Shine Technologies is a unique nuclear fusion company. The conventional path for nuclear fusion projects is to raise and spend billions of dollars and decades of research and development in efforts to successfully find a path over, around or through the technical barriers that have prevented nuclear fusion from becoming a large scale energy production source. Until relatively recently, that path was almost completely dependent on government grants. In cases like the ITER – International Thermonuclear Experimental Reactor – the effort has involved tens of billions of dollars (current estimate is $25 B), thousands of scientists, engineers, constructors and technicians and a construction schedule that stretches out over 29 years. The funding partnership includes six individual countries plus the European Union, which is supplying approximately 45% of the budget. Parts and materials for the project are being supplied by 35 different countries. Greg Piefer, Shine Technologies CEO and Founder, chose a different path. He is a technical expert and fusion researcher who was inspired by the same dreams of unlimited fusion energy that drive others to study and work in the field, but he also has a commercial side that knows that investors, even governments, do not have the patience and the depth of resources needed to undertake and successfully complete projects whose characteristics are similar to ITER and don’t produce profits along the way. He knew several known ways to stimulate and control a nuclear fusion reaction. The equipment used to produce those reactions doesn’t work fast enough to produce the energy needed to sustain the reaction and have enough left over to capture and sell to a commercial energy market. They are useful devices for teaching researchers about fusion and they are precise and reliable neutron generators for valuable tasks like remote logging of the materials in oil and gas wells. Piefer’s valuable insight was that neutrons from fusion had special characteristics that could produce commercial value long before the equipment could produce energy at a competitive cost. He and the team that he inspired became convinced that they could create a sustainable path to commercial fusion energy by building, using and refining equipment and techniques that use fusion to produce neutrons for successively larger markets that require ever lower unit costs. They established a four phase development program that remains their guiding development strategy. The first phase sells precise testing and measuring services that use Shine neutron generators where the neutrons supply their material penetrating power. Unlike the gamma rays used in conventional radiography – X-rays for materials and equipment – neutrons penetrate dense materials and are scattered by light elements. The critical nature of the components that benefit from neutron imaging leads customers to pay extraordinary prices for Shine’s specialized services. The neutrons produced by Shine’s imaging fusion devices sell for $100,000 – $1,000,000 per kilowatt-hour of energy released – which is a calculated metric derived from fusion reactions per second per dollar. (Those numbers do not have any misplaced zeros.) The second phase, with a far larger Total Addressable Market (TAM), is medical radioisotope production. Using a process of continuous refinement and practice, Shine has been able to improve its devices to the point where they can profitably enter the market with neutrons that cost the equivalent of $100 per kWh (a factor of 1000 improvement over the first phase) that can be reduced to $20/kWh as the process is scaled up using their NRC licensed Chrysalis facility. That facility, located in Janesville, WI, was carefully sited next door to a regional airport that enables Shine’s medical isotopes to be rapidly delivered throughout the United States and competitively delivered almost anywhere. Chrysalis is expected to be completed within the next two years. As Piefer describes during our conversation, it will be the highest capacity isotope production facility in the world. Piefer also described the invested effort that gives Shine the ability to produce isotopes that meet the stringent purity requirements for medical applications. The company’s radio chemistry skills are being exercised every day as they are already shipping isotopes created in a smaller facility. The third step, which is still in the R&D phase is to use more capable Shine fusion devices that can produce neutrons for about $1/kWh to help recycle used nuclear fuel. During the conversation, we spent quite a bit of time talking about how this application will work. There are some nuances that are worth hearing. The fourth step in the plan is to produce clean energy with a target price for neutrons of about $0.01-$0.02/kWh. That is the dream and the application that unlocks a TAM measured in the trillions of dollars. Here is the company’s distillation of their four phase plan: The framework: value per kilowatt-hour of fusion outputSHINE force-ranks fusion markets by unit economics, not market size — starting with the customers who pay the most per unit of fusion output, and using each market as commercial practice to drive costs down for the next. The metric: fusion reactions per second per dollar, a proxy for cost per kilowatt-hour.The cost curve, by the numbers >$1,000,000 per kWh — what one deployed SHINE fusion system is worth to its customer: it scans every nuclear fuel rod the customer manufactures, and hasn’t skipped a beat since deployment. ~$100,000 per kWh — typical value in the testing market (e.g., neutron imaging of F-35 turbine blade cooling channels that only neutrons can see). ~$100 per kWh — where SHINE had to get costs to make medical isotope production work. ~$20 per kWh — expected for Chrysalis at full capacity, coming online in the next 18–24 months. ~$1 per kWh — the target for spent fuel recycling, feasible because the business stacks four revenue streams: recycling service fees, recycled uranium/plutonium fuel, separated isotopes, and electricity sold at market rates. 10–20¢ per kWh — typical value of electricity, the final market. From recycling, SHINE estimates roughly a factor of 10 remains to put pure fusion energy economically on the grid. Disclosure: Nucleation Capital, the sponsor of Atomic Insights, is an investor in Shine Technologies. We believe their vision and their execution elevates their commercial prospects above a number of companies whose primary selling point is an attractive, but distant dream.
