Inside Green Innovation: Progress Report - Fourth Edition highlights:
- The level of innovation in 2022 matches 2021 and is at a record high compared to norms throughout the 2000s and 2010s.
- Innovation output in the US – in particular from new entrants to the sector –counters a comparative drop from other countries.
- The fusion sector has a high number of innovators each making a small number of yearly contributions.
- Innovation in the fission sector continues to focus on safety enhancements.
Nuclear fusion
Figure 1: Five-year trend (2018-2022) - global priority filings - nuclear fusion
Fusion innovation surged in 2021, only to plateau in 2022.
Fusion energy is in a golden age of media attention, with weekly stories about exciting new breakthroughs, thought-provoking collaboration announcements, and so on – particularly in the UK. The running joke may still be that fusion is 40 years away, but technological innovation proceeds apace in the sector nonetheless; and that 40-year estimate is now often reduced to 30, and even 10 in some quarters. According to a recent report by the Fusion Industry Association, total funding in the sector has reached over USD 7.1bn, with at least USD 900m in the last year alone. This years’ notable investees are Xcimer (USD 100m), SHINE (US 90m), and Helion (USD 65m). Each company is approaching fusion in its own way – a trend we see repeated across the fusion sector. Generally, no two companies fusion sector has the same approach to tackling the technology. With many companies now loudly targeting grid power by the 2030s, this report looks at the patent trends in the fusion sector, identifying companies that could contribute to supplying power to the grid. And given the differences between fusion companies, potentially identify where there might be common ground. Readers familiar with our third edition report on nuclear energy will notice that this fourth edition builds on our previous findings, with a more specific focus on recent trends.
Growth in the fusion sector
Figure 2: Twenty-year trend (2003-2022) - global priority filings - nuclear fusion
In the third edition, we reported the beginnings of an upward trend in new fusion technology filings, with 50% more filings in 2021 compared to the modest 100 or so per year seen throughout the 2000s and 2010s. While this surge trend appears fleeting, the most recent stage shows that new applications filed in 2022 has at least maintained the record high level set in 2021. At only two datapoints, it is too early to say whether this is now the new ‘steady state’ level for fusion patents, merely a temporary boost following enhanced media focus (a hype-driven innovation curve) or the early stages of a sustained boom in fusion patents that will lead to real-world, widespread commercial application of a mature technology.
Figure 3: Five-year trend (2018-2022) – priority applications by country - nuclear fusion
We can attribute the increase in filings in 2021 to a large upsurge in filings in Asia, in particular China (four times previous levels), Japan (two times previous) and Korea (three times previous). However, it is not these countries driving growth in 2022. Rather, each of these countries has seen a decrease in patent filings with Korea even returning to approximately its pre-2021 average levels. The main driver of recent filings is the US, which generated ~1.7 times the number of new inventions in 2022 as in 2021. This growth in US patent filings can be correlated directly with the growth of the fusion industry in the US. A flurry of new US startups over recent years is seeing the US establish itself as the global leader for fusion technology, with over half of private fusion companies globally now US based. The US has long been a driver of growth in many high technology industries, and it seems that fusion is heading in the same direction. Historically there have been many innovators in the fusion sector that do not pursue a patent strategy, either through altruism, because they preferred a trade secret strategy or other reasons. These approaches perhaps tie into the previously-accepted logic that commercial fusion is too far away for a twenty-year patent term to be relevant. However, the patent data from the US should inspire companies in other countries that, if not already doing so, ought to have a fully-informed patent strategy. It is no coincidence that the companies that received the lion’s share of last year’s fusion funding are all US-based. The fusion sector is expanding rapidly and, even though the investment pot is generous, it will quickly be swallowed up by those (US) companies which can show investors they have the necessary IP protections in place for commercialising their technology.
Figure 4: Ten-year trend (2013-2022) - top filers - nuclear fusion
Looking at top filers over the last decade, we see that UK company Tokamak Energy still leads the way for innovations in the fusion sector. The company is developing a magnetic confinement (tokamak) approach to fusion energy and is making great strides in superconducting magnets technology. Russian national research appears to be still going steady, unsurprising for a country with a strong history in fusion/plasma research. And, on the topic of national/public research, it is welcome to find the UK Atomic Energy Authority now appearing on the recent top filers list; UKAEA patents are generally focussed on its STEP project, which is the UK’s flagship fusion programme.
