Feds commit $50 million to for-profit nuclear fusion companies, chasing the 'holy grail' of clean energy
- The Department of Energy officially announced that $50 million will go toward private nuclear fusion companies in public-private partnerships.
- The U.S. government has put federal money into fusion science research since the 1950s and today invests about $700 million per year into fusion research, Andrew Holland, the CEO of the fusion industry trade group, told CNBC.
- This is the first time substantial amounts of money have gone to for-profit companies.
The United States government is putting a sizable amount of money behind private sector nuclear fusion companies for the first time in the latest sign of how momentum is building behind the "holy grail" of clean energy.
At the Global Clean Energy Action Forum in Pittsburgh on Thursday, the Department of Energy officially announced $50 million will go toward private fusion companies in public-private partnerships.
"This money signifies that the U.S. government is getting serious about building a fusion program that will have commercial significance on an accelerated timeframe," Andrew Holland, the CEO of the Fusion Industry Association, an industry trade group, told CNBC.
"If the U.S. government puts its full weight behind accelerating fusion energy to the grid, it could bring a transformational new energy source to the U.S.," Holland told CNBC.
Conventional nuclear reactors are based on nuclear fission, a process in which a neutron slams into a large atom and splits it, releasing energy. Nuclear fusion occurs when two heavier atoms slam together to form a heavier atom — the way stars are powered. It is often seen as the holy grail of clean energy, because it offers virtually unlimited energy, releases no greenhouse gasses and generates no long-lasting nuclear waste. But it's proven very difficult to duplicate the process safely in a way that can be scaled and commercialized.
The U.S. government has put federal money into fusion research since the 1950s and today invests about $700 million per year. Holland told CNBC. But that money has mostly gone toward national labs and universities and toward the primary international research project in France, ITER.
But the $50 million announced in Pittsburgh for private fusion companies "is the first substantial investment by the U.S. government into private sector fusion-energy companies," Holland told CNBC.
"This is not for pure science. This is a commercial development and deployment program," Holland told CNBC.
The $50 million will help companies prepare detailed plans, but isn't sufficient funding to construct expensive fusion power plants. Nevertheless, it will help bolster and give U.S fusion companies credibility.
"This is critical since fusion power is such an audacious but vital technology for the United States and our collective fight against climate change. We want a U.S. firm to be the first to reach net power," Matthew Moynihan, a nuclear fusion consultant, told CNBC.
"Net power" refers to a key threshold in the fusion industry whereby more power is generated than it takes to catalyze the reaction. "This is also more than just a paycheck: Winning this funding will give firms the government's stamp of approval, something investors will want to see as they consider adding more money to the industry," Moynihan told CNBC.
The private sector fusion industry has attracted almost $5 billion in venture capital and other funding, according to the Fusion Industry Association.
Notable recent raises include $1.8 billion in funding from Commonwealth Fusion Systems, a spinoff from Massachusetts Institute of Technology research, from a slew of heavy-hitting investors including Bill Gates, John Doerr, Salesforce co-CEO Marc Benioff's Time Ventures, and Google. Another private fusion company, Helion, announced a $500 million raise led by Silicon Valley insider Sam Altman and which includes the potential for another $1.7 billion in funding depending on Helion meeting particular funding goals.
While the program is currently funded at $50 million over the next 18 months, Congress has authorized spending as much as $415 million in future budgets. The public-private funding program was first authorized in the Energy Act of 2020.