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Suppliers to the nuclear fusion industry are expanding capacity as they bet a race to build reactors and power plants will create a lucrative market long before the technology delivers on its promise of abundant electricity.
Consultancy Helixos estimates that construction spending on commercial fusion plants will reach $73.1bn per year by 2040, more than three times the $20bn worth of electricity it expects them to generate by then.
Japanese manufacturer Fujikura and engineering group Aecom, based in the US, are among companies wagering that efforts to support the fusion sector will prove profitable years before it sells meaningful amounts of electricity.
Helixos co-founder Alex Borovskis said the first big commercial opportunity could come from building the “still relatively expensive” new plants because fusion will still be in its “early build-out phase”.
Investment has poured into fusion start-ups with governments and hyperscalers — companies such as Alphabet, Amazon and Microsoft that are building data centres — on the hunt for a clean energy source capable of powering electricity-intensive AI.
Fusion groups aim to commercialise a technology that replicates the reaction that powers the Sun by forcing atomic nuclei to combine in a superheated plasma.
While its proponents are excited because it emits no carbon and does not produce long-lived nuclear waste, fusion developers have struggled to turn the potential shown in experiments into sustained electricity production.
One engineering executive said that some private companies were setting “very, very ambitious” targets to “excite the market”, and predicted that many will drop out of the race before achieving commercial fusion.
But groups including Tokyo-based Fujikura are not deterred. It is spending about $72mn to triple production capacity for its superconducting magnet materials by 2027 and double it again by the spring of 2028, in anticipation of increased demand from private fusion companies.
The material is used in next-generation superconductors that generate the strong magnetic fields needed to contain superheated plasma.
“The volume needed for use of the material in fusion is really one or two orders of magnitude difference compared to other uses,” Masanori Daibo, general manager at Fujikura, told the FT, adding that future demand for the material would be mainly for fusion.
Dallas-based Aecom has invested in Type One Energy, a Bill Gates-backed start-up that is aiming to build commercial fusion plants in the US and UK by the mid-2030s.
Troy Rudd, chair and chief executive of Aecom, said fusion looked to be “five to 10 years away” from commercial deployment, rather than being “always 20 years off” — referring to a well-known joke in the industry.
“There is real economic investment being made,” he said. “This is not a money-losing proposition for us by any means.”
An executive at an engineering company said investments by suppliers were already generating “meaningful” revenue and that their own firm had about $250mn of orders.
A joint venture led by Kier Infrastructure, based in Salford in northern England, and French nuclear engineering company Nuvia in March won an initial £200mn contract to work on the UK’s national prototype fusion plant. The whole project, called Step, could eventually cost £20bn and aims to demonstrate commercial viability by delivering electricity to the grid by 2040.
Ross MacKenzie, managing director for natural resources at the British firm, said fusion has “quite a long runway” and that Kier wants to be “part of the conversation” about the technology’s development.
“When [fusion] develops in the future . . . it will go down one of probably several different avenues,” MacKenzie added. “And what we think is going to go down now, it’s probably going to be wrong.”
The rush has highlighted the fragility of the fusion sector supply chain. It is “small, specialised, fast-growing and currently constrained”, according to John Ruddleston at Ki Consultancy.
This means companies could be left unprepared to meet a sudden wave of orders. Superconducting materials, in particular, are dominated by a handful of Japanese and Chinese manufacturers, while uncertainty about future demand could discourage smaller suppliers from investing.
Kyoto Fusioneering, a provider of technology to the nuclear fusion industry, said it was trying to persuade its own suppliers to expand production of components such as gyrotrons, devices used to heat plasma.
Yuhei Nozoe, head of sales, said he had even arranged drinking sessions — in addition to regular meetings — as he sought to convince the companies to build capacity. Many were reluctant to spend money and bet on demand that may be decades away and could be delayed further.
Nozoe said he had been talking to “company CEOs, government people, everyone from top to bottom” to convey that demand for fusion equipment will come.
“For private companies, 10 years is already beyond the medium term and becomes a long-term plan,” he added. “So the question of whether they should invest now for that kind of timeline is a very difficult discussion.”
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