The quest for clean, baseload power sources to meet growing global energy demands has positioned fusion energy as a leading technology. Unlike nuclear fission, fusion offers a fundamentally different approach to energy production, with significant advantages in safety, fuel availability, and waste management.
Fusion is the process of combining two light atomic nuclei into a single, heavier nucleus. The most common fusion reaction being developed involves isotopes of hydrogen, deuterium and tritium, which fuse to form helium and a neutron, releasing a tremendous amount of energy. Deuterium can be extracted from seawater, and tritium can be bred from lithium or even obtained from certain types of fission reactors, making fusion fuel abundant.
Nuclear fission works by splitting heavy atomic nuclei such as uranium-235 into smaller nuclei. This process also releases energy, along with additional neutrons that can trigger more fission reactions in a chain reaction. Fission is well understood and commercially viable, but it carries drawbacks like long-lived radioactive waste and potential for meltdown. Fusion generates no high-level waste like spent nuclear fuel and has no chain reaction. If the plasma containment fails, the reaction simply stops. This makes it inherently safe - there’s no risk of a catastrophic meltdown.
Despite its advantages, controlled fusion has remained elusive for over 70 years. The main challenge is achieving and maintaining the conditions required for a net energy gain, commonly referred to as Q>1.[1] This refers to the ability to produce more energy from the reaction than it takes to sustain it. While the science is challenging, the progress made in recent years is a cause for optimism. When commercial fusion power becomes a reality, it will redefine the global energy landscape and play a central role in combating climate change.
In December 2022, the U.S. National Ignition Facility (NIF) achieved a historic milestone: it generated more energy from a fusion reaction than the lasers delivered into the fuel pellet—an achievement known as “ignition” or energy gain.[2] This was a major scientific breakthrough, but there’s still a long road to turning it into a reliable, grid-scale power source.
With over 50 fusion startups competing worldwide, the race to develop the first viable fusion power plant is more intense than ever. [3] Dozens of startups and national labs around the world are now competing to bring fusion to market. Governments are investing billions in large-scale experimental reactors like ITER, which aims to demonstrate sustained fusion by the 2030s.[4] Meanwhile, the private sector is accelerating progress with smaller, more agile designs and faster innovation cycles.
With the private developers moving closer to scientific breakthroughs, fusion continues to gain the attention of sectors in the greatest need of energy. Fusion has caught the attention of the data center industry given their ever-growing demand for clean, baseload power; tech giants have already entered into power purchase agreements with fusion developers despite the technology not yet being perfected.[5]
As with any clean energy project, development of fusion devices will require a host of insurances to support the bankability and success of each project. With differing regulatory requirements than fission, fusion facilities are expected to bypass many regulatory hurdles that lengthen commercialization of fission reactors; this means construction can, and has, begin earlier than advanced and small reactor technologies. The opportunity for insurers to engage in the construction of fusion facilities exists today along with other lines of business to support commercialization, including decommissioning assurance in support of early licensing, surety bonds, and liability coverages for early delivery of tritium.
Fusion energy represents a significant step towards a cleaner energy future, offering stable, around-the-clock power with minimal environmental impact. As demonstration projects progress and power purchase agreements grow, the insurance community's support will be crucial. With its potential to harness the power of the stars, fusion energy is poised to redefine the global energy landscape.
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
