X-energy CEO Clay Sell on SMRs, Going Public and Next Steps
IPO Edge and the Palm Beach Hedge Fund Association hosted a fireside chat on Oct 19, 2023 with J. Clay Sell, Chief Executive Officer of X-energy to discuss X-energy’s market opportunities, differentiated nuclear technology and more. The event was moderated by IPO Edge Editor-in-Chief John Jannarone and Editor-at-Large Jarrett Banks. You can watch the full replay of the webinar here.
[You can also click here to watch a previous fireside chat with Mr. Sell and David Kaplan, Co-Chairman and Chief Executive Officer of Ares Acquisition Corporation (NYSE: AAC): “Going Green with Small Nuclear Reactors.”]
Below are edited and condensed excerpts from the Oct. 19 fireside chat with J. Clay Sell.
How did you get started in the nuclear industry?
I have a unique history in the nuclear business. I’ve been involved in it for 29 years. I did take a 10-year gap where I developed renewable projects in South and Central America. But what really brought me back to the nuclear industry was a belief that there was no way the world can meet the increasing energy demand and decarbonize a global economy, which is 80% dependent upon fossil fuels, without a massive increase in clean, firm power sources. And without question, the number one clean, firm power choice that is out there for utilities, and, we’re now seeing, for industrial customers, et cetera, is nuclear power.
And so there was a special moment in time that I thought would lend itself to a new innovative company like ours that was bringing technology that has been around but had never been brought to the marketplace in this way. I thought it was the greatest business opportunity of my lifetime and a great opportunity to both make money and have a huge impact on the world in which we live.
Where has X-energy received funding?
The bulk of our funding is really committed to us from competitive grants that we’ve earned from the U.S. government. In the last five or six years, we’ve earned on a competitive basis over $1.5 billion dollars in U.S. government funding. We combined that with over $400 million that we’ve raised in private capital to bring our technology to the marketplace.
Can you explain how TRISO-X pebbles work?
We take a kernel of uranium that is enriched to 15.5% U-235. Then we wrap that little poppy seed, it’s half-a-millimeter wide, in layers of ceramic and graphite material. Then we combine those now millimeter-sized poppy seeds into the billiard ball sized fuel form that we use in our reactor. And those layers of ceramic material form the containment structure around the fuel. Let me tell you why that’s important.
First, it’s an incredibly robust fuel form. Second, those layers retain all of the waste products that are produced during the nuclear chain reaction while the fuel is being consumed, keeping the waste inside the fuel and outside of the biosphere, the air and water that you and I live and breathe in.
How much do your reactors cost?
You get clean solutions from wind and solar, but when the wind’s not blowing and the sun’s not shining, they produce no power. What the US economy needs is something that does both, that’s completely clean and always on. That’s what nuclear power provides.
When you compare nuclear power to a fossil plant with carbon capture and sequestration, or a wind and solar plant with long duration storage, which by the way hasn’t been widely deployed yet, the cost of a nuclear power plant is very attractive. And that has been validated by the number of customer announcements that we’ve made.
What is the next decade is going to look like for X-energy?
We have a significant amount of customer interest that we’re managing. Some of those customers are now doing feasibility studies. Then we will move them into joint development agreements where they start spending real money to develop the projects with us.
For the next five to six years, we are going to complete the engineering on our Xe-100 reactor. We’re working to help Dow file a construction permit with the U.S. Nuclear Regulatory Commission (“NRC”), get that through. Then we will work with Dow to start construction on this first project in, we expect, about three years. We expect that project will come online around the end of the decade, so in the 2029 to 2030 timeframe.
In parallel to that, we have a fuel business. We manufacture the fuel in a proprietary manner where we’ve made significant investments to improve quality and reduce the cost of manufacturing. We have a plant that will soon be under construction in Oak Ridge, Tennessee to build commercial quantities of TRISO-X fuel. We expect that plant will be online in early 2026 to start producing the fuel for our first project at Dow Chemical.
We are a licensing company. We license our technology to those that build our plants. We sell fuel for the 60-year life of these plants. We also sell a host of services associated with the early development of those plants: site-specific engineering; site characterization; and regulatory support. Revenue comes in early on each of these products, so working that revenue and business development side in conjunction with our product development is really the focus for the next few years.
Why are you going public now?
We are a rapidly growing company. We want the ability to access the sources of capital that are only available to public companies. We had an opportunity to team with an extraordinary partner in Ares Capital Management through the Aries Acquisition Corporation . Aries is a $360 billion plus platinum class asset manager on a global scale, 30 offices, 3,600 employees. What was attractive to me is they brought a long history of infrastructure project development, and particularly green infrastructure project development to our company.
So when we think about how we are going to evolve our business model on a go forward basis, how we’re going to finance the construction of plants all over the globe, how we continue to lean into and perform as a public company, there were a lot of soft skill sets, experience and capabilities that Ares brought to us that was very attractive. They made a sizable underlying investment in the company and we just couldn’t be more pleased with the opportunity to partner with them.
About X-Energy Reactor Company, LLC
X-energy is a leading developer of small modular nuclear reactor and fuel technology for clean energy generation that is redefining the nuclear energy industry through its development of safer and more efficient advanced small modular nuclear reactors and proprietary fuel to deliver reliable, zero-carbon and affordable energy to people around the world. X-energy’s simplified, modular and intrinsically safe SMR design expands applications and markets for deployment of nuclear technology and drives enhanced safety, lower cost and faster construction timelines when compared with conventional nuclear. For more information, visit X-energy.com or connect with us on Twitter or LinkedIn.
About Clay Sell
Clay Sell serves as Chief Executive Officer of X-energy. Clay has deep professional expertise across many sectors of the international and U.S. energy industry developed through his service in senior level positions in the private sector and government. Sell joined X-energy as CEO in January 2019 and has led the company through a period of dramatic transformation and growth in product development investment, U.S. government funding awards, private capital raised, and customer commitments.
From 2008-2018, Clay was the president of Hunt Energy Horizons, LLC, the renewable energy subsidiary of Hunt Consolidated, Inc., a multinational energy, real estate, and investment corporation controlled by the Ray L. Hunt family of Dallas. Previously, Clay held positions for 14 years in the U.S. government, as Deputy Secretary of Energy in the George W. Bush Administration from 2005-2008, as a Special Assistant to the President from 2003-2005, and in senior staff positions in the U.S. Senate and House of Representatives. Clay holds a Juris Doctorate from the University of Texas School of Law and a BBA in Accounting from Texas Tech University.
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