FT : UK nuclear venture aims to realise fusion dream

UK nuclear venture aims to realise fusion dream
STEP is successor to 40-year-old record-breaking EU project in Oxfordshire

A UK venture to build the world’s first fusion power plant will take centre stage this week as its EU-backed predecessor winds down after 40 record-breaking years.

The new Spherical Tokamak for Energy Production (STEP) project to be built in Nottinghamshire aims to use pioneering reactor technology in a bid to finally prove fusion’s promise as a safe and potentially inexhaustible source of low-carbon energy. 

STEP succeeds the Joint European Torus (JET) project outside Oxford, which conducted its last experiment in December and will announce final “milestone results” on Thursday.

The transition comes at a time when climate change and geopolitical conflict have encouraged a wave of public and private investment in the field of fusion research.

“The global interest in fusion . . . has gone through an extraordinary transformation over the last few years,” said Tim Bestwick, deputy chief executive of the UK Atomic Energy Authority (UKAEA), which runs Britain’s fusion programme.

“The thing that’s changed most is the widespread realisation that we need something with the attributes of fusion energy to get us out of the challenges we have on both security and low-carbon energy,” he said.

Fusion’s great promise is that by recreating the reaction that generates the Sun’s heat, power stations will be able to produce abundant energy anywhere in the world.

The process involves heating a plasma of two hydrogen isotopes — normally deuterium and tritium — to extreme temperatures so that they fuse, producing helium and neutrons.

The reaction creates no long-lived radioactive waste, the isotopes can be sourced in large quantities, and a small cup of the fuel has the potential to power a house for hundreds of years.

However, after four decades of experiments the technology is still years away from proving it can generate commercially viable power.

The UK has been at the forefront of fusion research in large part because of the decision to build JET — a collaboration between EU member states, Switzerland, the UK and Ukraine — just outside Oxford in the early 1980s.

It was opened by Queen Elizabeth II in 1984, created the first deuterium-tritium plasma in 1991 and delivered a world record for energy output in 1997. JET set another landmark in 2021, producing enough energy in a five-second reaction to boil about 60 kettles, although that was still far less energy than the experiment consumed.

Melanie Windridge, chief executive of advisory group Fusion Energy Insights, said JET had been “running and doing cutting-edge physics for decades, and decades longer than was ever intended”.

Under the government’s current timeline, the STEP machine will not start operating until the early 2040s. But environmental and political urgency could bring that forward.  

“We’re going to look very closely at the opportunity to accelerate the progress,” said David Gann, inaugural chair of UK Industrial Fusion Solutions, the government body responsible for delivering the plant.

Whereas JET was an experimental machine, the principal objective of STEP is to produce electricity for the grid in a way that makes commercial sense. It will be built on the site of a decommissioned coal-fired power plant.

Artificial intelligence, particularly machine learning, is set to play a key role in STEP, enabling scientists to test digital versions of the technology before committing to a design, Gann said.

STEP, like JET, will be a type of fusion machine known as a tokamak. But while JET and the roughly 50 other working tokamaks in the the world are doughnut-shaped, STEP will be spherical like an “apple with a slender core”, said Gann.

By bringing the superheated plasma closer to the wall of the machine, spherical tokamaks can in theory be more compact and use smaller, less expensive magnets. That could make them easier to commercialise, although they will require immense feats of engineering.

Tokamaks heat the plasma to temperatures 10 times greater than the centre of the Sun and use liquid helium at a temperature close to absolute zero — minus 273C — as a coolant for their superconducting magnets. 

“Within two metres of each other you have got the hottest place in the solar system and some of the coldest temperatures on earth,” said Joe Milnes, former head of JET operations and now executive director for engineering and computing at the UKAEA. “How do you make a machine that can deal with this challenge? You have to crack on and make it happen.”

One advantage of fusion is that, unlike nuclear fission, it does not create radioactive spent fuel that needs to be stored in secure silos for thousands of years. 

Tritium is mildly radioactive but when the Financial Times visited the Oxfordshire facility, it was possible to pass beyond the giant concrete shield doors and into the tokamak’s vast hangar, even though the last reaction had taken place less than five weeks previously. 

JET’s final task will be to disassemble the tokamak, the first time such a full decommissioning has been tried. That should yield valuable new insights, not least for the robotic techniques that will be used in the process. 

