Yesterday morning I wrote a post titled Where is Hyperion Power Generation headed now? By the time I was ready for a lunch break, I had received an email from the Chief Operating Officer of Hyperion Power Generation offering to fill me in on some of the details that he was able to make public. (It is gratifying to think that there are some people who so eagerly read my work that they notice as soon as I say something about their company. Of course, it could be the effect of cleverly using search engines and alerts programmed to help companies keep track of what people are saying about them.)
It turns out that I knew the new COO at Hyperion. Dave Carlson and I once went on summer cruise together when we were midshipmen at the Naval Academy. We were both on the off shore sailing team and lived in the same wing of Bancroft Hall. We also attended nuclear power school at about the same time and have run into each other a few times over the years at class reunions. The nuclear world is small and heavily populated with former submarine sailors.
After catching up and discussing our upcoming 30th reunion, Dave explained that Hyperion was focusing its efforts in a different direction from the vision of its founders. Instead of building systems aimed at remote areas all over the world, the company is developing a financially strong first customer in North America and planning to license their system in either the US or Canada. Dave is well aware of the scale of that challenge; he has been in the nuclear and energy industry a long time.
Hyperion is seeking to build a partnership with an engineering, procurement and construction (EPC) contractor that can help them build a complete power plant. The basic reactor design is unchanged and the economic model remains a system that can compete in markets where the best available power source is a Diesel engine running on fuel that costs at least $4.00 per gallon. That is roughly $30 per million BTU, more than 7 times the current price of natural gas in the continental United States. When fuel prices are that high, electricity costs at least 30 cents per kilowatt hour to generate.
As Dave explained, the markets where Hyperion Power Modules will be successful are entirely different markets from those that my own employer, B&W, is aiming to serve with the B&W mPowerTM Reactor. TVA would not be interested in building Hyperion Power Modules at the Clinch River site; its service territory has too many other low cost options.
Not surprisingly, Dave was not able to share any details about the specific customers his company is targeting or the EPC contractors that are being considered. We discussed some of the necessary rule changes that would be required to enable the economic viability of any kind of reactor that is smaller than 1000 MWe – some of the unnecessary, but fixed costs associated with the current regulatory model are simply impossible to carry with a far smaller revenue base.
The security costs alone – if a small, remotely-sited, mostly underground reactor is stubbornly treated like existing sites – would be on the order of $30 million per year. A 25 MWe power plant running with a 90% capacity factor and selling power at $0.30 per kilowatt hour would generate a little less than $60 million per year in sales. Spending half of gross revenue on security forces is a non-starter, especially when those guards would be bored stiff.
Dave mentioned some of the other people who have recently joined Hyperion and the experience that they bring to the effort. He had a lot of praise for the ground breaking and paradigm changing work that Hyperion’s founders had done. Without going into any details, he indicated that part of the reason for the separation was a matter of the founders being worn down by knocking on the doors of so many resistant people. As Dave said, Grizz Deal is a “high energy guy” who gets impatient when faced with the prospects of pushing against bureaucrat after bureaucrat, many of whom have no interest in seeing nuclear fission energy provide power and fresh water to people who have neither.
There is no way of knowing if Hyperion’s new focus will succeed. However, as Dave and I agreed at the end of our call, it is a worthwhile effort. The potential benefit for the world’s human population motivates some of us to patiently press forward, despite the carefully designed barriers to entry that have been erected by the established energy providers during the past 50 years. There is some chance for success with the right attitude, the right technical choices and a patient application of pressure backed by facts and resources.