Fusion energy is a long shot, and building a fusion reactor is like building a star. Scientists have studied fusion physics for over a century and tried to harness it. Almost every time researchers make progress, the goalposts seem to move further away.
The huge promise of fusion is difficult to overlook. It uses abundant fuel generated from seawater to start the same reaction that drives the sun. Unlike other energy sources, it produces no greenhouse gasses and little waste.
With rising global temperatures and escalating energy demands, the search for fusion is more urgent than ever. Even so, fusion is typically considered an academic curiosity rather than a must-try moonshot, a real world-changing solution.
What is Fusion Energy?
Did you know that the International Thermonuclear Experiment Reactor (ITER) is capable of generating 500 megawatts of fusion power for 400 seconds with 50 megawatts of input power? Thirty-five countries, including the European Union and the United States, are collaborating on ITER, which is being billed as the world's largest fusion reactor.
Fusion energy is defined as the electricity or power generated by nuclear fusion processes. Fusion energy and nuclear energy (nuclear fission) are not synonymous, as the two processes differ slightly. While fission generates energy by dividing an atom in half, fusion generates energy by fusing two lighter atoms into a larger one.
Fusion energy generates no carbon dioxide, and it produces helium as an exhaust and consumes significantly less land than other renewable energy sources such as solar and wind. This assists the world in making a more rapid transition to a greener environment. Fusion energy consumes significantly less fuel and generates very little radioactive waste. For example, one gram of fusion fuel composed of deuterium and tritium produces the same amount of energy as one ton of coal.
Nuclear fusion is the polar opposite of nuclear fission, which is far more well-known. Nuclear fusion mimics the sun's energy in a laboratory setting, producing carbon-free power that could eventually replace fossil fuels. By fusing or combining atoms, the process generates energy.
By contrast, nuclear fission, the process that powers today's nuclear power plants, generates energy by breaking atoms. Commercialization of nuclear fission technology has already occurred, and you can invest in it. Nuclear fission has a number of drawbacks, including hazardous waste, the risk of spills, and a negative public attitude.
Nuclear fusion produces little to no radioactive waste while generating an infinite amount of power from hydrogen-based elements such as deuterium and tritium. Toxic waste has been a key impediment to nuclear power deployment, and therefore nuclear power without waste or spills would represent a significant breakthrough. Nuclear fusion produces very little radiation, which means it cannot be used as a weapon, another significant advantage.
Finally, fusion can generate power without emitting carbon dioxide or experiencing blackouts. It is not dependent on the weather, such as wind or solar power, or on the right site, such as geothermal or hydroelectric energy.
While this all seems extremely promising, scientists have been researching nuclear fusion for decades. The problem is to generate sufficient energy to make the process commercially viable. At the moment, fusion requires more power than it produces, making it an impractical answer to climate change. While some fusion power businesses plan to begin commercial operations in the 2030s, that is still a decade away.
Nonetheless, the urgency of climate change mitigation is higher now than it was two decades ago. Hundreds of millions of dollars are being invested in nuclear fusion businesses and government-sponsored initiatives like JET and ITER. Research dollars could result in additional discoveries, eventually enabling the technology to become feasible. For example, European scientists achieved a new record for nuclear fusion energy generation in February 2022, more than double the previous mark.
Fusion energy's potential
For decades, the potential of fusion energy, pioneered by the Soviet Union, has tantalized scientists but always appeared just beyond reach.
"Fusion is undoubtedly the biggest technical task humanity has ever faced," writes Arthur Turrell in his book The Star Builders, which chronicles the decades-long struggle of engineers, physicists, and mathematicians to accomplish what some still feel is impossible. "How near we depend not on the passage of time, but on our willingness, investment, and commitment of resources to get there."
A rising number of private companies, notably First Light, are now attempting to commercialize years of public research by demonstrating the feasibility of fusion power and connecting it to the grid by the 2030s.
Unlike nuclear fission, which involves the splitting of atoms, fusion does not generate considerable amounts of radioactive waste and will never result in a nuclear accident on the scale of Chernobyl. Deuterium and tritium, the most efficient chemical inputs for fusion, are also abundantly available.
Experts say that one glass of the resulting fuel contains the energy equivalent of one million gallons of oil and could provide up to 9 million kilowatt-hours of electricity, enough to power a home for more than 800 years.
According to its proponents, these attributes suggest that fusion, by delivering cheap, infinite zero-emission electricity, has the potential to truly save the world.
