The article below is an excerpt from our Q4 2022 commentary.
On December 13th, 2022, the U.S. Department of Energy (DOE) announced a nuclear fusion breakthrough. For the first time in history, scientists at the Lawrence Livermore National Laboratory achieved fusion “net energy gain,” releasing more energy than was consumed in the reaction. Immediately, journalists wrote near-utopian articles describing imminent abundant clean energy. Jennifer Granholm, US energy secretary, summed up the excitement: “This milestone moves us one significant step closer to the possibility of zero carbon abundance fusion energy powering our society.”
Unfortunately, our research shows that the likelihood of nuclear fusion’s usable power remains extremely low.
There are two “nuclear” reactions: fission and fusion.
During a fission reaction, the nucleus of significant, heavy elements (notably uranium) breaks apart into lighter elements. During the transformation, elemental mass converts into energy per Einstein’s famous E=MC2 equation. Only a specific rare uranium isotope (U-235) is prone to spontaneous nuclear fission; if all uranium underwent fission, none would remain on Earth. The key to creating a fission chain reaction is to enrich natural uranium from 0.05% U-235 by mass to 5-7%. Under particular circumstances, fuel rods of low-enriched uranium will see some of its U-235 isotopes undergo fission, releasing energy from neutrons. These neutrons will lead to further fission reactions in nearby uranium atoms: a chain reaction.
The energy released during this chain reaction is absorbed (presently using high-pressure water and soon using molten salt) and used to spin a turbine and generate electricity. The reaction’s heat tends to be between 300-500 degrees Celsius. By varying the degree of enrichment, and the physical configuration, a fission reaction can either fizzle out, maintain a steady-state chain reaction (nuclear power reactor), or generate a super-critical uncontrolled energy release (an atomic bomb). Uncontrolled fission was first demonstrated at the Los Alamos test facility in New Mexico as part of the Manhattan Project with the Trinity Test in 1945. Controlled fission first generated power in 1951 at EBR-I in Idaho and has been used ever since.
Fusion, on the other hand, is a much more complicated reaction.
Under the right circumstances, very light atoms (usually two specific hydrogen isotopes) fuse to create a heavier atom, releasing prodigious amounts of energy. Under normal circumstances, ions (atoms stripped of their electrons) repel each other. Extremely high temperatures and pressures (typically only found in stars) are necessary to overcome the repelling forces that prevent atoms from fusing.
The detonation of Ivy Mike – the world’s first thermonuclear hydrogen bomb - successfully demonstrated runaway fusion in 1952. An atomic bomb generated enough energy to create the extreme temperatures and pressures needed to allow for the fusion of deuterium and tritium (isotopes of hydrogen and lithium, respectively).
As early as 1956, scientists hoped to harness nuclear fusion for helpful power production. However, while fission took six years from initial uncontrolled reaction to an early power station, controlled fusion has proved much more elusive.
The challenge comes from the extreme operating conditions, namely the temperature, and pressure. The Lawson Criterion maps the so-called “triple product,” or combinations of temperature, pressure, and time that will result in the fusion of two atoms. There have been several approaches to fusion, all of which involve extreme temperatures or pressures. The time element has been the most challenging considering the difficulties in maintaining extreme temperature and pressure over anything but minor time intervals.
In the seventy years since Ivy Mike proved nuclear fusion was possible, overcoming the Lawson Criterion to create a sustained fusion reaction has been impossible.
A critical element of a sustained reaction is the “Q” factor which measures how much energy the fusion reaction releases compared with how much energy it consumes to create the appropriate conditions (high temperature and pressure). Until late last year, no reactor had ever had a Q-factor greater than one – i.e., more energy released than consumed. In a widely heralded event last December, Lawrence Livermore’s National Ignition Facility (NIF) announced it had finally broken the elusive barrier, achieving a Q-factor of ~1.5x.
While the media was keen to push the breakthrough as “game-changing,” a closer analysis revealed many remaining challenges.
