Which future requirements should corporations meet to be fit for fusion technology?

Euphorically titled the ‘holy grail of clean energy’, fusion technology promises an almost limitless, stable, and carbon-free power source. Recent advancements are bringing industrial applications in reach, shifting the focus away from primary research-oriented discussions. Yet, addressing the remaining technological, financial, and social challenges remains essential. In our previous introduction, Fusion energy: revolution in the energy sector?, we shared insights on fusion’s transformative potential, highlighting its ability to reduce greenhouse gas emissions while pointing out the strategic challenges ahead. To answer the first strategical question from the introduction, we now look at the future value chain, to identify the transformative requirements for corporations in the energy sector.

How could fusion technology impact the energy value chain?

Unpacking five hypotheses

1. The generation process will materially change with fusion entering the energy mix. Fusion energy has the potential to make a decisive contribution to emission-free base load and ensure a stable energy supply as demand increases. Unlike magnetic fusion, laser-based inertial technology has already demonstrated a positive energy balance but has yet to achieve industrial maturity. To become economically viable, initial investment cost must decrease, along with ensuring low marginal cost.[1] Finally, access to the naturally limited raw material tritium must be secured. This fuel component can be obtained directly from the abundantly available element lithium, using the neutrons generated during the fusion process.[2]

2. Power plants could be built in close proximity to consumption, which would simplify distribution through the existing grid infrastructure. This would reduce the need for expansions of transmission grids as currently required due to large power transfers and backfeeding of intermittent energy sources.

3. The demand-driven provision of fusion energy would mitigate the need for substantial investments in storage solutions. The prerequisite for this is a comprehensive load management for optimal efficiency. Additionally, the energy mix must include sufficient installed fusion generation capacity to balance fluctuations from intermittent sources.

4. Fusion energy could improve predictability and counteract market and price risks in trading. This shift reduces reliance on volatile commodity markets while maintaining base load. Additionally, accurate demand forecasting is essential to stabilise price levels.

5. To implement fusion energy in retail, public acceptance is crucial, hinging on stable energy prices on the one hand. Therefore, cost advantages must transpire to both, industrial as well as private clients. On the other hand, it is essential to create awareness that fusion energy, under compliance with strict safety standards, holds the potential to achieve carbon neutrality.[3]

For corporations in the energy sector, the projected impact of fusion technology on the value chain might result in transformative requirements. Depending on the appetite for change and available budgets, corporations can develop their own heatmaps of strategic focal points and urgencies (see figure 1).

The integration of fusion technology into the energy sector presents both significant opportunities and challenges for corporations. To remain competitive and future-ready, corporations must strategically adapt, primarily by fostering partnerships with start-ups, focusing on local grid infrastructure, and continuously reevaluating long-term storage needs. In the upcoming newsletter, we will deal with the second strategic question from the introduction and discuss the best future organisational set-up and how corporations should transform accordingly today.

How do you assess the implications of fusion technology? Our team of experts is looking forward to a professional exchange.

[1] Fraunhofer Institute for Laser Technology (2022)

[2] Max Planck Institute for Plasma Physics (2024)

[3] Fraunhofer Energy Alliance (2024)