What will power the grid in 2035? The race is wide open

artificial intelligence Insatiable demand for power There are technology companies searching for new sources of energy – a search that has fueled competition and investment in fusion and fission startups.

For many, natural gas is the easy solution for 24/7 base load power. It has been tested, inexpensive, and widely available. But the war in the Middle East has exposed the vulnerable supply chain after Iranian drone attacks destroyed much of Qatar’s natural gas infrastructure, a major exporter. At the same time, increasing demand has created… Waiting list for gas turbines As long as today’s demands will likely not be met until the early 2030s.

These delays pose a risk not only to technology companies, but also to the natural gas industry itself.

In the United States, 40% Of the natural gas consumed today goes to generate electricity. By the time the turbine shortage subsides, the industry could be filled with a new crop of competitors. Both small modular nuclear reactor (SMR) startups and fusion energy startups plan to start connecting their first commercial power plants to the grid in the next five to seven years, about as long as it takes to source parts for a new natural gas power plant.

Nuclear threat

SMR startups may have the best chance of going without natural gas-fired power plants. In many cases, this technology modifies existing fission reactor designs, but the basic physics has proven its feasibility and has been widely used for decades.

Many SMR companies aim to have the reactors up and running before the contract expires. Kairos Power, which counts Google as a future customer, is one of them. Company I got approved For its Hermes 2 experimental reactor in 2024, construction is underway Going well. Oklo who Merged With Sam Altman’s blank-check company in 2024, it is targeting 2028 for its first commercial operations, according to its plan. Annual report.

Others hope to follow in a few years. Energy Amazon is an investoraiming to Early 1930sWhile TerraPower, founded by Bill Gates, owns… Dealing with metaand plans to begin commercial operations In 2030.

To replace natural gas as the preferred source of generation, SMEs will need to scale quickly, achieving the economies of scale on which their business models depend. Which It won’t be easy. But technology companies seem confident enough that it is Investing in startups Or sign agreements with them to obtain energy amounting to gigawatts.

Fusion timeline

Other tech companies are bracing for merger power. Although not as proven as fission, nuclear fusion promises to provide large amounts of energy using only seawater as fuel.

Fusion startups are also targeting the early 2030s — or earlier — to deploy their first reactors. Fusion strength

One of the front runners is Commonwealth Fusion Systems On the right track to turn the switch on its experimental reactor next year. Its first commercial reactor, the 400-megawatt Arc, is expected to begin generating power in Virginia in the early 2030s.

Another startup, a relative newcomer, is hoping so Start construction In a grid-scale power plant in the year 2030. Inertia Enterprises based its technology on the reactor design used by the National Ignition Facility, which was the first to prove that controlled nuclear fusion reactions could generate more energy than they consume.

But Helion may have the most aggressive schedule of them all. The startup backed by Sam Altman is The race to build Orionits first commercial power plant, by 2028 to supply electricity to Microsoft. And the company too It is reportedly in talks with OpenAI To provide up to 5 GW by 2030 and 50 GW by 2035. To achieve these numbers, Helion would have to build 800 reactors by the end of the decade and another 7,200 in the five years after that.

If the startup can deliver energy in such quantities, it will rewrite the entire energy market. The United States added last year 63 gigawatts New generating capacity through all sources. If Helion can build nearly 10 gigawatts of new capacity each year, the company alone will add more capacity than the entire natural gas industry did last year.

Price problem

The challenge facing all of these companies – including gas turbine manufacturers – is cost.

SMR startups rely on mass manufacturing to cut costs, but this hypothesis has not yet been proven. Today, nuclear power is one of the most expensive forms of new generating capacity at about $170 per megawatt hour, according to Lazard. Fusion faces a broadly similar challenge, though it faces more unknowns. Some experts expect the possibility of operating one megawatt-hour from a fusion power plant About $150 Starting.

Meanwhile, new natural gas-fired primary power plants cost about $107 per megawatt hour per Lazard, though prices have been trending higher in recent years, which could put them on a collision course with both new fission and fusion reactors.

But they may all be undermined by renewables coupled with batteries.

Wind and solar energy costs have fallen sharply over the past decade. Wind power seems to have reached a plateau in recent years, but solar prices continue to decline with no signs of stopping. Batteries have also become cheaper over the years, to the point where networks are installing huge quantities of them. 58 gigawatt-hours last year. Even without subsidies, prices for solar power coupled with batteries range from $50 to $130 per megawatt hour, which overlaps with fusion, fission and natural gas.

All of these numbers are relative to current chemical-derived battery technology for electric vehicles. Newer designs that directly target network connections could bring prices down even further. The form of energy, for example, Recently signed a deal Google is powered by a 30 gigawatt-hour iron-air battery. Other XL batteries can be used Reuse old oil tanks To store its inexpensive organic liquid, the size of the battery is limited only by the size and number of tanks.

Because these new batteries avoid using critical metals such as lithium, cobalt or nickel, they promise to reduce the cost of long-term energy storage so dramatically that anything else is difficult to deliver.