Some fusion industry executives have questioned the UK’s decision to focus on a single fusion project. The US government, in contrast, is backing several start-ups employing different approaches.

Windridge at Fusion Energy Insights dismissed those concerns. “We can talk for decades about which option might be the best but ultimately you have got to build things, you have got to try things and see what works,” she said.

STEP will now take up the big challenge of making the long-held dream of fusion energy a reality, despite the multiple forbidding obstacles. 

“It’s a quest,” said Bestwick of the UKAEA. “And we think that quest is worth it.”

FT : European scientists set new nuclear fusion energy record

European scientists set new nuclear fusion energy record
Experiment was ‘fitting swansong’ for UK’s JET facility outside Oxford

European scientists have set a new record for the amount of energy generated from nuclear fusion, another sign of progress in a decades-long effort to produce power by harnessing the reaction that powers the sun.

Researchers at the Joint European Torus facility outside Oxford generated 69 megajoules from a sustained fusion reaction lasting five seconds — enough energy to boil about 70 kettles — surpassing their previous record of 59 megajoules set in 2021.

The latest achievement came in December during the final set of experiments to be conducted at JET, which will be decommissioned this year.

But scientists remain a long way from harnessing fusion power to make it commercially viable. The JET experiment in December consumed far more power than the reaction produced. To build a power station, scientists and engineers must also figure out how to sustain the reactions for longer.

A collaboration between EU member states, Switzerland, the UK and Ukraine, JET has been the world’s largest, most powerful operational “tokamak” machine since it became operational in 1983 and set its first record for energy output in 1997.

The tokamak design, pioneered by Soviet scientists in the 1950s, uses powerful magnets to hold a plasma of two hydrogen isotopes — deuterium and tritium — in place as it is heated to temperatures hotter than the sun so that the atomic nuclei fuse, releasing energy.

“JET’s final fusion experiment is a fitting swansong after all the groundbreaking work that has gone into the project since 1983,” said Andrew Bowie, UK minister of nuclear and networks.

For decades plasma physicists have argued that fusion reactions will one day provide a safe and potentially inexhaustible source of low-carbon energy.

Unlike fission — the process harnessed by nuclear power stations in which atoms are split — fusion produces no long-lived radioactive waste. The isotopes can be sourced in large quantities, and a small cup of the fuel has the potential to power a house for hundreds of years.

Experts welcomed Thursday’s announcement as a further sign of progress.

“JET has operated as close to power plant conditions as is possible with today’s facilities, and its legacy will be pervasive in all future power plants,” said Sir Ian Chapman, chief executive of the UK Atomic Energy Authority, which runs Britain’s fusion programme. “It has a critical role in bringing us closer to a safe and sustainable future.”

JET is due to be replaced by a UK programme, known as the Spherical Tokamak for Energy Production (STEP) project, to be built on the site of a decommissioned coal-fired power station in Nottinghamshire. The government hopes STEP will become one of the first fusion machines in the world to supply power to the grid by the early 2040s.

>>> Ralph Lauren beats by $0.60, beats on revs; provides Q1 and FY24 guidance (1

Ralph Lauren beats by $0.60, beats on revs; provides Q1 and FY24 guidance (147.14)
  • Reports Q3 (Dec) earnings of $4.17 per share, excluding non-recurring items, $0.60 better than the FactSet Consensus of $3.57; revenues rose 5.6% year/year to $1.93 bln vs the $1.87 bln FactSet Consensus.
  • Guidance Details:
    • For Fiscal 2024, the Company continues to expect revenues to increase approximately low-single digits to last year on a constant currency basis, now centering around 2% compared to 1% to 2% previously. Based on current exchange rates, foreign currency is now expected to have a modest benefit on revenue growth of approximately 10 basis points in Fiscal 2024. The Company continues to expect operating margin for Fiscal 2024 to expand approximately 30 to 50 basis points in constant currency to 12.3% to 12.5%, driven by gross margin expansion. Foreign currency is now expected to have a roughly neutral impact on Fiscal 2024 operating margin. Gross margin is now expected to increase approximately 140 to 180 basis points in constant currency (compared to 120 to 170 basis points previously), with reduced freight costs, favorable channel and geographic mix and continued growth in AUR more than offsetting product cost inflation. Foreign currency is now anticipated to negatively impact gross margins by approximately 20 basis points in Fiscal 2024.
    • Gross margin expansion is still expected to more than offset higher operating expenses as a percent of revenue due to channel mix shifts and as the Company invests in long-term strategic growth initiatives, notably digital and key city ecosystem expansion.
    • For the fourth quarter, the Company expects revenue growth to be in a range centered around 2% in constant currency to last year. Foreign currency is expected to negatively impact revenue growth by approximately 160 basis points. Operating margin for the fourth quarter is expected to expand approximately 350 to 400 basis points in constant currency, driven largely by gross margin expansion, with about 40 basis points of negative foreign currency impact. Foreign currency is expected to negatively impact gross margin by approximately 50 basis points in the fourth quarter.

