Startups Undeterred Despite Weak Economy

Hyperion Power Generation:

Hyperion Power Generation wants to go nuclear in a small way.

The Santa Fe, N.M.-based company has shrunk the nuclear reactor into a 25-megawatt package, intended for commercial applications, that's small enough to fit in the back of a truck.

"This has the opportunity to change the energy [market,]" CEO John R. Deal said. "The idea is to take the power of nuclear energy in places it was unable to go before."

Deal, who presented at the conference Tuesday, said the company is raising an undisclosed sum in a second round of funding and told Greentech Media he expects to close the round in January "or a little after."

Altira Group LLC in April announced it had invested in Hyperion's first round of funding. The amount of that round was also undisclosed, but Deal said the company is "certainly well-funded" from the Series A.

So why the new round?

"Part of the reason is to get more brains involved," he said. "It turns out to get the attention financial geniuses you have to let them invest. It's the opposite of paying them; they pay you."

All together, the company expects it will need a total of less than $60 million in capital to enter the market, he said.

The company plans to sell $25 million reactors that can each power the equivalent of 20,000 average homes for eight to 10 years for about 2.5 cents per kilowatt-hour, said Deal, whose business card includes the nickname "Grizz."

The reactors produce heat that is used to run a boiler that makes steam, which is converted into electricity. It doesn't require any water or separate cooling system, so that a Hyperion power plant would use the same amount of water as any other steam-turbine plant, he said.

And Hyperion already has had plenty of customer inquiries - including some from companies running big data centers - and believes it has an addressable potential market of $750 billion, Deal said.

"We hit the market in just over four years and we're completely backlogged with orders," he said.

The company expects to deliver a reactor to its first customer in June of 2013, he said.

Much of the interest is driven by the cost. Compared with the cost of heavy oil, at $10 to $15 per million British thermal units of energy, Hyperion expects the cost to its customers to be $3 per million Btu, Deal said. 

The company also plans to take responsibility for the entire fuel cycle, including managing the waste and recycling of the uranium, he said, adding that after eight to 10 years, the waste from the reactor would be about the size of a softball.

The technology, developed by more than 30 scientists in the national labs, uses uranium hydride, which Deal said is chemically unable to have a meltdown, as it stays at its optimal temperature without any external moderation or controls. 

"There's nothing to break down or to maintain," he said.

Still, at the end of his presentation, Deal ended up fielding plenty of questions about the safety of distributing nuclear power. 

First of all, it would be difficult for anyone to get into the reactor because it would be hot and would stay hot for about six months, he said.

The uranium also would be useless for making a bomb, he said. "You'd be better off starting with yellow cake from Niger," he said. "This was designed by the nonproliferation team at Los Alamos, so this is proliferation proof."

If someone did manage to break open the reactor – and that would take a very large charge, he said – it would expel radiation, but the radiation would be very limited to that area, he said.

"If someone blew up a natural gas plant, it would be a lot bigger deal," he said.