Commercializing Fusion Energy Won’t Take a 'Moonshot'
Solving climate change is the grand challenge of our time; the solutions proposed range from trillions of dollars in government spending to free-market absolutism. The truth is, we need both government spending and a business-led approach to technology development.
Some have claimed that government-led “moonshots” will not help solve the climate crisis, and that private companies, such as those developing fusion energy, can solve technological challenges faster and cheaper than government efforts. Private companies are often more adept and innovative, but the most effective way to create and bolster a new, impactful industry is with public-private partnerships, supported by government funding, particularly when this goal serves a public purpose.
Fusion is the process that powers the stars; here on Earth, scientists have engaged in government-supported basic fusion research for over sixty years. Every so often, though, commentators call for a “moonshot” – an endeavor supporting a rapid increase in government funding. Indeed, one of us authored a paper in 2014 outlining the steps for a Fusion Apollo Program. Essentially, if scientists can prove they could create a fusion reaction that produces more energy than it consumes, fusion would offer reliable and limitless carbon-free energy. Unfortunately, even as the scientists met their targets, their budgets were repeatedly limited, and at times, cut entirely.
Fortunately, entrepreneurs have risen to this challenge, funded by private investment. A burgeoning private fusion industry now exists, with the goal of developing fusion energy on a more impactful timeline. Currently, 24 fusion start-ups, and even more affiliated companies have joined the Fusion Industry Association (FIA), a coalition formed to promote and advocate for the industry.
While we agree with those who imply that the private sector is better equipped to develop commercially-viable fusion energy, we disagree with the opinion that public funding is unnecessary.
Many of these newly formed fusion companies would not exist if it were not for targeted government funding. For example, Zap Energy, a Seattle-based fusion start-up, was formed in 2017 thanks to the U.S. Department of Energy (DOE) funding for fusion research at the University of Washington and Lawrence Livermore National Laboratory. Zap was subsequently funded by the ARPA-E OPEN 2018 and BETHE programs. It has now succeeded in drawing investment from Chevron’s investment arm and is rapidly expanding and reporting promising results.
The government also must spur further advancements within private industry by creating new and innovative public-private partnerships - bringing together the best from the government, the private sector, and academia. This approach would be modeled on previous collaborative efforts at bringing advanced technologies to market.
In May 2020, SpaceX became the first commercial company to launch NASA astronauts to the International Space Station; a private company returned human spaceflight capabilities to the U.S. for the first time in nearly a decade. SpaceX would not have been successful without NASA’s Commercial Orbital Transportation Services (COTS) program. Beginning in 2005, the COTS program challenged U.S. private industry to develop, own, and operate their own space transportation systems.
Importantly, the program included a performance-based, fixed-price milestone structure where funding was only issued after completion of pre-defined objectives. With responsibility for cost overruns allotted to these private companies, there was incentive to keep projects on schedule and reduce costs, limiting risk to the taxpayer. The demonstrated success of the COTS program illustrates a structure worth replicating, including a milestone-based approach that successfully shifts incentives and risks, and an establishment of high-level requirements that strongly promotes innovation.
Today, the status of the fusion industry is comparable to that of the space industry in the early 2000s. A similar public-private partnership funding model could propel the growing number of private fusion companies even further. Private fusion companies have the ability to efficiently innovate by taking ideas directly from the lab to the marketplace, while fully understanding that the technology must work and meet the market requirements for quality and costs.
A properly designed public-private partnership would allow private fusion companies to leverage the unquestionable knowledge and technical capabilities throughout the DOE and its national labs. This effort would incorporate certain milestones to be completed by the private sector partners that would be verified by DOE expert review teams. Unlike traditional government programs, compensation would be provided only upon completion of these agreed-upon milestones, creating an incentive for fusion companies to minimize costs and schedule delays. Ultimately, a government-led portfolio approach of diverse fusion concepts would reduce risk, leverage shared resources and knowledge, and accelerate us to the date of energy breakeven and eventual commercialization.
The FIA has been championing this funding model since its inception in 2018, and the idea is slowly beginning to gain more traction. The U.S. Fusion Energy Sciences Advisory Committee, under the purview of the DOE, recently released a report that amounts to an ambitious new mandate to prioritize fusion-energy development, and stresses the importance of leveraging public-private partnerships to propel this development. In addition, the National Academies of Sciences Engineering and Medicine also released a new report detailing how to bring fusion to the U.S. grid within the 2035-2040 timeframe, and making a key recommendation for the DOE to move forward with the creation of public-private partnerships.
Congress has affirmed this approach by including an amendment to the Covid relief and omnibus appropriations bill of December 2020 that authorized $325 million over five years for the creation of a new milestone-based public-private partnership program, as explained above. The Department of Energy is setting up this program now, and significant government funding, which we anticipate could come through the upcoming infrastructure bill, can assure the beginning of this common-sense initiative.
America is at its best when society as a whole is working together towards a common goal. While that includes partnerships between the private and public sectors, it also warrants combined efforts among philanthropists, academics, scientists, and engineers to meet this common goal. The government-run Apollo Program was effective because it had one task: get to the moon before the USSR. The U.S. cannot settle for simply surpassing other countries’ efforts to demonstrate the first self-sustained fusion reaction; American fusion plants must be designed so that they are economical enough to “sell tickets” to the moon. In so doing, America will take the lead in the industry of the future, providing cheap and clean energy to the world.
Andrew Holland is the Executive Director of the Fusion Industry Association.
Daniel Slesinski is a graduate student at Johns Hopkins University.