Star Power, Fusion and the Future of the Energy Market

By Lyle Horne

The sun has provided humanity with free light and heat since the dawn of time. Yet, for centuries we had little understanding of the physics behind this seemingly unlimited supply of energy. We now know that the sun produces energy through nuclear fusion, the process of merging the atoms of lighter elements into heavier ones releasing a small amount of matter as energy in the process. Since the dawn of the nuclear age scientists and engineers have been tantalisingly close to harnessing this phenomenon to meet all our energy needs.

At first glance, the technology seems too good to be true, almost unlimited energy from an abundant fuel source that produces no greenhouse gasses. And unlike the nuclear fission used in our current power plants, fusion does not produce radioactive waste or contamination.  We have already used fusion to create thermonuclear weapons. However, energy generation experiments have thus far failed to break even. Mainly due to the difficulty of sustaining a controlled reaction that produces more energy than is required to start it up.  Nevertheless, we have made significant progress, and many physicists are optimistic that the first operational fusion power plants will be coming online in the next couple of decades.

If we are to be confident that fusion energy will power our society in the near future, then we need to think seriously about how this revolutionarily new technology could change the global energy market. Whoever successfully commercialises the technology will be able to completely dominate the entire sector. It is not just fossil fuels that will suffer; fission and renewables will all be blown out of the water. What does this mean for jobs in these currently growing sectors? Put simply; fusion is an existential threat to the existing energy industry.

If fusion worked cost-effectively, it would provide abundant, safe, affordable and clean energy for everyone on the planet. It could completely alter international politics and economics. Fossil fuel companies would be obsolete, which could cause massive disruption on the world stock markets. That said, there are some key sectors where fossil fuels would likely remain important at least for a while. For example, transportation is still heavily reliant on fossil fuels. Until electric vehicles become widespread (which will take some time, particularly in developing countries) internal combustion will remain king no matter how cheap electricity is. This is particularly true of the airline industry. Although fusion will likely dominate large scale power grids, small scale operations and off-grid plants will still require more straightforward methods of power generation such as wind, solar and hydro.

Overall, it is normal for entire economic sectors to rise and fall over long periods, but as we already see with the rise of automation, sudden changes can lead to social instability. It is estimated that 58 million people worldwide work in the energy sector. Given the speed at which fusion power could effectively replace all other forms of energy generation policymakers need to plan ahead.    

The views expressed in this article are the author’s own, and may not reflect the opinions of The St Andrews Economist.

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