Figure 5: Two-year overview (2021-2022) – top filers – nuclear fusion
Looking at the filing data for 2021 and 2022 reveals an interesting insight into the fusion sector as a whole: there is no one company dominating in terms of new innovations. Most innovators are turning out two, three or four innovations per year in their respective niches of the sector.
Figure 6: Two-year overview (2021-2022) – top US filers – nuclear fusion
Digging deeper into the increases in US patents in 2021 and 22, we see the same story. There is no one dominant player. Many of the same companies filing patents in 2021 continued to do so in 2022, and often filed more in 2022, but these companies alone are not driving the growth in the US fusion sector. Rather, it is a multitude of smaller innovators entering the sector that appear to be driving new filings. This trend is common in high technology sectors, and hopefully we will continue to see a growing momentum of more new filings from a growing number of start-ups and spin-outs; dependent on investors maintaining confidence in the industry alongside appropriate government and regulatory support. As the sector matures, there will likely be consolidation around dominant organisations, with the winners of the innovation race benefiting from strong positions in the market, or at least from a healthy exit.
Particular technologies
Over the last decade a key area of innovation has been magnet technologies, corresponding to magnetic confinement having previously been one of the more promising routes to fusion. The UKs Tokamak Energy has been particularly dominant in this area, including recently establishing a new business division to explore commercialising complementary markets for its magnet technology (“TE Magnetics”).
Figure 7: Two-year overview (2021-2022) – top technology areas by patentee – global
(Patent family = A set of patent applications and/or granted patents across multiple countries that protect the same invention and were filed by a common applicant. Also, a single application can appear in multiple technology groups.)
Figure 8: Two-year overview (2021-2022) – top technology areas by patentee – US only
However, magnet advancements were not a dominant driver of the increased innovation in 2021 and 2022. Instead, we have seen an increase in the core area of plasma generation (including particle beam techniques) and also in electrical discharge technologies, indicating many fusion companies still trialling less explored approaches to nuclear fusion. Notably, the data for the US only shows the same pattern.
Nuclear fission
The other side of the nuclear coin is energy from nuclear fission. Fission power has long been touted as a reliable and increasingly safe route to climate change mitigation. Over the last fifty years, the International Atomic Energy Agency estimates that the equivalent of seventy gigatonnes of carbon dioxide emissions were avoided through using nuclear power. Along with other forms of green energy, particularly renewables (e.g., wind power, as also covered in this report), nuclear fission still has a significant role to play in achieving carbon neutrality, while the world awaits commercially viable fusion power.
Figure 9: Ten-year trend (2013-2022) - global priority filings – nuclear fission
In the fission sector, the downward trend we reported last year continues. 2022 saw the lowest number of priority filings since 1963, when the sector was still in its infancy. However, this global trend masks that innovation is still strong in Asia, particularly from Korea, Japan, China and India. Indeed, from the top 10 filers in 2022, seven are from Asia (three from Korea, three from Japan, one from China).
The two main drivers of recent innovation appear to be Korea Hydro & Nuclear Power Co. and Hitachi GE Nuclear Energy Ltd. (both having similar filing numbers and both significantly more than the next highest filer).
Figure 10: 2022 overview - technology by patentee – nuclear fission
Last year we reported on the past decade’s interest in small modular reactors (SMRs) and microreactors. While 2022 saw a similar number of SMR related filings as in 2020 and 2021, the total number of SMR-related filings represent only around 5 percent of the yearly fission sector filings.
Innovation in the sector instead appears to be generally geared towards safety considerations of any type of reactor, small, micro or other. This is perhaps unsurprising given that Fukushima is still fresh in many minds. Indeed, looking to the prolific innovators, we see that many of the recent innovations by Korea Hydro and Hitachi are heavily focussed on safety, such as emergency cooling, monitoring/testing and pressure suppression systems.
This is a trend repeated across the wider fission sector, with innovations in 2022 across all innovators being mostly in the same safety-related technology areas seen in Figure 10; in particular, monitoring and testing technologies and emergency cooling technologies.
Adam Tindall
Partner
Matthew Bennett
Associate