"I could not be more hopeful," says Silicon Valley venture capitalist Sam Altman, who just invested $375 million in Helion, a United States-based fusion startup. "And being the most cost-effective way out of the climate catastrophe, less expensive energy transforms civilization."
Expect no fusion energy stocks to trade this year or next year. In April 2021, US scientists unveiled a novel concept for fusion reactors. Over the years, projections for fusion energy timeframes have dropped at a somewhat modest rate.
According to WHYY, "if scientists can reliably produce and sustain nuclear fusion on Earth using elements found in ocean water, virtually unlimited energy could be available at the push of a button—all without the risk of harmful carbon emissions from burning fossil fuels, the variability of wind and solar energy, or the potential of nuclear fission meltdowns and radioactive waste."
According to some predictions, we are still a decade away, but this is certain to change. The joke has been that nuclear fusion energy is and will always be 30 years away throughout the decades.
There are no publicly listed nuclear fusion companies, and nuclear fusion startups are unlikely to issue an initial public offering in the near future. Market conditions for pre-revenue companies are favorable; startups can raise capital from private investors, yet revenues may be too far ahead to be listed on public markets. After all, even startups anticipate selling power in the 2030s.
Although some conventional energy firms such as Eni, Equinor, and Chevron have invested in nuclear fusion, these are far from clean energy investments. Their futures are dependent on oil and gas. However, this does not preclude investing in nuclear fusion.
Fusion energy is still in its infancy. Fusion energy businesses are making sluggish progress toward developing the technologies essential to assist in the deployment of nuclear fusion reactors. Private fusion energy companies may need another decade to develop commercially viable fusion energy successfully. Investors may need to regularly monitor fusion energy companies' operational activities and ensure they reach short- to medium-term targets.
Given the increased excitement surrounding fusion energy, investors may be expecting the following:
How to invest in fusion energy?
As a non-accredited investor, investing in fusion energy is extremely difficult. There are a few viable possibilities for future fuel and engineering supply chains. It is advisable to keep an eye out for fusion startups' prospective initial public offerings. Some of the major nuclear fusion companies' shares are offered via pre-IPO trading platforms such as EquityZen or Forge (formerly Sharespost). These sites enable you to purchase shares from startup employees who have exercised their stock options but require cash, albeit you should keep in mind that the employees likely have a better understanding of the business than you do. They could be selling for a variety of reasons: perhaps they require funds to purchase a home, or perhaps they dislike the direction in which the business is heading.
To invest in pre-IPO shares, you must also be an accredited investor. Generally, this implies you must earn at least $200,000 each year for two years or have the net worth of at least $1 million, minus your primary residence. Additionally, the platforms have a minimum investment requirement of $10,000 for EquityZen and $100,000 for Forge.
Of course, investing in unproven technology in pre-IPO shares is extremely risky. There is not a single nuclear fusion power plant operating at the moment. Even if nuclear fusion is commercially viable, it is difficult to predict which firms will make it a reality. This is particularly true if one is not a scientist. Although commercialization of nuclear fusion is not predicted until the 2030s, nuclear fission has been around for a long time. You can already invest investment in conventional nuclear power.
Fusion Energy Stocks to watch
With the assistance of venture capitalists and individual investors, several fusion firms are investing heavily in developing commercially viable fusion technology. Several of these companies have made significant strides in recent years and are edging closer to their aim of creating safe and clean energy.
1. Commonwealth Fusion Systems
Commonwealth Fusion Systems (CFS) is a Massachusetts-based fusion energy startup. The organization was founded in 2018 as a spin-off from MIT's Plasma Science and Fusion Center with the goal of developing a fusion power plant based on the ARC tokamak reactor design. CFS had raised about $115 million in funding from a variety of venture capital firms by the end of 2020, including Breakthrough Energy Ventures, Khosla Ventures, Temasek, and Equinor.
Commonwealth Fusion Systems (CFS) collected more than $1.8 billion in late 2021 from investors including Bill Gates, George Soros, Eni, and Khosla Ventures. The startup was spun off from the Massachusetts Institute of Technology in 2018 with the goal of commercializing nuclear fusion. They are working in collaboration with MIT's Science and Fusion Center to capitalize on decades of research.
CFS has already conducted tests on the world's most powerful fusion magnet capable of containing plasma, a heated gas in which nuclear fusion occurs. The next step will be to construct a demonstration power plant, followed by commercial units in the 2030s. EquityZen offers shares for sale.
