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Commonwealth Fusion Systems raises $1.8 billion to build a real ARC reactor

After decades of seeing fusion as the "holy grail" of energy that's just over the horizon, this may be the decade where the technology comes to market.

If successful, the technology could usher in a new era of cheap, clean energy for the world. And it would be thanks to the heroic efforts of technologists like the team at Commonwealth Fusion Systems, which just announced it has raised $1.8 billion in new funding.

That's the largest single private investment in fusion technology to date and it came from a slew of some of the most active investors in climate technologies (including us).

“The world is ready to make big investments in commercial fusion as a key part of the global energy transition," said CFS chief executive Bob Mumgaard, in a statement. "This diverse group of investors includes a spectrum of capital from energy and technology companies to venture capitalists, hedge funds, and university endowments that believe in fusion as a large scale solution to decarbonize."

All of this money is pouring in for one reason: fusion has the potential to create hundreds of megawatts of energy from a resource as common as a glass of seawater -- and without any longterm radioactive waste.

That's why investors (like us) are excited about the technology. And it's why a group of strategic, financial, and some of the world's wealthiest people are backing the company.

These are some of the biggest names in investing including: Tiger Global Management; Bill Gates; Coatue; DFJ Growth; Emerson Collective; Fine Structure Ventures; Google; JIMCO Technology Fund, part of JIMCO, the Jameel Family’s global investment arm; JS Capital; Marc Benioff’s TIME Ventures; Senator Investment Group; a major university endowment; and a pension plan; as well as current investors, including Breakthrough Energy Ventures; The Engine; ENI; Equinor Ventures; Future Ventures; Hostplus; Khosla Ventures; Lowercarbon; Moore Strategic Ventures; Safar Partners; Schooner Capital; Soros Fund Management LLC; Starlight Ventures; Temasek; and others.

We're not the only investors that are investing technologies bringing fusion power to market. In early November, Helion Energy announced a $500 million investment with another $1.7 billion in milestone-based commitments -- bringing its total potential capital raised to $2.2 billion.

And General Fusion, a Canadian startup pursuing the commercialization of fusion energy, raised $130 million to fund the development of its own approach to fusion power.

If any of these companies is successful, it would be a huge win for the world -- and each is pursuing slightly different approach to generating power.

Helion is betting on small, modular systems that generate electricity directly without using steam turbines. The company's founders see that as a competitive advantage that could see them integrated into energy systems sooner -- and they're aiming to have a pilot reactor ready by 2024.

"Every time we make a technology choice and a pathway toward development... we focused on mass production," said Helion founder David Kirtley.

Unlike Helion's approach, which uses a novel design, Commonwealth Fusion Systems is looking to stand on the shoulders of decades of research conducted by some of the world's most brilliant physicists to integrate into existing power systems.

It's the same system design that governments are pouring billions into for the massive $22 billion ITER fusion energy project under construction in France.

Commonwealth's innovations take the decades of research into that fusion power plant design, called a Tokamak, and combine it with new material science innovations to bring dramatically reduce the size, cost, and complexity of a reactor system.

The published, peer-reviewed papers on the technologies they've developed indicate that their approach should work. Even if some scientists think it will take two times as long as Commonwealth projects to get there.

“Reading these papers gives me the sense that they’re going to have the controlled thermonuclear fusion plasma that we all dream about,” Cary Forest, a physicist at the University of Wisconsin who is not working with Commonwealth told The New York Times. “But if I were to estimate where they’re going to be, I’d give them a factor of two that I give to all my grad students when they say how long something is going to take.”

Commercialization is critical. Adam Stein, a senior nuclear energy analyst at the Breakthrough Institute, a California think-tank, told The Wall Street Journal that he expected to see successful demonstration projects within the decade, but that the critical step is getting to market.

"Net positive energy is a long distance away from net positive power, which is a system that can put out more power than it uses, ultimately as electricity on the grid," Stein said. "These are still demonstration projects we're looking at."

The funding for Commonwealth is intended to move the company beyond a demonstration project and begin work on its ARC reactor (yes, it's called an ARC reactor) -- which would be the first commercial fusion power plant. Financing will advance the design, finalize the site, and help bring partners around the table for the world's first fusion power plant.

Strategic investors like the Italian energy giant, Eni could help Commonwealth Fusion Systems get there.

"From the very beginning, we have strongly believed that this technology could be breakthrough on the path to producing net zero energy. Magnetic fusion can significantly increase the pace at which the world cuts its carbon emissions," said Claudio Descalzi, the chief executive officer of Eni, in a satement. "We have worked with the CFS team for these last years because we recognized that their work could transform the energy landscape. Thanks to their monumental breakthroughs, a commercial fusion plant is soon going to be within reach. We’re proud to be backing the company with significant new investment together with project management and engineering expertise to make that prospect a reality."


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