Billionaires are rallying around nuclear, according to a recent report from Pitchbook on venture investments in 2021. Notably, some of these billionaires, Elon Musk and Marc Andreessen, have spoken out about the need to both preserve existing nuclear and to "build 1,000 new state-of-the-art nuclear power plants in the U.S. and Europe right now."
This isn't exactly new, since billionaires like Bill Gates, Jeff Bezos and Peter Thiel have been both investing and advocating for nuclear for years but, nevertheless, 2021 was a banner year for nuclear venture fundraising. Not just are billionaires excited about the prospects for nuclear energy to solve climate, a lot of non-billionaire investors are as well.
According to Pitchbooks, which tries to track all venture investment deals, a record $3.4 billion was plowed by investors into nuclear ventures, which was more than the amount invested in the prior decade combined. Fusion ventures were a major beneficiary of this growing investor interest, despite yet having progressed past the "science project stage" with Commonwealth Fusion raking in $1.8 billion by itself and Helion Energy raising $500 million, but the majority of the 28 deals that were closed were likely in fission.
There is clearly a trend around an increased level of investor interest in next generation nuclear and a willingness by investors to jump in to the sector. Nucleation Capital was also launched and made its first investments in 2021—which were reported to and presumably included in the analysis by Pitchbook. Our ability to do so a function of the same factors that have stimulated the rise in venture activity, which include:
1. Widespread recognition that nuclear energy deserves inclusion in green taxonomies and is a critical rare source of firm, clean power that competes against fossil fuels, not renewables.
2. 60+ years of commercial operating experience provide ample evidence that the risks of a nuclear accident are grossly overplayed by the press and nuclear's opponents.
3. Overly hyped radiation fears have been muted by a broader understanding of the beneficial effects of background levels of radiation that occur naturally in our environment.
4. Mastery of next-gen nuclear technology is vital to both national and international security so that Russian and Chinese providers do not succeed in supplying the world's future energy needs and thus being in a position to apply geopolitical pressures on developing nations.
5. Grassroots climate and clean energy advocacy has made its mark on the world stage at COP 26 and demanded not just to protect existing nuclear power plants but also to deploy next-generation designs.
6. Fast-growing wind and solar development have not proven an ability to deliver the level of decarbonization needed to meet climate goals, due to their intermittency and dependence on natural gas.
7. Longer term decarbonization goals will require energy abundance that is not feasible with current dilute sources of energy but require nuclear's ability to repower coal plants with clean energy.
With the Russian invasion of Ukraine, the geo-political issues have risen to the top and have increased interest among many countries in eliminating dependence on natural gas even faster than previously planned. If there is a silver lining to the war being fought in Ukraine, it may be the added impetus that it has given to the global urgency to reduce gas dependence and build (or restart) nuclear energy. This reverses the prior trend, where gas (with externalized emissions) replaced nuclear energy, since the only fuel that really competes with nuclear is natural gas (so long as emissions can be externalized).
Learn more at Bloomberg, Tech Billionaires Rally Around Nuclear as Energy Crisis Looms, by Lizette Chapman, March 22, 2022. [PDF]
