Nu­clear fu­sion in­vestors feel they are spot­ting what could be the world’s big­gest dis­rup­tion – un­mak­ing and re­build­ing the world’s way of mak­ing elec­tric­ity.

The Peak (Hong Kong) - - Contents - STORY RYAN SWIFT

Nu­clear fu­sion in­vestors feel they are spot­ting what could be the world’s big­gest dis­rup­tion – un­mak­ing and re­build­ing the world’s way of mak­ing elec­tric­ity

By and large, the elec­tric­ity busi­ness is dirty. Gen­er­at­ing elec­tric­ity still in­volves burn­ing a lot of coal. Burn­ing nat­u­ral gas is cleaner, but still causes harm­ful emissions. De­spite years of heavy in­vest­ment in re­new­able en­ergy sources such as wind, so­lar and geo­ther­mal, these still con­sti­tute a dis­tinct mi­nor­ity of to­tal elec­tric­ity gen­er­a­tion. Add to that the al­most cer­tain in­crease in elec­tric­ity de­mand and gen­er­a­tion in the years to come, as Asia and Africa con­tinue to in­dus­tri­alise and ur­banise. The pres­sure for green sources of elec­tric­ity will only in­crease.

Nu­clear fis­sion, the process of split­ting heavy ura­nium atoms to cre­ate heat and there­fore elec­tric­ity, has fallen from fa­vor be­cause of the hor­ri­ble risks as­so­ci­ated with the ra­dioac­tive waste that re­sults from the fis­sion process. Ch­er­nobyl and Fuk­ishima are tes­ta­ments to that. Yet, nu­clear fis­sion is one of the big­gest sources of emissions-free elec­tric­ity the world has.

To fix this dilemma, a global band of sci­en­tists and en­gi­neers have been on a quest to crack the rid­dle of nu­clear fu­sion power, a po­ten­tial source of clean, lim­it­less elec­tric­ity. For over 50 years, ma­jor gov­ern­ments and re­search labs have com­mit­ted re­sources to try­ing to make nu­clear fu­sion power work, in the hope that pol­lu­tion-free, read­ily avail­able elec­tric­ity can be had, ev­ery­where in the world. Nu­clear fu­sion re­lies on iso­topes of hy­dro­gen, read­ily found in sea­wa­ter.

Nu­clear fu­sion power is made by fus­ing to­gether two hy­dro­gen atoms to cre­ate a heav­ier helium atom, which re­leases a tremen­dous amount of heat en­ergy. The process is the same, that pow­ers the Sun, and therein lies the prob­lem. Cre­at­ing and con­tain­ing a nu­clear fu­sion re­ac­tion is es­sen­tially try­ing to cre­ate and con­trol a small piece of the Sun, on Earth. It’s re­ally hard to do. Gen­er­at­ing the tem­per­a­tures nec­es­sary to in­duce fu­sion of hy­dro­gen re­quires enor­mous in­puts of en­ergy. More­over, the Sun re­lies on pres­sure from its grav­ity to in­duce fu­sion of hy­dro­gen atoms. To get a hy­dro­gen gas to a state hot enough to cre­ate fu­sion (known as a plasma) re­quires that gas to reach tem­per­a­tures of about 100 mil­lion de­grees Cel­sius. The tem­per­a­ture of the core of the Sun is es­ti­mated to be about 15 mil­lion de­grees by com­par­i­son. But the big ques­tion is, how do you har­ness some­thing that’s 100 mil­lion de­grees? And that has been the ques­tion that’s stopped fu­sion from join­ing and prob­a­bly tak­ing over the world’s en­ergy mix.

A com­mon re­frain among fu­sion en­thu­si­asts and en­gi­neers is that nu­clear fu­sion is just 30 years away – and has been so for at least 40 years. Ev­ery so of­ten, the prospects of nu­clear fu­sion as a com­mon power source seem to brighten, only to dim again as en­gi­neer­ing chal­lenges refuse solutions. Un­til now, al­most all re­search and progress in nu­clear fu­sion tech­nol­ogy has come from ma­jor in­ter-gov­ern­men­tal pro­grammes or na­tional fu­sion lab­o­ra­to­ries work­ing with lead­ing uni­ver­si­ties.

Yet, in the past few years, a small band of sci­en­tists and en­gi­neers, some de­mor­alised by slow progress in ex­ist­ing labs, have be­gun to work on smallscale projects, tak­ing start-up ap­proach to the en­gi­neer­ing prob­lems, which could fi­nally yield the long awaited so­lu­tion of how to com­mer­cialise nu­clear fu­sion power. Along the way, they have opened up op­por­tu­ni­ties for early stage in­vestors, keen to see fu­sion power be­come re­al­ity – and pos­si­bly be­come the world’s first tril­lion­aires in the process.


In 1985, as the Cold War was about to en­ter its last phase, then USSR Sec­re­tary Gen­eral Mikhail Gor­bachev and US Pres­i­dent Ron­ald Rea­gan met in Geneva, Switzer­land, to dis­cuss a range of is­sues. At that meet­ing, they set in mo­tion an enor­mous project now called ITER (In­ter­na­tional Ther­monu­clear Ex­per­i­men­tal Re­ac­tor), whose aim was to solve the en­gi­neer­ing rid­dles of cre­at­ing a sta­ble and con­tained nu­clear fu­sion re­ac­tion, draw­ing from it the heat re­quired to gen­er­ate elec­tric­ity. ITER has since been the main fo­cus of in­tra-gov­ern­ment fund­ing and at­ten­tion for decades. The Sovi­ets and the Amer­i­cans had both been work­ing on the pos­si­bil­i­ties of nu­clear fu­sion power up to that point. The com­mu­niqué re­leased by the US and USSR em­pha­sised the im­por­tance of nu­clear arms re­duc­tion and peace­ful co­op­er­a­tion. The last item on the com­mu­niqué said that the na­tions of the world should be brought to­gether to de­velop and widely dis­trib­ute the “es­sen­tially in­ex­haustible” en­ergy from fu­sion power.

To­day, the mas­sive ITER re­ac­tor is cur­rently un­der con­struc­tion in Cadarache, in the South of France, and it could eas­ily be the most com­plex en­gi­neer­ing en­deavor on Earth. There are now 35 na­tions di­rectly in­volved with the ITER project, while many of these na­tions har­bour their own na­tional and univer­sity lab­o­ra­to­ries do­ing re­search work on nu­clear fu­sion, and on build­ing re­ac­tors with the aim of bet­ter un­der­stand­ing the physics and the en­gi­neer­ing.

The web­site for ITER touts its size, with an ar­ray of over­whelm­ing sta­tis­tics, al­most as if to jus­tify the many bil­lions that have been spent so far. Over 4000 work­ers are or will be re­quired on a site cov­er­ing 180 hectares. At the heart of it all is the main re­ac­tor build­ing (one of 39 build­ings on site), which is a seven-storey struc­ture in re­in­forced con­crete. The re­ac­tor core will weigh three times as much as the Eif­fel Tower, and the cen­tral mag­net at the core will gen­er­ate a force twice that of the rocket power of a space shut­tle. So far, the cost of build­ing the ITER re­ac­tor is es­ti­mated at US$20 bil­lion (HK$ 155 bil­lion), four times the orig­i­nal es­ti­mate 10 years ago.

But for the small ven­tures now set­ting out on their own, it is ITER’S gar­gan­tuan size that is the big­gest prob­lem. Bu­reau­cracy is widely blamed for de­lays and cost over­runs, and that’s frus­trat­ing to the sci­en­tists and en­gi­neers des­per­ate to see fu­sion be­come a re­al­ity. Worse, ITER takes up much of gov­ern­ment fund­ing, leav­ing univer­sity based re­search labs and projects search­ing for money. And ITER it­self is not im­mune to fund­ing in­ter­rup­tions – the United States Congress has re­peat­edly ques­tioned the prospects of con­tin­ued fund­ing.

Com­pared to the colos­sal ef­fort at Cadarache, Cana­dian fu­sion com­pany Gen­eral Fu­sion’s op­er­a­tion is tiny. It is tucked into a large ware­house at the end of a non­de­script cul-de-sac on the out­skirts of Van­cou­ver, and em­ploys less than 70 peo­ple. Yet, it is this op­er­a­tion that sev­eral pri­vate in­vestors are bet­ting will win the race to com­mer­cialise


nu­clear fu­sion power. Should Gen­eral Fu­sion (or another of the con­tes­tant com­pa­nies) win that race, then it and its in­vestors could over­turn the global elec­tric­ity in­dus­try, a busi­ness mea­sured in tril­lions of dol­lars.

For Christofer Mowfry, newly-in­stalled CEO of Gen­eral Fu­sion, the last decade has seen a “par­a­digm shift” in the way fu­sion re­search and de­vel­op­ment is be­ing done, from large gov­ern­ment pro­grammes to smaller, faster ven­tures. It is a de­vel­op­ment in­spired in part by the growth of start-up ven­tures in rock­etry and space ex­plo­ration – if start-up ven­tures can do that, why not nu­clear fu­sion?

Given that cur­rent in­vest­ments in such nu­clear fu­sion pro­grammes are of­ten mea­sured in the mil­lions or tens of mil­lions of dol­lars, it’s a cap­ti­vat­ing idea, par­tic­u­larly if you’re a far-sighted tech guru. Bil­lion­aires such as Jeff Be­zos, Mi­crosoft’s Paul Allen, Peter Thiel and oth­ers have de­cided to stake their claim on the po­ten­tial of nu­clear fu­sion.


The tech­ni­cal chal­lenges to fu­sion are im­mense. A 100-mil­lion de­gree plasma has to be cre­ated, sus­tained and con­trolled. It has to be held in a vac­uum us­ing mag­netic forces, as noth­ing can touch it. Yet, heat needs to be cap­tured to ul­ti­mately gen­er­ate the elec­tric­ity. At the same time, gen­er­at­ing tem­per­a­tures that run to the mil­lions of de­grees also re­quires an enor­mous en­ergy in­put. So far, no­body has achieved net en­ergy gain from a fu­sion re­ac­tion.

Var­i­ous fu­sion pro­grammes at univer­sity and gov­ern­ment labs have made progress and de­vel­oped a num­ber of pos­si­ble ap­proaches to the chal­lenges. In fact, a num­ber of the ideas that start-up ven­tures are look­ing at are based on older de­signs that may have be­come vi­able thanks to new ma­te­ri­als, tech­nol­ogy and faster com­put­ing power. Gen­eral Fu­sion’s Mowfry cites the on­set of high speed com­put­ing as a ma­jor rea­son that his com­pany is mov­ing for­ward. “A lot of the fun­da­men­tal work and tech­ni­cal plat­forms have been cre­ated or de­vel­oped by gov­ern­ments in na­tional lab­o­ra­to­ries,” Mowfry says. “In the last 10 to 15 years, the com­put­ing power and data an­a­lyt­ics have gone up enough to al­low in­sights into the data that Gen­eral Fu­sion gen­er­ates.”

It’s the high speed com­put­ing power that also al­lows for Gen­eral Fu­sion’s pre­ferred ap­proach to gen­er­at­ing fu­sion – pre­cisely timed “pis­tons” that rapidly com­press a plasma to cre­ate a fu­sion burst. For David King­ham, CEO of Toka­mak En­ergy in the UK, a key tech­nol­ogy has been the de­vel­op­ment of high tem­per­a­ture su­per con­duc­tors, which only started to be man­u­fac­tured

around 2011. These su­per con­duc­tors are needed to make the mag­netic fields needed to con­tain a plasma, and do so in a rel­a­tively small space.

