General Fusion is powering forward with a demonstration plant designed to show its novel energy technology can work at scale. New CEO Greg Twinney says the Burnaby, B.C.-based company will seek new funding within the next year, in what has been a hot market for fusion even as other late-stage private firms struggle amid recession fears and supply-chain challenges.

Companies in the nuclear fusion space hope to generate power in the same way as stars, ​​by combining atoms rather than splitting them apart as conventional reactors do. Unlike existing plants, the technology promises to generate less difficult-to-dispose radioactive waste and doesn’t require materials that can be used in atomic weapons.

Founded in April 2002, General Fusion is now backed by sovereign wealth funds and e-commerce billionaires, and has more than 200 staff, mostly based in Canada. In June 2021, it announced it would build its demonstration plant at the UK Atomic Energy Authority’s (UKAEA) Culham Science Centre, near Oxford, England. The prototype will be about 70 per cent of the size of the final product, which the firm intends to sell to utilities and other power operators.

General Fusion plans to begin construction at Culham in late 2022 or early 2023, said Twinney, speaking to The Logic from the U.K., where he was meeting with UKAEA officials. The firm originally aimed to turn on the plant in 2025, but now says it will likely need an additional year or two to be operational. While supply-chain issues have hit firms across the economy, General Fusion is “in a great position,” according to Twinney, citing its links to UKAEA—which has long-standing connections in the industry—and the way his company has designed its plant: “We’re using existing technologies to do this because it’s the most practical and cost-effective way.”

The company’s recent moves and partnerships have increasingly taken it beyond its B.C. base. The Culham centre is currently home to the Joint European Torus (JET), an experimental reactor set to be decommissioned after 2023. By building its own demonstration plant on the site, General Fusion will gain access to some of JET’s former workforce “These are people who’ve operated large fusion machines, which are a rare breed of people globally,” said Twinney, noting that working with the UKAEA “accelerates and derisks” its plans.  

In November 2021, General Fusion set up a U.S. office in Oak Ridge, Tenn., close to a flagship U.S. Department of Energy (DoE) nuclear lab. Twinney cited the expertise and high-speed computing capacity in the area as a draw. Domestically, General Fusion is moving to a larger facility near Vancouver International Airport, where it will continue to develop and test technology. It has “built the IP and the talent group in Canada,” said Twinney, who notes that there’s no equivalent of Culham or Oak Ridge here. “We are the fusion industry in Canada.” 

Twinney said Canadian governments and other domestic organizations did express interest in the demonstration plant, although General Fusion declined to name them. Nor would the company disclose how much funding the U.K. government is providing. In the U.S., General Fusion has retained a firm to lobby federal officials for money from a number of fusion programs, as well as on legislation affecting the sector. 

Ottawa has provided support. In October 2018, the federal government awarded General Fusion $49.3 million from the Strategic Innovation Fund to develop the technology for its demonstration plant. The company is also backed by Sustainable Development Technology Canada, a commercialization agency. General Fusion is now looking at federal and provincial programs to support its next demonstration and commercialization phase, said Megan Wilson, chief strategy and marketing officer.

The firm is still finalizing the demonstration-plant design, so it doesn’t yet have a cost estimate, said Wilson, although last year it told The Logic it would be approximately US$400 million. 

Investor-controlled General Fusion has raised nearly US$393 million to date, according to Pitchbook data. That includes a US$130-million Series E round closed in November 2021, led by Temasek, Singapore’s sovereign wealth fund. Other investors included the city-state’s GIC, the Business Development Bank of Canada (BDC) and Jameel Investment Management Company (JIMCO), as well as the family offices of Amazon founder Jeff Bezos and of Shopify founder Tobi Lütke and his wife Fiona McKean. 

Twinney, formerly General Fusion’s CFO, replaces Christofer Mowry, a longtime U.S. nuclear and power executive who became CEO in March 2017. “I’ve spent my entire career commercializing technology and bringing technology companies from early stage to scale-up and exit,” said Twinney, who previously held top roles at Markham, Ont.-based Real Matters, which he helped take public, and Vancouver’s Hootsuite.

General Fusion will need to raise capital again within the next 12 months to take it through the first phase of the fusion demonstration plant, he said. The company is targeting a multiple of the US$130 million it raised in its last round.

Twinney wants to raise enough to last the company for two or more years before seeking financing again. “That’s why we brought on investors like Tamasek and GIC and BDC—because they are with us for the long haul.” 

General Fusion isn’t the only firm in the sector cashing up. Fourteen fusion firms raised a combined US$2.98 billion in 2021, according to Pitchbook data. After decades of incubation in government programs, the technology’s development is speeding up in the private sector, said Zoltan Tompa, managing director of BDC’s cleantech practice. Researchers have made a number of significant advances that have brought it “to the cusp of scientific break-even”—that is, the point at which a reaction generates as much power as is required to create it. 

Those improvements, along with advancements in computing, materials, sensors and superconductors, make “fusion a viable prospect on a commercial basis within the next 10 to 15 years,” said Tompa.

Other firms in the space have raised significant sums. In December 2021, Cambridge, Mass.-based Commonwealth Fusion Systems closed a US$1.8-billion Series B round, led by Tiger Global Management with participation from Breakthrough Energy Ventures and its backer Bill Gates. 

But General Fusion doesn’t require the same amount of capital as competitors, who “still need to do a lot of frontier science,” Tompa said. For example, some other firms need lining materials that don’t yet exist capable of withstanding the neutrons released by the reaction—a problem General Fusion’s design avoids. 

General Fusion investors Temasek and JIMCO are also backing Commonwealth, while Lütke and McKean’s Thistledown Capital joined a €35-million ($50.2-million) Series A round for Munich-based Marvel Fusion in February. That doesn’t worry Tompa. Many investors are “taking a portfolio approach to fusion, fully recognizing that there’s a number of horses in the race [that will] finish at different speeds” or not at all, he said. It also means there are more financiers who understand the space and are comfortable with its risks. General Fusion, Tompa said, can target them as prospective investors.

Venture financing in Canada is starting to cool following record raises last year. But the “climate-tech space probably will not fall quite as far and quite as fast as undifferentiated tech,” said Tompa, noting that government net-zero targets and carbon-pricing policies have recently buoyed the sector. Global institutional investors including Toronto-based Brookfield Asset Management and TPG have brought in billions for climate funds, while venture firms have raised smaller funds that also need to be deployed. 

Fusion is necessary because it won’t be possible to produce enough power from renewables alone to get to a zero-carbon grid, said Tompa. Investors backing firms in the space “recognize that this is going to be a long hold,” he added, but they expect the return will be worth it. Or as Twinney puts it: “We are trying to sell fusion, and this isn’t something that’s going to happen overnight.”