Week 47: Nuclear fusion energy is coming. Will it save us?

In this issue: ▸ How fusion energy works ▸ New hope for fusion ▸ The fusion players ▸ The places we cannot afford to destroy ▸ Environmentalists do not have greener portfolios ▸ And much more...

Dear all,

The quest for the next dimension of the reality we create goes on. While the days walk around confused and dizzy, and the months look for yet another kick to make it to the end of the year, humanity lives on. Looking for the light, looking for the salvation. An old quest, an eternal one. Repeating itself over and over again.

Heart of the stars, on the tips of human fingers, stretched towards the universe.

What if we already have a solution that could save us all, and not only save us but also create a source of energy that is both endless, safe and pollution free?

I’m talking about fusion energy, a proposed form of power generation that would generate electricity by using heat from nuclear fusion reactions.

As a person who questions that “tech will save us all”, I had to spend a substantial amount of time to dig into the divinity of this energy source.

I spent many evenings, hours reading on this. The feeling it created. Limitless. I was thought-drunk trying to understand what I was reading and why I knew so little about it.

How fusion energy works

The fireball at the heart of our solar system is powered by nuclear fusion. The crushing pressures in the sun’s core squeeze hydrogen nuclei together so powerfully that they overcome their natural repulsion and fuse.

These nuclear clinches generate larger particles with masses that are not quite the sum of their parts. The missing mass becomes energy, a fiery embodiment of Einstein’s equation E=mc². The equation shows that, in terms of energy production, a tiny bit of mass goes a long way thanks to the colossal multiplier of c, the speed of light (300,000km per second), squared. 

A prospect of almost limitless power from minimal fuel.

Just one glass of this fuel has the energy potential of 1m gallons of oil and could generate, depending on the fusion approach, as much as 9m kilowatt hours of electricity, enough to power a home for more than 800 years, scientists estimate. 

Can you feel the divinity in this? Not only would the energy be carbon-free and almost limitless, it would also be cheap. The fusion solution could produce power for less than $0.01 per kilowatt hour. Yeah. You sort of feel it now. This is how it works:

New hope for fusion

Soviet physicists developed the first fusion machine in the 1950s using an approach known as magnetic confinement fusion.

The tokamak, short in Russian for toroidal chamber with magnetic coils, enabled a plasma of deuterium and tritium, both hydrogen isotopes, to be held in place by powerful magnets and heated to temperatures hotter than the sun so that the atomic nuclei fuse, creating helium and releasing energy in the process.

Hotter than the sun. Imagine that. A temperature of 120 million Celsius.

The problem is that while scientists have become adept at fusing the two isotopes, the Soviet tokamak, and all other fusion systems developed since, require a vast amount of power. And in more than half a century of trying, no group has been able to generate more energy from a fusion reaction than the system consumes.

But after a series of public and private sector breakthroughs in the past six months, some industry participants are far more hopeful. In China in May, a machine known as East, the Experimental Advanced Superconducting Tokamak, managed to sustain a fusion reaction at 120m degrees Celsius for a record 101 seconds.

Temperatures over 100m C generally required for magnetic confinement fusion had been attained before but never sustained for such a long time.

Then in September, a Boston-based start-up demonstrated the use of a high-temperature superconductor to generate a much stronger magnetic field than a traditional tokamak. The group, Commonwealth Fusion Systems, which grew out of MIT, Massachusetts Institute of Technology, believes the discovery will enable it to make a more efficient fusion machine that will be smaller, cheaper and more viable as a commercial source of power.

Fusion is coming, faster than you expect. Investors are warming to it. And the number of private fusion companies is growing. Read more.

The fusion energy players

Private participation in the sector is relatively new. In the second half of the 20th century fusion research was advanced by international public consortiums, and the biggest projects in the world remain government-funded.

The US Department of Energy helped establish MIT’s Plasma Fusion Center, now the Plasma Science and Fusion Center, in 1976 in response to the oil crisis and rising prices.

The Joint European Torus, which remains the world’s most advanced tokamak, was opened in Culham, a village south of Oxford, in 1984.

Then in 1985 US president Ronald Reagan and Mikhail Gorbachev agreed to co-operate on ITER, the International Thermonuclear Experimental Reactor — the world’s largest nuclear fusion project, to ease cold war tensions.

Some experts believe ITER is still most likely to produce net energy first, but the project, a collaboration between 35 countries that remains under construction in France almost 40 years later at an estimated cost of more than $20bn, has become a byword for glacial progress.

Four of the most advanced companies, which between them account for 85 per cent of private sector funding, are Commonwealth Fusion Systems, California’s TAE Technologies, Oxford-based Tokamak Energy and Canada’s General Fusion.

If you want learn more – and please do, it’s mind-blowing! – I recommend you visit these pages:

As for the future of fusion and when it will fulfil its promise, experts expect the 2030’s to be the decade of commercial fusion power. Full stop.

The places we cannot afford to destroy

In other news, the places humanity must not destroy to avoid climate chaos have been revealed.

A detailed new mapping has pinpointed the carbon-rich forests and peatlands that humanity cannot afford to destroy if climate catastrophe is to be avoided. The vast forests and peatlands of Russia, Canada and the US are vital, researchers found, as are tropical forests in the Amazon, Congo and south-east Asia.

Environmentalists do not have greener portfolios

Now onto Sweden, which is one of the most mature ESG markets in the world. An interesting study from this elongated country tells us something about how challenging ESG must be in so many other places too.

The study surveyed a large sample of Swedish households and connected the responses to administrative data to relate pro-environmental attitudes and values to actual investment decisions.

The result? Surprisingly, and sadly, pro-environment households are not more likely to hold pro-environment portfolios.

This results from financial disengagement in general: they are less likely to own stocks, check pension balances, or make green active retirement planning choices.

You can find the study here.

How did Activision pass the ESG Test?

Meanwhile – in a news that could also explain some of the reluctance towards ESG investing – asset managers seem willing to include any company paying lip service to progressive priorities.

Just how thorough are investment managers when they screen the companies in their ESG funds? Not very, if the example of video game company Activision Blizzard is typical.

Activision – the maker of “Call of Duty,” “World of Warcraft” and “Candy Crush Saga” – has drawn numerous complaints from employees and regulators of sexual misconduct, retaliation and discrimination, yet it’s included in many prominent ESG funds.

In July, the company was sued by the California Department of Fair Employment and Housing. Among other things, the state alleged “women were subjected to constant sexual harassment, including groping, comments, and advances,” and “the company’s executives and human resources personnel knew of the harassment and failed to take reasonable steps to prevent the unlawful conduct, and instead retaliated against women who complained.”

One employee committed suicide after male co-workers allegedly passed around a picture of her genitals at a holiday party.

Activision says the lawsuit is “meritless and irresponsible.”

Company valuations and climate strategies are poles apart

Analyses of companies globally by management consultancy Kearney in November, as well as data by Credit Suisse Group AG published in April (CSGN.S), has found that companies that lowered their emissions in sectors where doing so was expensive and government regulation was limited were valued less, on average, than more emitting peers.

Investors were only found to reward the most emitting companies, such as energy, mining and heavy industry, for taking action on climate change when the cost of doing so was relatively small and government support and regulations were relatively strong.

“Investors want climate leadership, they want tangible transition plans, but at the same time they are only willing to reward companies that can do so without sacrificing returns,” Betty Jiang, Credit Suisse’s head of U.S. ESG research, said.

And that is the core of the challenge for the entire ESG wonderland! 

That’s all for this week’s newsletter.

Kind regards,
Sasja