Fusion energy faces a new test that has nothing to do with physics

Fusion energy has cleared major scientific hurdles. Now researchers have a new way to determine whether future power plants can actually make money.

Scientists spent the last decade proving fusion energy works as a matter of physics. The next hurdle isn’t scientific, but financial. 

A new study lays out a framework for figuring out whether fusion power plants can actually turn a profit in a competitive energy market.

The approach treats the economics with the same rigor physicists have long applied to the plasma itself.

The research was led by MIT professors Dennis Whyte and Andrew W. Lo, both affiliated with Rutherford Energy Ventures and MIT’s Plasma Science and Fusion Center. 

Fusion power faces a financial test

Whyte, a professor of nuclear science and engineering at MIT and a leading figure in the field, argues fusion research has reached the point where money deserves the same scrutiny as the science.

“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 goal, Whyte says, is to build “this framework, where all the economics are clear, and then we understand what it would mean” for any fusion power plant, regardless of the specific technology behind it.

Borrowing an idea from physics

Fusion energy works by recreating the reaction that powers stars. It fuses light atomic nuclei together to release energy, typically inside a plasma confined by magnets or triggered by powerful lasers.

In 2022, researchers at the National Ignition Facility in Livermore, California, achieved a fusion reaction with positive energy gain, a genuine scientific milestone.

Venture capital has since poured into the field, even though a commercially viable plant remains a very different challenge.

The new framework draws direct inspiration from the Lawson Criterion, a formula developed in the 1950s. It describes the combination of temperature, plasma density, and confinement time needed to produce net energy from fusion, regardless of a reactor’s size.

That formula calculates “plasma Q,” the ratio of fusion power produced to the power required to sustain the reaction.

“The Lawson Criterion describes the scientific success of energy gain from fusion plasmas, while our framework generally describes economic Q, which is the ratio of capital gained to that expended,” Whyte explained.

The numbers behind fusion economics

The framework lays out ten parameters for judging whether a fusion power plant makes economic sense.

Some are physical, covering how much energy a plant consumes versus produces. Most fall under engineering and economics: construction costs, power density, how efficiently fusion power converts into a sellable product, and how durable the conversion components are.

The exercise centers on what it takes to achieve a net-positive economic return, applied to practical power plant design.

Crucially, the framework doesn’t play favorites among the many competing approaches for generating and containing fusion energy.

It’s “completely agnostic to whatever fusion concept you use, because the physical reality of fusion is that you expend money to build the capability to produce fusion power,” Whyte said.

Nor does it depend on reactor size, since every input can be scaled to whatever project or output level is being evaluated.

“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,” Lo said.

Putting a price on fusion energy

Lo, a professor of finance at MIT Sloan School of Management, points to a persistent gap in how the field approaches costs. 

Researchers track the expenses of basic experiments closely, but estimating what an actual commercial fusion reactor will cost to build and run is a fundamentally different, less mature exercise.

“It’s challenging to reduce complex scientific and engineering requirements to economic consequences,” Lo said. 

“But if we don’t do that, we’re not going to get the funding we need to achieve the impact we want.”

Investment in fusion is growing

That gap matters more now as fresh investment pours into fusion. Commonwealth Fusion Systems, an MIT spinoff Whyte co-founded, recently secured a new billion-dollar funding round and hopes to open its first plant in Virginia sometime in the 2030s.

Lo acknowledges that the industry’s first commercial reactors will involve real uncertainty. But he sees reason for optimism in how other deep-technology industries have evolved once they got off the ground.

“This pattern of learning by doing exists in all deep technology sectors,” Lo said, pointing out that sequencing a human genome costs roughly a million times less today than it did about 25 years ago.

“We’re going to see the same thing, but maybe not to the same degree, in fusion energy.”

Lo has spent years helping scientific research secure financial backing in biotechnology. He is now launching a new MIT Sloan program called CATAPULT, aimed at giving researchers better tools for turning their work into products.

On fusion specifically, he’s confident the moment for this kind of analysis has arrived. “It’s pretty clear that economic viability is something we can start assessing now.”

Giving fusion energy a price

Thousands of decisions go into building a commercial fusion plant, and the authors believe their framework finally offers a way to quantify what any one of those decisions is actually worth.

“When you’ve got a framework to evaluate it in a quantitative way, it tells you about the literal worth of making a particular design decision,” Whyte said.

“That seems to me at this moment of fusion development absolutely critical, and what we’ve been missing.”

The study is published in the Journal of Fusion Energy.

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