Proxima Fusion signs agreement with Japan for fusion power supply chain

The race to build the world’s first commercial fusion power plant continues, and one of Europe’s leading candidates in the field has just received a boost.

Munich-based Proxima Fusion signed a memorandum of understanding with two Japanese industrial partners, Fujikura and Kyoto Fusioneering, in Tokyo on October 28. Both Japanese Prime Minister Sanae Takaichi and German Chancellor Friedrich Merz, who were visiting to deepen trade ties, were in attendance.

Anne Mettler, president of Brussels-based clean energy think tank Catalyze Europe and former vice president of Breakthrough Energy, said developing this technology should be a strategic imperative for Europe.

“Europe is a resource-poor geography and we rely heavily on China. The world is competing for technological superiority. It’s a zero-sum game,” Mettler told CNBC in a personal capacity.

“Fusion is a silver bullet because it promises abundant, clean, and limitless energy.”

Fusion energy seeks to replicate the way the sun generates electricity by using superheated plasma to fuse two lighter atomic nuclei into one heavier one, releasing vast amounts of energy in the process.

There are two main approaches: one uses high-power lasers and the other uses powerful magnets to confine the plasma. Proxima is developing a type of magnetic device called a stellarator that is designed to hold plasma in place for long periods of time.

The agreement with Kyoto Fusioneering will expand existing research on next-generation gyrotrons, devices that generate high-power microwaves used to heat plasma.

Proxima’s agreement with 141-year-old Fujikura will explore plans to manufacture high-temperature superconducting (HTS) tape, a special metal tape that becomes superconducting at relatively high temperatures and can conduct current with virtually no resistive loss, on an industrial scale in Germany.

The tape is coiled to form a powerful magnet that confines and controls the heated plasma within the stellarator.

Francesco Sciortino, co-founder and CEO of Proxima Fusion, told CNBC that Fujikura has more than 50,000 employees worldwide, has built a reputation on optical fibers, and is a leader in high-temperature superconductor manufacturing. “They think this tape could be the next fiber optic,” he said.

He said Proxima, which is considering plans to build a manufacturing facility in Lower Saxony, hopes to produce about 5,000 kilometers (3,100 miles) of tape a year by 2030.

The €140 million ($160 million) facility will be financed with a portion of the proceeds from a $468 million funding round in July that valued Proxima and whose backers included: alphabetOwned by Google, $2.7 billion.

Proxima estimates that the Alpha fusion demonstrator will require about 20,000 kilometers (12,400 miles) of tape, and the planned Stellaris fusion power plant will require an additional 40,000 kilometers (24,900 miles) of tape.

Sciortino said establishing tape production in Germany is important because it will help Europe build the expertise and supply chain needed to turn its leadership in fusion research into industrial capability.

This is something Europe has historically struggled with, according to Catalyze Europe’s Mettler.

“Every region wants to transform its scientific leadership into industrial leadership, which is something Europe has traditionally not been very good at, and to transform its scientific leadership into the euro,” she said.

Mettler said Europe had its industrial giants to be proud of, but disruptors tended to be more successful with frontier technologies.

“If Europe develops this technology first, we have a big advantage, but the key is building the supply chain,” he said.

Sciortino said he remains confident that Proxima will be the first company to operate a pilot plant, but stressed that the key to profitability is to make the plant’s operation as simple as possible.

“Designing, manufacturing and operating a factory can be complex,” he said. “Our view is that we can handle design and manufacturing complexity, but we need operational simplicity. We are aiming for net energy growth by the early 2030s.”

But Proxima also has wealthy competitors. These include U.S.-based Commonwealth Fusion Systems and Helion Energy, which are also backed by Google, and Canada’s General Fusion. China has a number of state-backed companies, most notably China Fusion Energy, but Tokyo-based Helical Fusion is leading the Japanese push.

“The fusion energy supply chain needs to be built years in advance. People tend to think of frontier technologies like a switch that can be thrown,” Mettler said. “That’s not the case here.”