Daily Update: Nuclear Fusion Takes a Big Step Forward
Today is?Friday, December 16, 2022, and here’s your?curated selection of essential intelligence on financial markets and the global economy?from?S&P Global . Subscribe?to be notified of each new?Daily?Update.?
A quote frequently attributed to science fiction author William Gibson goes like this: “The future is already here — it's just not evenly distributed.” This week, the weighted center of that uneven distribution would have been at the National Ignition Facility at the Lawrence Livermore National Laboratory in Livermore, Calif. On Dec. 13, the U.S. Energy Department confirmed that scientists working in the lab produced a?breakthrough in fusion science . Using a laser to power a fusion reaction, they produced more energy in the reaction than the energy being contributed by the laser, thus achieving a net energy gain. But the modesty of this claim belies the actual advancement. A huge step forward has been made in the search for cheap, carbon-free energy.
Our sun produces power through nuclear fusion. For decades, scientists have been trying to recreate that reaction on Earth as a source of clean, cheap energy. Today’s nuclear power plants produce energy through fission, in which atoms are split to generate power. Fusion combines?isotopes of hydrogen to make helium , releasing energy in the process, just as the sun does. Among the many advantages of fusion over fission (which also has no carbon emissions) is that fusion doesn’t?produce long-lived radioactive waste ?since the main byproduct is helium.?
Kim Budil, director of the Lawrence Livermore National Laboratory, was careful to emphasize that, while the work of her team represents a huge step forward in the production of fusion energy, commercial applications should not be expected to follow quickly. According to Budil, a commercial reactor would require "many, many fusion ignition events per minute" to create a sustained energy source.
While the Energy Department is proposing a multi-decade timeline for the commercialization of fusion, private investors have been sinking money into commercial projects. Three separate companies — Commonwealth Fusion Systems in Massachusetts, Helion Energy in Washington and TAE Technologies in California — have raised over $2.5 billion from investors over the past two years. The success of the team at the National Ignition Facility may lead to more funding, especially since the team in Livermore was using laser technology from the 1980s.
In Europe, scientists at the?International Thermonuclear Experimental Reactor , or ITER, are sure to be watching these developments closely. ITER is the biggest nuclear fusion project in the world, currently under construction in Cadarache, southern France. ITER is funded by the EU, China, India, Japan, South Korea, Russia and the U.S. While the ITER project has suffered from significant cost overages, the news from the National Ignition Facility will create optimism about the commercialization of fusion energy in Europe, where energy security is of immediate concern.
After decades of work, fusion scientists have gotten some much-needed good news in their search for cheap, carbon-free energy. Given the significant energy needs of our developed and developing economies, we must hope that commercialization can happen on an accelerated timeline.
Today is?Friday, December 16, 2022, and here is today’s essential intelligence.
Written by Nathan Hunt.
Economy
Economic Research: Fed-Labor Market Standoff (2022), Who Will Blink? (2023)
2022 got off to a surprising start as the Federal Reserve made an about face from its accommodative strategy after minutes from its two-day Federal Open Market Committee Meeting (FOMC) in November indicated "many participants" worried that "elevated inflation could prove more persistent". This was a marked departure from its view earlier in the year that inflation was “largely transitory” and a somewhat implicit acknowledgement of a misjudgment. The Fed came out swinging to kick off the new year with an aggressive stance of front-loading much stiffer rate hikes. However, this series of jabs and upper cuts have failed to find the target so far with only a moderate impact on prices.
—Read the report from?S&P Global Ratings
Capital Markets
Funding 'Arms Race' Drives Up M&A Pricing For Banks With Low-Cost Deposits
U.S. banks are increasingly looking to M&A to solve funding pressures, making targets with low-cost core deposit bases more valuable than ever, according to industry experts. The median tangible book premium to core deposits fell sharply in 2020 after the M&A market cooled during the pandemic. While premiums have risen since then, they still remain well below pre-pandemic levels, according to S&P Global Market Intelligence data. But that metric may rise to historic levels again in 2023 as banks increasingly turn to M&A for low-cost, core deposits, according to industry experts.
—Read the article from?S&P Global Market Intelligence
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Global Trade
Global Autos Production Slumps In November Amid Declining Demand
Latest global sector PMI data, compiled by S&P Global, highlighted the tough conditions being faced by Automobiles & Autoparts manufacturers at present, with the sector the second-worst performer of all those covered in November. Firms registered the most pronounced drop in production and new orders since the onset of COVID-19 in early-2020. Meanwhile, for the first time in three months, staffing numbers declined, dropping at the quickest pace since July 2020, as producers adjusted capacity to weakened order book inflows.
—Read the article from?S&P Global Market Intelligence
Sustainability
Watch: What Is The Voluntary Carbon Market?
What is the Voluntary Carbon Market, how does it work and what role does it have in the global drive to reduce emissions? The first video in this series explains how carbon credits are created and traded in the VCM and who's involved in the market. Learn more about Platts carbon price assessments and indices, daily news and market commentary, from S&P Global Commodity Insights.
—Watch the video from?S&P Global Commodity Insights
Energy & Commodities
Listen: 2022: A Year Global Oil Markets Won’t Forget
In this special episode of the Platts Oil Markets podcast, S&P Global Commodity Insights leaders Joel Hanley, Sambit Mohanty and Richard Swann round up the events of 2022. From the war in Ukraine to renewed Chinese lockdowns, the team looks at disrupted trade flows and the renewed challenges for supply and demand in a volatile world.
—Listen and subscribe to Oil Markets, a podcast from?S&P Global Commodity Insights
Technology & Media
Thoma Bravo Takes Another Bite Out Of Public Infotech Space With Coupa Deal
Thoma Bravo LP plans to further consolidate the information technology sector as the private equity firm takes out one public company after another. The firm on Dec. 12 said it will join Abu Dhabi Investment Authority to pay $81 per share for Coupa Software Inc., an enterprise resource planning and spending management company. The per-share price pencils out to $6.17 billion, according to 451 Research, valuing the Coupa enterprise at $8.0 billion.
—Read the article from?S&P Global Market Intelligence
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