Many companies predict commercial viability next decade, but more funding is needed now
Physicists have been promising since the 1960s that fusion reactions have thepotential to provide an abundant, emissions-free solution to the planet’s long-term energy needs. Now, scientists, fusion executives and investors say the foundations may finallybe in place for a company, or several, to demonstrate a commercially viablefusion plant by the 2030s.
“The stage is set for a big five years in fusion,” says Richard Pearson, a co-founder of Japan’s Kyoto Fusioneering, which was set up in 2019 to developfusion power plant technology. “A lot has to happen, and there is a lot to do, butthe emphasis and excitement in the industry is definitely there.”
The promise of fusion — in which hydrogen isotopes are heated to such extremetemperatures that they fuse, releasing energy — has tantalised researchers fordecades. Unlike fission — the process harnessed by nuclear power stations in whichatoms are split — fusion produces no long-lived nuclear waste. The only gasemitted is helium, the isotopes can be sourced in large quantities, and a smallcup of the fuel has the potential to power a house for hundreds of years.
"This could be the thingthat powers the earthnot 50 years but 500years into the future" - Richard Pearson, Kyoto Fusioneering
The challenge has been that the energy-dense reactions are hard to sustain. Untilrecently, no group had produced moreenergy from fusion than the reaction consumes — a milestone known as energy gain, or scientific break-even. US scientists achieved that landmark for the first time in December 2021 but only producedabout a gain of 1.1 megajoules — about enough to boil a kettle.
To make further progress, the nascent sector must now demonstrateengineering break-even, in which the energy produced from a fusion reactionexceeds the total energy used to power the machine. Whoever succeeds must then take that design and demonstrate it can produce energy at a scale and costthat makes it commercially viable.Out of 39 fusion companies surveyed by the Fusion Industry Association (FIA)last year, a third said commercial viability would be demonstrated between2031 and 2035, and another third said it would happen between 2036 and2040.
Charles Boakye, an energy transition strategist at Jefferies, one of the fewinvestment banks studying the sector, thinks this will happen between 2035and 2037, but is doubtful the device will be ready to be scaled. “I think the truth is we will see a very, very poorly designed fusion power plant connected to the grid, or at least producing some form of electricity, in the mid 2030s,” he says. One obstacle will be the lack of readiness in supply chains to provide theengineering, materials, and expertise required to roll out a fusion solution atscale. “Suppliers are waiting in a holding pattern until they see engineeringbreak-even,” Boakye adds.
Jefferies’ analysis found more than 45 private companies working oncommercialising fusion but only two companies — Kyoto Fusioneering and theUK’s Oxford Sigma — working on technologies and solutions to support thesector.
Andrew Holland, executive director of the FIA, says the body is working withmore than 80 affiliate members, most of which are supply chain companies, so that they are ready to scale with the industry. But he is more concerned about whether adequate funding will be available toenable the sector to grow as quickly as it could. This month, US Congress, for example, approved $790mn for fusion energyresearch in 2024, representing the seventh straight year of increased funding. “It’s great that it did grow . . . but it’s not enough to meet the opportunity,”Holland says.
Private sector companies have led effortsto commercialise fusion energy in recentyears, raising more than $6bn to date inprivate funding. However, these companies are nowlooking to government support to help de-risk their projects as they seek to raisehigher amounts of capital from investors.
The UK, Germany and Japan have all launched their own programmes tosupport fusion companies and, in November, the US and UK signed a partnership agreement to collaborate on fusion initiatives and share researchand development facilities. China has also stepped up its support of fusion research, creating a consortiumin December, led by the China National Nuclear Corporation, to advance thedevelopment of fusion energy in the country.
“If you think about fusion as the ultimate energy source for human kind thereare obvious geopolitical implications,” says Pearson at Kyoto Fusioneering.“This could be the thing that powers the earth not 50 years but 500 years into the future.”
Chinese fusion research has traditionally been a “few years behind” Europe andthe US but made recent advancements and demonstrated an ability to “movefast once they get this in place”, says Boakye. “Unlimited or very cheap power, it’s the whole game, if you think of the rise incomputing we’re seeing, the rise in data centres, AI, military capabilities,” hesays. “At the moment there is definitely a feeling . . . that it’s important who gets there first.”
