US-based Type One Energy has announced the closing of its record US$82.4 million seed financing round – and one of its big investors is a Kiwi venture capital firm that wants to commercialise fusion energy here.
Vignesh Kumar, joint managing partner of the GD1 fund, says Type One’s focus on advancing its FusionDirect programme in the ASEAN region and specifically New Zealand makes investment “a very compelling thesis for us”.
“If you’re able to establish something like a prototype fusion plant in this part of the world, you’re really able to add a bit more validation to the thesis around energy supply,” he tells Newsroom.
Kumar points out that most New Zealand electricity generation is from renewables like hydro that are subject to the vagaries of weather, and so that’s contributing to soaring power prices. Adding clean, affordable fusion energy to the mix would help smooth those impacts.
Type One Energy chief executive Chris Mowry also emails from the US, to say the company has “a robust vision” for the region. “Australia and New Zealand are really leaning forward on climate policy and environmental policy. They’ve got a great innovation ecosystem and those are things that make those locations great places for us to launch our focus on Southeast Asia.”
Fusion is a developing technology that’s not yet been made commercially viable, yet governments including the US, UK and Japan are investing heavily in it – at least US$426 million already.
Private investors have put in more than 10 times that: US$6.7 billion, according to a new Fusion Industry Association report.
“Would I entertain a micro fusion reactor in my backyard? Yeah, I probably would. But I’m a venture capitalist investing in frontier technology – my risk tolerance is insanely high!”
Vignesh Kumar, GD1 joint managing partner
They see it as something of a magic bullet – like existing nuclear fission power plants, but without the same costs or risks.
“As fusion advances towards commercialisation, the consistent and growing investment from both private and public sectors is vital for overcoming the scientific and engineering challenges that remain,” the report says.
The International Atomic Energy Agency agrees: it is stepping up its support to member states, it says, by accelerating the research and development of fusion energy generation to meet tomorrow’s energy demands and mitigate carbon emissions. “International collaboration is vital to achieving this grand engineering challenge of the 21st Century.”
Simply put, nuclear fusion is the process by which two light atomic nuclei combine to form a single heavier one while releasing massive amounts of energy.
A fusion reaction (like what happens on the surface of the sun) releases four times more energy than a fission reaction. But it’s difficult to generate: it requires enormous heat to create a state of matter called plasma – a hot, charged gas made of positive ions and free-moving electrons that has unique properties distinct from solids, liquids and gases.
There are 45 companies around the world known to be working to perfect and commercialise fusion by the early 2030s, including Type One Energy in Tennessee, and NZ’s own OpenStar in Wellington.
Investors include everyone from Bill Gates to venture capitalists to this country’s Ngāi Tahu Holdings – but they want governments to come to the party, to kickstart what they see as a public good technology that could help the world decarbonise with cheap electricity.
“If I was being judged by my grandkids, in the way that I look up to my grandparents, I think this is the choice I should make.”
Ratu Mataira, OpenStar
Kumar, who previously worked in senior engineering roles for Fisher & Paykel Healthcare and for Apple, declines to say whether he’s spoken with Government ministers about backing fusion, but he’d welcome their support for a prototype plant. “I absolutely would,” he says.
“Public-private partnerships are how you get things out of the lab, especially when they are large, complex science and engineering-dense projects. There’s a bit of education though to go, so I think people have to first realise this isn’t a scary thing.
“The public has a bit of learning, and so do our Government and officials. Given the country’s appropriate stance on nuclear fission, obviously we want to not go anywhere near that. But I think New Zealand has to kind of sober up and realise it’s not ‘nuclear’ that’s a problem. It’s fission that we’re against, but we want to be supportive of technologies like fusion.”
Auckland-based Kumar has personal experience of the lifesaving power of technology. After successfully overcoming his own nine-month battle with blood cancer, he co-founded Journey Health, a digital health patient reported outcomes platform for oncology care. So there’s not much that scares him, personally.