First, the Q-factor was somewhat misleading to a non-scientific audience. The NIF’s laser generated a pulse that delivered 2.05 MJ of energy into a fuel pellet 1 cm in diameter. The energy immediately stripped the fuel of its electrons and heated the ions to an internal temperature of three million degrees, which precipitated the fusion reaction. The reaction released 3.15 MJ of energy, resulting in a Q-factor of 1.5x. However, the laser consumed nearly 300 MJ of energy, suggesting the reaction consumed ~100 times as much energy as it released. Moreover, the reaction lasted less than one-billionth of a second. To create electricity, the reaction must run continuously -- firing 846,000 times daily.
Theoretically, a Q-factor greater than one could lead to “ignition,” where the energy released is enough to allow additional fusion in a sustained chain reaction, similar to fission. The difference is that fission chain reactions are largely passive: fuel rods undergo sustained fission once inserted with little intervention. Generating the 1.15 MJ of net energy gain with fusion (enough to power a toaster for 15 minutes) required the precise placement of 192 large lasers focusing their output on a hyper-polished pellet less than 1 cm in diameter. The likelihood of sustained chain-reaction fusion is not practical.
Many journalists pointed out that even if December’s breakthrough was not yet “ready for prime time,” it proved that fusion’s widespread adoption was only a matter of time. Unfortunately, this logic is highly harmful, especially if looking for readily adaptable solutions to the CO2 production problem.
Nuclear fission is a proven technology that can be deployed at scale relatively quickly to improve energy return on investment and address carbon emissions. Gen IV nuclear fission reactors will generate as much as 180 units of energy for every unit consumed, produce little to no waste, and be “walk away” safe. Utilities could commercially deploy these technologies in at least seven years with open access to capital markets.
Instead of committing to next-generation fission reactors (small modular reactors), investors have poured ~$5 bn into private nuclear fusion companies (N.B., none of which were involved in the NIF “breakthrough”). In our view, this technology will never be viable as a source of electricity.
We commend the scientists working at NIF and elsewhere for their invaluable contributions to scientific advancement. However, the answer to our energy needs lies in a much more prosaic technology available now and operating safely for seven decades.
Vaclav Smil describes nuclear fission as the most successful failure in history. It is successful because it has achieved all of its goals; it is a failure because we inexplicably refuse to adopt it.
Intrigued? We invite you to download or revisit our entire Q4 2022 research letter, available below.
Registration with the SEC should not be construed as an endorsement or an indicator of investment skill, acumen or experience. Investments in securities are not insured, protected or guaranteed and may result in loss of income and/or principal. Historical performance is not indicative of any specific investment or future results. Investment process, strategies, philosophies, portfolio composition and allocations, security selection criteria and other parameters are current as of the date indicated and are subject to change without prior notice. This communication is distributed for informational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services. Nothing in this communication is intended to be or should be construed as individualized investment advice. All content is of a general nature and solely for educational, informational and illustrative purposes. This communication may include opinions and forward-looking statements. All statements other than statements of historical fact are opinions and/or forward-looking statements (including words such as “believe,” “estimate,” “anticipate,” “may,” “will,” “should,” and “expect”). Although we believe that the beliefs and expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such beliefs and expectations will prove to be correct. Various factors could cause actual results or performance to differ materially from those discussed in such forward-looking statements. All expressions of opinion are subject to change. You are cautioned not to place undue reliance on these forward-looking statements. Any dated information is published as of its date only. Dated and forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any dated or forward-looking statements. Any references to outside data, opinions or content are listed for informational purposes only and have not been independently verified for accuracy by the Adviser. Third-party views, opinions or forecasts do not necessarily reflect those of the Adviser or its employees. Unless stated otherwise, any mention of specific securities or investments is for illustrative purposes only. Adviser’s clients may or may not hold the securities discussed in their portfolios. Adviser makes no representations that any of the securities discussed have been or will be profitable. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio.