Investments Powering the Future of Nuclear Fusion Technology

By Naveen Athrappully
Naveen Athrappully
Naveen Athrappully
November 10, 2021 Updated: November 10, 2021

Optimism regarding the harnessing of nuclear fusion—an unlimited, safe, affordable, and clean energy source that powers the sun and other stars—in the coming decade has driven investors to fund projects, reigniting dreams of world-changing technological breakthroughs.

There are at least 35 private fusion companies across the world including the United States, Canada, China, UK, and France, according to the Fusion Industry Association. Eighteen of the companies have received a combined total of around $1.8 billion in private funding. Many startups have also popped up in recent years and their numbers are increasing quickly.

“The thing with fusion is, it’s impossible to have an accident; there’s no long-term waste and you can’t weaponize it,” Christopher Mowry told the Wall Street Journal. He is the chief executive officer of General Fusion, a Canadian startup backed by billionaire Jeff Bezos. “It removes the issue of energy security, which has troubled the world for more than a century.”

How Nuclear Fusion Works

Nuclear fusion is the combining of two light atomic nuclei to merge into a single heavier one, releasing a tremendous amount of energy in the process, four times as much as nuclear fission reactions. There are no carbon emissions and extremely low levels of radioactivity.

These fusion reactions take place in plasma, a state of matter different from the usual solids, liquids, and gases. Temperatures exceeding 180 million degrees Fahrenheit are needed for the nuclei to overcome their mutual electrical repulsion during the collision, and fuse together.

For the attraction force to outweigh repulsion, the nuclei must be confined within a small space. This essentially increases the chances of collision. On the sun, extreme gravity provides the necessary conditions for fusion to take place.

Fusion reactions can be a basis for future power plants. According to scientists, first-generation fusion reactors will use a mixture of deuterium and tritium, two isotopes of hydrogen. If successful, a few grams of these reactants can produce a terajoule, which is enough energy to last a single individual in a developed country for over 60 years.

Reaching the Temperature Threshold to Power an Energy Plant

Until now, no company has been able to generate more energy than it consumes in a self-sustaining reaction through fusion tech. Multiple challenges like mastering density and pressure required to trigger the process still remain. But private investors seem to have confidence in the promise that fusion provides, and they’ve started pouring in money into nuclear startups.

Helion Energy, a private fusion company, announced on Nov. 5 that it raised $500 million in its latest round. Helion claims that it has achieved the necessary temperature threshold, 180 million degrees Fahrenheit, needed for generators to power an energy plant.

The next step for the company is to achieve net output, i.e. more energy generation than consumption, and become self-sustaining. Helion aims to get to this stage by 2024. Investors have promised an additional $1.7 billion if the company manages to reach specific benchmarks.

“People are still measuring investment returns with the usual metrics,” Michl Binderbauer, chief executive of California-based TAE Technologies, told The New York Times. TAE has raised about $900 million, the largest-ever amount of funding raised by a fusion startup.

Although the company says it plans to become commercially viable by 2030, the technology remains nascent, which makes it difficult for traditional investors to understand. Binderbauer has, as a result, resorted to selling the technologies that have been developed so far in the nuclear startup’s journey to energy self-sustenance. A TAE subsidiary is working on a project to treat cancer using particle beams.

MIT’s Commonwealth Fusion Systems announced a breakthrough in September when it successfully tested a high-temperature superconducting electromagnet that generated a magnetic-field strength of 20 tesla. The strong magnetic field increases the rate of fusion energy production by better plasma confinement.

Commonwealth Fusion Systems believes it can produce nuclear-fusion-powered electricity by the early 2030s, and reach net energy generation by 2025.

The UK government has set an ambitious goal to become the first country to commercialize fusion energy. The government has invested around $248 million into a reactor that is planning to be viable by 2040. This would be a game-changer for the industry as well as how energy production and consumption is perceived around the world.

Currently, the largest fusion program is that of ITER based out of Southern France. A $22 billion multinational government-funded project, ITER is not designed to produce electricity but to showcase the feasibility of fusion technology.

Similar to MIT technology, ITER features a larger machine called a tokamak, which makes use of magnetic fields to confine and squeeze the plasma for triggering the fusion reaction. According to scientists, ITER is on track to deliver superheated plasma by the end of 2025, and full fusion by 2035.

When scientific breakthroughs happen, big investors are expected to participate in the fusion energy business. “Once the money starts getting behind things, the sky is the limit,” said David Harding, founder of investment management firms with holdings worth an estimated $36 million and a key backer of fusion tech companies. “There aren’t many fusion projects in the world, but there are many investors.”

Even if returns from investing in fusion technologies remain doubtful, especially in the near-term, supporters maintain that the technology is worth pursuing. Wind and solar cannot be relied upon to provide electricity in places and times when the climate cannot be depended upon. There are not many options left, they say.