December 14, 2022
The U.S. Department of Energy announced yesterday that researchers have produced a nuclear fusion reaction that creates a net energy gain, a scientific breakthrough scientists have chased since the 1950s that could provide a source of energy that is clean, affordable and virtually limitless.
The recent fusion experiment at the National Ignition Facility at the Lawrence Livermore National Laboratory produced net energy gain, also called ignition, which is an important threshold where the fusion experiment created more energy than the energy needed to create it. The NIF experiment created a reaction that produced 120% as much energy as the experiment consumed.
Retail shareholders who do not closely follow scientific news might have missed the announcement, but its impact is massive. Gianluca Sarri, a professor at Queen’s University Belfast who researches laser and plasma physics said it is “one of the biggest results of science in the past 20-30 years.”
Despite the breakthrough, individual investors will have to wait to tap into the enormous investing opportunities in nuclear fusion. Sari told the Financial Times, which was first to announce the breakthrough, commercial use of the power in the form of a fusion-generation power plant is at least 10 years off.
For retail investors, the time to start thinking about nuclear fusion is now. Though there are just a couple companies that individual shareholders can invest in right now to tap into the exploding fusion market, the potential could be tremendous for the $15 trillion global energy industry. Bloomberg experts estimate that fusion energy could be worth around $40 trillion once the market matures. Applications for fusion stretch well beyond electricity production. In addition to providing a continuous supply of electricity and heat, fusion also can be used for hydrogen production, water desalination, direct air CO2 capture and electro-fuel and chemical production.
Retail shareholders can leave the science to the scientists, but simpy put, nuclear fusion happens when two hydrogen nuclei are fused releasing a huge burst of energy, the same reaction that powers the sun and other stars. It is hugely important because unlike burning carbon fuels, nuclear fusion does not emit greenhouse gasses and has relatively little waste. Fusion uses common and easily obtainable elements – deuterium and tritium. Deuterium comes from seawater and tritium is produced by a physical reaction with lithium. Fusion produces significantly more power than renewable sources like solar and wind but does not rely on the weather to produce it.
Huge sums of money are pouring into nuclear fusion and this week’s announcement is expected to create even more interest. Jeff Bezos and Bill Gates invested $3.4 billion into companies working on fusion. Seattle-based Helion raised $500 million from Sam Altman and Peter Thiel. The Fusion Industry Association lists about 35 different companies that are developing nuclear fusion technology. The association predicts that fusion will be connected to the energy grid sometime in the 2030s.
The technology is so new that there are just a couple companies for retail shareholders to invest in now, and only indirectly. Chevron Corp. (Tii:CVX), one of the world’s largest energy companies, invested in Zap Energy in 2020. Zap Energy is a Seattle start-up developing a modular nuclear fusion reactor. The president of Chevron Technology Ventures, Barbara Burger, said, “Our investment in Zap Energy adds to Chevron’s portfolio of companies we believe are likely to have a role in the energy transition.” Lockheed Martin (Tii:LMT) and its Skunk Works team are working on compact nuclear fusion reactors as well.
Other companies worth following for individual shareholders interested in fusion technology, through not yet listed include: AGNI Fusion Energy, Commonwealth Fusion, First Light Fusion, General Fusion, HB11 Energy, Helion, HyperJet Fusion Corp., Marvel Fusion, TAE Technologies and Tokamak Energy.
Since nuclear fusion takes lithium, retail shareholders also can invest in publicly traded mining companies that specialize in the soft metal. Albemarle Corp. (Tii:ALB) and Livent Corp. (Tii:LTHM) both produce lithium and also are key producers of the element for electric vehicle batteries.
The successful ignition experiment is the first step toward truly harnessing the power of the sun and could revolutionize how we produce energy without harming the environment. For individual investors, stocks related to the technology are few and far between, but nuclear fusion is definitely worth keeping a close eye on.
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