Nuclear Fusion: Explosive Hype or the Next Investment Opportunity?

The U.S. Department of Energy recently announced1 a major breakthrough in nuclear fusion. Scientists at the National Ignition Facility at Lawrence Livermore National Laboratory in California used 192 lasers2 to direct enough energy at a pellet containing deuterium and tritium — heavier forms of hydrogen — in order to fuse them. The fusion produced 50% more energy2 than was used to create it. This marks the first time in history that a net gain in energy has been achieved from a nuclear fusion reaction.

This point at which energy in equals energy out is known as scientific breakeven and it’s a puzzle scientists have been working on for over 60 years2. Nuclear fusion, the type of energy that powers the sun and stars, is the opposite of nuclear fission, which is the type of nuclear energy created at power plants today.

Surpassing scientific breakeven represents one of the greatest scientific breakthroughs this century as nuclear fusion has the immense potential to solve our energy crisis — if it’s ever able to be commercialized. If so, nuclear fusion3 would provide carbon-free energy without air pollution or risk of a meltdown and with far less toxic waste than nuclear fission produces. It has the potential to generate4 four times more energy than fission and four million times more energy than oil or coal. With just a few grams of reactants, nuclear fusion could theoretically provide enough energy for one person for sixty years4.

In response to the DOE’s announcement, former US Energy Secretary under the Obama administration, Ernest Moniz, stated5 that nuclear fusion could make its way onto the power grid within the next decade. Moniz also sits on the board of TAE Technologies, a nuclear fusion startup that has been researching commercialized solutions for nuclear fusion since the late 1990s. At the same time, President Biden responded5 by setting a goal of commercializing a fusion reactor within a decade. The director of the lab in California says5 these timelines are overly optimistic.

While reaching scientific breakeven is no small feat, the true goal if nuclear fusion is to be commercialized is for scientists to reach “wall-plug breakeven3,” or the point at which the output energy equals the total input energy for the entire reactor.

The groundbreaking nuclear fusion reaction2 at NIF produced 3.15 megajoules of energy from 2.05 megajoules of laser energy. But, roughly 300 megajoules of energy was needed to power the lasers. In other words, nuclear fusion is still at least one-hundredth of where it needs to be before it’s viable for the energy grid. Many researchers6 doubt the use of laser-derived fusion as viable for commercial fusion energy to begin with. And even if it is viable, capsules are currently very expensive and the reaction requires lithium — a finite resource — and short-lived types of hydrogen that would need to be produced on-site.

Given these barriers, there may be far more hype than substance surrounding nuclear fusion and its near-term potential. While it may be tempting to invest in nuclear fusion in light of this scientific breakthrough, we believe it is important to look at the fundamentals of the industry and consider less risky alternatives already positioned with the potential to provide return, growth, and impact.

Over the last decade, solar costs have declined 85%7 while wind costs have declined 45%7. Today, building new wind and solar infrastructure costs less7 than adding the equivalent capacity in coal or gas in two-thirds of the world. Considering how far nuclear fusion still has to go, we don’t think it will be our solution to decarbonizing the economy in the timeframe needed to prevent the worst effects of climate change from occurring. Instead, we believe expanding cheap wind and solar is our best bet for achieving our climate goals. 

TrueShares Eagle Global Renewable Energy Income ETF (RNWZ) is an actively-managed ETF that seeks to provide exposure to renewable infrastructure companies with stable cash flow. Unlike nuclear fusion, we believe RNWZ’s holdings are viable and gaining significant market share today, with plenty of innovation to satisfy even the most curious of investors. 


The Fund may not achieve its objective and/or you could lose money on your investment in the Fund. The Fund is recently organized with no operating history for prospective investors to base their investment decision which may increase risks. 

Because the Fund invests in Renewable infrastructure Companies, the value of Fund shares may be affected by events that adversely affect companies in that industry. These can include contract counter-party defaults, adverse political and regulatory changes, poor weather conditions for renewable power generation, falling power prices, losses on financial hedges, technological obsolescence, competition and general economic conditions.

Focusing on environmental factors may forgo opportunities that might otherwise yield favorable investment results.