to see Harris elected, rather than Trump, and the existing policies continued.

Sources

You can find more detailed information about the basis for this Summary Assessment from these sources.

  1. Forbes, Trump Plans To Rescind Funds For IRA Law’s Climate Provisions, But May Keep Drug Price Measures, by Joshua P. Cohen, Sept. 9, 2024.
  2. Bloomberg, US Economy Will Suffer If IRA Repealed, Solar Maker CEO Says, by Mark Chediak, Oct. 22, 2024.
  3. Politico E&E News, Trump cites cost and risks of building more nuclear plants, by Nico Portuondo, Francisco "A.J." Camacho, Oct. 29, 2024.
  4.  Huffington Post, Donald Trump Takes A Skeptical View Of Nuclear Energy On Joe Rogan’s Podcast, by Alexander Kaufman, Oct. 27, 2024
  5. Bloomberg, Trump 2.0 Climate Tipping Points: A guide to what a second Trump White House can—and can't—do to the American effort to slow global warming, by Jennifer A. Dlouhy, Sept. 30, 2024.
  6. Joint Economic Committee, How Project 2025's Health, Education, and Climate Policies Hurt Americans, August 2024.
  7. FactCheck.org, Trump Clings to Inaccurate Climate Change Talking Points, Jessica McDonald, Sept. 9, 2024.
  8. New York Times, Trump Will Withdraw U.S. From Paris Climate Agreement, Michael D. Shear, June 1, 2017
  9. Cipher: Here's how cleantech stacks up in three swing states: Taking stock of Michigan, Pennsylvania and Wisconsin, Sept. 3, 2024.
  10. Bloomberg Green, Climate Politics: Double-Punch Storms Thrust Climate Into the US Presidential Race, by Zahra Hirji, Oct. 11, 2024.
  11. New York Times, Biden’s Climate Plans Are Stunted After Dejected Experts Fled Trump, by Coral DavenportLisa Friedman and Christopher Flavelle, published Aug. 1, 2021, updated Sept. 20, 2021
  12. Bloomberg, The Donald Trump Interview Transcript (with quote "Green New Scam"), July 16, 2024.
  13. Google: New nuclear clean energy agreement with Kairos Power, by Michael Terrell, Oct. 15, 2024, and Google's The Corporate Role in Accelerating Advanced Clean Electricity Technologies, Sept. 2023.
  14. The New Republic, Trump Pushes Deranged Idea that Climate Change is Good for Real Estate, by Robert McCoy, Sept. 18, 2024.
  15. Grid Brief: What Was Said About Energy During the VP Debate, JD Vance and Tim Walz Discuss Energy and Climate During VP Debate, by Jeff Luse, Oct. 2, 2024.
  16. CNN: Fact check: Sea levels are already rising faster per year than Trump claims they might rise over "next 497 years', by Daniel Dale, June 29, 2024.
  17. CNN: Fact check: Tramp's latest false climate figure is off by more than 1,000 times, by Daniel Dale, April 2023.
  18. Yale Program on Climate Change Communication, YPCCC's Resources on Climate in the 2024 U.S. General Election, by Anthony Leiserowitz, Edward Maibach, Jennifer Carman, Jennifer Marlon, John Kotcher, Seth Rosenthal and Joshua Low, Oct. 8, 2024.
  19. SIGNED: Bipartisan ADVANCE Act to Boost Nuclear Energy Now Law, Senate Committee on Environment & Public Works, July 9, 2024.
  20. Rodgers, Pallone, Carper, Capito Celebrate Signing of Bipartisan Nuclear Energy Bill, the ADVANCE Act, July 9, 2024.
  21. The White House, Bill Signed S. 870, July 9, 2024.
  22. Power Magazine, The ADVANCE Act—Legislation Crucial for a U.S. Nuclear Renaissance—Clears Congress. Here's a Detailed Breakdown by Sonal Patel, June 20, 2024
  23. Sidley Austin LLP, Congress Passes ADVANCE Act to Facilitate U.S. Development of Advanced Nuclear Reactors, June 26, 2024.

October 26, 2024

Nucleation’s Three Year Overview

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Nucleation Capital Completes its Third Year!

Issues a report on the growing demand, the status of Nucleation Fund I, plans for Fund II and portfolio updates

Nucleation issued its Three Year Report to all Limited Partners (LPs) of the fund in mid-October, following the completion of three full years of investing at the end of Q2-2024.

