Nuclear power’s future is being disrupted | Financial Times
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Investor interest in small modular reactors is growing as demand for electricity is set to soar

Last month Sam Altman, the (in)famous founder of OpenAI, posted a picture on social media of an elegant A-frame wooden building in a verdant tropical setting.

It looks like a billionaire’s weekend pad. However, what the image actually depicts is the putative design of a small modular (nuclear) reactor invented by Oklo, a company that Altman has chaired since 2015. And it was posted because Oklo has just merged with a special purpose acquisition company created by Altman and Michael Klein, the Wall Street dealmaker, valuing it at $850mn.

That will make some observers wince. The acronym “Spac” became toxic two years ago because the concept was badly abused during the last credit bubble. Adding “nuclear” into the mix risks making it doubly radioactive, in the public mind, given past accidents at the Chernobyl and Fukushima plants (and current Russian threats to Ukraine’s Zaporizhzhia plant).

Nevertheless, investors and policymakers should pay attention. On Thursday the United States Air Force announced plans to use Oklo’s reactor for the Eielson Air Force Base in Alaska — seemingly the first potential use of commercial SMRs by the Federal Government on American soil.

And activity — and investor interest — around SMRs is rising elsewhere. A rival company called TerraPower, backed by Bill Gates, is also developing reactors. So is NuScale, which listed via a Spac last year and recently received $275mn in funding from variety of governments for a Romanian project.

Industrial giants such as Britain’s Rolls-Royce are jumping into the action while GE Hitachi is building an SMR plant in Canada. And last month Britain launched an international competition for the best SMR design, pledging to take “up to a quarter of the UK’s electricity from homegrown nuclear energy by 2050”.

There are three factors sparking this. One is a recognition that demand for electricity will soar in coming years, because of global growth and the fact that digital innovations such as AI need “a lot” of additional electricity. This creates, as Altman admits, “urgent demand for tons and tons of cheap, safe, clean energy at scale”.

Second, relying on fossil fuels to generate this electricity will exacerbate global warming — but renewable sources, such as wind and solar, cannot plug the gap without major breakthroughs in battery storage.

Third, the nuclear tech has changed. In the 20th century, this was generated in massive power plants that were costly and time-consuming to build. The cost of Britain’s planned Hinkley Point C nuclear power station, for example, has surged to £32bn, while the bill for America’s new Vogtle plants has doubled from $14bn to over $30bn.

But since SMRs are small and use factory-produced designs, they are much cheaper and faster to build, and can be moved close to the electricity demand. Moreover, the tech developed at companies such as Oklo and TerraPower uses recycled nuclear waste as fuel, potentially reducing the waste disposal headache.

Indeed, Oklo’s officials claim that just the “existing inventories of used fuel in the US could power the country’s energy needs for over 150 years” — if their tech is adopted. “It’s the best way to decarbonise,” Jacob DeWitte, Oklo founder, tells me.

Not everybody agrees. Many environmentalists detest nuclear power so deeply that they want to exclude it from green taxonomies. Parts of the traditional nuclear establishment also hate the idea that libertarian “tech bros” — like Altman — are now becoming “nuclear bros”, says Allison Macfarlane, a former head of the US Nuclear Regulatory Commission.

“Very few of the proposed SMRs have been demonstrated and none are commercially available, let alone licensed by a nuclear regulator,” she noted in a recent essay(opens a new window) that decries the Spac structures and hype. “Existing nuclear power plants play a significant role in greenhouse gas reductions and will continue to do so. But the promise of SMRs is questionable.”

She has a point: Oklo’s first US federal licensing application was rejected last year. And while DeWitte tells me he will refile next year, and is optimistic about the result, he also admits that the plants will not start until at least 2027.

But even with these caveats, I personally welcome these initiatives. Yes, SMR tech is still unproven, and Spacs have a mixed record. But the dirty truth is that we urgently need to experiment with all the clean energy ideas we can find, given climate change.

And while it was the US government that initially unleashed nuclear innovation in the west — as seen recently in the movie Oppenheimer — the dismal truth is that public sector agencies have since become lamentably slow-moving and risk averse. Hence why China and Russia are now running the first SMR pilots, along with Argentina.

If nothing else, let us hope that the competitive threat from the “tech bros” will prod western governments and the traditional nuclear establishment into moving faster. And if Oklo’s new recycling tech actually works and can produce clean and safe power, that would be even better — not just for the US air force but for the wider world.