CFS has made great strides in recent years. For example, in October 2020, it produced the Viper high-temperature superconducting wire, and in September 2021, it showed a high-temperature superconducting magnet capable of generating magnetic fields of up to 20 Teslas. This magnet technology has the potential to be used to build the SPARC tokamak, which the team hopes to complete by 2025. SPARC tokamak would assist CFS in validating the technology necessary to construct the ARC power plant design.
2. Helion energy
Based in Redmond, Washington, Helion Energy has raised approximately $12 million from Peter Thiel's venture capital firm Mithril Capital Management, Capricorn Investment Group, and Y Combinator, a prominent startup accelerator. Helion asserts that it is developing a fusion engine that is 1,000 times smaller, over 500 times cheaper, and ten times faster than competing ventures.
Additionally, Helion has received a $5 million grant from the US Department of Energy. The Company's objective is to have a commercial facility running within six years.
3. TAE Technologies
TAE Technologies is a technology company based in California that was created in 1998 with the goal of developing safe, clean, and carbon-free fusion power. By 2021, the business will have over 900 issued patents, a staff of 250 skilled individuals, and $880 million in private money. Internationally, it is represented by offices in the United Kingdom and Switzerland.
TAE has spent the last two decades developing patented technology for generating and distributing on-demand fusion power. TAE intends to replicate the method through which the sun generates energetic light in order to generate nuclear power. The Company is attempting to fuse hydrogen and boron in order to create more energetic and intense light than the sun.
As of 2021, TAE is developing Norman, a fifth-generation fusion platform. This platform integrates TAE's unique power management technology with field-reversed configuration (FRC) for effective operation. Copernicus, the organization's six-generation fusion platform, is scheduled to launch in 2022.
In the latter half of the decade, Michl Binderbauer, TAE's CEO, confirmed that the business would build a commercial-scale power plant called DaVinci. After that, it will take at least another decade to a decade and a half for the group to develop economically distributable fusion power.
4. Tri Alpha energy
Tri Alpha Energy, founded in 1998 in California, has reportedly raised between $140-$200 million in finance to date from the likes of Paul Allen's venture capital firm Vulcan Capital, Goldman Sachs, and Venrock. This 150-person Company has operated in stealth mode for the last 17 years and only recently launched a website. This year, they made a significant breakthrough when they heated a ball of hydrogen plasma to 10 million degrees Celsius and maintained it at that temperature for five milliseconds without degradation. This appears to be a great feat in the field of fusion energy. However, in order to pull more energy out of fusion than you put in, you would need to maintain that rate for one second, which would take an eternity at the current rate. "I give them the benefit of the doubt," one expert stated. I intend to keep an eye on them for the next two or three years".
5. General Fusion
General Fusion, a 2002 startup based in Canada, is developing a fusion power system based on the magnetic target fusion (MTF) principle, which employs shock waves to compress hydrogen plasma to fusion temperatures.
MTF, according to General Fusion, is a more efficient, reliable, and cost-effective technique for generating fusion energy. The organization anticipates completing its prototype by 2022. General Fusion's research and development team consist of 140 individuals who have proved their capacity to build, simulate, and test sophisticated fusion devices.
By 2021, the group would have secured $150 million from a syndicate of global investors, venture capital companies, technology pioneers, and industry leaders, including Cenovus Energy, Bezos Expeditions, and Chrysalix Venture Capital, Pender Ventures, and Khazanah Nasional. General Fusion has engaged in advanced fusion research with Microsoft, McGill, Princeton Plasma Physics Laboratory (PPPL), and Queen Mary University of London.
Final Remarks
In recent months, nuclear fusion has generated more interest than it has in years. A technology that has been in development for more than half a century has regained prominence in the media and boardrooms, with billions of dollars of new investment coming into a burgeoning private industry fuelled by some of the world's most powerful names and brains. The lofty goals of fusion proponents correspond to the promise that the technology may one day offer — zero-carbon energy that is not constrained by resource constraints or location. The fusion energy firms discussed in this article have made significant investments in researching fusion energy technology and making progress toward safe and clean fusion energy power. Additionally, investors can follow private firms like Helium Energy, Tokamak Energy, Zap Energy, and First Light Fusion to better understand industry trends and technologies. Due to the fact that the fusion energy business has not yet reached its full potential, investing in these companies may be dangerous.
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