The report covered the state of the current market, with the recent slate of high-profile power purchase announcements, a review of recent major nuclear purchase announcements by major technology companies, as well as a run-down of key events of the prior three years heralding the current inflection point in the market. Additionally, Nucleation provided its assessment of what is coming down the pipeline for investors in both energy and carbon management demand.

The report further shared more details about Nucleation's plans and strategies for its three year-old evergreen Fund I and for its upcoming, traditional Fund II. Lastly, Nucleation provided detailed and confidential updates on the progress made and current status of each of its twelve Fund I portfolio ventures.

REQUEST A COPY

If you are interested in learning more about either Fund I, our low-cost evergreen fund, now in its fourth year, or our upcoming traditional Fund II, click here to request a copy of our Three Year Report Overview.

August 23, 2024

Help us expand our deal syndications

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Nucleation Capital is growing!

Seeking help increasing our syndicate deal flow

The level of activity and new venture formation in the areas of advanced nuclear and deep decarbonization innovation is growing rapidly.  Nucleation Capital is seeking to expand our reach and connect with as many of these new ventures as we can. We are thus pleased to invite you to work with us to help us expand our syndicate deal flow and earn a share of our upside syndicate compensation.  Here's how it works.

You find and connect with a young, growing venture that fits our thesis. If this venture is actively looking to raise capital and has a fundraising pitch deck, you introduce them to us and we will review their deck. If we agree that it is a promising prospect, you can offer to help them raise capital through our pronuclear investor network and syndicate. If they like that idea and agree to give us an allocation of equity, you will then produce a deal memo and we will float a syndicate to help them raise capital.

When investors agree to participate in the syndicate, they pay no management fee but they agree to pay carried interest to the deal sponsor, which is Nucleation Capital. Depending upon your contribution to creating the deal memo and promoting the SPV, we will provide a fair split of the carried interest fee earned from the successful exit of this venture.

There are two ways that you can work with us to bring us potential deals and earn participation on the success of the ventures you bring:

1. Venture Associate: If you are a young professional keen to learn how to help ventures raise capital with some spare time to devote to meeting new teams and making introductions, we will bring you on as a Venture Associate.  You'll get training, guidance on how to find and connect with new ventures, and invitations to participate in due diligence sessions as well as other opportunities to enage with our syndicate team. We'll help you build your skills in this area and show you how to evaluate new ventures.

2. Ventury Ally: Perhaps you are a bit too busy to take on the task of writing deal memos but you are well connected, want to help worthy ventures raise capital and would like to make introductions. We invite you to join our team as a Venture Ally and we will delegate syndicate prep tasks to another member of our team. We would welcome your help connecting us to new teams working in our sectors through simple introductions.

This is an incredible opportunity for those keen to learn the ins and outs of the venture capital industry and for those who are deeply connected into the start-up world to help to help build stronger ventures.

Learn more here about this opportunity to join Nucleation's syndication team.

July 9, 2024

Biden Signs the ADVANCE Act

By Rod Adams, Nucleation Capital Managing Partner and founder of Atomic Insights.

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President Biden has signed S. 870, “A bill to authorize appropriations for the United States Fire Administration and firefighter assistance grant programs, to advance the benefits of nuclear energy, and for other purposes.”

NRC’s Newly Aligned Mission Will Accelerate Nuclear Energy Deployment

With resounding bipartisan, bicameral support that also achieved enthusiastic support of the Executive Branch, the US has enacted a new law announcing its support of nuclear energy. It has the potential to make an even larger impact on global atomic energy use than the combination of the Atomic Energy Act of 1954 and President Eisenhower’s Atoms for Peace program of international nuclear energy expansion.

Seventy years ago, that earlier combination of law and policy partially removed the blanket of tight security that had locked up fission energy in the years immediately following WWII. President Eisenhower’s clearly stated goal in enabling commercial atomic energy was to develop “the greatest of destructive forces” into a “great boon, for the benefit of all mankind.”

The “great boon” produced a wave of nuclear power plants that now produce the energy equivalent of Saudi Arabia’s oil production. That energy comes at a low marginal cost without air pollution or greenhouse gases, but nuclear power’s contribution to world energy production leveled off at roughly 2600 TWh/yr 20 years ago.

A growing fraction of the world’s science, engineering, environmental and political leaders agree that the situation needs to be changed. In November 2023, the United States led a coalition of two dozen nations in a promise to take action to triple world nuclear energy production by 2050.

