IAEA TECDOC SERIES IAEA-TECDOC-1997 Alternative Commercialization Pathways for Fusion Energy Systems Proceedings of a Workshop International Atomic Energy Agency Vienna, 2022 FOREWORD Nuclear fusion energy has significant potential to fulfil the future demand for low carbon energy sources. Coordinated international efforts by States, supported by the IAEA, have pushed fusion development steadily forward in the past several decades. In recent years, a number of alternative approaches have been proposed that would open up new pathways to commercialization of fusion energy systems. Such new approaches have found more than US $1 billion of investment in total as of 2020, and strides in the development of fusion energy systems that might meet the market demands of the near future are being made. In response to this new development, the IAEA organized the first IAEA Workshop on Fusion Enterprises in June 2018 in the United States of America. The purpose of the workshop was to analyse the potential role of fusion energy in electricity markets, to capture the status of different fusion energy systems on the path to commercialization, to present an overview of the existing private fusion enterprises, and to understand how they can contribute to the commercialization of fusion as a reliable future source of energy. This publication was prepared from contributions of workshop participants. It is intended as the first IAEA publication to analyse the role and contributions of fusion enterprises towards the commercialization of fusion. This publication sketches an outline of a roadmap for the development of fusion energy systems in the coming decades, bringing together input from expert stakeholders from the diverse range of disciplines that are essential to fusion's commercial success. The IAEA gratefully acknowledges the contributions of the participants, and S. Woodruff and R.L. Miller (United States of America) for compiling the first draft of this publication. The IAEA officers responsible for this publication were S.M. Gonzalez de Vicente and S. Takeda of the Division of Physical and Chemical Sciences. CONTENTS 1. INTRODUCTION 1.1. BACKGROUND 1.2. OBJECTIVE 1.3. SCOPE 1.4. STRUCTURE 2. MARKET 2.1. INTRODUCTION 2.2. CLIMATE CHANGE AND FUSION ENERGY 2.3. SUMMARY OF THE SESSION 3. COMMERCIALIZATION PATHWAYS 3.1. FOUR COMMERCIALIZATION PATHWAYS 3.2. TECHNOLOGY READINESS LEVELS 3.3. SUMMARY OF THE SESSION 4. FUSION POWER CORE DESIGN 4.1. SUMMARY OF THE SESSION 5. CONSTRAINTS OF FUSION ENERGY SYSTEMS 5.1. SUMMARY OF THE SESSION 6. TECHNOLOGIES OF FUSION ENTERPRISES 6.1. GOVERNMENT INVESTMENT IN FUSION TECHNOLOGIES 6.2. SUMMARY OF THE SESSION 7. CONCLUSIONS REFERENCES PAPERS PRESENTED AT THE MEETING SESSION I: MARKET - THE GLOBAL MARKET CONTEXT FOR FUSION ENERGY - PORTFOLIO CONSIDERATIONS IN FUSION ENERGY DEVELOPMENT - PERSPECTIVES ON FUSION ENERGY FROM UTILITY COMPANIES SESSION II: COMMERCIALIZATION PATHWAYS - A PORTFOLIO APPROACH TO FUNDING AND COMMERCIALIZATION - GENERAL FUSION'S APPROACH TO COMMERCIALIZATION - REDUCING RISKS TO COMMERCIAL FUSION - SPINOFFS FROM EARLY STAGE FUSION COMPANIES - HISTORY LESSONS FROM DU PONT FOR THE SUCCESSFUL DEVELOPMENT OF FUTURE PUBLIC-PRIVATE PARTNERSHIPS IN FUSION ENTERPRISES - FUSION NEUTRON SOURCE AS A DEVELOPMENTAL STEP TO COMMERCIALISATION - FUSION AS A HIGH-TEMPERATURE HEAT SOURCE FOR FUEL PRODUCTION SESSION III: FUSION POWER CORE DESIGN - FUSION LCOE: BASIS AND METHODOLOGY - CONSTRAINTS PLACED ON RADIAL BUILD DEFINITION DUE TO TRITIUM BREEDING AND SHIELDING REQUIREMENTS - SUMMARY OF ARPA-E'S 2017 FUSION COSTING STUDY - PRE-CONCEPTUAL FUSION POWER PLANT STUDIES – WHAT ARE THE PARTS? SESSION IV: CONSTRAINTS OF FUSION ENERGY SYSTEMS - TRITIUM FUEL CYCLE SAFETY - COMMERCIALIZING FUSION: THE LEGAL PERSPECTIVE - AN OVERVIEW ON THE SAFETY OF FUSION ENERGY FOCUSED ON THE U.S. FRAME SESSION V: TECHNOLOGIES OF FUSION ENTERPRISES - OVERVIEW OF MAGNETIC CONFINEMENT FUSION ENERGY CONCEPTS - OVERVIEW OF INERTIAL FUSION ENERGTY SYSTEM CONCEPTS - OVERVIEW OF MAGNETO-INERTIAL FUSION AND OTHER INTERMEDIATE-DENSITY PULSED CONCEPTS - THREE CHALLENGES FOR LOW-COST MAGNETIC FUSION POWER - ENABLING TECHNOLOGIES FOR FUSION POWER – A PERSPECTIVE FROM BERKELEY LAB ABBREVIATIONS ANNEX I: WORKSHOP PROGRAMME COMMITTEE ANNEX II: LIST OF PARTICIPANTS 1. INTRODUCTION 1.1. BACKGROUND International public support has pushed fusion energy development forward in the last several decades. The world's largest international scientific experiment, ITER, is under construction and is scheduled to achieve the first plasma by the end of 2025; Wendelstein 7X, a billion-dollar class stellarator in Germany, is producing experimental results that meet expectations; JT-60SA, a joint research tokamak device of the European Union and Japan, completed its construction in March of 2020, to name a few advances. However, in recent years, a number of innovative fusion devices have been proposed by private fusion enterprises that potentially can open up new approaches to faster commercialization of smaller fusion energy systems. Such new approaches have found over 1 billion USD total investments, as of 2020 [1], catalysing strides in the development of commercial fusion systems. 