- A recent, significant breakthrough occurred when scientists finally generated more energy from a nuclear fusion reaction than they put into it.
- Major companies like Alphabet and Chevron have invested in TAE Technologies, a startup in the nuclear fusion space. In fact, almost $3 billion was invested in this space in 2021.
- It is fully expected that more money will be allocated toward this cleaner and limitless energy source.
A recent scientific breakthrough may impact the future of renewable energy sources. On December 5th, scientists at the Lawrence Livermore National Laboratory were able to get more out of a nuclear fusion reaction than went into triggering it.
Nuclear fusion doesn’t use any fossil fuels or produce greenhouse gases. This energy source also doesn’t rely on favorable weather conditions like solar and wind energy do.
Many experts have referred to nuclear fusion as the “holy grail” of clean energy, but it’s expected that we are still decades away from any commercial use. We’ll look at how you can invest in fusion energy right now, even though commercialization will take a while.
What’s nuclear fusion all about?
Nuclear fusion is the process that combines atoms into a single larger atom, and it’s what gives the sun its energy. Scientists in 50 countries have been trying to recreate this process since the 1960s, but substantive progress has been elusive until recently.
The end goal of nuclear fusion is to provide large quantities of clean energy for the world. Since nuclear fusion doesn’t use fossil fuels like oil or gas, it doesn’t produce any greenhouse gases like those responsible for trapping the sun’s heat and causing climate change.
It’s also worth noting that fusion experiments use hydrogen, which is extracted for a low cost from seawater and lithium. As a result, nuclear fusion really is the “holy grail” of renewable energy since supplies could last for millions of years.
This means that we would never run out of energy,
According to a report from Bloomberg, investors will likely put over $1 billion into this renewable energy source in 2022. This figure is down from the $2.6 billion invested in 2021 in what was considered a boom year.
This was the first time scientists could trigger a fusion reaction that created more energy than it consumed. Consequently, it’s believed that we are one giant step closer to building a commercial fusion power plant.
If we reach this point, it would drastically change the entire energy industry and every company in it.
What does nuclear fusion energy mean?
Energy is the backbone of all economic activity since every business venture requires some source of fuel to function. If we can create limitless clean energy using nuclear fusion, there will be no limits to our output.
The recent breakthrough resulted from a century of research and funding coming together.
In the long run, fusion energy benefits everyone since fusion reactions don’t generate CO2 emissions like coal and fossil fuels. With fusion running on hydrogen, it can be produced in unlimited quantities.
President Joe Biden mentioned that he wanted fusion power by 2032. While getting a commercial fusion reactor running within a decade is a bold goal, it shows plenty of optimism in the field.
The hope within the industry is that this recent milestone will accelerate the process of innovation and increase funding to ensure that we don’t have to wait decades for this energy source.
How can you invest?
If you’re looking to invest in this industry, there are some stocks you can purchase now. While many private companies are working in this field, some public companies are poised to benefit from a fusion-focused future.
Here are a few notable points about investing in fusion energy to consider:
- Alphabet and Chevron took part in a $250 million funding round this past summer with TAE Technology, a nuclear fusion startup that launched in 1998. TAE stated they’re hopeful they could commercialize the fusion reactors by the early 2030s.
- Italian energy company Eni has invested over $50 million in Commonwealth Fusion Systems.
- Bloomberg reported that fusion energy could soon have a $40 trillion valuation.
These publicly traded companies could benefit from nuclear fusion energy in the future.
- Alphabet (GOOG): You may not think of the parent company of Google as one that’s associated with this space, but they invested heavily into fusion energy and worked closely with TAE to allow machine learning and data science to advance research.
- Chevron (CVX): This oil giant has also invested in fusion energy. The investments in clean energy sources and the analyst estimate that this stock could rise over 10% in the next year make this a stock worth looking into.
- Albemarle Corporation (ALB): Nuclear fusion requires fuels to operate, and lithium is one of them. This lithium producer could see its shares increase if nuclear fusion takes off in the next decade.
- Amazon (AMZN): If a massive global retailer like Amazon can use nuclear fusion for low-cost and high-power efficiency, it could cut costs and increase revenue. Jeff Bezos, the former CEO of Amazon, has also invested in General Fusion, a startup that’s aiming to turn fusion into a commercially viable source of energy,
- Verizon (VE): On a similar note to Amazon, if Verizon can use this energy source, it would improve the business functions of the data giant.
Most of the investment dollars in this field have come in at the venture stage, as we’re far removed from seeing commercial fusion energy.
How should you be investing?
Even though investing heavily in fusion energy might be tempting, we can’t ignore that this energy source could be decades away from commercialization. This breakthrough will require billions more in spending to come to commercial fruition.
Scientists have touted that nuclear fusion energy could be the largest change to energy use since the industrial revolution. However, it should go without saying that you’re taking a risk when you invest in a technology that’s possibly decades from commercialization.
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