First Reaction: Kam Ghaffarian, CEO of X-Energy

Back in February, I interviewed Kam Ghaffarian, Founder and CEO of an advanced reactor development company called X-energy. We communicated via email—between X-energy, numerous other business interests, and his philanthropic efforts in the developing world, Kam can be hard to keep up with. But I was determined to have this conversation with him, regardless of the medium. I’d had a handful of brief in-person interactions with Kam in the past, and each one revealed some fascinating, unexpected new detail about his pebble bed reactor project, his personal life, or both. For instance, our first meeting took place in a Third Way conference room, where Kam explained the milestones his nuclear company had reached thanks to his personal investment of $30+ million. And it ended with him casually pointing out the window at K Street, where he fondly remembers parking cars for a living as a young immigrant from Iran. Like I said—unexpected.

Thanks for taking the time to chat, Kam. I’ve got just a few questions, starting with…
What’s your earliest memory associated with nuclear energy?

My pleasure, Ryan.

I’ve done quite a bit of international travel. Something that often stood out to me was the air quality and large amounts of smog. This really bothered me - not only do we miss out on seeing the beauty of the world around us but it has a tremendous impact to our overall health. I also sponsor a school in Kinshasa, located in the Democratic Republic of Congo. Over 700 underprivileged children attend the school. When visiting the school, I see immediately what the impact of having no power can do to a community. Fundamentally I knew that the generations to come would have a big problem if we didn’t start delivering technologies to provide abundant and clean electricity.

So you jumped in. Who pitched you on starting X-energy?

I like to solve problems and want to make a difference. As I looked into the air pollution problem and the need for clean energy alternatives, I realized that there were ideas and solutions all around us. I reached out to a few long-time associates, leading technologists that I worked with at NASA to investigate the problem further. They brought in a nuclear physicist affiliated with MIT to begin devising solutions to those problems - namely how to get power that is affordable, safe, clean, and secure to the communities and regions that need it the most.

And that led you to high temperature gas-cooled reactors?

This journey with X-energy did not begin with the solution of advanced nuclear - it began with an assessment of the problem, which was how to radically change or replace the fossil fuel cycle with something that will not destroy the planet. We began by analyzing and focusing on the creation of a hydrogen-based fuel economy. In other words, a transition to hydrogen-powered cars, which would require hydrogen gas stations. We quickly realized that with a constant water supply and a fuel source - such as a small modular reactor - we could create the last stations that this infrastructure would require. But we also realized that our nation was not ready for this transition and the implementation would take too long. But our analysis did show us the unique and compelling benefits that the small modular reactor brought, and we then saw that by deploying these SMRs for remote communities, we could make a huge difference.

The evolution to advanced nuclear, and more specifically high temperature gas cooled reactors (HTGRs) happened after I had a chance to meet with our current Chief Nuclear Officer, Dr. Eben Mulder and our Vice President of Engineering, Dr. Martin van Staden. They explained to me the virtues and benefits of the pebble bed HTGR, and how this advanced nuclear technology satisfied ALL of my fundamental requirements - safety, security, cleanliness, and affordability. From there it was a matter of advancing the design concept and getting the industry and the US government on board.

You didn’t have an academic or professional background in nuclear at this point. You’re presented with details on reactor specifications, the regulatory process, and power market operations—any one of which could make someone’s eyes go crossed—and you have to decide whether or not to make a hefty commitment of your time and money. What was your vetting process like?

While I don’t have a nuclear background, I am an engineer. I spent several years working on advanced ground systems for NASA space missions, so I am not intimidated by highly complex technologies. But I also recognize my limitations and do not try to solve these complex problems myself! A standard practice in all of my businesses has been to locate and hire the smartest people that I can find - smarter than me, in most cases - to ensure we have deployed the brightest people to the right assignments. Having established a core team of HTGR experts to inform me on the technical decisions, we set out to add broader capabilities in licensing, fuel development, business development, and systems engineering. Within X-energy, we’ve been able to hire some of the best people in industry when it comes to HTGRs. We are continuing to hire people with specific HTGR experience and skills, both from industry and graduate school programs, to fill out our engineering, licensing, and neutronics teams.

Put X-energy in a box over to the side here for just a minute. Of the other 50-something advanced nuclear projects being developed in North America, can you pick one or two that stand out to you for having a particularly good product and/or business model?

I love the concept of developing advanced reactors with the capability of using reprocessed spent fuel as their primary fuel source. I believe this duel-purpose reactor (create energy + reduce spent fuel stockpiles) will create a new revolution in advanced nuclear at some point in the future. But there are still technological challenges to be overcome to make this concept a reality. The goal of X-energy is to make a different in the world as quickly as possible - this is why we chose the pebble bed HTGR as our technology of choice - it’s been built before, operated before, and the uranium-based fuel requires no “technological miracles” to be available in the mid-2020s when we plan to start building our first reactor.

You seem to be pretty good at building businesses in the technology space. You’re doing good with your school in Kinshasa and other humanitarian efforts. What’s something you’re just bad at? Like, exceptionally bad?

I am exceptionally bad at relaxing. My mind is always going. This is the reason that I am actively engaged in 18 different businesses - half of them non-profits. I like the “action” associated with creating and running businesses and therefore I give myself little time to slow down. People close to me know that I am always coming up with ideas and initiatives. I am also not very good at golfing. It tends to be too slow-paced for me.

Alright, you saved that answer with the part about bad golfing. I mean, I believe all of it, but it was starting to sound like the classic “I work too hard” response that people give a hiring manager when asked about their biggest weakness. I want the embarrassing stuff!

Ha! Yes, I can see that. But it’s all true!

One of your companies, SGT, is the 2nd largest contractor to NASA. You have a considerable amount of experience working with the federal government to deliver some very complex aerospace technologies. What has NASA done well to encourage private-sector innovation, and could any of those “best practices” be applied to private-public partnerships in advanced nuclear?

I think NASA has been a great example of the right balance between government-funded development of highly-risky technology and industry being the implementer of those technologies after the risk has been retired. This is the standard approach NASA takes for new deep space and earth-observing instruments - because the degree of risk that industry would have to be willing to take would make the development cost-prohibitive. So NASA either performs the initial development, or performs it collaboratively with industry. Then, after the technology has been proven, you can see commercial industries forming and applying that technology effectively, with NASA relinquishing the role in order to focus on the next risky adventure.

I think it’s important to realize that the current fleet of US reactors were not initially developed with private equity funding - they were developed as part of government programs, and afterwards industry could take those designs and applied them to create a commercial industry. The same thing should happen with advanced reactors. The 50+ companies you’ve noted are all doing great things - but we are all small with limited funding. It takes ~$1B to complete the nuclear reactor and plant design and licensing BEFORE you can construct and the payback on investment is measured in decades. Only the government is capable and willing to make these kinds of investments; they would do this because of the economic benefit gained through exports, improved US economy, industry efficiency and competitiveness increases, etc. I look to the government, namely DOE and perhaps DOD, as a trusted nuclear partner, just as my aerospace company looks to NASA as a trusted partner.

Last question… Guilty pleasure TV show?

Stargate

OK. That one wasn’t so unexpected.

:)