Best New Ideas in Money

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Tammy Ma: Let's say the US government were to get serious about fusion energy, like actually serious about fusion energy. It probably could be done as fast as a decade, but more likely it will be a bit longer than that.

Stephanie Kelton: Welcome to the Best New Ideas in Money, a podcast for MarketWatch. I'm Stephanie Kelton. I'm an economist and a professor of economics and public policy at Stony Brook University.

James Rogers: And I'm James Rogers, a Financial Columnist at MarketWatch.

Stephanie Kelton: Each week we explore innovations in economics, finance, technology, and policy that rethink the way we live, work, spend, save, and invest. James, when you turn on the lights or plug in your laptop, do you ever stop and think about where that power comes from?

James Rogers: I do, actually, Stephanie, but tell me and I'll wager. Our listeners are curious too, what powers the United States?

Stephanie Kelton: Well, as of earlier this year, fossil fuels provide about 60% of America's power. The rest comes in about equal parts from renewables like wind, solar, and hydro or nuclear power.

Speaker 4: Here, in fact, is the answer to a dream as old as man himself. A giant of limitless power at man's command. And where was it science found that giant? In the atom.

James Rogers: Yes. Today we're talking about nuclear energy, which has always been full of promise and peril.

Stephanie Kelton: The promise is essentially the same as it's always been, carbon-free energy, and lots of it. The peril we now know all too well, Three Mile Island, Chernobyl and Fukushima terrifying accidents with long-lasting consequences.

James Rogers: And that's not to mention the waste, but there are different types of nuclear energy and the nuclear energy of the future. That's nuclear fusion doesn't produce the kind of long-lived waste you might associate with nuclear power. Fusion is also much safer than fission, which is how we produce nuclear energy today. We'll come back to the differences between fusion and fission later in the episode.

Stephanie Kelton: While fusion isn't happening yet, it's beginning to feel increasingly possible, and later on we'll talk about recent breakthroughs that could lead to a fusion-powered future with one of the scientists who's working to make that future a reality.

James Rogers: In the second half of the episode, we'll look at the state of nuclear power today as well as a few innovative new ideas that could bring about a renaissance in an industry that's been on the decline for decades.

Stephanie Kelton: We're starting off with fusion, the nuclear energy of tomorrow.

Tammy Ma: So fusion may be the ultimate energy source because there's so many advantages to it if we can make it work.

James Rogers: That's Dr. Tammy Ma.

Tammy Ma: My name is Tammy Ma. I am the lead for the Inertial Fusion Energy Initiative here at Lawrence Livermore National Laboratory.

Stephanie Kelton: Lawrence Livermore is a major federal research center in California. Its primary focus is ensuring the safety, effectiveness, and readiness of the nation's nuclear arsenal, but the scientists working at Livermore are also making major breakthroughs in energy and nuclear fusion in particular. So back to fusion. Why does Ma say that it's the ultimate energy source?

Tammy Ma: It is inherently safe. There's no high-level nuclear waste. There is no carbon anywhere in the fusion process that we are generating. It is sustainable. We know how to obtain the fusion fuel that we need without damaging the environment.

James Rogers: So that's safe, clean, and sustainable. According to Ma.

Tammy Ma: Fusion power plants, most of the designs would have fusion power plants on the orders of hundreds of megawatt or gigawatt type scale, meaning they're similar to coal-powered plants of today, and so you could help meet baseload and use that power to run large cities.

James Rogers: What's baseload? Well, demand for energy fluctuates, and baseload refers to the minimum amount of power that must be supplied to the energy grid at all times. You can think of it as always on power and fusion, like coal or natural gas is always on, even when it's cloudy or when the wind isn't blowing.

Stephanie Kelton: And in terms of the amount of energy that a fusion plant could produce for context, one gigawatt provides enough energy to power about 750,000 homes.

Tammy Ma: It is basically, sometimes you'll hear we'll say limitless. It is very, very abundant. The amount of deuterium we have in seawater is enough to feed, we think humans for another 30 million years and our growing energy needs. And so you'll often hear that fusion is limitless.

James Rogers: Deuterium and tritium are hydrogen isotopes and in this case what you need to know is that they're the fuel for fusion.

Stephanie Kelton: Deuterium is naturally occurring and plentiful, and tritium, while extremely scarce in nature, is easy enough to create in a lab. According to Ma.

James Rogers: In her view, shifting away from energy that requires scarce resources to fusion, which is powered by essentially limitless resources could be key in resolving the wars we fight over energy.