The ITER de­sign, King­ham says, was de­vel­oped be­fore these con­duc­tors were avail­able, and he sug­gests that ITER is wedded to a de­sign that should have been aban­doned long ago. It is for this rea­son, he says, that some sci­en­tists and en­gi­neers have drifted away from the big projects like ITER, in search of faster mov­ing projects. Last year, ITER chief Bernard Bigot said the re­ac­tor will not see the first plasma test be­fore 2025, while fu­sion won’t hap­pen be­fore 2035.

While ITER cel­e­brates its size, for the in­vestors and CEOS of the small ven­tures, be­ing small af­fords a flex­i­bil­ity re­quired to over­come the im­mense tech­ni­cal chal­lenges. By be­ing small, nu­mer­ous changes and it­er­a­tions to a re­ac­tor de­sign can be made at each step, rather than be­ing com­mit­ted to a gar­gan­tuan – but flawed de­sign. New tech­nol­ogy can be quickly in­cor­po­rated and changes can be quickly made.



The growth of a hand­ful of com­pa­nies led by sci­en­tists and en­gi­neers try­ing to build a com­mer­cial fu­sion re­ac­tor has opened the way for nu­mer­ous in­vestors to get in­volved. But it’s not an easy field to deal with. How does an in­vestor tell the dif­fer­ence be­tween one ap­proach to nu­clear fu­sion from another, es­pe­cially when both meth­ods may have top-level sci­en­tists and en­gi­neers on staff?

Both King­ham and Mowfry point to a staged model of fund­ing as pro­vid­ing a means of as­sur­ance for in­vestors. “We set out a plan to raise money in or­der to hit (tech­ni­cal) mile­stones. We first tackle a tough chal­lenge, then raise more money,” says King­ham. Such an ap­proach al­lows in­vestors to feel that their money is not just go­ing into a sci­ence project with no de­ter­mined out­come, or just into a re­search black hole with no bot­tom. It also po­ten­tially helps to get in­vestors that are used to look­ing at much shorter, more de­fined time­lines, to get on­board.

Ven­ture cap­i­tal funds SET Ven­tures and Chrysalix were both early stage in­vestors in Gen­eral Fu­sion, around 2009 and 2010. Both found out about the work of Gen­eral Fu­sion through part­ners and de­cided to press for­ward. “We were com­pelled by the story (of Gen­eral Fu­sion), us­ing fu­sion tech­nol­ogy in a cost ef­fec­tive man­ner. They look at it like it’s not just a sci­ence ex­per­i­ment. We looked around, and there were not many other fu­sion ven­tures at that time,” says Rene Savels­berg, CEO of SET Ven­tures.

Both SET Ven­tures and Chrysalix had to rely on third party ex­perts to guide them on their prospec­tive in­vest­ment in fu­sion. In SET’S case, Savels­berg says they went to an in­sti­tute in the Nether­lands linked to the ITER project for ad­vice, hold­ing a num­ber of ses­sions with them be­fore fi­nally sign­ing on. Chrysalix did some­thing sim­i­lar in Canada. “I don’t think any­one can in­vest with­out out­side ex­perts,” says Mike Sher­man, man­ag­ing part­ner of Chrysalix and now a board mem­ber of Gen­eral Fu­sion.

That said, both CEOS and in­vestors say that the pool of in­vestors can now widen, as sev­eral ven­tures move from an early stage of de­vel­op­ment to­wards a more com­mer­cial stage. Gen­eral Fu­sion has man­aged to at­tract in­vestors rang­ing from pri­vate in­di­vid­u­als (Jeff Be­zos, bil­lion­aire founder of Ama­zon) to the sov­er­eign wealth fund Khaz­anah Na­sional.

