In the Spotlight: Nuclear Energy

Hi friends! 👋 Logan here.

Doing something a bit different for this week’s Spotlight Series. Rather than highlighting an entrepreneur this week, I wanted to revisit an old format Middle Tech experimented with in the early days and record an essay-style podcast on a topic I’m interested in (shoutout Weekend Thoughts - if you’re an OG, you know).

For this week’s episode, I wrote a blog providing a brief overview on the current state of nuclear energy. I’ve always had a fascination with the energy sector, simply because everything is downstream of energy. As we look to modernize our energy sector, I’ve become very curious around what exactly that’ll look like in the future. This blog explores part of that question, focusing on nuclear energy’s role in that future.

Before diving in, keep in mind I’m not in the nuclear space, nor do I have a degree in the underlying science of nuclear energy. I’m just a curious fella that’s done some research for the past 3 years. If I get anything wrong, I’d love to be corrected.

A Brief Overview on the Current State of Nuclear Energy

It's been almost three years since I first became interested in and started closely following the nuclear energy space. I put out two short podcasts (Nuclear Energy: Part 1 and Part 2) where I went on a curiosity-driven deep dive to learn about the space, inspired by the question: "Why is nuclear energy not a larger part of the clean energy conversation?"

That initial deep dive has only sparked more curiosity and a fascination with what the future could look like if we implement the technology appropriately. After all, energy is the origin of everything. And figuring out how to produce enough of it sustainably will largely determine the trajectory of human civilization. The more energy we can produce, the more humanity can flourish. I literally cannot think of a more exciting thing to follow.

A Refresher on Nuclear Energy

I think the best place to start off with this episode is to just reiterate the difference between the two different types of nuclear energy. The only type we have readily available to us currently is nuclear fission, which is when an atom - typically uranium - is bombarded with neutrons in order to make the nucleus split apart. This splitting releases a huge amount of energy in the form of heat, which is used to boil water and turn a turbine, just as we do with coal. While fission reactions are also utilized in nuclear bombs, the reaction that takes place to produce energy is carefully moderated to produce a steady and controlled output of heat. This type of reaction is also associated with the downsides of nuclear energy - meltdowns and nuclear waste. I could, and probably will, create an entire episode about the mitigation of those risks, but for now just know that new reactor designs are making those issues less of a concern. 

The other type of nuclear energy is produced by the opposite reaction to fission - the fusing of two atoms, known as nuclear fusion. You’ll often hear nuclear fusion referred to as the holy grail of energy sources, due to its ability to theoretically provide us with unlimited clean energy, without the risk of meltdowns or nuclear waste. Billions upon billions of dollars have been poured into private companies that are pursuing the nuclear fusion breakthrough, and real progress is being made. The Lawrence Livermore Lab was the first to achieve fusion ignition back in December of 2022, meaning that the reaction produced more energy than it consumed, and several private companies claim to be close. I tend to fall into the camp that believes that we’re going to achieve sustainable nuclear fusion energy within the next decade - maybe even sooner. My favorite company to follow in the space is Helion, who recently signed a power purchase agreement with Microsoft to power some of their data centers by 2028. Side note: guess who Helion’s chairman of the board is? Sam Altman. He personally invested $375 million into the company, and is also the CEO of OpenAI - the AI company Microsoft invested $13 billion into. There's a lot going on once you realize the chess game that Sam is playing, but I digress. That’s a topic for another blog.

We’re at an interesting time in nuclear energy’s history. If we can achieve commercial fusion energy in the next 10 years, then should we even bother with building more fission reactors? I think the answer is yes, but it’s more nuanced than a binary yes or no. So I wanted to break down the news I’ve seen coming from the space, where I think things are headed, and what I believe an ideal state would look like.

We’re About to Need A Lot More Energy

First, I’d like to make the case for why we’re about to see a surge in energy demand, outside of the normal growth we see as our population increases. There’s a new energy-hungry technology in town, and it’s really hungry. As you might’ve guessed, that new technology is Artificial Intelligence. Running the computers required for large language models (LLMs) is incredibly energy-intensive. As AI becomes more integrated into everything, the energy demands of data centers will grow at an accelerated rate. To linger on the data center topic for just a second, allow me to provide some additional context. These facilities house the physical infrastructure that runs the software we access via the cloud, executes cryptocurrency mining algorithms, and trains and hosts large language models. According to a report from the International Energy Agency, there are currently over 8,000 data centers globally, with over 33% of those in the US. These data centers consume about 4% of global electricity, a number expected to double by 2026 as more data centers are brought online and AI integration grows. As we pursue Artificial General Intelligence, we'll encounter two bottlenecks: compute (producing enough GPUs) and energy. I believe significant money and attention will focus on these bottlenecks over time.

