The Race to Power the Grid in 2035: Fusion, Fission, and Natural Gas Vie for Dominance

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As the demand for electricity surges, particularly driven by the growth of AI, tech companies are exploring a range of new energy sources to power the grid in the coming years. While natural gas has been a go-to option, the industry is facing supply chain challenges and delays that have opened the door for alternative technologies like small modular nuclear reactors (SMRs) and fusion power. These emerging energy solutions are aiming to start connecting to the grid in the next 5-7 years, potentially disrupting the natural gas industry's dominance. However, cost remains a key challenge for all these technologies as they compete with the rapidly falling prices of renewable energy paired with battery storage.

Why it matters

The race to power the grid in 2035 has significant implications for the future of the energy landscape. The outcome will impact electricity prices, grid reliability, and the ability to meet growing energy demands, particularly from the tech sector. The competition between natural gas, nuclear fission, and nuclear fusion highlights the industry's search for the most viable and cost-effective long-term solution to provide baseload power.

The details

Natural gas has long been a reliable and inexpensive option for baseload power generation, but the industry is now facing supply chain issues and delays in obtaining new gas turbines. This has created an opening for alternative technologies like small modular nuclear reactors (SMRs) and fusion power startups, which are aiming to connect their first commercial power plants to the grid in the next 5-7 years. SMR companies like Kairos Power, Oklo, X-energy, and TerraPower are racing to scale up and realize the economies of scale needed to displace natural gas. Fusion startups like Commonwealth Fusion Systems, Inertia Enterprises, and Helion are also targeting the early 2030s to deploy their first reactors, with Helion aiming to build 800 reactors by 2030 and 7,200 more by 2035 to potentially rewrite the energy market. However, cost remains a significant challenge for both nuclear fission and fusion, as they currently struggle to compete with the falling prices of renewable energy paired with battery storage.

• In the next 5-7 years, SMR startups plan to start connecting their first commercial power plants to the grid.
• Commonwealth Fusion Systems expects to start generating power from its first commercial reactor, the 400-megawatt Arc, in the early 2030s.
• Inertia Enterprises hopes to start construction on a grid-scale fusion power plant in 2030.
• Helion aims to build its first commercial-scale power plant, Orion, by 2028 to supply Microsoft with electricity.
• Helion is reportedly in talks to provide up to 5 gigawatts of power to OpenAI by 2030 and 50 gigawatts by 2035.

What’s next

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