Digital technologies have disrupted the structure of markets on an unprecedented scale and scale. Today there is yet another wave of innovation emerging, and that is the decarbonization of the global economy.
While governments still lack the conviction to truly tackle the climate crisis, the general direction is clear. The price of carbon in Europe has risen from less than $ 10 to over $ 50 per tonne. Shell suffered a resounding defeat by a Dutch court. The major blackout in Texas earlier this year revealed the fragility of the existing energy supply even in a highly industrialized country. We urgently need to invest more in the development and deployment of reliable and clean electricity generation technologies to make decarbonization a reality.
Forward thinking investors understand this. Global investments in low-carbon technologies reached $ 500 billion in 2020, according to Bloomberg. Renewable energies accounted for around $ 300 billion, followed by the electrification of transportation ($ 140 billion) and heating ($ 50 billion).
However, we are still far from the finish line. According to the International Energy Agency, global CO2 emissions this year are expected to jump 1.5 billion tonnes from 2020 levels. And more than 80% of global energy consumption is always made up of coal, oil and gas.
Fusion, the process that powers the stars, could be humanity’s cleanest source of energy.
This is why we must continue to support new technologies with disruptive potential. Nuclear fusion is particularly promising. Fusion, the process that powers the stars, could be the cleanest source of energy for humanity. We are already indirectly harnessing the power of fusion through solar energy. Being able to build fusion reactors would give us an âalways-onâ version, independent of weather conditions.
But why finance the merger, given that we do not yet know how to do it? First, it is not a choice proposition. We can afford to develop renewable energy and study new forms of energy production at the same time, as these – at least at this early stage of development – will require a relatively insignificant amount of money. The last of the US government plan is to devote 174 billion dollars over 10 years to the electrification of automobile transport alone, so investing 2 billion dollars to create a fusion power plant seems feasible.
Second, we are on the verge of needing a lot more electricity than ever before. Global demand for carbon-free energy sources is expected to triple by 2050, driven by increasing urbanization, electrification of industrial processes, loss of biodiversity and increasing energy consumption in emerging markets.
Third, there has been tremendous advancement in the necessary supporting technologies. Superconducting magnets for the approach to magnetic confinement fusion have become much cheaper, lasers for inertial confinement fusion have become much more powerful, and breakthroughs in materials science have made nanostructured targets available, which allow the ‘use of completely new approaches to fusion, such as the low neutron fuel pB11.
Fortunately, there is a growing number of entrepreneurial efforts from world-class teams to try and build the merger. At least 25 startups around the world are currently targeting the merger, tackling the problem with a wide range of technologies. The amount invested in private merger companies around the world has increased tenfold to nearly $ 1 billion in 2020, according to Crunchbase.
The benefits of a successful merger are almost limitless. The clean power generation market represents a trillion dollar opportunity. According to the Materials Research Society, around 26 TW of primary energy capacity need to be built globally between 2030 and 2050 to meet growing global energy needs. Just 1 TW of capacity will generate $ 300 billion in revenue, and a 15% market share from 2030 to 2050 would generate more than $ 1 trillion in annual revenue.
We need a lot of shots on goal here, which is why Susan Danziger and I have already personally invested in three different fusion startups (Zap Energy and Avalanche in the US and Marvel Fusion in Germany).
But it’s not primarily the potential for financial growth that drives us: there is an opportunity to make an indelible difference in the trajectory of human history. If even a small fraction of the great wealth accumulated by entrepreneurs and investors over the past two decades is invested here, the likelihood of a successful merger increases dramatically. This, in turn, will unlock much more investment from venture capital funds and governments.
Now is the time to get fully into decarbonization. Funding for the merger with its breakthrough potential must be part of this effort.