Researchers at MIT have proposed a framework for judging when fusion power plants become commercially viable, as investment in the sector accelerates.
The study, published last month in the Journal of Fusion Energy under the title “Criteria for the economic viability of fusion power plants“, sets out 10 parameters covering the physical inputs needed to sustain fusion reactions, and the construction costs required to compete in energy markets. The parameters are not tied to reactor size, meaning they can be scaled to any project or power output.
Dennis Whyte, professor of nuclear science and engineering at MIT and co-author of the paper, said the aim was to bring discipline to an industry that has proved fusion works as a physical process but has yet to answer whether it can work economically.
“It’s all the things that come along with finding, allocating, and spending money at this scale,” Whyte said: “This is critical to what we do. We should look at the economics. If we want this technology to actually be meaningful in the world economy, we have to start getting straight with ourselves about these topics.”
The framework draws on the Lawson Criterion, a 1950s formula describing the plasma conditions needed to generate net energy from fusion. Whyte and co-author Andrew W Lo, professor of finance at the MIT Sloan School of Management, have adapted this into what they call an “economic Q” – the ratio of capital gained to capital expended – which must exceed one for a plant to be considered viable.
Lo said the framework was designed to work regardless of which fusion method a developer uses. “It doesn’t matter whether the fusion power plant is small or large, the bottom line is: in both cases you better have money coming out that exceeds the money going in, otherwise it’s not going to be around for very long,” he said.
The paper’s release follows a fresh billion-dollar funding round secured by Commonwealth Fusion Systems, the MIT spinout company Whyte co-founded, which is aiming to open its first commercial power plant in Virginia in the 2030s.
Lo, who has previously worked on financing models for the biotechnology sector, said fusion development could follow a similar cost curve to human genome sequencing, which he said is now a million times cheaper than it was 25 years ago. “We’re going to see the same thing, but maybe not to the same degree, in fusion energy,” he said.
Whyte and Lo also co-founded Rutherford Energy Ventures, a consultancy and investment advisory firm that is working with the US Department of Energy’s Oak Ridge National Laboratory to build a fusion research consortium.
Three of the paper’s other co-authors – Rachel Bielajew, Maria Hancock, Riley Moeykens and Guinevere Shaw – are also affiliated with Rutherford Energy Ventures.
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