Academic Review 2024

57 ACADEMIC REVIEW 2024

Nuclear fusion economics At present, nuclear fusion is not being used as a commercial source of energy. This is because currently fusion reactors need more energy put in than the energy they produce. As energy can be considered as an essential good, the demand for it in the UK is rather high and inelastic. This implies that if a firm can supply energy at a competing quantity, there will always be revenue to be made. The entire purpose of trying to make fusion work is to supply larger amounts of energy at a lower price. Not only will fusion be beneficial for businesses in industry, but there will also be many benefits to society. The first advantage of fusion over fission has to do with the risk of market failure. When it comes to the byproducts, there is no radioactive waste to deal with in fusion reactors. This means that the risk of negative externalities to the environment due to radiation contamination is completely eliminated. In addition, there is no possibility of nuclear meltdowns. This is because fusion is not a chain-based reaction, making explosions impossible (International Atomic Energy Agency, 2022). For these reasons, fusion reactors are definitely more favourable than today’s fission plants as the risk of catastrophes and market failure is reduced to zero. When it comes to different approaches to fusion, some of these reactors are extremely expensive to build – such as the JET Tokamak in Oxford estimated at $440 million. Another example of this would be the ITER experiment in France, which originally was planned to have cost $5 billion, whereas now it is estimated at around $22 billion and the cost may even go much higher (Robert & Roger, 2021). This is well over 10 times more expensive than a fission reactor. Although ITER is technically still an “experiment”, the cost of its construction is making it far from being viable for commercial use. The funding required almost defeats the whole purpose of its economic practicality. However, there are other businesses such as First Light who have taken an approach to achieve fusion using more basic and cheaper technology. It is unknown what their status is today, but we do know that they did achieve fusion more cheaply than anyone else has in 2021 by using a projectile-based method (Miles, 2022). There are other rivals in this race to achieve cheap fusion such as Helion in the US who also show very promising progress. Most of these organisations have claimed that their reactors will be ready for commercial use by the 2030s (Future, 2022) (Jones, 2022). This is why I believe that if we do have a commercial fusion

Output will drop. This will allow firms in any industry to supply a higher quantity at each price, and therefore the SRAS curve shifts down and to the right as seen on figure 3 (EconowaughAP, 2015). Q Q P The rollout of this new generation of power plants will have many significant effects on the UK as a society. Energy is involved in almost every single aspect of the life in the 21st century. This affects the cost of living, the cost of producing, the cost of consuming and almost any type of cost in terms of economics. Once fusion is available, energy will become more abundant in our society and eventually around the world. This abundance of energy will reduce its price, and this will have many spillover effects. The first would be that costs of production P MSC construct these new reactors compared to the fission plants we have today. Not only will they be easier to construct, but they will also be a lot more worth the investment compared to a fission reactor. This is because fusion releases four times more energy than fission, and with this higher efficiency firms will be able to supply more energy at a cheaper price and therefore their profit will increase. MPC MPB = MSB breakthrough, research groups such as First Light and Helion will be the ones responsible for it. Once fusion has been commercialised it will certainly be cheaper and faster to construct fusion plants rather than fission plants. The reason construction of these reactors will be much faster is due to the extremely low risk involved in the fusion reaction itself. In addition to this, some types of fusion reactors such as Helion will not require access to open water. This is because their cooling system does not rely on using water vapour to drive turbines. These factors will significantly cut the time needed to plan and

Costs & Bene ts

Figure 3: Increase in Aggregate Supply Diagram

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