Even before the U.S. signed that declaration of intent, House and Senate Republicans and Democrats began holding hearings, listening to constituents, debating with colleagues and engaging in what used to be considered the normal order of business to produce the ADVANCE Act of 2024.

I’ll say that again, Republicans and Democrats from both the House and Senate worked together in a sustained manner to pass a bill important to all of us in 2024. 

That bill was passed in May with a vote of 393-13 by the House of Representatives. It was passed in June by the Senate with a vote of 88-2.

The bill’s title – ADVANCE – is derived from “Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy.” The name might be dismissed as a clever acronym, but each of the words helps to convey the intent of the authors and approvers.

The new law of the land is clear; the United States has decided that it is moving forward at an increasing speed – accelerating – in the important task of deploying multi-function, advanced nuclear energy so we can spread the benefits of clean atomic energy to all mankind.

Mission alignment

A key accelerant is the Act’s direction to the Nuclear Regulatory Commission to update its mission statement. The new law tells the NRC that its modern mission is to provide a reasonable assurance of adequate protection of public health and safety in “a manner that is efficient and does not unnecessarily limit” the use of radioactive materials and nuclear energy to benefit society.

Here is the complete provision from Section 501 of the Act

SEC. 501. MISSION ALIGNMENT.

(a) Update.—Not later than 1 year after the date of enactment of this Act, the Commission shall, while remaining consistent with the policies of the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.) and the Energy Reorganization Act of 1974 (42 U.S.C. 5801 et seq.) (including to provide reasonable assurance of adequate protection of the public health and safety, to promote the common defense and security, and to protect the environment), update the mission statement of the Commission to include that licensing and regulation of the civilian use of radioactive materials and nuclear energy be conducted in a manner that is efficient and does not unnecessarily limit—

(1) the civilian use of radioactive materials and deployment of nuclear energy; or

(2) the benefits of civilian use of radioactive materials and nuclear energy technology to society.

Ted Nordhaus, the Executive Director of the Breakthrough Institute, supports the mission realignment. He is quoted by Axios as follows. “When we look back on this thing five years from now…. no one will remember anything else that happened in this piece of legislation, except for the change in the statutory mission.”

Nuclear energy opponents have sharply questioned the act’s NRC mission realignment section. Their opposition indicates the importance and the value of the provision in the national effort to more promptly deploy nuclear energy facilities.

In a piece published in the Montgomery County Sentinel, Karl Grossman provided reactions to the ADVANCE Act from a host of historically antinuclear groups and individuals, some of whom were most upset by the mandate given to the NRC.

Senator Ed Markey testified against the Act during the Senate floor debate, aiming particularly at the mission realignment section. He revealingly stated that the “Commission’s duty is to regulate, not facilitate.”

He is correct in noting that the new mission effectively tells the NRC to facilitate nuclear energy development, but wrong in implying that regulators shouldn’t facilitate the technology that they are assigned to regulate. FDA (Food and Drug Administration) staffers help us all retain access to both food and medicinal drugs while the staff members at the FAA (Federal Aviation Administration) work hard to ensure that air travel is both safe and available.

Dr. Ed Lyman of the UCS, provided the following comment.

“The change to the NRC’s mission effectively directs the agency to enforce only the bare minimum level of regulation at every facility it oversees across the United States.”

Leaving out his emotionally laden modifiers, Dr. Lyman is correct in noting that the change essentially directs the NRC to impose the minimum necessary level of regulation. Safety rules should be viewed as a “pass-fail” assignment. If they are good enough, there is no reason to raise the bar, especially when the claimed improvement is in a calculated probability that is already tiny. Layered requirements do little or nothing but they inevitably increase costs.

How does changing the mission improve prospects for advanced nuclear energy?

The Nuclear Regulatory Commission has always attracted talented, well-educated, service-minded employees. Most of them are dedicated to mission accomplishment but they have been culturally encouraged to believe their safety mission should be interpreted as avoiding all appearances of favoring the use of nuclear energy. The Advance Act revises the mission to align with the societal need for nuclear; it will change the culture.

Applicants should find a new, more helpful attitude emerging among regulators. Instead of assiduously avoiding advice that might be classified as “consulting” to the benefit of industry, they might offer their expertise and guidance with the goal of improving regulatory efficiency and the overall safety performance of the project being reviewed.

Junior NRC staff members have expressed serious concerns about climate change and air pollution as reasons why they became interested in nuclear energy. They understand how data show that most of the energy not produced by nuclear power will be produced by burning fossil fuels. The change in law provides a tool that enables them to resist negative influence from longer serving staff members who habitually avoid facilitating nuclear power.