>>> US Gapping down

Gapping down
In reaction to earnings/guidance
:
  • APPS -18.3%, DT -14.9%, GPRO -11.7%, LITE -11.5%, QLYS -10.1% (also increases buyback auth by $200 mln), PYPL -9.4% (also sees shares repurchases of at least $5 bln in FY24), ACLS -8.8%, CMP -6.9% (also terminates lithium brine project in Utah), RPD -6.6%, PAYC -6.3% (also names new Co-CEO; also to expand in UK), FLT -6.2% (also increases buyback auth by $1 bln), BWA -5.7%, NVST -5.5%, AZN -5.2%, NTGR -5%, TPX -5%, SPGI -4.4%, UHAL -4.3%, EG -3.9%, LNC -3.8%, ORLY -3.7%, MKSI -3.7%, ABG -3.7%, EFX -3.6%, ZBH -3.6%, LSPD -3.4%, CCJ -3.3%, FLNC -3.2%, PYCR -3%, HSY -3%, IPG -3%, PM -2.7%, CXW -2.5%, STE -2.3%, KVUE -2.2%, MCK -2.1%, AXTA -1.7%, MOH -1.5%, ENS -1.1%, HOG -1.1%, CX -1%, SNA -1%
Other news:
  • TENX -58.5% (Enrolls First Patient in Phase 3 LEVEL Study Evaluating TNX-103) L -3.7% (files mixed shelf securities offering)
  • AUTL -3.5% (Autolus Therapeutics and BioNTech (BNTX) announce strategic CAR-T Cell therapy collaboration; prices 58333336 American Depositary Shares at a price of $6.00/ADS for total gross proceeds of $350 mln)
  • ALEC -1.7% (announces first patient dosed in PROGRESS-AD Phase 2 clinical trial of AL101/GSK4527226 in patients with early alzheimer's disease)
  • CLNE -1.4% (announced the successful completion and operational launch of its latest renewable natural gas production facility at Tri-Cross Dairy in Viborg South Dakota)
  • COR -0.9% (Walgreens Boots Alliance (WBA) sells shares of Cencora for $992 million of proceeds)
Analyst comments:
  • NVST -5.5% (downgraded to Mkt Perform from Outperform at William Blair)
  • NYCB -5.1% (downgraded to Neutral from Buy at DA Davidson)
  • ZI -3.9% (downgraded to Sell from Neutral at Citigroup)
  • EQNR -3.4% ( downgraded to Hold from Buy at DZ Bank)
  • HTZ -2.4% (downgraded to Equal-Weight from Overweight at Morgan Stanley)
  • BABA -2.1% (downgraded to Neutral from Outperform at Macquarie)
  • WERN -1.3% (downgraded to Hold from Buy at Stifel)
  • AXP -1.2% (downgraded to Equal-Weight from Overweight at Morgan Stanley)
  • FTNT -1% (downgraded to Sell from Hold at DZ Bank)
  • OMF -1% (downgraded to Neutral from Overweight at Piper Sandler)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance
:
  • ARM +29.4%, CFLT +24.4%, OSCR +19.5%, BLBD +8.5%, DIS +7.6% (also to invest $1.5 bln in Epic Games; also increases dividend by 50%; announces new share repurchase program; also to make full suite of ESPN channels as standalone digital platform in fall 2025), BDC +7.5%, VKTX +7.4%, MPWR +6.4% (also acquires Axign B.V.; also increases dividend), UAA +5.7%, GL +5.3%, BTI +5.3%, WMG +5% (also launches plan to achieve $200 mln in annual savings ), CYBR +4.9%, WMS +4.7%, MAS +4.7%, QNST +4.5%, RDN +4.1%, CPA +4.1%, RRR +4.1% (also declares $1/sh special dividend), SWI +3.7%, UTI +3.4%, UL +3.4%, WYNN +3.1%, ARES +3%, PDM +2.9%, APO +2.9%, SLF +2.7%, MT +2.6%, OHI +2.5%, HAE +2.5%, EHC +2.4%, TDG +2.4%, GTES +2.4%, TPR +2.2%, CSGS +2.1% (also increases dividend), BN +1.9%, ITT +1.8%, CENT +1.7%, THC +1.6%, ALL +1.5%, NFG +1.5%, COTY +1.4%, STLA +1.4% (sales update), NWSA +1.2%, BAX +1.1%, TROW +1%, TTGT +0.9%, SAVE +0.9%, PBH +0.9%, KIM +0.9%
Other news:
  • ACTG +8.8% (licensing and settlement agreements relating to its WiFi-6 patent portfolio)
  • ADVM +6.4% (announces preliminary safety and efficacy data from the ongoing LUNA Phase 2 trial in patients with wet age-related macular degeneration) DO +5.8% (announces new floater commitments)
  • IMGN +5.7% (lifting after disclosing AbbVie (ABBV) merger update; expects the closing of the transactions to occur on or about February 12 2024)
  • GTN +2.3% (issues statement relating to DIS FOX WBD stremaing service)
  • SNPS +2.3% (mulling selling its software business according to Bloomberg)
  • FUBO +2.1% (issues statement regarding Sports Streaming JV)
  • IONS +1.9% (FDA has granted Fast Track designation to Ionis and AstraZeneca's (AZN) eplontersen)
  • SF +1.7% (raises cash dividend by 17% to $0.42 per share)
  • OMAB +1.4% (Jan traffic)
  • ALK +1.1% (ALK and HA receive second request from DOJ)
Analyst comments:
  • CRTO +3.4% (upgraded to Overweight from Equal Weight at Wells Fargo)
  • OHI +2.5% (upgraded to Neutral from Underperform at Exane BNP Paribas)
  • SPR +2% (upgraded to Outperform from Market Perform at TD Cowen)
  • ALLY +1.8% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
  • DFS +0.9% (upgraded to Overweight from Equal-Weight at Morgan Stanley)