Toka­mak En­ergy in the UK counts tech in­vestors such as UK bil­lion­aire and hedge fund founder David Hard­ing, who fa­mously brought sci­en­tific and math­e­mat­i­cal rigour to the world of in­vest­ing in the 1980s, mak­ing his for­tune along the way. Also on board is Sir Martin Wood, founder of Ox­ford In­stru­ments and a pi­o­neer in su­per­con­duc­tors. King­ham says that Toka­mak En­ergy is up to 25 in­vestors now, half of which are in­di­vid­u­als and the other are in­sti­tu­tional in­vestors, and that a num­ber of share­hold­ers have in­vested on sev­eral rounds. “Ul­ti­mately, we need to raise more than €200 mil­lion to make the progress we want,” King­ham says.

There are less than half a dozen se­ri­ous, pri­vate nu­clear fu­sion ven­tures world­wide that have re­ceived any in­vest­ment. Though these com­pa­nies will not pub­licly pro­vide in­vest­ment in­for­ma­tion, Dr Stephen Dean, pres­i­dent of Fu­sion Power As­so­ciates, a non-profit re­search and ed­u­ca­tion foun­da­tion, es­ti­mates that about US$500 mil­lion has been in­vested in such ven­tures so far. He puts an­nual ex­pen­di­tures at about US$100 mil­lion. These are rel­a­tively small fig­ures, but given the tech­ni­cal com­plex­ity and the high risk, high re­ward na­ture of fu­sion power, it could also be viewed as the right mo­ment to plant a flag.

One big thing that has changed is the na­ture of the in­dus­try, says Chrys­lix’s Mike Sher­man. He points to two ma­jor shifts since Chrysalix put money down on Gen­eral Fu­sion – an in­crease in the num­ber of pri­vate fu­sion power ven­tures, and an in­crease in the ur­gency in the dis­cus­sion about cli­mate change. Fu­sion power was the sub­ject of a re­cent doc­u­men­tary screened at the SXSW fes­ti­val (a gath­er­ing of the Tech­no­rati) called Let There Be Light, which high­lights both the dif­fi­cul­ties with the ITER project, and the hope­ful chal­lenge mounted by Gen­eral Fu­sion.

The dis­cus­sion around solv­ing the cli­mate cri­sis has also brought on board im­pact in­vestors. Cana­dian bil­lion­aire Jeff Skoll, who was the first in­vestor in ebay and later fi­nanced a num­ber of so­cially-ori­ented films, in­clud­ing Al Gore’s 2006 doc­u­men­tary, An In­con­ve­nient

Truth, has in­vested in He­lion En­ergy, along­side Peter Thiel.

It may also be that some of the tech bil­lion­aires be­hind such dar­ing ven­tures are also sim­ply in­ter­ested in mak­ing sure that progress on nu­clear fu­sion is made, re­gard­less of who wins the race. That may yield re­sults for in­vestors, even if they back the los­ing horse. “The in­tel­lec­tual prop­erty sit­ting with Gen­eral Fu­sion is pretty valu­able al­ready,” says Savels­berg of SET Ven­tures. “Ev­ery time we look, we see progress.”

The end goal for all these ven­tures is a com­mer­cialised re­ac­tor, com­pact enough to be man­u­fac­tured on in­dus­trial land and shipped any­where in the world. Nu­clear fu­sion re­lies on iso­topes of hy­dro­gen, read­ily found in sea­wa­ter. Both Mowfry and King­ham ex­pect to be able to masspro­duce their patented re­ac­tors for buy­ers glob­ally. King­ham en­vi­sions man­u­fac­tur­ing will take place on old dock­lands near Lon­don. By 2019, Toka­mak En­ergy aims to get its new­est re­ac­tor, the ST40 to nearly fu­sion gain – mean­ing that al­most as much en­ergy is com­ing out as go­ing in. From there, King­ham reck­ons the next step will be a re­ac­tor that could be a pro­to­type for a com­mer­cial re­ac­tor – along with the fund­ing to make it hap­pen.