Nuclear energy opponents have asserted that regulating without imposing unnecessary limits is simply a way to increase industry profits and improve the financial health of its investors, but they say that as if it is a bad thing.

They don’t like nuclear energy, often for competitive or ideological reasons. They know that profits and investor returns will attract the skills and resources that are required to make nuclear energy flourish. They prefer to starve the industry and are willing to forgo the environmental, health, safety and security benefits associated with a vibrant, growing clean nuclear energy industry.

The rest of us aren’t willing to give up the benefits, especially when decades worth of experience has shown us that nuclear energy risks are lower than those associated with available replacement power sources.

Regulatory efforts that eliminate unnecessary limits will help nuclear project deployers overcome some of the few credible concerns remaining about expanding the use of nuclear energy. It’s true that nuclear plants cost too much and take too long between planning and project completion.

A mission-driven regulator that protects health and safety while recognizing the relatively larger human costs and environmental risks associated with competitive energy sources will enable fission power to increase its role in addressing all facets of the energy trilemma – energy security, energy equity and environmental sustainability.

An exciting, growing, problem-solving and respected industry will attract an increasing flow of talented people who can develop the skills needed to reinforce the industry’s growth potential.

Nuclear plants use the same power conversion technology as fossil fuel plants, but they have recently been costing several multiples more in Western countries. There are no good reasons for that situation to continue to be true.

If bureaucratic inertia prevents the mission realignment directive from producing the intended results, the Advance Act’s language provides licensees a tool for challenging NRC impositions when a legal case can be made that NRC regulations or processes “unnecessarily limit” the use of nuclear energy.

Though it’s not blindingly obvious, giving the NRC a new sense of mission will make a global impact. The US Nuclear Regulatory Commission has a well-earned reputation as being the world’s most influential nuclear regulator. Its altered focus and processes will inspire improvements elsewhere.

Additional features of the ADVANCE Act

Even though it has the potential for outsized impact, the word count of the “mission realignment” portion of the Advance Act is a minor fraction of the act itself. There are additional useful features and provisions of the important new law.

The Advance Act gives the NRC increased responsibilities in international nuclear regulations and trade, reduces fees for advanced reactor license applicants, establishes prizes for the first of a kind licenses in five different categories, delineates some considerations for licensing reactors for nonelectric applications, directs the preparation for licensing demonstration reactors on DOE or other national security sites, mentions fusion energy, requires new considerations and processes related to nuclear plant siting choices, establishes timelines for combined license application reviews, requires regulatory provisions for micro-reactors, modifies prohibitions on foreign ownership of nuclear power plants, directs a report on advanced manufacturing for nuclear energy projects, seeks to improve the process of qualifying advanced and accident tolerant nuclear fuels, authorizes special hiring authority and requires improvements in nuclear reactor environmental reviews.

The Clean Air Task Force issued a press release with the following comment on the importance of the Act.

“As we continue to decarbonize our nation’s energy system and address growing energy demand, we need all options available and nuclear energy will play an important role in making sure we are able to meet these challenges.  The passage of the ADVANCE Act will bolster the United States’ ability to expand its capacity for this carbon-free, always available energy source,” said Evan Chapman, U.S. Federal Policy Director at Clean Air Task Force. “Nuclear energy has bipartisan support, and has a range of economic, national security, and climate benefits. This bill will address current barriers to deploying innovative nuclear energy technologies, help preserve existing nuclear capacity, and build capacity at the Nuclear Regulatory Commission, marking a significant step forward for American nuclear energy leadership. We applaud Congress for passing this important legislation and look forward to President Biden’s signature to turn this act into law.”

Sources

You can find more detailed information about the rest of the act from these excellent sources.

  1. SIGNED: Bipartisan ADVANCE Act to Boost Nuclear Energy Now Law, Senate Committee on Environment & Public Works, July 9, 2024.
  2. Rodgers, Pallone, Carper, Capito Celebrate Signing of Bipartisan Nuclear Energy Bill, the ADVANCE Act, July 9, 2024.
  3. The White House, Bill Signed S. 870, July 9, 2024.
  4. The ADVANCE Act—Legislation Crucial for a U.S. Nuclear Renaissance—Clears Congress. Here's a Detailed Breakdown by Sonal Patel, Power Magazine June 20, 2024
  5. Congress Passes ADVANCE Act to Facilitate U.S. Development of Advanced Nuclear Reactors Sidley Austin LLP, June 26, 2024

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