1.2. OBJECTIVE The International Atomic Energy Agency (IAEA) organized the First IAEA Workshop on Fusion Enterprises from 13 to 15 June 2018 in Santa Fe, United States of America (USA) to analyse recent scientific and technical developments and to understand how these can contribute to the commercialization of fusion as a reliable future source of energy. The objective of this publication is to provide a summary and contributed papers of this workshop, which gathered 42 experts, mostly from the USA but also from the United Kingdom (UK), Canada and China. 1.3. SCOPE This publication highlights several critical aspects to consider for the new pathways for fusion energy systems. It is intended as the first Agency publication that sketches an outline of a roadmap for the commercial development of alternative fusion energy systems, bringing together input of expert stakeholders from the diverse range of disciplines that are essential to fusion's commercial success. 1.4. STRUCTURE The First IAEA Workshop on Fusion Enterprises was organized into five sessions: Market (chaired by Ms Sehila M. Gonzalez de Vicente), Commercialization Pathways (chaired by Mr Eric Ingersoll), Reactor Core Designs (chaired by Mr Ryan Umstattd), Constraints (chaired by Mr Simon Woodruff), and the Technologies (chaired by Mr Thomas Weber). Sections 2 to 6 of this publication provide the summaries of each workshop session. In Section 2, the future markets for fusion energy systems are discussed in the context of the global utility market, taking into consideration climate change and projected economic growth. In Section 3, various strategies for mitigating risks for the development of fusion energy systems are presented. In Section 4, methods for designing, building, and cost estimations of fusion reactors are discussed. Section 5 considers other major conditions that need to be satisfied for fusion commercialization to be successful, including licensing, safety, and possible nearer term revenue sources from fusion neutron sources. In Section 6, the overview of the current state-of-the-art of fusion devices and enabling technologies is presented. Finally, in Section 7, general conclusions and suggestions for further work are presented that would support the new pathways for fusion energy systems. Contributed papers of the workshop participants follow the main text, organized by sessions. 2. MARKET 2.1. INTRODUCTION The global energy demand is expected to grow rapidly in the coming decades. The IAEA expects the world energy consumption to increase 18% by 2030 and 38% by 2050, at an annual growth rate of about 1% (Fig. 1) [2]. The U.S. Energy Information Authority (EIA) International Energy Outlook 2019 Reference Case projects a similar picture, with non-OECD nations calculated to account for 69% of the global energy consumption by 2050 [3]. Among all energy sectors, electricity use is projected to grow at more than double the pace of overall energy demand in the International Energy Agency (IEA)'s Stated Policies Scenario [4]. IEA predicts that renewable energy sources will become the technology of choice in the power sector, making up almost two-thirds of added global capacity in the year 2040 (Fig. 2), thanks to declining costs and continuation of supportive government policies. This is transforming the global power mix, with the share of renewable energy sources in electricity generation rising to over 40% by 2040, from 25% today. Nuclear demand falls in developed countries although it is predicted to make up 1/6 of total demand in developing countries [4]. While the global energy investment has fallen over the last three years from 790 to 750 billion USD/year, according to the estimates of IEA, investments in energy efficiency are increasing and are driven by government policy; total investment has shifted towards renewable energy sources and associated networks and flexibility, and clean energy investment is on the rise (globally by 13% in 2017, driven by US spending) [3]. Additionally, ESG (Environmental, Social and Governance) investment, also known as sustainable investment, is gaining momentum worldwide [5]. Many funds are starting to shift from what is considered stranded assets (i.e. fossil-fuel-related investments) to sustainable investments. As a result, corporate investments in new energy technology companies are growing strongly, reaching their highest ever level of just over USD 6 billion in 2017 [6]. Notably, Information Communication and Technology (ICT) companies are making strategic investments in energy technologies [6] to get a stake in potentially key new technology areas in the last few years, as shown in Fig. 3. Where does fusion fit into this context of the world energy market? In many States, the governments are investing primarily in fusion energy sciences, as part of a portfolio of technologies that may be deployed in the future [7]; fusion energy generation is a technology viewed with low technology readiness. A recent Electric Power Research Institute (EPRI) study also resonates with this view [8]. However, small programmes are starting in a few States to support the ambitions of private fusion enterprises, most notably the ARPA-E Programme by the U.S. Department of Energy [9]. 