I posted this on the RB SCTY board. I did not know that fusion was a possibility in the near future. If it works then it will truly transform our world. Not only would unlimited, cheap (almost free) energy affect many of our investments, but I think it would also lead to an era of prosperity on a scale that the world has never seen.
SCTY business is built on their ability to offer residential customers of electricity a lower cost per kW than what the utilities charge. It’s all based on the current cost structure of the utilities which is based on the cost to generate power. The cost of solar has been dropping and is approaching the cost of power generation by other means (fossil fuels). If fusion technology ends up working, it could replace fossil fuels in existing power plants. The rest of the infrastructure (the grid) would remain unchanged. In short, the primary effect on the utilities would be to dramatically lower their cost to generate electricity. Therefore, the threat is that Solar City would no longer have a lower cost than the utilities to generate power which would mean that it could no longer incentivize customers to adopt solar.
The investment in SCTY is based on long term contracts (20-30 years) with customers and on the notion that solar costs will continue to decline while the utilities cost structure (their cost to generate power) will continue to increase. This all falls apart if an energy source that is cheaper than solar is developed and can be easily implemented by the utilities. In summary, a bet on SCTY is a bet that solar will be a dominant energy source of the future for many years to come.
5 years to a prototype sounds like a lot of fusion Real Soon Now talk that we have been hearing for years now. When one has to put more energy in than one gets out, it is not yet economically exciting. Will it happen some day … I sure hope so, but I’m not going to alter my current investment strategy based on it until they clearly get closer to something practical.
I posted this on the RB SCTY board. I did not know that fusion was a possibility in the near future. If it works then it will truly transform our world. Not only would unlimited, cheap (almost free) energy affect many of our investments, but I think it would also lead to an era of prosperity on a scale that the world has never seen.
Thanks Chris. Incredibly interesting video. They seem really serious about it. (By the way, the reason the link didn’t transfer correctly is that you can’t just copy one of these links off a MF post as the end is cut off. You have to go back to the original whole link. Just for your future reference.)
IF fusion works not just solar, but all utility companies are dead. But the big question is “IF”.
It’s been 3 decades and since I was a kid I have heard possibilities of breakthrough in Fusion. But it never comes by. I will be skeptical till they actually show it working and an ability to scale it.
A analogy from the battery industry - not a week goes by without some article somewhere about a big breakthrough. It has been that way for many many years. But still the core technology has moved very little. Elon Musk correctly said - it is one industry with the biggest BS. There will be many claims floating around but nobody ever sends a prototype.
Nuclear fission reactors mostly did not lower the cost of electricity. In my area they actually increased the cost of electricity. I see no reason why fusion will be different. The main reason for interest in fusion is environmental and availability (they can be put where non nuclear sources are scarce and expensive) Not cost, because the first ones will likely cost more than fission plants, already so expensive that they are mostly non competitive to fossil fuel.
.In any case it is many years away. Umpteen companies have promised practical fusion but none have delivered . It does make nice PR.
I don’t want to sound skeptical - actually, I’m very skeptical. I’ve been hearing about cold fusion for longer than I can remember - seriously, longer than I can remember - at least 50 years. To date, nothing. My guess is that this too will amount to nothing, or at best nothing competitive.
I would really like to be wrong. I’ve only got a small position in SCTY which would obviously be damaged by this technology. But this goes way beyond my portfolio. Cheap, clean energy would be so impactful in so many ways it’s hard to fathom. Almost all of them positive. No, it wouldn’t eliminate fossil fuels, but it would pretty much eliminate coal, the dirtiest of all fuels. More electric ground vehicles would follow, but air transportation is still pretty much stuck with kerosene (there’s been some successful experimental zero-carbon fuels from algae and other plants, but nothing large scale).
No doubt, there would be strong resistance from some political factions both here and abroad. Fusion would entirely alter the political landscape of Middle East. I can’t think of a more disruptive technology.
I’ve been hearing about cold fusion for longer than I can remember - seriously, longer than I can remember - at least 50 years.
I suspect this was merely a slip of the keyboard but there is an important difference between fusion and cold fusion, which was first proposed in 1989: http://en.wikipedia.org/wiki/Cold_fusion
Very few people have any faith in cold fusion at this point and while I agree with you that hot fusion not going to be economically viable any time soon it is not theoretically impossible, merely really really hard.
Yes Sean - I meant fusion, not specifically cold fusion. Just the same, I’m not holding my breath waiting for economically viable fusion of any variety. While, yes, I truly wish it were viable and implemented, sooner rather than later despite how it might adversely impact my investments (which I find impossible to evaluate anyway).
my conclusion from the posts Even assuming the best scenario, it will be 50 years or more before significant fusion power is delivered to the grid. By "significant "I mean more than one (pilot) plant delivering substantial amounts of electricity at competitive non subsidized prices.
IMO the nascent fusion industry is more threatened by solar than the other way around. Because in 50 years fusion will not be competing with today’s solar technology but but with solar technology improved by 50 years worth of growth in technology and scale. Where the power is fusion (sun) but where there are no operating costs or employee salaries to be paid.
And don’t forget the fear factor. Virtually no one (other than Ronald Reagan) has ever objected to some passive solar panels, but I don’t care how safe the technology is, there will be loud cries of NIMBY to any kind of nuclear power plant anywhere within a few hundred miles of the backyard in question.