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Getting a commercial reactor online by the 2030s doesn’t sound as crazy as it used to.
There’s a reason they call a seemingly impossible technological reach a “moonshot.” Over the years, the term has been used to refer to virtual reality, self-driving cars, and biometric identification such as DNA fingerprinting. Now, it’s fusion’s turn.
“Where we are on fusion is kind of where we were on getting to the moon when Kennedy gave his speech,” Phil Larochelle, a founding partner at Breakthrough Energy Ventures who leads its fusion investment strategy, told me, referencing John F. Kennedy’s 1962 speech about putting a man on the moon by 1970. “Did they have any idea how they were going to make a guidance computer that was actually going to get on the moon? No. Did they have the rockets that they needed that were strong enough to get to the moon? No. And so it’s kind of like that in fusion.”
There have already been some high-profile milestones over the past few years. Toward the end of 2022, the National Ignition Facility at Lawrence Livermore National Lab beat breakeven, creating a fusion reaction that produced more energy than it took to heat up the fusion plasma. Or when the startup Commonwealth Fusion Systems, a.k.a. CFS, announced that it had developed a new type of extremely powerful magnet to better contain and control superheated plasma. Now, startups and investors think the next decade will be critical for commercialization.
“When we started BEV, we kind of assumed that fusion was going to be too far off,” said Larochelle. But after talking with CFS and learning more about the company’s magnet tech, minds changed. Breakthrough invested in the company — and eventually three other fusion startups, too. “These better magnets matter a lot,” Larochelle told me. “It matters as much as the transistor did to a computer. It’s that level of component level breakthrough that totally changes the game.”
For the ordinary optimist, fusion energy might invoke a cheerful Jetsons-style future of flying cars and interplanetary colonization. For the cynic, it’s a world-changing moment that’s perpetually 30 years away. But investors, nuclear engineers, and physicists see it as a technology edging ever closer to commercialization and a bipartisan pathway towards both energy security and decarbonization.
To some extent at least, the data backs them up. According to the Fusion Industry Association, over 60% of all private fusion companies were founded in 2019 or later. And in the past three years alone, fusion companies have brought in over $5.1 billion, over 70% of the sector’s total funding since 1992.
“We would hope to see a breakeven moment by private companies in the next two to three years, by 2028-ish,” followed by a commercial reactor in the mid-2030s, Julien Barber, an investor at Emerson Collective, told me. Thus far, Emerson, which is headed by Laurene Powell Jobs, has invested in two fusion companies, CFS and Xcimer Energy.
The major players in the startup ecosystem say they’re on track to get there. “The progress has actually been faster than Moore’s law,” Ally Yost, senior vice president of corporate development at CFS, told me, “but people weren't looking at that.”
Moore’s law is a prediction — largely validated for decades — that the number of transistors on a microchip, and thus a computer’s processing speed, would generally double every two years. The performance of fusion reactors, especially the donut-shaped tokamak reactors that CFS uses, has historically improved at an even faster rate. But due to some midcentury researchers and technology enthusiasts overpromising on the near-term feasibility of fusion, cynicism remains. It also doesn’t help that the large, intergovernmental fusion megaproject known as ITER has consistently faced delays and huge cost overruns due to the technical complexity of the project, as well as the difficulty of wrangling 35 countries to work together.
Thus far, though, the private sector is faring better. CFS has raised over $2 billion, more than any other private company in the space. It uses an approach known as magnetic confinement fusion, which involves using strong magnets to confine fusion fuel in the form of a plasma. If you can keep the plasma dense enough and hot enough for long enough, atoms start fusing together, releasing a vast amount of energy in the process. ITER, as well as startups including Type One Energy, Thea Energy, and Renaissance Fusion are pursuing the same fundamental route, though with their own technical twists.
