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Researchers from the Massachusetts Institute of Technology – MIT – have made a breakthrough in nuclear fusion. But suppose we did indeed have free energy. What then?

Question: If energy suddenly become free, should we celebrate or fret?

That may seem like a ridiculous question, of course, free energy should be good news. But assuming an innovation emerges that makes energy so cheap that it is effectively free, then the immediate result may be for the global economy to experience recession.

To illustrate this, consider what happened in 2014 and 2015 when the oil price crashed. Stock markets fell, growth in the global economy slowed.

This does not mean that in the long run, or even the medium term, the result of free energy wouldn’t be good news – but there would be an immediate shock.

Nuclear fusion has been cited as technology that could indeed give the world energy that is so cheap that it is effectively free.

The world record for fusion pressure has been broken, according to researchers at MIT's Alcator C-Mod experimental fusion reactor. So that sounds promising.

Nuclear fusion is possible, we know this, because there is a very successful nuclear fusion reactor already – it is called the sun.

If we could crack the riddle of being about to enlarge, as opposed to split, the atom which is what nuclear fusion is, the impact on the world would be beyond massive. The phrase game changer would not do it justice. Unlimited energy would, for example make water desalination cost effective, and then the world’s oceans would become a giant source of free water – ending the single biggest cause of famine, and possibly removing the biggest geo political pressure point likely to emerge in the next few decades.

But then again, don’t hold your breath, we have been here before – many times, and so far, breakthroughs in nuclear fusion have turned out to be big disappointments.

On the other hand, look at how the cost of both renewable energy and energy storage has fallen. If the trajectory of falling costs continue, then within a couple of decades energy won’t be free, but it will be much cheaper than it is today. And that will be good news, but have a devastating effect on the fossil fuel business.