Tammy Ma: If we can make fusion work, it means energy security. If we can deploy fusion in a way that is equitable and just and out to societies worldwide, it could be a way to also meet energy sovereignty needs too. We can basically stop fighting wars over energy because it will completely change the paradigm of our relationship with energy.

Stephanie Kelton: That all sounds pretty good, doesn't it?

James Rogers: It certainly does, but what exactly is fusion?

Tammy Ma: Fusion is the merging of two atoms under high enough densities, temperatures, pressures, and holding it together long enough that those two atoms fuse into a heavier element, and in that creation of the heavier elements, mass is liberated. And so with that comes out a huge amount of energy.

Stephanie Kelton: Fusion is what's happening inside stars, including our own sun.

James Rogers: It's not the same thing as the type of nuclear power most of us are familiar with. That's called fission? Yes. The two are frustratingly similar names.

Tammy Ma: So fission means the breakdown of the heavy element like uranium or plutonium, and when you break down that heavy element into smaller constituent elements, you release energy that way. Fission is relatively easier. I mean, obviously, we already have many fission power plants. Fusion, we're still in the very early stages of trying to develop the science enough that we can build the technology around it to actually demonstrate a fusion power plant.

James Rogers: Fusion isn't happening in the real world, is it?

Stephanie Kelton: Not quite, but according to Ma, it isn't too far off either.

Tammy Ma: So we do know fusion works, right? Fusion powers the sun and the stars. So we know the principle of fusion works very well. Now what we're trying to do is recreate fusion in the laboratory in a controlled way, and so this is how you can precisely control the amount of energy coming out and then also utilize it for good, rather than weapons. Where we are now is really in an inflection point, though, because the breakthrough that we had last December was a proof of principle. It was a demonstration that this can work in the laboratory. Of course, there's still more work to do, but where we are now, the reason I say it's an inflection point is, because we're seeing advances in many different technologies that we would actually need to make a power plant really work.

Stephanie Kelton: Let's back up a little bit. In December of 2022, there was a big breakthrough at Lawrence Livermore.

Tammy Ma: So the holy grail of fusion research is to generate more energy out than you put in, and if you generate enough energy out, then you can actually harness that as an energy source. Now, we're not violating any principles of physics here. We're converting mass into energy because what we're doing is taking two light elements, fusing them, and then the element that comes out, weighs a little bit less than your original two atoms in.

James Rogers: How does this actually work? Well, it's complicated, but at Livermore, scientists use powerful lasers to force hydrogen atoms inside a small cylinder to combine and form helium, and that reaction is where the energy-generating magic happens.

Tammy Ma: Last December, we were able to generate three units of energy out for two units of energy in. So three over two is a gain of 1.5. Anything over one is basically ignition.

Stephanie Kelton: Ignition is simply more energy out than in, and in this case, three over two is a modest but measurable gain.

Tammy Ma: That's equivalent to having a Porsche driving at about 150 miles per hour or dropping a 700-kilogram weight from the Empire State Building.

Stephanie Kelton: If you're wondering whether or not it's safe to be simulating the energy that powers the sun in the suburbs of California, you're not alone.

Tammy Ma: Controlled fusion is exactly that. It's controlled and so it is not dangerous. And in fact, we say fusion power is inherently safe because you first have to deliver energy into the system to make it go.

Stephanie Kelton: Meaning, according to Ma, flick the switch off and it stops.

James Rogers: Remember, fusion isn't empowering any cities just yet.

Stephanie Kelton: But there are a handful of private companies working on making fusion a reality. Commonwealth Fusion Systems, which has raised more than $2 billion in venture capital, says it will demonstrate ignition. And remember, that's more energy out than in by 2025.

James Rogers: Another company, Helion, which has also raised more than $2 billion, says it will deliver power to Microsoft by 2028.

Stephanie Kelton: And a third company, TAE Technologies, aims to plug fusion into the grid by the 2030s.

James Rogers: Without commenting on any of the claims made by any of these companies, we asked Ma for her perspective on their ambitious goals.

Tammy Ma: The companies that you just mentioned are just a few in a growing fusion ecosystem. So we're seeing a lot of momentum and a lot of interest, and that certainly helps to grow the field, and oh, it brings a lot of money in, of course, and how fast you can develop technologies is directly related to the amount of investment, quite honestly. So this is great. What I will say is that although it's a very exciting moment in time, we also have to be cautious because each of the subsystems we would need to build up for a fusion power plant. All of that still needs a lot of development. The technology is still relatively immature, and all of this has to come together in a way where the systems work together, but then, it also has to be economically viable. Fusion needs to be able to compete with the other energy sources out there, so the challenges are still quite momentous. And then on top of that, fusion is a type of nuclear energy, so there's many public perception, and social issues. We are still going to have to work with the public on and governments on to set the policies in place to make the technology, make the science development really come together into something real efficient power plant.

