It’s hard out there for nuclear energy startups. Not only do they face daunting challenges in trying to develop more efficient and safer methods of generating power from nuclear materials, but regulations and the current political climate can also pose roadblocks.
At least, that’s board member Russ Wilcox’s take on the factors that contributed to the recent shutdown of Transatomic Power.
Formed in 2011, the MIT spinout generated buzz a few years ago because its team thought it was close to finding a way to turn nuclear waste into nuclear fuel. To pursue the idea, the company raised at least $6 million from investors, including Founders Fund, Acadia Woods Partners, and Armada Investment.
The company suffered a big setback in 2016, when its scientists realized they had made mistakes in their original analyses, and the design of Transatomic’s molten salt reactor wouldn’t be able to consume nuclear waste as part of its process of producing nuclear fuel. The startup worked on an updated reactor design that it has said still provides benefits, including producing less waste than conventional nuclear reactors and significantly reducing the risk of a meltdown.
But Transatomic decided to call it quits in September and release its intellectual property for private, public, or nonprofit researchers to use. In a blog post announcing the decision, co-founder and CEO Leslie Dewan said the company was unable to “scale up the company rapidly enough to build our reactor in a reasonable timeframe.”
Xconomy reached out to Wilcox to get more details on what happened. Wilcox (pictured above), a partner at Boston venture firm Pillar Companies, helped start Transatomic Power and sat on its board. His comments, unsurprisingly, put a positive spin on Transatomic’s journey, but they provide an interesting snapshot of the current environment for clean energy startups. Here are the highlights of our e-mail exchange:
Xconomy: What happened at the end with Transatomic? Did it try to raise more funding?
Russ Wilcox: As the company neared the end of its cash reserves, we soberly reviewed the business case for investment—either around the table or with external sources or partners—and concluded it was not favorable. We also did not foresee political conditions becoming sharply more favorable to nuclear energy in a timeframe that would have been practical to wait out. Therefore, we chose to shut down gracefully. The final step was to publish the work into the public domain for others to use down the road.
X: What’s your take on the technical setback Transatomic suffered a couple years ago?
RW: Setbacks are par for the course in bold new ventures, and the TAP [Transatomic Power] concept remains attractive.
Briefly, what was the setback? A traditional reactor needs 5 percent enriched fuel. Once the fuel is used for a few years and drops down to 3 to 4 percent enriched, the reactor cannot work anymore, and the rod is replaced, and that generates a stream of waste.
In contrast, most ideas for advanced reactors need 10 to 20 percent enrichment—a real barrier to adoption because the more enriched, the [closer] you get to having a [nuclear] proliferation problem. This new TAP design was expected at first to run at 2 percent [enrichment], which meant it could even burn waste fuel rods. Eventually, the company found calculation errors and developed an improved model and realized that 5 percent fuel [enrichment] would be needed. As a result, the reactor could no longer claim to burn waste, and the company had to walk back that claim.
My view: while there is a difference between 2 percent and 5 percent, the TAP design is still much better than other advanced concepts, and is still safer, cleaner, and less expensive, and is still worth pursuing for its technical merits.
X: What else contributed to the startup’s shutdown?
RW: The factors that I feel ultimately created the most headwinds for the company were not technical, rather they were the structural downsides of being a U.S. nuclear startup. The U.S. is highly concerned with proliferation, and there are tough laws in place against licensing, exporting, or co-developing nuclear technology without strict oversight and review. That is a strong incentive to sell only to the domestic market. However, the U.S. already has plenty of power plants!
The U.S. also has a highly bureaucratic regulatory regime, which has been fairly successful at avoiding accidents, yet adds huge costs and blocks innovation. Put it all together, and it means that a nuclear startup can only succeed with aggressive government backing. Current politics simply do not support this—the right does not believe in mitigating climate change; the left does, however wants to focus all its money on solar and wind.
Although there have been a few small advanced nuclear research grants offered by [the U.S. Department of Energy] in the past few years, Washington has zero interest to undertake a moonshot crusade to develop a new generation of nuclear power for purely environmental reasons. In contrast, China believes in climate change, needs more power plants, and does want to export. That is why a team in China working on a similar-yet-inferior idea to TAP received billions in funding during the same timeframe. [Editor’s note: There have been some bipartisan efforts by Congress this year to fund nuclear energy programs, form partnerships between government researchers and private companies, and reduce regulatory burdens.]
Overall, I do not see much opportunity for U.S.-based, advanced nuclear startups to succeed at scale until the country has a change of heart and urgently seeks sources of clean energy.