Lawrence Livermore, on the other hand, achieved its breakthrough fusion reaction (which it’s since repeated several times) using an approach known as inertial confinement, in which powerful lasers fire at a pellet of fusion fuel, causing rapid compression and heating that leads to nuclear fusion. But the national lab is not aiming to create a commercial reactor. So when the founders of the startup Xcimer Energy saw that the National Ignition Facility was closing in on its goal, they jumped to get inertial confinement tech ready for market.
“In August of 2021, NIF achieved a fusion gain of about 0.6,” Xcimer’s President and CTO, Alexander Valys, told me, referring to the ratio of the energy generated by the fusion reaction to the energy required to heat the fusion plasma. An energy gain of one constitutes breakeven, so the moment didn’t get any mainstream press to speak of. “But inside the field, everyone knew that the previous NIF shot record was effectively a gain of like 0.01,” Valys said. The massive jump indicated to him that, “If we’re going to do this, we have to do it now.” Since then Xcimer has gotten backing from the biggest names in the space, including BEV, Lowercarbon Capital, and Emerson Collective, as it looks to build lasers at lower cost and higher power.
One thing that ties fusion’s various technical approaches together is the fact that they’ve all benefited tremendously from advances in supercomputing, which allows researchers to better model plasma physics and rapidly simulate fusion experiments. “It’s really taken the advent of modern computational methods and supercomputers to be able to model that process with sufficient accuracy, that you can actually develop a machine that recreates those conditions,” Christofer Mowry, CEO of the magnetic confinement startup Type One Energy, told me.
At this point, many leading companies say that the problem is no longer about basic science, but cost. Clea Kolster, head of science at Lowercarbon Capital, told me that once CFS turns on its demonstration reactor, the company knows its fusion gain will be “at least greater than two.” (Lowercarbon is a CFS investor.) That said, there’s still loads of uncertainty around the reactor’s performance, as outside studies project that its energy gain will be more like 11 — although even that might not be enough for it to make economic sense.
So while the economics of fusion are a large part of what venture capitalists are betting on these days, private investment in the industry has actually fallen over the past two years, after peaking in 2022 at $2.8 billion. “A step change in growth will be required once private companies deliver results on their prototype machines,” Andrew Holland, CEO of the Fusion Industry Association, said in a statement, adding that last year’s $900 million in funding “will not be enough to deliver fusion’s ambitious goals.”
To date, government funding has comprised a mere 6% of the industry’s total, but contra the private funding trend, that figure has been ticking up as of late. Last year, the Department of Energy announced $46 million in funding for eight private fusion companies to help the administration reach its goal of demonstrating fusion at pilot scale within a decade.
All the companies I spoke with were awardees, and all agreed that much more would be needed, pointing to the public-private partnership between NASA and SpaceX as a model for how the government could more deeply support commercialization of fusion. That partnership was the product of NASA’s Commercial Orbital Transportation Services program, designed to catalyze the development of private spacecraft and funded to the tune of $800 million.
China, meanwhile, is outspending the U.S. on fusion, just as it’s done with solar, and launched a national fusion consortium at the beginning of this year.
“We are about to harness the sun a second time, and we can’t make that mistake again. We have to get serious about building this industry here in the United States,” Clay Dumas, a partner at Lowercarbon Capital, told me. The firm has a dedicated $250 million fusion fund, and has invested in a total of eight companies in the space, spanning a wide array of technical approaches. “That is going to take the combined efforts of investors and entrepreneurs and policymakers and energy companies and governments to make sure that we can drive this forward on the timeframe that it needs to happen.”
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Current conditions: More than 300,000 people in Louisiana are without power after Hurricane Francine • Hungarian lawmakers met in a dried riverbed yesterday to draw attention to the country’s extreme drought • An Arctic blast could bring snow to parts of the U.K.