2.2. CLIMATE CHANGE AND FUSION ENERGY Climate change mitigation is one the central concerns of the global community today. To facilitate worldwide coordination toward solving this vast and complex issue, the Paris Agreement was adopted in 2015, signed by 197 parties under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC). The central aim of the agreement is to strengthen the global response to climate change to hold 'the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels' [10]. However, some States are struggling to develop clear strategies to achieve a drastic reduction in carbon dioxide emissions while providing an abundant amount of energy for continued economic growth. The World Meteorological Organization (WMO) currently predicts the global temperature rise to be 3 to 5 degree Celsius by the end of this century [11]. This projection indicates that current efforts might be insufficient to meet the 2.0-degree target or the more ambitious 1.5-degree target. The Intergovernmental Panel on Climate Change (IPCC) published projections of the temperature changes for several trajectories of the future greenhouse gas concentrations in its Fifth Assessment Report as Representative Concentration Pathway (RCP) (Fig. 4) [12]. These trajectories suggest that, in order to achieve the Paris Agreement goals, the global community has to follow RCP 2.6 and bring the greenhouse gas emissions down to zero by around 2070. Fusion energy may potentially contribute to achieving this ambitious global goal, similarly to other low-carbon energy sources such as Photovoltaic (PV), wind, hydroelectric, and nuclear fission (see Fig. 2). Earlier studies estimate that the life cycle greenhouse gas emissions for electricity generation with fusion (~10 g CO2-eq/kWh) might be about half of that of fission (~20 g CO2-eq/kWh) and about one-fifth of that of solar PV (~50 g CO2-eq/kWh, depending of the location) [14, 15]. While these estimates are early results, they indicate fusion energy could significantly reduce the greenhouse gas emissions in the power sector when commercialized. Policy makers around the globe are already planning long term strategies to achieve the Paris Agreements goals. For instance, the European Commission presented its long term vision in November 2018, in which the Commission drew a path for EU toward achieving the 1.5-degree target (Fig. 5) [16]. This illustrated trajectory presents a path toward achieving net-zero emissions by 2050 for the EU. As part of those efforts, the trajectory of greenhouse gas emissions from electricity generation (the power sector) are projected to be reduced to near zero by 2040. This implies that, to achieve the Paris Agreement goals, the energy transition to low carbon sources in the power sector would have to be completed as early as 2040. This publication discusses alternative and faster commercialization pathways for fusion energy systems with the aim of accelerating the commercialization of fusion to support achieving Paris Agreement targets. For fusion energy systems to make a significant contribution to the global energy transition, it is desirable that the technology becomes commercialized in the first part of the 21st century, with an initial installed capacity of a few GW by 2050 [17]. This is one of the key reasons why the fusion community must involve policy makers and governments in this effort as well as explore new ways of financial support to pave faster pathways toward commercialisation of the technology. 