>>> US Early premarket gappers

Early premarket gappers
  • Gapping up:
    • CFLT +26%, ARM +24.5%, OSCR +23.3%, BLBD +8.6%, ACTG +8.5%, MPWR +7.7%, BTI +6.4%, DIS +6.2%, WMG +6%, VKTX +5.5%, GL +5.3%, QNST +4.7%, RDN +4.1%, RRR +4.1%, WYNN +3.9%, UTI +3.7%, HAE +3.7%, UL +3.4%, NWSA +3.3%, ARES +3%, SLF +2.7%, BKH +2.6%, EHC +2.4%, GTN +2.3%, RKLB +2.3%, FORM +2.3%, CPA +2.2%, FUBO +2.1%, CSGS +2.1%, MT +2%, SF +1.7%, CENT +1.7%, OHI +1.6%, MAT +1.6%, NFG +1.5%, SNPS +1.4%, ALL +1.4%, ALK +1.1%, BNTX +1.1%, DAN +0.9%, TTGT +0.9%, PBH +0.9%
  • Gapping down:
    • TENX -51.6%, APPS -16.3%, ACLS -9.3%, PYPL -9.2%, QLYS -8.6%, GPRO -7.6%, RPD -7%, PAYC -7%, CMP -6.9%, AZN -6.2%, NVST -5.5%, ORLY -4.9%, MKSI -4.4%, UHAL -4.3%, EG -3.9%, L -3.7%, FLT -3.6%, NTGR -2.9%, FLNC -2.8%, EFX -2.6%, CXW -2.5%, MCK -1.9%, SANA -1.5%, MOH -1.5%, ENS -1.1%, MUR -1%, PYCR -1%, COR -0.9%, SAVE -0.9%, HMC -0.8%