More than 60 scientists have co-authored a new study, published in The Lancet Planetary Health, warning that human activity is damaging the natural systems that support life on Earth. Almost all of these support systems – including the climate, soil nutrient cycles, and freshwater – have been pushed into danger zones as humans strive for ever more economic growth. Thus, the researchers say, the health of the planet and its people are at risk, and the poor are the most vulnerable. The study concludes “fundamental system-wide transformations are needed” to address overconsumption, overhaul economic systems, improve technologies, and transform governance.
The Lancet
Carmaker Stellantis announced yesterday it is pouring more than $400 million into three facilities in Michigan to ramp up electric vehicle production and boost the company’s “multi-energy strategy.” The Sterling Heights Assembly Plant will be Stellantis’ first U.S. facility to build a fully electric vehicle, the Ram 1500 REV. The Warren Truck Assembly Plant will be “retooled” to produce the upcoming electric Jeep Wagoneer. And the Dundee Engine Plant will be upgraded for parts production for the company’s STLA Frame architecture. As The Associated Pressexplained, Stellantis “is taking a step toward meeting some commitments that it agreed to in a new contract ratified last fall by the United Auto Workers union after a bitter six-week strike.” The company is aiming for 50% of its passenger car and light-duty truck sales in the U.S. to be electric by 2030.
Police arrested a 34-year-old man suspected of starting a wildfire in California that has now burned more than 36,000 acres and is less than 20% contained. The Line fire is one of several large blazes burning in the state and threatening thousands of structures. Last month another man was charged with arson on suspicion of igniting the Park fire, which consumed 430,000 acres in Northern California. As Heatmap’s Jeva Lange reported, arson officially accounts for only about 10% of fires handled by Cal Fire. But when there are thousands of fires across the state during a given season, that’s not an inconsequential number. And a warmer world has made extreme fire conditions more common, as have decades of misbegotten fire suppression policies in the Western United States. As a result, arson fires in rural areas are more likely to burn out of control than they would have been half a century ago, Lange wrote. Experts warn that California’s fire season, fueled by “weather whiplash,” is only just ramping up and is likely to intensify with the arrival of the Santa Ana winds.
Brazil’s President Luiz Inácio Lula da Silva has pledged to finish the paving of a controversial road through the Amazon rainforest. The BR-319 highway would connect some major cities and improve cargo movement, which has been disrupted by record-low water levels in the Amazon River due to drought. But its construction could also hasten deforestation, including in old growth forests. “Without the forest, there is no water, it’s interconnected,” said Suely Araújo, a public policy coordinator. “The paving of the middle section of BR-319, without ensuring environmental governance and the presence of the government in the region, will lead to historic deforestation, as pointed out by many specialists and by Brazil’s federal environmental agency in the licensing process.” Lula made the pledge during a visit to assess the damage from massive fires in the rainforest, which his Environment Minister Marina Silva blamed on extreme drought caused by climate change.
A new survey of more than 1,000 EV owners in California has some interesting insights into what these drivers want from a charging station. It found they were 37% more likely to choose a charger with additional amenities like restrooms and convenience stores. “This symbiotic relationship between businesses and EV chargers may benefit both EV chargers and local businesses,” said Alan Jenn, assistant professor at the Electric Vehicle group of the Institute of Transportation Studies at UC Davis.
Next 10
Also, California’s EV drivers really don’t want to wait to charge up, and are willing to pay almost a dollar more per 100 miles of charge if there’s no wait time at the charger. With every minute of extra wait time, a driver’s willingness to use a charger falls by 6%. The survey was conducted by the non-profit Next 10 and the Institute for Transportation Studies at UC Davis.
“If Harris is now bragging about her administration’s support for fossil fuels, if she is casting the Inflation Reduction Act as a law that helped fracking, that means climate activists have much more work to do to persuade the public on what they believe. The Democratic Party’s candidate will not do that persuasion for them.” –Heatmap’s Robinson Meyer on Kamala Harris’ energy playbook.
The rapid increase in demand for artificial intelligence is creating a seemingly vexing national dilemma: How can we meet the vast energy demands of a breakthrough industry without compromising our energy goals?
