An experimental energy company has secured $US2 million to build a molten salt reactor that eats nuclear waste.

Transatomic Power is an MIT spin-off that aims to make nuclear power more efficient by focusing on smaller, high-efficiency plants.

Their designs could be built in a factory and shipped by train to their destination, but investors are getting excited about much more than the size.

Transatomic says it has a system that uses a range of new fuel types, including materials normally considered waste at traditional nuclear plants.

The engineers say it is better to eke more power out of spent nuclear fuel that to seal it up in metal caskets for 100,000 years.

The waste-powered system is built on a molten salt design, which has a number of advantages over previous reactors.

Molten salt reactors are essentially immune to meltdowns, like the still affecting the Fukushima region in Japan.

Standard nuclear plants have been cooled by water, which has a boiling point well below the 2,000°C at the core of a nuclear fuel pellet.

The fission that is needed for these reactors to function is a violent chain reaction, which is extraordinarily difficult to control, and will only stop when the system is running as it should, or runs out of fuel.

An emergency shut-down at a traditional nuclear plant involves pumping water in until it cools, which if unsuccessful leads to a meltdown and widespread radiation.

But molten salt reactors are not so susceptible to mishap.

Transatomic proposes a reactor which would use salt mixed with normal nuclear fuel to slow down the reaction.

As temperatures increase, the salt expands and slows the rate of fission.

As the melting point of salt is above the core temperature, if power was lost then the reaction would stop on its own.

The technology has been proposed several times, but Transatomic says it added improved internal reactor geometry (PDF) to improve the process.

They say the internal geometry will allow the reactor to be fuelled with nuclear waste or mined uranium enrichment to just 1.8 percent. This level is around half the purity required for traditional reactors, and a great deal less than in used for nuclear weaponry.

The latest funding will allow Transatomic to validate elements of its reactor design, and the company says a finished version of the plant would cost about $US1.7 billion. It is aiming for a commercial-scale model by 2020.