2.3. SUMMARY OF THE SESSION In this session, the global energy market was reviewed with a focus on electricity markets, considering projections presented in the preceding section. For the successful commercialisation of fusion energy, it is important for the fusion industry to learn the perspectives of the utility companies from the early stage of development. Perspectives from two utility companies in the U.S. were presented as case studies with the aim of helping to shape up fusion development roadmaps toward a faster and successful commercialisation. Four main points crystallised from the discussion. First, the importance of considering the balance of plant (BOP) for fusion power plant was raised, both to estimate costs accurately and to increase the credibility of fusion vendors. Secondly, it was suggested that the fusion community may have to engage with the licensing authorities for appropriate licensing frameworks at an early stage. Thirdly, it was recommended that the fusion community seek short-term, non-electricity production avenues (e.g., hydrogen production, neutron source, etc.) in parallel to the electricity production. Finally, the importance of politics in the development of technology was remarked upon. To summarise the session on market, the market potential for fusion energy is growing, driven both by the improvements in quality of life in non-OECD countries as well as by the needs to replace ageing power plants in OECD countries with low-carbon energy sources. While this publication primarily focuses on the electricity market, the possibility of other markets for fusion were also discussed to seek a faster commercialisation pathway. There are many applications for fusion energy systems – such as neutron sources and hydrogen production. Technical discussions on these applications are also presented as papers at the workshop (see section SESSION I: Market). The following workshop participants contributed to Session I: Eric Ingersoll (Managing Director, Energy Options Network) on the global market context for fusion energy in which cost reduction strategies are encouraged at an early stage in the technology development; Ryan Umstattd (Senior Commercialization Advisor, ARPA-E U.S. Department of Energy) on portfolio considerations in fusion energy development, in which the competitive landscape for fusion is outlined, and fusion adoption scenarios are presented. Further, perspectives of two utility companies are shared by Joseph Kowalczyk (Southern Company) and Thomas Fallgren (PNM). 3. COMMERCIALIZATION PATHWAYS Commercialization is the process of introducing a new product to a market. In other terms, it is the shift of a technology from the R&D phase to the generation of revenues. Various models can be considered for the commercialisation of a new technology. 3.1. FOUR COMMERCIALIZATION PATHWAYS Figures 6–9 present four possible commercialization pathways for fusion energy systems and their advantages and disadvantages: 1. In the 'moonshot' commercialisation pathway (Fig. 6), scientific break-even is aimed at a technical demonstration of the concept, before the technology is built as a power-producing system. Typically, a start-up seeks funding from numerous sources (angel investors, VC, government like ARPA-E) up to 100M USD. The next step towards power production is more expensive (500M+ USD), often via a Public-Private Partnership. - Pros: Very focused approach; investors cash-in early; shortest timeline to goal. - Cons: Needs firm venture capital support; revenues not expected before 10+ years; large initial capital risk. 2. 'Mega-fund' commercialisation pathway (Fig. 7): mode borrowed from pharmaceutical industry where investments are made across multiple companies in a single fund to diversify risk. - Pros: Focused approach; synergy among concepts; large business ballast. - Cons: Limited number of investors capable of investing billions of USD; long time to revenues; many distinct concepts required. 3. 'Spin-out' pathway (Fig. 8): start-ups develop underlying technologies (e.g. HTS materials, diagnostics, switches) to produce nearer-term revenues and achieve cash neutrality early. - Pros: Can focus on necessary technology; easier VC fundraising; revenues in shortest timeline. - Cons: Potential dilution of effort from core energy goal; complex IP management; longest timeline to fusion energy. 4. 'National emergency' model (Fig. 9): driven by government defense spending (e.g., Manhattan Project). - Pros: Very focused approach; less stress for short-term commercial returns. - Cons: Defense rather than civilian focus; commercial revenues may never happen; longest timeline to civilian energy. 3.2. TECHNOLOGY READINESS LEVELS The market readiness of a product is denoted by Technology Readiness Levels (TRLs 1–9) originally developed by NASA. Most fusion components are currently at TRL3 (proof-of-concept level), having not yet seen sufficient neutron fluences under reactor environments. 3.3. SUMMARY OF THE SESSION Combining multiple commercialization pathways is likely necessary. Investors manage risk by identifying a diverse portfolio of concepts and technologies. Spin-out technologies provide critical near-term cash flow and build technical capabilities, while staged investments and risk mitigation strategies accelerate commercial viability. 4. FUSION POWER CORE DESIGN The fusion power core sustains the fusion reaction and captures energetic D-T neutrons in a tritium-breeding blanket that transforms kinetic energy into heat while breeding tritium. The primary coolant is pumped to a heat exchanger to extract thermal energy. Outside the nuclear island/balance of plant (BOP), designs generally resemble conventional pressurized water reactors (PWR). 