If that challenge sounds familiar, that’s because it is. The U.S. has a long history of rising to the electricity demands of innovative new industries. Our energy needs grew far more quickly in the four decades following World War II than what we are facing today. More recently, we have squared off against the energy requirements of new clean technologies that require significant energy to produce — most notably hydrogen.
Courtesy of Rhodium Group
The lesson we have learned time and again is that it is possible to scale technological innovation in a way that also scales energy innovation. Rather than accepting a zero-sum trade-off between innovation and our clean energy goals, we should focus on policies that leverage the growth of AI to scale the growth of clean energy.
At the core of this approach is the concept of additionality: Companies operating massive data centers — often referred to as “hyperscalers” — as well as utilities should have incentives to bring online new, additional clean energy to power new computing needs. That way, we leverage demand in one sector to scale up another. We drive innovation in key sectors that are critical to our nation’s competitiveness, we reward market leaders who are already moving in this direction with a stable, long-term regulatory framework for growth, and we stay on track to meet our nation’s climate commitments.
All of this is possible, but only if we take bold action now.
AI technologies have the potential to significantly boost America’s economic productivity and enhance our national security. AI also has the potential to accelerate the energy transition itself, from optimizing the electricity grid, to improving weather forecasting, to accelerating the discovery of chemicals and material breakthroughs that reduce reliance on fossil fuels. Powering AI, however, is itself incredibly energy intensive. Projections suggest that data centers could consume 9% of U.S. electricity generation by 2030, up from 4% today. Without a national policy response, this surge in energy demand risks increasing our long-term reliance on fossil fuels. By some estimates, around 20 gigawatts of additional natural gas generating capacity will come online by 2030, and coal plant retirements are already being delayed.
Avoiding this outcome will require creative focus on additionality. Hydrogen represents a particularly relevant case study here. It, too, is energy-intensive to produce — a single kilogram of hydrogen requires double the average household’s electricity consumption. And while hydrogen holds great promise to decarbonize parts of our economy, hydrogen is not per se good for our clean energy goals. Indeed, today’s fossil fuel-driven methods of hydrogen production generate more emissions than the entire aviation sector. While we can make zero-emissions hydrogen by using clean electricity to split hydrogen from water, the source of that electricity matters a lot. Similar to data centers, if the power for hydrogen production comes from the existing electricity grid, then ramping up electrolytic production of hydrogen could significantly increase emissions by growing overall energy demand without cleaning the energy mix.
This challenge led to the development of an “additionality” framework for hydrogen. The Inflation Reduction Act offers generous subsidies to hydrogen producers, but to qualify, they must match their electricity consumption with additional (read: newly built) clean energy generation close enough to them that they can actually use it.
This approach, which is being refined in proposed guidance from the U.S. Treasury Department, is designed to make sure that hydrogen’s energy demand becomes a catalyst for investment in new clean electricity generation and decarbonization technologies. Industry leaders are already responding, stating their readiness to build over 50 gigawatts of clean electrolyzer projects because of the long term certainty this framework provides.
While the scale and technology requirements are different, meeting AI’s energy needs presents a similar challenge. Powering data centers from the existing electricity grid mix means that more demand will create more emissions; even when data centers are drawing on clean electricity, if that energy is being diverted from existing sources rather than coming from new, additional clean electricity supply, the result is the same. Amazon’s recent $650 million investment in a data center campus next to an existing nuclear power plant in Pennsylvania illustrates the challenge: While diverting those clean electrons from Pennsylvania homes and businesses to the data center reduces Amazon’s reported emissions, by increasing demand on the grid without building additional clean capacity, it creates a need for new capacity in the region that will likely be met by fossil fuels (while also shifting up to $140 million of additional costs per year onto local customers).
Neither hyperscalers nor utilities should be expected to resolve this complex tension on their own. As with hydrogen, it is in our national interest to find a path forward.