Both CEOS see their com­pa­nies get­ting to com­mer­cialised fu­sion power by the 2030s. But op­ti­mism, how­ever help­ful, doesn’t change the fact that fu­sion is hard to do. Nu­clear physi­cists seem di­vided on whether the start-up ap­proach to some­thing so tech­ni­cally dif­fi­cult can ac­tu­ally suc­ceed. The fun­da­men­tal ques­tion re­mains: can a small, in­vestor driven start-up beat the jug­ger­naut that is ITER?

Then, there is the fact that fel­low tech bil­lion­aires aren’t all con­vinced of fu­sion’s prom­ise. Elon Musk has said that fu­sion power would be great, but that with so­lar, you have “in­di­rect ac­cess to fu­sion power” al­ready. And a new gen­er­a­tion of nu­clear fis­sion sci­en­tists is also em­ploy­ing the start-up ap­proach to the ques­tion of mak­ing nu­clear fis­sion, with its ra­dioac­tive is­sues, bet­ter and more ro­bust.


Should nu­clear fu­sion power be­come a re­al­ity, one of the big­gest ben­e­fi­cia­ries would be Asia. China still gets the over­whelm­ing ma­jor­ity of its elec­tric­ity from burn­ing coal and In­dia is strug­gling to add power


gen­er­a­tion ca­pac­ity. Re­new­ables are part of the mix, but are still far be­hind over­all re­quire­ments. Com­pact nu­clear fu­sion re­ac­tors could also pro­vide power to cities re­gard­less of lo­ca­tion. Mowfry even spec­u­lates that com­pact nu­clear fu­sion re­ac­tors could be lo­cated in­side a city, which he says is per­fect for densely pop­u­lated Asia, though such a huge re­order­ing of power dis­tri­bu­tion would be a chal­lenge.

Gen­eral Fu­sion’s Mowfry in­di­cates that, as of this fall, he will be tour­ing Asia, look­ing for the next round of fund­ing to take Gen­eral Fu­sion through its next en­gi­neer­ing chal­lenge. Hong Kong is on his list of very prob­a­ble des­ti­na­tions. David King­ham of Toka­mak En­ergy UK is also in­ter­ested in Asian sources of fund­ing. So far, Toka­mak En­ergy hasn’t re­ceived any in­vest­ment from Asia, but King­ham says he is in talks now with sev­eral po­ten­tial in­vestors in Asia.

For Hong Kong based in­vestors, the op­por­tu­nity to change the world, and get a piece of the ac­tion, is com­ing soon. If, by 2030, a cou­ple of com­pact nu­clear fu­sion re­ac­tors are pow­er­ing Hong Kong, the in­vest­ment will have been worth it. The only thing stand­ing in the way is the ques­tion of how to keep a 100-mil­lion-de­gree gas con­tained and pro­duc­tive.

An artist's con­cep­tion of the plasma in­side ITER


The In­ter­na­tional Ther­monu­clear Ex­per­i­men­tal Re­ac­tor in Saint-paulles-du­rance, south­ern France. Ger­man Chan­cel­lor An­gela Merkel at the Wen­del­stein 7-x nu­clear fu­sion re­ac­tor of the MaxPlanck-in­sti­tut für Plasma­physik in Greif­swald, north­ern Ger­many on Fe­bru­ary 3, 2016.


Gen­eral Fu­sion is in­vest­ing heav­ily in find­ing a so­lu­tion to cre­at­ing ef­fec­tive fu­sion tech­nol­ogy. Christofer Mowry, CEO of Gen­eral Fu­sion.

ABOVE AND BE­LOW Gen­eral Fu­sion's lab­o­ra­tory in Bri­tish Columbia, Canada;toka­mak En­ergy's power mod­ule con­cept de­vel­oped with Prince­ton Univer­sity.

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