The primary groups I’ve seen making moves to account for these bottlenecks are those with capital and regulation authority - big tech and the government. In March, news broke that Amazon Web Services had acquired Talen Energy's nuclear data center campus in Pennsylvania for $650 million. The data center is powered by the adjacent 2.5 gigawatt nuclear plant. Microsoft is also exploring the similar moves, as a recent job posting calls for someone to “lead project initiatives for all aspects of nuclear energy infrastructure for global growth”. And just earlier this month, Bill Gate’s nuclear energy company, TerraPower, broke ground on America’s first next-generation nuclear facility, which is said to be “far safer than any existing plant, with the temperatures held under control by the laws of physics instead of human operators who can make mistakes. It also has a shorter construction timeline and will be cheaper to operate”

The government has been making moves as well, mostly aimed at reducing the regulatory hurdles that have made bringing new nuclear online unrealistic. In February, the house approved a bipartisan bill that’s “designed to reduce regulatory hurdles and support the development of small, factory-built nuclear reactors” also know as SMRs - which, in my opinion, are the future of nuclear fission energy. Then in March, the Biden administration approved a $1.5 billion loan to restart Michigan’s Palisades Nuclear Plant, which would be the first successfully restarted nuclear plant in American history. While I'd love to see the US focus on bringing new reactors online that take advantage of modern tech, I do think this is a step in the right direction. And just earlier this month, Congress passed the ADVANCE Act, which stands for Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy, aimed at speeding up development of next-generation nuclear reactors and position the US to lead the international market, while also helping aging reactors stay online. But even more relevant to those reading this blog, there’s actually a bill that’s passed through the Kentucky Senate that seeks to establish the “Kentucky Nuclear Energy Development Authority” which aims to “nurture an environment conducive to the growth and development of the nuclear sector across our commonwealth”.

The primary hurdles for bringing new nuclear energy onto the grid are overly-burdensome regulatory processes, and development costs/lack of financing options for new builds. We largely have regulation to thank for soaring development costs, but it seems like the support is there to make some serious progress over the next few years.

Envisioning the Future

All this progress has me excited for the near future, but I don’t think everyone’s in agreement over how exactly all of this should be implemented. For example, a common argument I see against introducing more nuclear energy to our grid is pointing out the declining cost of solar and making the argument that solar + batteries can supply all the power we need. To be clear, I agree that we should continue to invest in solar energy, but I think it would be foolish to concentrate a majority of our energy production in any one source. I’d rather see us diversity our power portfolio with sources that create more resilience for our grid. I believe small modular reactors (SMRs) are a great solution to be able to provide consistent, stable, baseload power to supplement what we produce from solar. 

From what I’ve gathered, these SMRs are going to be the future of the nuclear energy space as they’re typically cheaper to build, safer, more scalable, and able to be deployed in locations where large reactors are unrealistic. As it stands currently, the system is definitely broken when it comes to building large reactors. Back in March, Georgia Power finally brought Vogtle 4 online, which is the largest producer of clean energy in the nation. But the reactor was 7 years over schedule and $17 billion over budget. Again, a lot of that has to do with the regulatory requirements for building reactors, but I’m not sure the economics of building massive reactors like that will make sense in the future with solar decreasing in price like it currently is. Even moreso when you consider that we may very well achieve commercial fusion before we can even bring another large reactor online in America (long shot, I know, but I’m optimistic).

A future with abundant energy eventually leads to a future with abundant intelligence. That’s a future that holds a lot of incredible potential for humanity, and one that I hope I live long enough to witness.

Have an opinion about something I said in this podcast? I want to hear about it. Reach out to me at [email protected] if you have any feedback.

That’s all we’ve got for you this week! Thanks for reading. Don’t forget to forward if you enjoyed this one 😁🫶 

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