Editor’s Note: Welcome back to Jeff Brown’s prediction series. Over the next several days, Jeff will share his biggest predictions for the new year. Today, Jeff discusses nuclear fusion. The technology just had a breakthrough. What does it mean for the future of clean energy? Read on…
Van Bryan (VB): Jeff, I’d like to ask you about nuclear fusion technology. It recently made the news. Could you bring us up to speed on what this technology is and the recent breakthrough?
Jeff Brown (JB): The mistake most people make is they assume that nuclear fusion is like the type of nuclear energy we’re familiar with, which would be nuclear fission.
At a very high level, fission technology creates energy by splitting the nucleus of an atom. This is the technology that is in use today when we think about “nuclear power”. And in some countries, like the U.S., nuclear fission can be highly politicized – wrongly in my opinion – because it produces long lived nuclear waste.
Nuclear fusion is quite different. Energy is released when there is fusion of two or more nuclei. Energy is a byproduct of the reaction. This is the same reaction that happens within stars. We can think of nuclear fusion as “the power of the sun.”
Most approaches to nuclear fusion have only short lived radioactive byproducts which are insignificant compared to nuclear fission reactors. And some approaches to nuclear fusion have no waste at all.
When the world commercializes this technology, it will mean limitless, clean, sustainable, and almost free energy for the planet. It will solve all of our clean energy goals.
And it means that technologies like electric vehicles will actually be clean unlike today, because we’ll be fueling them with electricity produced from 100% clean energy.
And yes, there was an important breakthrough recently.
I recently wrote about it in The Bleeding Edge earlier this month. And I went on Glenn Beck’s radio show both immediately before and after the details were made public.
Researchers at the Lawrence Livermore National Laboratory (LLNL) announced that they had achieved “ignition” and achieved net-energy production via a fusion reaction.
On December 5, the National Ignition Facility (NIF) produced 3.15 megajoules of output from just 2.05 megajoules required to achieve ignition.
And you’re right, I predicted this exact event would happen. Back in 2019, I said that we would see net energy production from a fusion reaction within the next five years.
Almost every expert and journalist had been forecasting that the industry wouldn’t see this happen until somewhere around 2030 – 2035. Yet here we are, and the announcement from LLNL is just the beginning. We’re in for even more exciting news in the next two years.
VB: But I understand that there’s some important nuance here, correct?
JB: That’s right. This was absolutely a remarkable achievement. There’s no question about that. But as I told readers at the time, there’s still more work to be done.
The whole NIF facility takes up an area about the size of three football fields.
The plasma that the experiment created was only a tenth of a millimeter in diameter. It was about 10 times hotter than the sun and only lasted for a few billionths of a second.
In order to achieve that, it required an extraordinary level of precision engineering. The lasers were configured to specifications down to five-trillionths of a meter, the timing of the lasers was measured in the billionths of a second, and the fuel capsule had to be a near-perfect circle that was a hundred times smoother than a mirror.
So, this was a remarkable achievement, but we’re still a long way from commercialization.
This internal confinement approach to nuclear fusion is great for research; but very unlikely to be used for commercialization. All of the companies that are building nuclear fusion reactors are using magnetic confinement to control and maintain a fusion reaction. This is the path forward.
So aside from being a very expensive and complex science and research experiment, why bother with an inertial confinement system like this?
To speculate, I’d say that one of the motivations for making this announcement was money.
VB: How do you mean?
JB: The current administration has made a point about investing in “green” energy technology. And yet, they continue to throw money away on projects that will never realistically create baseload power in order to have a “clean” electricity grid. Solar and wind energy simply aren’t able meet the world’s energy needs on a sustainable basis. But fusion can.
I’m confident that the team at LLNL has been frustrated at the lack of funding for nuclear fusion energy. The current administration has been throwing around hundreds of billions of dollars to support the electric vehicle and electric vehicle battery industries, and yet how much has the nuclear fusion industry received in total grants this year for fusion research?
I think you’ll be very surprised. Just $117 million. And all of the scientists know that the EV’s are being “fueled” with electricity produced by fossil fuels. They know it’s just for show, and yet they have the technology capable of solving the worlds clean energy needs.
I can’t imagine how frustrated they have been.
So, in essence, the LLNL was saying to the government, ‘If you’re really serious about clean energy, this is the solution.’ And I completely agree. Everything else is a distraction.
It’s funny, this is exactly what I said when I was a guest on the Glenn Beck podcast back in 2019. And I was recently on his show again to discuss this event.
[Editor’s Note: Readers can feel free to catch up on Jeff’s original conversation with Glenn Beck right here.]
But while most of the world is focused on the breakthrough at the LLNL, I’ve also been keeping an eye on some of the developments happening in the private sector.
VB: What have you been looking at there?
JB: First and foremost, the private sector is where the real excitement is happening. As I mentioned before, the private companies working on building fusion reactors are mostly using magnetic confinement as their technology to establish, maintain, and control the plasma.