James Rogers: That said, what does more reckon, how soon could a commercially viable fusion power plant come online?

Tammy Ma: It very much depends on the support, the level of investment that goes in, and the will. And so I do, I'm biased because I work at a national lab, so I'm in the public sector, but this type of work is still a very long-term risk. It is rare for private companies to actually have the amount of capital, typically on the order of hundreds of millions to billions, in order to build large-scale experimental facilities, let alone full reactors. So there still needs to be significant public investment, I think, to make this happen. And so let's say the US government were to get serious about fusion energy, like actually serious about fusion energy, and decided to do something like a Manhattan Project type of investment and go all in and pull scientists together from all across the US. It probably could be done as fast as a decade, but more likely it will be a bit longer than that.

Stephanie Kelton: A decade. That's really not as long as I was expecting, but is the US government getting serious? Could we see something similar to how the federal government has supported commercial space exploration? For example.

Tammy Ma: The Department of Energy recently held a call for proposals. They called it a milestone program, which was modeled on the NASA commercial orbital transportation program a while back, which originally funded SpaceX, actually. So the idea behind that program was that government would help private companies to break into a sector, and hopefully the companies are agile and flexible enough that they can take the technology and move a little bit faster, I suppose. And then the companies have to cost share as well. But the idea is that there's significant government support towards a goal, and so the Department of Energy recently had a similar program for fusion, and we've seen a lot of interests. We had eight private companies get funded that way.

James Rogers: But go into space and get in fusion online, or a little bit different.

Tammy Ma: When government was ready to help commercialize space, we had already gone to the moon and we had already developed the technology. It was just a little bit of wieldy, a little bit expensive for NASA to be doing all of this work, and we were looking for different solutions from the private sector. With fusion right now, we're in a different space because both the science and technology have not actually been proven yet. And so we're using the space model to try to accelerate towards commercialization. That being said, these types of programs bring enormous interests, many new ideas into the system, and so there's a lot of value to the government using its will to try to drive a sector that way.

James Rogers: Although there have been big breakthroughs in fusion recently, the idea itself isn't new. And in fact, a fusion reactor has been under construction in France for decades. Not only that, it's years behind schedule and billions of dollars over budget.

Stephanie Kelton: The project is called the International Thermonuclear Experimental Reactor, or ITER. What does Ma think? Do the issues ITER has experienced mean that we shouldn't get too excited about fusion, at least for now?

Tammy Ma: I think what's interesting is that ITER was always set up more as a diplomatic project, a science diplomacy project rather than really a big pure kind of R&D science project because the origins of ITER are out of the Cold War. Reagan and Gorbachev deciding that one of the best ways actually to build a strong relationship between two countries is to collaborate through science. And so, I think what you see then is the way the organization for ITER is set up is very much meant to support kind of international relations that has hampered a lot of the decision-making, I would think. The National Ignition Facility where I work, on the other hand, is a US project, it's all within one single national lab. And yes, the project did eventually go over budget was a bit late, but it got done, and it more than met the performance specifications. And a lot of that is simply because you can have a concentration of talent in one place with one single goal and not too many decision-makers in a single room. And so, I think that's unfortunately to blame for ITER.

Stephanie Kelton: On the other hand, that concentration of talent she mentioned is one big reason that Ma believes the United States should push into fusion.

Tammy Ma: One thing I want to emphasize is that the US right now is the undisputed leader in inertial fusion. We are the only ones that have achieved ignition. We are the only ones with the full-scale facility that can even achieve come close to the plasma conditions that you need for fusion. And we have a huge wealth of expertise in not only the physics but the simulation codes, the computational capabilities, advanced manufacturing, all the things you need to actually pull this together. And so we really need to capitalize on that lead that we have to make fusion energy a reality because other countries are getting interested too. And certainly, if we can make fusion work, we want it to be a solution that's deployed worldwide. We don't want to keep it to just the US, but what we're seeing right now is an entirely new energy economy, and whoever gets there first sets the values and sets the real set. And so that's why we need to really get behind and accelerate this technology so that we get there first.