4.1. SUMMARY OF THE SESSION Fusion power core designs have historically centered around ~1 GWe plants using Gen IV Cost Account Structures (CAS) to compute Total Direct Cost (TDC), Total Capital Cost (TCC), and Levelized Cost of Electricity (LCOE). Modern trends explore smaller (~100 MWe) modular units that depart from traditional economies of scale, aiming to recover competitiveness through factory fabrication, mass manufacturing, and shorter construction lead times (IDC reduction). 5. CONSTRAINTS OF FUSION ENERGY SYSTEMS Key constraints include licensing, safety, tritium management, materials activation, and radioactive waste handling. While inherently safer than fission (rapid shut down, no runaway chain reaction, low decay heat), fusion systems must handle tritium inventory safely, meet regulatory dose limits (<1 rem at boundary during accidents to avoid off-site evacuation plans), and address low-level waste (LLW) volumes and potential Greater-Than-Class-C (GTCC) classification. 5.1. SUMMARY OF THE SESSION Proactive and early engagement with regulatory bodies (such as the US NRC) is crucial to establish appropriate risk-informed, non-prescriptive regulatory frameworks for commercial fusion rather than applying rigid fission-based regulations. 6. TECHNOLOGIES OF FUSION ENTERPRISES Fusion approaches fall broadly into: - Magnetic Fusion Energy (MFE): low density, steady-state (Tokamaks, Stellarators, Spheromaks, Cusp/Mirrors) - Magneto-Inertial Fusion (MIF): intermediate density, pulsed/liner compression (MagLIF, FRC compression, Z-pinches) - Inertial Fusion Energy (IFE): high density, pulsed (Laser direct/indirect drive, Heavy Ion Fusion) 6.1. GOVERNMENT INVESTMENT IN FUSION TECHNOLOGIES Historically segregated between DOE Office of Science (MFE) and NNSA (ICF), with emerging intermediate-density concepts funded via ARPA-E (ALPHA programme) and private venture investments. 6.2. SUMMARY OF THE SESSION Key enabling technologies include high-temperature superconductors (HTS/REBCO), high-repetition pulsed power, advanced laser optics and drivers (such as StarDriver), and scalable RF linacs using micro-electromechanical systems (MEMS). 7. CONCLUSIONS The first IAEA Workshop on Fusion Enterprises emphasized key findings and follow-up actions: (a) Fusion enterprises need to engage early with national regulatory authorities to establish clear, risk-informed regulatory frameworks. (b) International coordination should be strengthened regarding safety, licensing standards, and radioactive waste management. (c) The fusion community should actively communicate fusion's role in global climate change mitigation by 2050 to attract ESG/sustainable capital and utility partners. (d) Expand public-private partnerships across core concepts and supporting enabling technologies. (e) Actively explore international and non-electricity market opportunities (such as industrial heat, synthetic fuels, medical isotope production, and neutron sources). PAPERS PRESENTED AT THE MEETING (Proceedings): - Session I (Market): The Global Market Context for Fusion Energy (E. Ingersoll); Portfolio Considerations in Fusion Energy Development (R. Umstattd); Perspectives on Fusion Energy from Utility Companies (J. Kowalczyk, T. Fallgren). - Session II (Commercialization Pathways): A Portfolio Approach to Funding and Commercialization (E. Ingersoll); General Fusion's Approach to Commercialization (D. Plant); Reducing Risks to Commercial Fusion (M. Handley); Spinoffs from Early Stage Fusion Companies (S. Wurzel); History Lessons from Du Pont for the Successful Development of Future Public-Private Partnerships in Fusion Enterprises (G. Goodman); Fusion Neutron Source as a Developmental Step to Commercialisation (J. Anderson); Fusion as a High-Temperature Heat Source for Fuel Production (S. Takeda). - Session III (Fusion Power Core Design): Fusion LCOE: Basis and Methodology (R. Miller); Constraints Placed on Radial Build Definition Due to Tritium Breeding and Shielding Requirements (L. El-Guebaly); Summary of ARPA-E's 2017 Fusion Costing Study (S. Woodruff); Pre-Conceptual Fusion Power Plant Studies – What are the Parts? (C. Kessel). - Session IV (Constraints): Tritium Fuel Cycle Safety (W. K. Hollis); Commercializing Fusion: The Legal Perspective (A. Roma); An Overview on the Safety of Fusion Energy Focused on the U.S. Frame (L. El-Guebaly). - Session V (Technologies): Overview of Magnetic Confinement Fusion Energy Concepts (D. Brunner); Overview of Inertial Fusion Energy System Concepts (M. Campbell); Overview of Magneto-Inertial Fusion and Other Intermediate-Density Pulsed Concepts (S. Hsu); Three Challenges for Low-Cost Magnetic Fusion Power (P. Turchi); Enabling Technologies for Fusion Power – A Perspective from Berkeley Lab (T. Schenkel).