Why we invested in KNXT — Leading the nuclear power renaissance
November 8, 2023
It is not necessarily the most intuitive insight, but nuclear energy is statistically as safe as solar and wind.
For decades, nuclear technology has carried a burden of fear and mistrust. The well-known accidents at Chernobyl and Fukushima Daiichi have cast a dark shadow over the industry, leaving many sceptical. Concerns about nuclear waste storage and management, as well as the high upfront infrastructure costs, have often resulted in nuclear being deprioritized as a technology.
However, nuclear is experiencing a renaissance. The latest generations of nuclear reactors come in different sizes, incorporate strong safety mechanisms, and utilise novel fuels. Modern small-scale nuclear power reactors not only boast exceptional safety records but are also cost-effective to build and install while being highly fuel-efficient. The Australian Government illustrates the benefits effectively in the graphic below:
Nuclear is not just one of the cleanest but also the fastest way we’ve decarbonized large grids. Renewable energy is great. But there are some essential limitations. Among renewables, only wind and solar can be practically deployed almost anywhere. However, their intermittent nature means that it’s sensible for just around 20% of electricity production in a given market to rely on them. If we had super-cheap large-scale long-duration storage solutions, that number could come up quite a lot. But we don’t. Not even close.
That’s why we have so many gas-fired power plants, belching CO2 into the sky. Except in the few countries that have embraced nuclear power — with the European champion being France. The French fell in love with nuclear power back in the 1970s, triggered by the 1973 oil crisis.
With nuclear power now being capable of generating baseload power at low prices, governments and investors have recently begun championing its renaissance. As nuclear energy releases no greenhouse gases and as the technology finds its place in both the IRA and the EU Green Deal, investments in the nuclear space are poised to rise enormously.
One of the front-runners is Sweden. They have ambitious plans to shift from 160 terawatt hours (TWh) of fossil-free electricity production to more than 360 TWh in the coming 25 years — primarily through nuclear power. This is why, at Climentum, we see immense short-term potential in Kärnfull Next, with long-term opportunities in markets increasingly embracing nuclear power.
Kärnfull Next (KNXT) is a pioneer in nuclear power project development. They’ve transformed the traditional government-led approach to nuclear projects, known for slow and costly deployment, by adopting a commercial energy asset development model. KNXT leads the way in commercial nuclear power project development, bringing together technology providers, site developers, regulators, investors, off-takers, and all other essential stakeholders to initiate projects efficiently.
KNXT offers nuclear power solutions to municipalities and industries, with a focus on small modular seactors (SMRs), they also provide the option to bundle these reactors with technologies such as high-temperature electrolyzers for hydrogen production. In doing so, KNXT is paving the fastest, cheapest and most eco-friendly way to decarbonize all forms of energy.
A number of factors speak in favour of KNXT as an attractive investment opportunity:
First-mover: KNXT has a unique position as the first nuclear power project developer in the Nordics and boasts partnerships with key players such as GE Hitachi and Fortum.
Scalability: KNXT has an attractive business model, developing projects to a point where they can be sold as SPVs to parties that do the actual construction. KNXT thus creates and accrues a lot of value without the CapEx burden of project construction.
Traction: KXNT already has a number of projects under development and the pipeline continues to grow as public, political, and financial sentiment continues to trend positively.
We are excited to be on this journey with KNXT and are proud to be part of the nuclear renaissance!