James Rogers: When we're back, we're going to look at the nuclear power that's turned on today. Will any new plants be built in the United States in the near future? That's after the break.

Stephanie Kelton: Welcome back to the Best New Ideas in Money. Before the break, we talked about nuclear fusion and how fusion is progressing from the lab to the real world.

James Rogers: Now we're taking a look at the nuclear plants that are currently operating, and remember, that's nuclear fission. What role does nuclear power generated by fission play in the world today?

Jacopo Buongiorno: In the United States, we get one fifth, 20% of our electricity right now from nuclear power plants.

Stephanie Kelton: Dr. Jacopo Buongiorno is a professor of Nuclear Science and Engineering at MIT.

Jacopo Buongiorno: That actually translates to roughly half of our carbon-free, emission-free electricity in the US. Similar situation in Europe, there are countries that rely very heavily on nuclear. In those cases, the share of clean electricity that comes from nuclear climbs up to 80%, 90%. So again, very important piece of our energy infrastructure now.

Stephanie Kelton: You might be surprised to hear nuclear power talked about in the same breath as renewables, and critics would say that the two are distinct categories. Buongiorno has a different perspective.

Jacopo Buongiorno: Very often, nuclear is cast in opposition, or in contrast with renewables such as solar, wind, and hydro. That is absolutely a mistake. The characteristics of these different energy sources are such that actually nuclear works very well with renewables and vice versa. Let me explain why. Nuclear is what we call firm capacity. It's essentially always on, 24/7, so it provides a nice base to meet the demand that the electric grid requires at any given time. On the other end, you have renewables such as solar and wind in particular that are intrinsically intermittent because, as we know, the sun doesn't always shine, the wind doesn't always blow. However, when sunshine is available and wind is available, power plants, solar and wind power plants, actually produce electricity at very, very low cost. The problem is that since they're not doing it all the time, but you still need to meet demand when they're not producing it. Because of this issue of intermittency, you would have to store the energy, the excess energy that is produced when the sun shines and the wind blows, and then deliver that energy at the time when solar and wind are not producing. That's theoretically possible. It's the question of energy storage, batteries, et cetera. But all the studies we have done, and at this point many other organizations perform, show that while it's theoretically feasible, one, it would be much, much more costly than having something like nuclear in the mix. And number two, the overall grid, the overall energy system would be a lot less reliable because of all that intermittency and that sort of juggling generation and demand over long periods of time.

James Rogers: Despite Buongiorno's belief that renewable energy and nuclear power are compatible, complementary, and key to the success of the energy transition, he says that there are no large-scale nuclear plants being constructed in the United States today.

Stephanie Kelton: Why is that? Georgia's Plant Vogtle was the first new large-scale nuclear power plant built in the US in decades, and it could be the last. Although Plant Vogtle is nearly operational, it's seven years behind schedule and a whopping $17 billion over budget. In fact, the delays and costs were so severe it drove Westinghouse, the company that built the plant into bankruptcy.

James Rogers: Is the Georgia plant a cautionary tale for industry? We asked Buongiorno.

Jacopo Buongiorno: It is certainly a cautionary tale, and I do think that it has sour the appetite of many investors in supporting large new nuclear projects of this time. Having said that, I think now that the project is complete, I think it's going to serve the people of Georgia and the electric grid down there well for many, many decades, and in fact, given the trend of for prices of electricity and cost of energy in general, I think eventually people realize that it's even going to be economically competitive and attractive. In other words, 10 years from now, people will look back and says, "Okay, it was painful. It took forever. It was very frustrating." But we're happy that we have these assets. So all of that has to be taken into account.

James Rogers: That said, there are new types of nuclear reactors being considered or in the early phases of construction in the United States today, the SMOLA.

Jacopo Buongiorno: So SMR stands for small modular reactors. EUS is definitely a leader in the development of that technology. These are reactors that produce of the order of a hundred or a couple of hundred megawatts.

James Rogers: That's much smaller than the gigawatt capacity we talked about earlier. So what do these SMRs look like?

Jacopo Buongiorno: They are essentially the same designs of the larger reactors that we've been operating for several decades, with some improvement. What they've done with these SMRs is to shrink them down in size, which is expected to simplify the construction, the delivery of these plants, and shrink or reduce the schedule so that they can be the deployed at a higher rate. And also importantly, the smaller size allows for an easier implementation of a safety approach, which we call passive safety.

Stephanie Kelton: Passive safety means that in the case of an accident, a reactor will automatically shut down without intervention.

