Scientists are confident that they’ve taken a huge step toward perfecting an amazing new technology. When finally completed, it will create more power than it uses and may even drive down the price of electricity to a tiny fraction of its current cost. Moreover, it will generate tremendous amounts of power without releasing carbon or other gases that are harmful to the environment.
The breakthrough came about when two teams of researchers, one from Commonwealth Fusion Systems (CFS) and the other from Massachusetts Institute of Technology’s Plasma Science and Fusion Center (PSFC), successfully tested a new magnet. This magnet is strong enough so that when used in a tokamak, a donut-shaped fusion machine, it will be able to achieve “net energy.” In other words, the tokamak will generate more energy than it takes to create this reaction.
“It’s a big deal,” Andrew Holland, Chief Executive Officer of the Fusion Industry Association, told CNBC. “This is not hype; this is reality.”
Nuclear fusion occurs when two atoms merge and become one larger atom; a tremendous amount of energy is created through this process. In a different process called fission, one atom splits into two or more smaller ones. Fusion has several important advantages over fission, as the fuel is derived from water, not radioactive uranium or plutonium. Also, it does not generate any long-term radioactive waste.
According to CNBC, if fusion can be commercialized on a large scale it could provide a near unlimited source of clean, inexpensive energy.
Test Results Positive
In the test performed by CFS and MIT, only 30 watts of energy were consumed. To get an idea of the degree to which this technology has improved, consider this: A traditional copper-conducting magnet that MIT had tested previously used 200 million watts, said Dennis Whyte, Director of MIT’s PSFC and a co-founder of CFS.
Until now, “Nobody — no companies, universities, national labs, or governments — has achieved the goal of break-even fusion,” Holland said.
However, they added that the successful performance of their new magnet technology is a key step in commercializing fusion. “This magnet will change the trajectory of both fusion science and energy, and we think eventually the world’s energy landscape,” said Whyte.
Follow The Money
Although CSF does not yet have a steady stream of revenues, it has raised more than $250 million from a handful of investors. Among them is Breakthrough Energy Ventures, a high-profile investment fund whose clients include Bill Gates, Jeff Bezos, Richard Branson, and Ray Dalio - each one a Wall Street powerhouse in his own right. To paraphrase an old saying, these gurus “have voted with their wallets.”
And the results of their “votes” can be counted a lot sooner than many people realize. The new magnet successfully tested by CFS and MIT will be used in a test fusion device they call SPARC, which is already under construction and on track to produce net energy from fusion by 2025.
Meanwhile, other players are becoming actively involved. In early November, start-up Helion Energy raised $500 million to build its own generator expected to create more power than it uses.
According to experts, this financing gives Helion a value of $3 billion. Helion’s Founder and CEO David Kirtley said when the technology used in the generator has been proven, $1.7 billion in follow-up investments would become available and used to develop a commercial system.
The company has already begun construction of a generator in Washington state, and when completed - the target date is 2024 - it will create enough electricity to power 40,000 homes, CNBC reports.
On a separate but related issue, there are more than 40 private fusion companies working on net energy, and some of them have been making enough progress to allow them to advance the timeline for the projects they are developing. If even one of these companies begins producing net energy, it would add a great deal of credibility to the theory that fusion power could be generated at an incredibly low cost and without emitting any gases that are harmful to the environment.
Sam Altman, a well-known investor and artificial intelligence researcher in Silicon Valley, said Helion’s long-term goal is not just to create clean energy but also electricity that costs just one cent per kilowatt hour.
Wishin’ And Hopin’
The idea of a new technology that will generate clean and very inexpensive energy is one that certainly will tantalize investors, but it’s not exactly a new one. Back in the 1950s, there was a great deal of excitement about nuclear power plants because it was believed they would do exactly this.
Well, we all know how that turned out. Rising prices and huge cost overruns changed the projections for very low-cost electricity; meltdowns and near meltdowns at Three Mile Island, Chernobyl, and Fukushima, and other problems that were smaller but still serious at other plants wrecked the public’s trust in the safety aspect of this technology.
Nevertheless, the world’s growing demand for energy that is both clean and affordable have put nuclear power companies (and their stocks) back into play. It also could be setting the stage for a very warm reception of net energy companies on Wall Street - and very understandably so. Literally every product we need, use, build, eat, import, and export would become dramatically cheaper if the energy costs associated with their production would drop to near zero. Entrepreneurs would have many more opportunities and businesses enjoy much higher demand and profits.
But not all businesses would benefit, because net energy companies would pose intense competition to existing power plants. These companies combined have incredibly large market caps and their revenues and profits could be challenged big time by net energy. Tens of millions of their shareholders could be impacted, many of them seniors and others who depend on the dividends they pay.
It’s very likely that net energy fusion power plants will be widely used in the future, although this won’t happen overnight. Still, investors should be alert to the opportunities - and the risks - that they may pose. Technology evolves very quickly. We’re living in an era when sharp and sudden changes have become commonplace.
Sources: cnbc.com; research.binus.ac.id; reuters.com; zerohedge.com