There’s one thing that’s clear about the modular, hot tub-sized nuclear technology being developed by Hyperion Power Generation — there is no lack of interest in it. A presentation by Hyperion’s CEO John “Grizz” Deal at the Dow Jones Alternative Energy Conference today was so full that every bit of standing room was taken, and attendees spilled out into the hallway. Hyperion is probably hoping it will get the same amount of interest from investors: Deal told us that the company is in the process of raising a Series B round of funding and plans to raise a Series C in about two years time.
Not all VCs have the stomach for funding a technology that has high risks, an untested market and few competitors to prove out the space. Questions from investors in the audience ranged from “How do you transport the fuel across state lines?” to “How will you pass regulatory hurdles?” Deal seems to have answers to most of the questions thrown at him, and he has already raised funds from venture and private equity firm Altira Group. The company said that it had signed up its first customer, TES Group, which it says is an investment company focusing on the energy sector in Central Eastern Europe, which has signed a letter of intent for six devices.
Deal knows the $25 million price point of each nuclear pod, which won’t be ready until 2013, could make the business unattractive to the VC world, which tends to dislike plays that require a large capital investment. But Deal says the development is done on a per-project basis with customers funding the process along the way, which is why VCs have been interested.
Hyperion’s pitch is that the nuclear modular devices are cheaper, easier to deploy, quicker to get built and can reach remote areas where traditional reactors can’t be built. Deal also says the technology is safer than traditional nuclear reactors because they don’t have moving parts and are more like a “nuclear battery.” In addition, the device produces waste “the size of a softball” after five to seven years of use. The main application is off-grid applications and developing geographies where the device could theoretically power a village that doesn’t have grid-connected power.
At the end of the day, though, a lot of investors might feel queasy at the thought of putting money into a device that will deliver mobilized nuclear power to developing nations. There are more than a few unknowns in that equation.