Finally the throwaway, “to go” culture that uniquely defines America has actually come up with something environmentally friendly (well at least in terms of carbon emissions)! Yesterday, New Mexico-based Hyperion Power announced that it is aggressively moving forward with the development of its nuclear power modules that the company says are smaller than an automobile yet can power 20,000 homes:
The HPM is a safe, self-contained, simple-to-operate nuclear power reactor, which is small enough to be manufactured en masse and transported in its entirety via ship, truck, or rail. Euphemistically referred to as a “fission battery,” the HPM will deliver 70 megawatts of thermal energy, or approximately 25 megawatts of electricity. This amount of energy is enough to supply electricity to 20,000+ average American-style homes or the industrial/commercial equivalent. “In response to market demand for the HPM, we have decided on a uranium nitride-fueled, lead bismuth-cooled, fast reactor for our ‘launch’ design,” said John R. Grizz Deal, Hyperion Power’s CEO. “For those who like to categorize nuclear technologies, we suppose this advanced reactor could be called a Gen IV++ design.”
The design that Hyperion Power intends to have licensed and manufactured first will include all of the company’s original design criteria, but is expected to take less time for regulators to review and certify than the initial concept created by Dr. Otis “Pete” Peterson during his tenure at Los Alamos National Laboratory. “We have every intention of producing Dr. Peterson’s uranium hydride-fueled reactor; it is an important breakthrough technology for the nuclear power industry,” noted Deal. “However, in our research of the global market for small, modular nuclear power reactors – aka SMRs – we have found a great need for the technology. Our clients do not want to wait for regulatory systems around the globe, to learn about and be able to approve a uranium hydride system. A true SMR design, that delivers a safe, simple and small source of clean, emission-free, robust and reliable power is needed today – not years from now. As we construct and deploy this launch design, we will continue to work towards licensing Dr. Peterson’s design.”
Kept quiet until today, this initial design for the company’s small, modular, nuclear power reactor (SMR) is the first of several that have been under co-development with staff from Los Alamos National Laboratory. Hyperion Power’s market goals include the distribution of at least 4,000 of its transportable, sealed, self-contained, simple-to-operate fission-generated power units. Offering a cost-efficient source of clean, emission-free, baseload energy, the HPM will provide crucial independent power for military installations; heat, steam and electricity for mining operations; and electricity for local infrastructure and clean water processes in communities around the globe.
A slideshow presentation about the Hyperion Power Module can be found here.
This news is interesting for several reasons. One, it demonstrates what we’ve been talking about in the comments section with respect to new technologies to supplant foreign oil imports in the United States and other developed economies. Indeed, if Hyperion can produce 4,000 of its units over the next decade and they perform as expected, these units would supply enough energy to power all the homes in the United States. Now clearly many of the units will be sold for targeted uses and not residential power generation but the point is that crude oil does not have a secure future as the dominant source of energy in the world.
The news is also interesting from an investment standpoint. Hyperion Power itself is a private company at this point and not open to retail investment, but the implementation of its technology may have significant impact on the uranium market during the next decade. In response to a question about the amount of uranium demand the Hyperion technology could create, I wrote this:
This won’t be very precise but the LEU used in conventional reactors requires approximately a 10:1 enrichment from the U238/235 ratio found in yellowcake (the exact enrichment factor depends on the U3O8 content of the concentrate which might be anywhere from 70-90%). Let’s assume that conventional reactor LEU is about 5% U235. So basically 19% LEU is about 4 times typical LEU content and thus 1kg of U for the Hyperion reactor would need about 40kg of U3O8.
The problem comes with determining the U content of the alloy used in the fuel pins as well as the total weight of the fuel core. It looks like 300kg is probably too light for the weight of all the pins (I calculate roughly 600-800kg by visual estimation) and so 300kg may be closer to the U% in the alloy. Assuming 300kg LEU alloy then and a 40x enrichment factor, we come up with 26,400 lbs U3O8 per Hyperion unit. At that pace 4,000 units need 105 million lbs. U3O8. If we assume the lowest estimate of fuel core lifetime at 5 years, we get about 20 million lbs. U3O8 per year.
Interestingly the U3O8 required for each reactor is only $1.7 million per unit according to the above calculation, demonstrating the huge leverage on fuel input cost that nuclear reactors are able to provide, and clearly allowing for quite a bit of U price appreciation without cutting into profit margins too much (the units are being priced between $25 – $50 million).
Finally, it isn’t likely these units will replace conventional “mega” reactors anytime soon as their initial deployment will be in tactical situations and it will take a long while to manufacture 4000 units. Nonetheless, if this works it would indeed be an impressive thing for the energy economy and create quite a bit of U demand to boot.
I’ll add that annual mine supply of uranium is about 100 million pounds so this one technology could generate a meaningful increase in demand. And there are several competing technologies in various stages of development as well. To be clear, the new demand will not happen for a while and when it shows up the demand will be gradual, but the trend should be pretty clear for those who are willing to think about it: long-term uranium fundamentals are very strong. This is important because right now uranium miners and explorers are among the most beaten up and unappreciated companies in the natural resources sector, providing an excellent opportunity for long-term positioning and accumulation in advance of a speculative bull market that could mature in the 2012-2014 timeframe. This next bull market is likely to make the last one in uranium look like a community theater rehearsal and if we play our cards right it should be possible to roll our (hopefully massive) gains in gold, silver and “hot metals du jour” over into the uranium sector at the perfect time. Just in case the bull market arrives early, however, we’ll be maintaining healthy exposure to uranium in our portfolios via EveryInvestor picks like Hathor and Terra Ventures (with more to come soon) as well as ultra-speculative gambits like Abitex Resources.