Jacopo Buongiorno: So the value proposition of the small modular reactors is twofold. On the one end, there is the expectation that is going to improve economics. On the other end, there is the desire, I would say the certainty, that is going to make these systems a little bit easier to operate and a little bit more perhaps reliable in case of abnormal occurrences.

James Rogers: Let's talk about those abnormal occurrences, what you might think of as an accident. Although waste is important, safety is the major concern when it comes to nuclear power. Will nuclear plants ever be safe enough for the public?

Stephanie Kelton: According to a recent Gallup poll, public support for nuclear energy is at the highest it's been in a decade, with 55% of Americans favoring using nuclear energy and 44% opposed.

Jacopo Buongiorno: I think people understand that technology evolves. It is true that there have been accidents, including Fukushima, which was 12 years ago. These events, while not as catastrophic as they've been depicted in the media, have also been learning experiences for the industry. And so mistakes, errors, flaws in design, or practices that were identified in the analysis that followed these accidents have been used very productively and positively to basically improve the operation of existing plants. And the lessons learned have also been incorporated in the new designs that will have to be built from this point on.

James Rogers: What about waste? Also known as spent fuel, new nuclear reactors generate waste. Most of that waste is currently stored at nuclear sites in dry casks or steel cylinders welded shut, which contain radioactive material. Critics say it's an accident waiting to happen. Supporters say it's a problem with clear and viable solutions.

Jacopo Buongiorno: So at the moment, dry casks are outside the nuclear power plants at the 50 plus sites that we have here in the US, and they're safe. This is not a crisis. It's also not a lot of material because doesn't take a lot of uranium to produce all that energy. As a result, you don't generate a lot of waste at the end of that process. But eventually, these dry casks and the materials inside them have to go to a permanent repository for permanent disposal. This is where things get tricky because the siding and the licensing of an underground repository has always been riddled with political controversy and has met opposition in the United States. The US is very much behind other countries in finding this sort of permanent solution to the waste issue.

Stephanie Kelton: In the United States, 12 nuclear reactors have permanently closed since 2012 with the most recent being New York's Indian Point in 2021. Does that mean nuclear power is on the wane? Not according to Buongiorno.

Jacopo Buongiorno: So that trend has actually been reversed already. At the moment. We actually do not expect any existing operating nuclear reactors in the US to shut down. The one question mark is Diablo Canyon, which is the last nuclear power plant in California.

James Rogers: Although Diablo Canyon is California's last nuclear plant, it provides 10% of the state's electricity. Critics say the plant presents a grave risk to people and the environment, while supporters say it generates a huge amount of clean energy. Its fate remains uncert.

Jacopo Buongiorno: Now, within the US everybody recognizes that the environmental value of these nuclear power plants is very, very high because when they shut down, they're typically replaced with a mix of natural gas and renewables. We like the fact that there are renewables coming online, but renewables without nuclear means that they have to be backed up by natural gas. And with natural gas comes more CO2 emissions.

James Rogers: What does the future for nuclear power look like?

Jacopo Buongiorno: We do have nuclear power plants now under construction in the United States and North America, and of course, many, many more worldwide. So things are changing. There is a lot of support, interestingly, in the United States, that support is bipartisan. There are some very clear economic incentives now, particularly through the Inflation Reduction Act, that can be leveraged to build new plants. And we do have companies that have stepped up and say, "Yes. Now it's time to consider new investments." So cautiously optimistic. The word cautious is very important every time we're talking about the nuclear industry or nuclear technology because the uncertainties are always high. But I am optimistic.

Stephanie Kelton: Thanks for listening to the Best New Ideas in Money. You can subscribe to the show wherever you listen to podcasts. If you like what you heard, please leave us a rating or review. And if you have ideas for future episodes, drop us a line at bestnewideasinmoney@marketwatch.com. Thanks to Tammy Ma and Jacopo Buongiorno. To learn more about nuclear energy, head to marketwatch.com. I'm Stephanie Kelton.

James Rogers: And I'm James Rogers. The Best New Ideas in Money is a podcast from MarketWatch. The producers are Michael McDowell, Mette Lutzhoft, and Katie Ferguson. Michael McDowell mixed this episode. Melissa Haggerty is the executive producer. Nathan Vardi was our newsroom editor on this episode. The Best New Ideas in Money theme was composed by Sam Retzer. Stephanie Kelton is an economist and a professor of economics and public policy at Stony Brook University and not part of the MarketWatch Newsroom. We'll be back next week with another new idea.