What we need, then, is a national solution to make sure that as we expand our AI capabilities, we bring online new clean energy, as well, strengthening our competitive position in both industries and forestalling the economic and ecological consequences of higher electricity prices and higher carbon emissions.
In short, we should adopt a National AI Additionality Framework.
Under this framework, for any significant data center project, companies would need to show how they are securing new, additional clean power from a zero-emissions generation source. They could do this either by building new “behind-the-meter” clean energy to power their operations directly, or by partnering with a utility to pay a specified rate to secure new grid-connected clean energy coming online.
If companies are unwilling or unable to secure dedicated additional clean energy capacity, they would pay a fee into a clean deployment fund at the Department of Energy that would go toward high-value investments to expand clean electricity capacity. These could range from research and deployment incentives for so-called “clean firm” electricity generation technologies like nuclear and geothermal, to investments in transmission capacity in highly congested areas, to expanding manufacturing capacity for supply-constrained electrical grid equipment like transformers, to cleaning up rural electric cooperatives that serve areas attractive to data centers. Given the variance in grid and transmission issues, the fund would explicitly approach its investment with a regional lens.
Several states operate similar systems: Under Massachusetts’ Renewable Portfolio Standard, utilities are required to provide a certain percentage of electricity they serve from clean energy facilities or pay an “alternative compliance payment” for every megawatt-hour they are short of their obligation. Dollars collected from these payments go toward the development and expansion of clean energy projects and infrastructure in the state. Facing increasing capacity constraints on the PJM grid, Pennsylvania legislators are now exploring a state Baseload Energy Development Fund to provide low-interest grants and loans for new electricity generation facilities.
A national additionality framework should not only challenge the industry to scale innovation in a way that scales clean technology, it must also clear pathways to build clean energy at scale. We should establish a dedicated fast-track approval process to move these clean energy projects through federal, state, and local permitting and siting on an accelerated basis. This will help companies already investing in additional clean energy to move faster and more effectively – and make it more difficult for anyone to hide behind the excuse that building new clean energy capacity is too hard or too slow. Likewise, under this framework, utilities that stand in the way of progress should be held accountable and incentivized to adopt innovative new technologies and business models that enable them to move at historic speed.
For hyperscalers committed to net-zero goals, this national approach provides both an opportunity and a level playing field — an opportunity to deliver on those commitments in a genuine way, and a reliable long-term framework that will reward their investments to make that happen. This approach would also build public trust in corporate climate accountability and diminish the risk that those building data centers in the U.S. stand accused of greenwashing or shifting the cost of development onto ratepayers and communities. The policy clarity of an additionality requirement can also encourage cutting edge artificial intelligence technology to be built here in the United States. Moreover, it is a model that can be extended to address other sectors facing growing energy demand.
The good news is that many industry players are already moving in this direction. A new agreement between Google and a Nevada utility, for example, would allow Google to pay a higher rate for 24/7 clean electricity from a new geothermal project. In the Carolinas, Duke Energy announced its intent to explore a new clean tariff to support carbon-free energy generation for large customers like Google and Microsoft.
A national framework that builds on this progress is critical, though it will not be easy; it will require quick Congressional action, executive leadership, and new models of state and local partnership. But we have a unique opportunity to build a strange bedfellow coalition to get it done – across big tech, climate tech, environmentalists, permitting reform advocates, and those invested in America’s national security and technology leadership. Together, this framework can turn a vexing trade-off into an opportunity. We can ensure that the hundreds of billions of dollars invested in building an industry of the future actually accelerates the energy transition, all while strengthening the U.S.’s position in innovating cutting- edge AI and clean energy technology.
Almost half of developers believe it is “somewhat or significantly harder to do” projects on farmland, despite the clear advantages that kind of property has for harnessing solar power.
The solar energy industry has a big farm problem cropping up. And if it isn’t careful, it’ll be dealing with it for years to come.
