Significant Barriers Remain to Commercializing Nuclear Fusion

Some world regions are struggling to develop clear strategies for achieving substantial CO2 emissions reductions while providing energy supplies sufficient for sustained economic growth. The World Meteorological Organization currently predicts that global temperatures will increase by 3° C to 5° C by the end of the 21st century. This projection suggests that current efforts may not be enough to achieve either a 2.0‑degree global climate target, or the more ambitious 1.5-degree goal.

Nuclear fusion offers an inexhaustible supply of energy and could be a solution. Enormous global effort is going into making the technology a reality, but it is still not yet economically feasible and has not been commercialized. Even if the promising International Thermonuclear Experimental Reactor (ITER) project is successful, the technology is not assured of being economically competitive, considering the reactors net energy gain and the levelized cost of electricity (LCOE). For nuclear fusion to be competitive, it must reach grid parity, which only happens when its LCOE is equal to or below the price of power on the grid.

This Guidehouse Insights Strategy Insight reviews the significance of nuclear fusion in tackling the growing demand for green energy. It explains the differences between nuclear fission and fusion and looks at various technology approaches, recent breakthroughs in the fusion industry, and its persistent lack of traction, despite decades of effort. The study also examines the industry's financial support from private and public funding, its major challenges, and offers key recommendations for stakeholders.