Fusion Energy Isn’t Just the Realm of Science Fiction After Regulatory Hurdles Cleared
Key takeaways
- The Nuclear Regulatory Commission has voted for fusion to be regulated differently to nuclear fission, paving the way for the sector to grow
- Experts predict the fusion sector could hit $4 trillion by 2030
- There are no public fusion companies as of yet, so a fusion investment strategy could look like indirect exposure
Nuclear fusion: harnessing the same power the sun uses to create energy. Pretty neat, right? Well, the industry recently had a massive boost in the form of regulatory clearance, which has perked up investment interest in the sector.
Let’s get into the new regulations and how the fusion energy sector is shaping up now and in the future.
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What’s changed lately in fusion?
The Nuclear Regulatory Commission (NRC), which is the top regulatory body for fusion power in the US, recently voted to regulate the fusion industry differently from the nuclear fission industry.
The key change was that fusion plants wouldn’t need funding to cover claims from nuclear meltdowns because fusion reactors don’t suffer the same catastrophic issue. The NRC also loosened rules around foreign ownership of fusion plants and getting rid of federal hearings during the licensing process.
It sounds dull, but the news is set to have a transformative impact on the fledgling sector. This means it could be a good opportunity for investors to get in at the ground level now.
The wider fusion market
So far, private investors have poured $5 billion into the fusion industry, with Bloomberg estimating the sector could be worth $4 trillion by the end of the decade and $40 trillion in the future. Those are some big numbers.
While there aren’t any publicly traded fusion companies yet, start-ups are pulling in some decent funding rounds despite the economic downturn. A few days ago, fusion start-up Avalanche Energy recently announced its $40 million Series A funding round, with its prototype reactor reaching a record 200 kilovolts.
So, how does one invest in fusion without any public companies? Indirect exposure. Bigger companies like Chevron and Alphabet are investing heavily in fusion start-ups such as Commonwealth Fusion Systems and TAE Technologies.
Then some big-picture thinking is needed. Energy-intensive industries like agriculture, construction and food production could be the first to consider transitioning to fusion energy. Then there are the raw materials needed for the process, like lithium and uranium, whose production companies could benefit from the upside as the sector rapidly develops.
The bottom line
If nuclear fusion can be achieved commercially, it can potentially tip the climate change scales permanently. That’s why the fusion industry is relieved that this regulatory decision paves the way for more scientific breakthroughs — and investors are keeping a close eye on an industry which could skyrocket.
The fight against climate change is growing, and you can help to support these groundbreaking companies through your portfolio. Q.ai’s Clean Tech Kit isn’t a full ESG portfolio, but it uses AI to find the stocks in the energy, EV and renewables industries that look like they could take off. How? By assessing several data sets to help you keep a finger on the pulse.
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