Researchers at SI2, an independent research arm of the Solar Energy Industries Association, released a study of farm workers and solar developers this morning that said almost half of all developers believe it is “somewhat or significantly harder to do” projects on farmland, despite the clear advantages that kind of property has for harnessing solar power.
Unveiled in conjunction with RE+, the largest renewable energy conference in the U.S., the federally-funded research includes a warning sign that permitting is far and away the single largest impediment for solar developers trying to build projects on farmland. If this trend continues or metastasizes into a national movement, it could indefinitely lock developers out from some of the nation’s best land for generating carbon-free electricity.
“If a significant minority opposes and perhaps leads to additional moratoria, [developers] will lose a foot in the door for any future projects,” Shawn Rumery, SI2’s senior program director and the survey lead, told me. “They may not have access to that community any more because that moratoria is in place.”
SI2’s research comes on the heels of similar findings from Heatmap Pro. A poll conducted for the platform last month found 70% of respondents who had more than 50 acres of property — i.e. the kinds of large landowners sought after by energy developers — are concerned that renewable energy “takes up farmland,” by far the greatest objection among that cohort.
Good farmland is theoretically perfect for building solar farms. What could be better for powering homes than the same strong sunlight that helps grow fields of yummy corn, beans and vegetables? And there’s a clear financial incentive for farmers to get in on the solar industry, not just because of the potential cash in letting developers use their acres but also the longer-term risks climate change and extreme weather can pose to agriculture writ large.
But not all farmers are warming up to solar power, leading towns and counties across the country to enact moratoria restricting or banning solar and wind development on and near “prime farmland.” Meanwhile at the federal level, Republicans and Democrats alike are voicing concern about taking farmland for crop production to generate renewable energy.
Seeking to best understand this phenomena, SI2 put out a call out for ag industry representatives and solar developers to tell them how they feel about these two industries co-mingling. They received 355 responses of varying detail over roughly three months earlier this year, including 163 responses from agriculture workers, 170 from solar developers as well as almost two dozen individuals in the utility sector.
A key hurdle to development, per the survey, is local opposition in farm communities. SI2’s publicity announcement for the research focuses on a hopeful statistic: up to 70% of farmers surveyed said they were “open to large-scale solar.” But for many, that was only under certain conditions that allow for dual usage of the land or agrivoltaics. In other words, they’d want to be able to keep raising livestock, a practice known as solar grazing, or planting crops unimpeded by the solar panels.
The remaining percentage of farmers surveyed “consistently opposed large-scale solar under any condition,” the survey found.
“Some of the messages we got were over my dead body,” Rumery said.
Meanwhile a “non-trivial” number of solar developers reported being unwilling or disinterested in adopting the solar-ag overlap that farmers want due to the increased cost, Rumery said. While some companies expect large portions of their business to be on farmland in the future, and many who responded to the survey expect to use agrivoltaic designs, Rumery voiced concern at the percentage of companies unwilling to integrate simultaneous agrarian activities into their planning.
In fact, Rumery said some developers’ reticence is part of what drove him and his colleagues to release the survey while at RE+.
As we discussed last week, failing to address the concerns of local communities can lead to unintended consequences with industry-wide ramifications. Rumery said developers trying to build on farmland should consider adopting dual-use strategies and focus on community engagement and education to avoid triggering future moratoria.
“One of the open-ended responses that best encapsulated the problem was a developer who said until the cost of permitting is so high that it forces us to do this, we’re going to continue to develop projects as they are,” he said. “That’s a cold way to look at it.”
Meanwhile, who is driving opposition to solar and other projects on farmland? Are many small farm owners in rural communities really against renewables? Is the fossil fuel lobby colluding with Big Ag? Could building these projects on fertile soil really impede future prospects at crop yields?
These are big questions we’ll be tackling in far more depth in next week’s edition of The Fight. Trust me, the answers will surprise you.