According to the report, which examines the potential for fusion in the UK, the government has estimated the 2040 levelised costs of electricity (LCOE) for the UK for standalone offshore wind, onshore wind and large-scale solar of £40/MWh, £44/MWh and £33/MWh respectively.
The £60-£70/MWh cost for fusion “provides the first target for nuclear fusion to be economically competitive”, the report concludes. It says fusion is uncompetitive today with other low-carbon options available in the UK – including wind and light-water nuclear fission reactors. The reason for this is the combination of a relatively high construction cost (£5,887/kWe) and a low capacity factor (56%).
The International Energy Agency has put the LCOE for advanced nuclear at $63/MWh (about £45/MWh).
With an improved, large fusion design the construction cost decreases to £4,135/kWe and the capacity factor to 75%. These two effects improve the fusion economics, decreasing the LCOE into the range £60 to £97/MWh. For a small fusion design, the energy cost of 75 units is in the region of £69- £99/MWh – a range that is comparable to 10 units of large fusion reactors and also the energy cost of LWR fission reactors.
LCOE captures both capital and operating costs that need to be covered. It is essentially the long-term price at which the electricity produced by a power plant will have to be sold at for the investor to cover all their costs.
The report says the €20bn International Thermonuclear Experimental Reactor (Iter) project in France should demonstrate the feasibility of fusion and provide some useful engineering design signals by the middle of the 2030s for the fusion power plants that follow.
Some key technology and design integration issues for these power plants will still be outstanding and be addressed by parallel development projects.
Estimates of costs for fusion energy at this stage of development are “inevitably uncertain”, the report concludes. Without a breakthrough in capital costs, it may be difficult for early large fusion designs to be competitive, even with the benefits of a large programme of build and production learning.
Capital costs of fusion are high, with the core device costs – magnets, vessel and divertor and blanket – being more than 66% of direct costs and almost 50% of total costs. Reducing the cost of these key components by innovation in either design or manufacture, and by production learning will have the most effect in making fusion competitive.
Though fuel costs are low, other operations and maintenance costs are significant – particularly the cost of replacing life-limited vessel and blanket components.
Reducing the amount of power to maintain the plasma and to run the reactor could significantly increase net output and reduce fusion energy costs.
Higher power availability or capacity factor and higher power conversion efficiency will directly improve costs, as will shorter build times and lower financing charges.
More advanced steady-state fusion designs, available perhaps a decade after Iter becomes operational, offer the possibility of competitive energy costs based on repeated production of standard systems, with lower financing costs.
Small fusion power plants have the potential to offer a faster route to market for fusion power, but initially they could have higher cost barriers because of the diseconomies of their smaller scale. These could be offset both by the economics of multiples and by shorter build times for these smaller plants.
Assystem commissioned the report to highlight the current opportunity for progress in the commercialisation of fusion energy. It said realising commercial fusion would help meet global energy demand for low-carbon power, acting as a stable anchor in energy systems comprised of renewables. Fusion can also be a source for hydrogen production and other new fuels/energy stores for industry and transportation.
Earlier this month, the government announced five sites that have been shortlisted as the potential future home of the UK’s first prototype fusion energy plant – the Spherical Tokamak for Energy Production, or Step – with a final decision to be made around the end of 2022 and operation scheduled for the early 2040s.