The Economics of Fusion Energy: From Demonstration to Market Viability

Abstract

This paper examines the economics of fusion energy as a source of firm, clean power in the United States. Using a Monte Carlo LCOE simulation across 10,000 iterations per development stage, I find that fusion's median cost declines from $313/MWh at first-of-a-kind to $45/MWh at nth-of-a-kind, competitive with utility-scale solar and wind. Capital expenditure is the dominant cost driver. I identify the hyperscaler data center market as fusion's most viable early commercial offtake channel, anchored by a revealed willingness to pay of $110-115/MWh for firm clean power. PJM capacity market revenues reduce fusion's effective NOAK LCOE to $30/MWh. The commercial case for fusion is not speculative, it depends on execution.