And unlike the insignificant $117 million in grants from the current administration for nuclear fusion, $4.9 billion was invested this year into private nuclear fusion companies.
This is what is so great about the U.S. market dynamics. It might appear that nothing is happening because the U.S. government doesn’t take clean energy seriously, but the private sector is driving the technology forward at a scale far greater than anywhere else in the world.
One company I’ve been following literally since it formed back in 2018 is Commonwealth Fusion Systems. It’s a company that was founded by a team that spun out of MIT’s Plasma Science and Fusion Center (PSFC). There are a few things that make Commonwealth interesting.
The first is their design for what’s called a tokamak reactor. It’s designed to be much more compact. It could fit on a space the size of a tennis court. So, instead of having a massive, multi-billion dollar fusion power plant, we could have a more decentralized electric grid. A handful of these reactors could be housed in relatively small facilities and realistically power entire cities 24/7.
Rendering of Commonwealths Fusion’s Reactor
Source: Commonwealth Fusion Systems
And Commonwealth believes it will reach net energy production by 2025. And the company is designing its reactors to produce 10 times the energy it takes to run them.
Another company I’m keeping my eye on is General Fusion. That’s a Vancouver-based company. General Fusion has an approach called “Magnetized Target Fusion.” And like Commonwealth, General Fusion’s reactors are designed to be compact. And like Commonwealth, it expects its reactors to be operational by 2025.
And I would mention I’m an investor in General Fusion alongside Jeff Bezos. I actually got in at a better valuation than Bezos. I get a kick out of that.
And there are even companies like Avalanche Energy that are developing a sub-compact nuclear fusion reactor that is small enough to be carried by an individual. At that size, it has the potential to fuel vehicles, boats, and even planes.
VB: And besides you and Jeff Bezos, who else is investing in fusion technology? I imagine it’s probably gaining interest.
JB: Absolutely, and I expect investment to really pick up with this latest breakthrough from LLNL. While the announcement makes for a great headline, especially for those who don’t understand the details behind the experiment, the key point is that it’s a tool to get a major increase in support from the U.S. government for both public and private fusion development.
And that means that venture capital and private equity investment will also pick up.
An early investor in Commonwealth Fusion was actually Eni, the Italian multinational oil and gas company. It invested $50 million all the way back in 2015.
I found that interesting. It suggests to me that the energy industry believes this technology could revolutionize how the world creates and consumes power. It was a very progressive and smart move from Eni.
Bill Gates was also an investor in Commonwealth. And it might surprise you to know that Alphabet (Google) invested as well. But it makes a lot of sense actually.
The hyperscale datacenters that companies like Google, Meta, Amazon, Microsoft, and Oracle use are some of the largest consumers of electricity on the planet.
And these datacenters can’t afford any downtime at all, which means that they need 100% reliable energy 24/7/365. Nuclear fusion solves that problem and produces 100% clean, emission-free electricity.
Naturally, there are some well-known venture capital firms that are focusing on clean energy startups and have invested in most of the private nuclear fusion companies.
There are also a bunch of private equity firms and even investment banks that have been throwing money around in the sector. This helps them achieve their largely superficial ESG targets for investing.
This was a record year for fusion investments. $4.9 billion has been invested through November into private nuclear fusion deals, which is more in a single year than all previous years combined.
Again, that compares to just $117 million of support from the U.S. government. The private sector is driving this industry, and next year will be no different.
I’m predicting that we’ll see another record year of investment in nuclear fusion that will eclipse this year by more than $1 billion.
VB: And what about investment implications for this trend?
JB: Unfortunately, all the companies in this space like Commonwealth Fusion and General Fusion are still private. So, it will be difficult for most investors to gain direct exposure.
With that said, I am actively looking for a private nuclear fusion company that might be willing to raise some capital via crowdfunding regulations. If I’m able to do that, I just might be able to provide access to this sector in Day One Investor, my private investment research service.
I’m quite passionate about nuclear fusion, so this is a search that I’m quite serious about. But there is another interesting angle that I haven’t seen anybody discuss yet…
The two “ingredients” required for most nuclear fusion reactions are deuterium and tritium. Under the right conditions—heat and pressure—helium is produced along with neutrons and a lot of energy.
Now, deuterium can be found fairly easily. It can be extracted from water. So, that’s not a problem. But tritium is a different story. It’s derived from lithium.
And as we discussed the other day, the world simply doesn’t have enough supply of lithium to meet the demand coming from the electric vehicle market. Demand is expected to outpace supply all the way through 2030 at least.
And keep in mind, these projections do not account for the potential for new demand coming from the nuclear fusion industry in the years ahead. What does that have to do with the supply/demand imbalance for lithium? And, most importantly, what does that do to the share price of lithium miners? I’m going to be doing a deep dive into this in 2023.
VB: Thanks as always, Jeff.
JB: Happy to do it.
Editor’s Note: Check back tomorrow for our final prediction from Jeff Brown. We’ll sit down to discuss quantum computing, and his quantum predictions for 2023. Be sure to catch that tomorrow.