Family capital drives transformative nuclear technology

On the cusp of commercial viability, fourth-generation nuclear technology is being driven by family capital at a time when many governments are championing alternatives to fossil fuel more than ever. 

In the vanguard to be one of the first, if not the first, to build and operate a commercially viable so-called advanced fission reactor, using fourth-generation nuclear technology, is Terrestrial Energy. 

Many of the family offices investing with us see the technology’s transformative potential

Based in Ontario, Canada, its chief executive Simon Irish says Terrestrial is close to receiving regulatory approval from the Canadian government. “We were the first company to complete phase one of Canada’s regulatory design review and the first to start phase two, which we expect to successfully complete in 18 months,” says Irish. “This will be a green light for utilities to adopt our advanced fission technology.”

The former investment manager, who is based in Terrestrial’s New York City office, says Canada has been very supportive of developing the technology. “The country sees the technology as having a strategic industrial and environmental value, and it has the highest level of political support,” says Irish. Recently, Terrestrial appointed Stephen Harper, Canada’s former prime minister, to its advisory board. 

Terrestrial has developed what it calls an integral molten salt reactor, which the company says is more affordable, cost-competitive, and versatile than conventional nuclear power plants. Terrestrial’s power plants can be built in four years, and two of them can power a city the size of Denver, says the company. 

“Our technology produces half the waste per kilowatt-hour compared to conventional nuclear,” says Irish. “This is an excellent first step, and further iterations will be capable of virtually eliminating the long-term waste challenge.”

Terrestrial’s reactors don’t emit any greenhouse gases – a big plus as governments commit to carbon-neutral energy targets. There’s much more on Terrestrial’s website on the technology involved and its benefits. 

So far, Terrestrial has raised more than C$60 million since its launch in 2013, which includes government funding from the US and Canada. But a big chunk of financing has come from family offices, says Irish. 

“Many of the family offices investing with us see the technology’s transformative potential,” he says. “If you look at any early wave of technology, it is the family office sector that plays such an important catalytic role in getting these technologies going.”

Irish wouldn’t be drawn on the names of the family offices backing Terrestrial, but says they have come from a host of countries, including the US, Canada, Switzerland and the UK. 

The biggest private investor to back fourth-generation nuclear technology is Bill Gates, who has said nuclear energy represents the next energy miracle. The tech multi-billionaire founded –  along with former Microsoft colleague, Nathan Myhrvold, and physicist John Gilleland – TerrePower in 2008. The Seattle-based company is developing so-called travelling-wave technology for small modular reactors. 

There are numerous other companies in the race to develop fourth-generation nuclear reactors,  including Oregan-based NuScale Power, UK-based Moltex Energy, and Sweden-based LeadCold. 

The rewards for these groups once they get regulatory approval for their technology and realize the engineering feat of building their reactors will be considerable. As Irish says, the technology is truly transformative. And that’s a big lure for family offices, which have the patience to wait for the technology to become commercially successful, unlike many institutional investors, who will mostly only invest when the technology becomes more established. 

But like any new technology, there are also considerable investment risks. A high profile fourth-generation nuclear technology company based in Cambridge, Massachusetts called Transatomic Power Corporation went under two years ago. The founders, two highly regarded MIT-trained scientists, shut down Transatomic after realizing substantive technical problems with their nuclear technology. 

But that wasn’t before prominent backers including tech investor Peter Thiel and Swiss-based tech billionaire Daniel Aegerter, and his family office invested in Transatomic. 

Political considerations are also a big factor in the path to market for advanced fission technology, as TerraPower found out last year. The company had to abandon its cooperation with the China National Nuclear Corporation to build one of its reactors in the country after the Trump administration placed limits on technology transfers to the world’s second-biggest economy.