Inertial Electrostatic Confinement of fusion ions in a modified Penning trap is further modified to include a mechanism for low‐power recirculation of electrons via a diverter electrode placed in the low‐field, cusp region of the trap. The locally divergent magnetic field lines act as a magnetic nozzle to extract energy bound up in the angular momentum of the larmor gyrations of the electrons, enabling the diverter potential to be close to that of the emitter while still collecting scattered electrons. In theory, the diverter recirculates a large fraction of the scattered core electron population back to the emitter through a much smaller potential difference, thereby reducing the overall power consumption for a given collisional diffusivity in the core region and improving overall system efficiency. Modeling of the general system is presented which suggests a power density that is too low to be practical for power generation unless ion density enhancement via a POPS type mechanism is realized. However, this technology is suggested as a potential candidate for an experimental plasma target, neutron source. © 2003 American Institute of Physics