I think wind and solar are plan A at this point, if for no other reason than they're hard to beat on cost. Battery storage is still expensive, though.
If fusion works out, it could be used to make up the difference when the sun isn't shining and the wind isn't blowing (though if we eventually get high-capacity transcontinental HVDC lines to buy and sell power from practically anywhere or batteries become really cheap, that becomes less of a concern).
Fusion would also would require far less land, and some people object to having a landscape covered in windmills and solar panels.
Fusion might be useful in places where renewables are less practical, like on ships. Naval vessels might conceivably replace fission reactors with fusion. If they're safe and relatively simple to run, you might even see them on civilian ships. Or you could have fusion reactors in remote places, like floating on a buoy in the middle of the ocean, to serve as a charging station for battery-powered ships.
Fusion may be useful for establishing a human foothold outside of Earth. For instance, methane production on Mars (for rocket fuel) will require enormous amounts of energy, which could be supplied by a fusion reactor. (A fission reactor would perhaps work just as well, but there are legitimate reasons why people get nervous about launching hazardous materials into space on a rocket that might blow up before it achieves escape velocity.)
We might also begin engaging in projects that require enormous amounts of energy. For instance, if certain CO2 absorption strategies are energy-intensive, and we can't practically generate that amount of energy from renewables.
At this point, we really don't know if it'll work much less what the practical limitations will be, so perhaps the best we can do is say "if a fusion reactor can produce X amount of energy and weighs Y tons and requires such-and-such amount of cooling and requires an overhaul once every N months at a cost of D dollars, we might want to use it in these applications".
Hydrogen made from renewables and burning in combined cycle turbines would likely be far cheaper than fusion.
Fusion would be horrible for ships. Ships are volume constrained, and fusion reactors are very large.
Land constraints are not globally significant at current energy demand. The world is constantly hit by 100,000 TW of sunlight; average global primary energy demand is about 18 TW.
In space, DT fusion reactors will be inferior to fission reactors, which will be much smaller and lighter for a given power output (and also much simpler).
It's very difficult now to make a case for fusion. In the past, the case was something like "fission will be a big winner, but then we'll have trouble with uranium availability and safety and waste, and fusion, while slightly more expensive than fission, will still be cheap and solve these problems." But that's not how it turned out -- fission failed because it was too expensive, and fusion being even more expensive than fission makes it a nonstarter.
Fusion doesn't have to be big. ITER is huge because it was the smallest it could possibly be given the superconducting magnetic coils that were available at the time it was being designed, but we have much better high temperature superconductors now. (This is the basis of MIT's SPARC and ARC projects.)
Currently, we don't have any practical working fusion reactors, so it's hard to say what the attributes of such a reactor would be. We have some designs that according to our understanding of physics might work, but the designs are likely to go through many iterations before we have something that can be mass-produced and deployed in volume. Rebco tape probably isn't the best high-temperature superconductor that will ever be discovered. And so on.
It does, actually, with neutron producing fuels. The problem is that volumetric power density is limited by the areal power density limit on the wall of the reactor, and by the need of a sufficiently thick blanket to absorb neutrons. The inferiority vs. fission is roughly (thickness of fusion reactor blanket)/(diameter of fission reactor fuel rod). This is independent of any details of plasma confinement.
Something like ARC has much higher power density than ITER, but it's still very inferior to fission reactor. ITER's power density is just so incredibly bad.
Does it matter? Fusion doesn't have the same power per unit volume as fission in order to be usable on a ship, it just has to be good enough to be usable in that application: i.e. able to produce maybe in the neighborhood of a couple hundred kilowatts continuously without being overly bulky or expensive.
There might be limits though on how small the reactor can be made. ARC is apparently meant to produce hundreds of megawatts, which sounds like it maybe be two or three orders of magnitude more powerful than what even a large container ship would use for propulsion. SPARC is a physically smaller reactor, but not intended for continuous or long-term use. If the basic design works out, probably the first real-world designs will be optimized for utility power generation, where size doesn't really matter except to the extent that "bigger" tends to mean "more expensive". Minimum-size designs might take longer to show up.
If I understand correctly, the ARC design uses FLiBe to capture the energy from the neutrons. It takes up the space between the vacuum chamber and the outer housing. The FliBe heats up, and is pumped out into heat exchangers that produce steam to run a turbine. At some point there's a practical limit to the amount of heat that can be removed that way, but it seems like a low-output reactor should be easier rather than harder to make from that standpoint.
"Hundreds of megawatts" may be oversized for ship application, but maybe more like 2x to 10x oversized rather than 100x to 1000x. Or maybe not. Apparently they use some pretty powerful reactors in aircraft carriers: https://en.wikipedia.org/wiki/A4W_reactor
If fusion works out, it could be used to make up the difference when the sun isn't shining and the wind isn't blowing (though if we eventually get high-capacity transcontinental HVDC lines to buy and sell power from practically anywhere or batteries become really cheap, that becomes less of a concern).
Fusion would also would require far less land, and some people object to having a landscape covered in windmills and solar panels.
Fusion might be useful in places where renewables are less practical, like on ships. Naval vessels might conceivably replace fission reactors with fusion. If they're safe and relatively simple to run, you might even see them on civilian ships. Or you could have fusion reactors in remote places, like floating on a buoy in the middle of the ocean, to serve as a charging station for battery-powered ships.
Fusion may be useful for establishing a human foothold outside of Earth. For instance, methane production on Mars (for rocket fuel) will require enormous amounts of energy, which could be supplied by a fusion reactor. (A fission reactor would perhaps work just as well, but there are legitimate reasons why people get nervous about launching hazardous materials into space on a rocket that might blow up before it achieves escape velocity.)
We might also begin engaging in projects that require enormous amounts of energy. For instance, if certain CO2 absorption strategies are energy-intensive, and we can't practically generate that amount of energy from renewables.
At this point, we really don't know if it'll work much less what the practical limitations will be, so perhaps the best we can do is say "if a fusion reactor can produce X amount of energy and weighs Y tons and requires such-and-such amount of cooling and requires an overhaul once every N months at a cost of D dollars, we might want to use it in these applications".