In August 2023, U.S. Department of Energy scientists successfully replicated a historic nuclear fusion reaction, seemingly confirming the net energy gain in a fusion experiment first reported in December 2022 was no fluke. The DOE called the news “a major scientific breakthrough decades in the making,” and it’s understandable why investors are excited about the opportunities nuclear fusion could create. These historic nuclear fusion reactions produced more energy than the laser energy used to generate the reactions, creating the possibility that fusion can be used to produce clean energy free of greenhouse gasses and radioactive waste.
Unfortunately for investors, there are limited options for investing in nuclear fusion companies at this point.
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“Turns out, investing in fusion is only slightly less difficult than creating energy from fusion itself,” says David Callaway, founder and editor-in-chief of Callaway Climate Insights.
“Going through a private equity fund or venture fund, if you are an accredited investor, is one way to do it.”
While the average retail investor does not have access to private equity funds, there are still some publicly traded companies positioned to benefit from demand for lithium as a feedstock to create the tritium used in fusion reactions, as well as investments in private fusion technology companies or the transition of legacy energy businesses to renewable energy sources. While the nascent technology shows some promise, investors should keep in mind that fusion technology is still a long way from commercial viability.
While pure-play nuclear fusion stocks are off the table for now, here are five ways to invest in nuclear fusion:
— Cenovus Energy Inc. (ticker: CVE)
— Albemarle Corp. (ALB)
— Chevron Corp. (CVX)
— Eni S.p.A. (E)
Cenovus Energy Inc. (CVE)
Cenovus Energy is a Canadian integrated oil and gas company, with operations in Canada, the U.S. and the Asia-Pacific region.
Cenovus first invested in General Fusion back in 2014. General Fusion is a Canadian company developing magnetized target fusion, or MTF, technology with the goal of bringing zero-carbon fusion energy to market by the early to mid-2030s. In August 2023, General Fusion announced a new MTF machine that will be built at the company’s new Richmond, British Columbia headquarters that is designed to produce fusion conditions of more than 100 million degrees Celsius. General Fusion says the new machine will be up and running by 2025 and is on track to achieve scientific breakeven — the point at which the energy created by the reactor equals the amount required to maintain it — by 2026.
Albemarle Corp. (ALB)
Albemarle is a specialty chemical company that produces materials used in several markets, including petroleum refining, energy storage, consumer electronics and polymers. Albemarle also just happens to be the world’s largest lithium producer, which many investors associate with electric vehicles and lithium-ion batteries.
However, lithium is also a critical element of the nuclear fusion process, so commercial-scale fusion energy production would likely generate increased demand for lithium. Lithium-6 isotopes provide tritium used in the deuterium–tritium fusion process.
Even if commercialization of fusion takes longer than investors hope, experts still anticipate EVs alone could trigger a global lithium shortage by 2025, according to BMI Research, a Fitch Solutions research unit. The more undersupplied the lithium market becomes, the higher lithium prices and Albemarle’s profit margins potentially rise. Therefore, green energy investors have twice the reason to love Albemarle.
[SEE: 7 Clean Energy ETFs to Buy Now]
Alphabet is one of the world’s largest online search and advertising companies and is the parent company of Google and YouTube. In July 2022, Alphabet invested in TAE Technologies, another company working toward the goal of producing commercial-scale fusion energy by the early 2030s. However, Google and TAE’s partnership actually dates back to 2014 when the two companies first partnered to apply machine learning to advance plasma research.
Investors got a preview of what nuclear fusion could mean for Alphabet’s share price when the stock jumped 5% the day the initial fusion breakthrough was announced in December 2022. In a fusion arms race that involves cutting-edge tech, Alphabet’s industry-leading artificial intelligence technology could give TAE the edge in cracking the fusion code in the next several years.
Chevron Corp. (CVX)
Chevron is a global oil major that operates exploration and production, refining and marketing, and petrochemical businesses. Chevron also participated in the $250 million funding round for TAE Technologies in July 2022. In addition, Chevron has invested an undisclosed amount in Zap Energy, a startup developing a next-generation modular nuclear reactor with the goal of producing commercially scalable fusion.
Clean energy investors often see legacy oil and gas companies like Chevron as obsolete dinosaurs, but Chevron is taking an aggressive approach to position itself for a green future. In addition to its investments in nuclear fusion, Chevron has pledged to invest $10 billion into clean energy technology, such as renewable fuels, geothermal energy and carbon capture.
While Chevron investors wait for nuclear fusion technology to advance, they can also enjoy Chevron’s 3.7% forward dividend yield.
Eni S.p.A. (E)
Eni is an Italian oil major that operates in 62 countries and generates 2,553 gigawatt-hours of energy from renewable sources. Eni was an early investor in fusion, taking an ownership stake in Commonwealth Fusion Systems — a spin-out of the Massachusetts Institute of Technology — in 2018. In March 2023, Eni announced a new collaboration framework agreement with CFS aimed at accelerating the industrialization of fusion energy.
Eni claims CFS has the “fastest pathway to commercial deployment of fusion energy” and predicts CFS’s first commercial power plant based on magnetic confinement fusion will be up and running in the early 2030s.
Fusion technology is a part of Eni’s long-term goal of becoming completely carbon-neutral by 2050. The first step in that long-term goal will be getting its upstream business to net zero by 2030.
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Nuclear Fusion: 5 Ways to Invest in the Energy Breakthrough originally appeared on usnews.com
