Nuclear fusion energy is set to become a “tool of geopolitics” with governments eager not to be left behind in what could be the defining technology of the 21st century, according to the head of the industry’s association, who also warned that it needs whole new classes of investors to realise its vast potential.
Andrew Holland, chief executive of the Fusion Industries Association (FIA) claimed governments are increasingly keen not to miss out on the transformational prospects of fusion, which aims to harness the reactions that power the sun to produce unlimited, on-demand, zero-carbon energy (see panel).
The FIA has now tagged 15 of the world’s 40-plus pioneering fusion companies as being involved in public-private partnerships (PPPs). “We’ll see those grow as fusion increasingly becomes a tool of geopolitics,” Holland told Recharge.
Nuclear fusion energy aims to harness the same reactions that power the sun to produce unlimited, on-demand, clean energy.
The process involves changing a gas to a plasma at temperatures of tens of millions of degrees, often aided by superconducting magnets, to create collisions between hydrogen atoms, tapping the energy that’s produced.
Unlike its close cousin nuclear fission – basis of the current global nuclear industry, which relies on splitting rather than combining atoms – fusion is said by scientists to present no risk of the sort of runaway reaction that led to the Chernobyl disaster.
And while it is not waste-free, the by-products are said to be low and short-lived compared to fission, and much more easily manageable.
“I’ve been called into the White House multiple times to try to make sure the US lead in [fusion] science doesn’t turn into something like what happened with solar panels – US science but mostly made in China.
“The UK has the most aggressive public timescale, the US is where the private companies mostly are,” said Holland, adding that fusion energy businesses are now based in 12 different nations – including two in China, where one, ENN, was boosted by $200m of investment last year.
The race by private fusion players to commercialise fusion power runs alongside government investment in science research in a field which is at the cutting edge of physics and would have vast implications for the global energy sector if it can deliver clean, grid electricity in time to make an impact on the energy transition and climate fight.
Bridging the valley of death
While governments will have to “put their fingers on the scale” to help get fusion from laboratory to commercial scale and viability – and the industry is increasingly confident that this is possible within a decade – it also needs a new class of private investor to help avoid a funding “valley of death”, said Holland.
That’s because the early-stage investors that have nurtured fusion’s growth so far, including a handful of billionaires such as Bill Gates and Jeff Bezos, will have to be joined by others in a position to “write the hundreds of millions of dollars in cheques” needed for companies to make a commercial-scale leap.
The FIA chief sees several potential sources, including “Wall Street type” players who are keen to gain exposure to the potential upsides of fusion via an investment bank such as Goldman Sachs or JP Morgan. However, Holland reckons the prospects for such investments would be massively boosted by some kind of broad-based vehicle that allows investors to back the sector as a whole, rather than having to pick one or two of the private companies active in the industry.
“If you’re not somebody who understands the difference between a laser-based approach and a magnetic approach [to fusion science] and just wants to invest in fusion you should have the ability to do that, and it just doesn’t exist right now.”
Another key source of investment could be the world’s oil and gas giants. Groups such as Chevron, Equinor, Eni and Shell are already backing various fusion players and Holland reckons the fossil fuel sector has “deep pockets and the ability to build at scale”.
Sovereign wealth funds from the Middle East and Norway could also play a part, Holland believes. He said a dip in funding growth for fusion should turn out to be the result of particular factors such as inflation and interest rate pressures, but added that this would be “worrying” if it continued.
Promises or reality?
As the fusion industry holds out its hands to governments and private investors alike, questions are asked about why funders should line up behind an industry that literally promises the earth but whose key breakthroughs have so far come in the laboratory only.
After all, fusion has set ambitious timetables before, and current optimism over the ability to deliver grid power – 19 of the FIA’s members believe they can do it before 2035 – could have a familiar ring to older observers of the energy scene.
“It’s important we match our promises with our resources,” said Holland, but he insisted those resources – technological, scientific and financial – are now immeasurably bigger than previous fusion false dawns, which helped fuel the old adage of a technology that is “always 30 years away”.
“There are massive advances in technology to help enable this – computing power, advanced manufacturing, you name it.”
But when it comes to government assistance for fusion for example, wouldn’t it be better directed to rolling out more – and more quickly – the technologies that have been proven to clean up the world’s energy system, namely wind and solar?
“It’s not a zero-sum game”, said Holland, who claimed all technologies will have a part to play in the transformation of global energy.
There’s no such thing in energy as a completely free market.
“We’re not asking for massive amounts of government money any differently from the massive amounts of government money that have gone into solar and wind,” not to mention the vast subsidies still directed to fossil fuels.
“There’s no such thing in energy as a completely free market.”
An early test for fusion’s credibility will come around 2028 when the most optimistic of its private players – US-based Helion Energy – not only aims to have its first plant online but also to be delivering commercial power to Microsoft under the sector’s first power purchase agreement.
Would failure to do so represent a blow? “They believe they have a pathway to get there… they’ve said ‘we wouldn’t be doing this if we thought we couldn’t deliver’. And they pay a penalty if they don’t so they are putting their money where their mouth is,” said Holland.