“We are proud to support innovative Māori entrepreneurs, such as Ratu Mataira, whose mahi exploring new technologies has the potential to significantly change the world’s energy generation landscape.”
Todd Moyle, Ngāi Tahu Holdings
“Would I entertain a micro fusion reactor in my backyard? Yeah, I probably would. But I’m a venture capitalist investing in frontier technology – my risk tolerance is insanely high!”
OpenStar founder Ratu Mataira agrees that he and his fellow scientists are trying to manage any imaginable risk to fusion energy, but thus far there seem to be few environmental or safety concerns. “A lot of smart people have tried really hard to think of everything we can.”
Most fusion reactions, including those at OpenStar, are fuelled by deuterium (a stable isotope of hydrogen extracted from seawater) and tritium (another such isotope, but it has to be generated in nuclear reactors). So one challenge is to limit the risk of any environmental release of the radioactive tritium.
OpenStar has already announced the completion of $12m in capital raises, and Mataira says there is potential for more. One possible source of investment could be the pharmaceutical industry, which is seeking suppliers of medical isotopes with the pending closure of key nuclear fission plants around the world. OpenStar could produce those isotopes.
The 32-year-old Mataira was inspired to success by family including his grandmother, the late Dame Kāterina Te Heikōkō Mataira, a te reo educator who became known as “the mother of kura kaupapa Māori”.
His path has been different, into science and a PhD – but he feels the same duty to future generations. “Fusion is the one technology, for a physicist, that will actually have a shot at helping ameliorate climate change. And if I was being judged by my grandkids, in the way that I look up to my grandparents, I think this is the choice I should make.”
Mataira, who is of Ngāti Porou and Ngāti Kahungunu whakapapa, is particularly excited that one of OpenStar’s investors is an iwi investment company. It’s important that iwi move away from farming and forestry, he says, and into more exciting opportunities like fusion and high risk ventures.
“With the vast amount of money that has already gone into other sources of energy, it is appropriate for significant new investment by governments into clean, safe, sustainable fusion energy.”
Andrew Holland, Fusion Industry Association
Ngāi Tahu Holdings’ chief executive, Todd Moyle, says investing in innovative new economy businesses is important to protect and grow the Ngāi Tahu Holdings portfolio in the long-term.
“These investments are a small percentage of our wider portfolio and are typically made alongside leading venture capital managers, reflecting the early stage and high growth nature of these companies,” he explains to Newsroom.
“We are proud to support innovative Māori entrepreneurs, such as Ratu Mataira, whose mahi exploring new technologies has the potential to significantly change the world’s energy generation landscape.”
Fusion Industry Association chief executive Andrew Holland is confident that at least one of the 45 competing fusion companies will nail it, and the impact will be revolutionary.
“I’ve literally bet my career that fusion will be able to meet its goals of having fusion energy produced in the 2030s,” the Washington DC-based executive tells Newsroom.
“The Fusion Industry Association’s membership represents multiple different approaches and teams. That means we have multiple ‘shots on goal’ to achieve this aim. I don’t know which team will get there, but I am confident that fusion will work, and it will change the world when it does.”
Holland pays tribute to the innovation coming out of Wellington – an experimental direction called levitated dipole that differs from the more common magnetic confinement or inertial confinement technology. It uses the superconductor innovation of Te Herenga Waka Victoria University’s world-renowned Robinson Research Institute.
“OpenStar and the emerging New Zealand advanced magnet ecosystem, like HTS-110, is poised to be an important player in the global fusion energy economy,” Holland says. “New voices can bring new ideas, and this is an important way to catalyse innovation.”
Should governments be investing more in fusion?
“Yes!” he replies, emphatically. “With the vast amount of money that has already gone into other sources of energy, it is appropriate for significant new investment by governments into clean, safe, sustainable fusion energy.”
He and others in the industry are looking for public-private partnerships, in which governments assume some of the early risk.
“Every country has different ways of commercialising new technologies,” Holland says. “We will see multiple different models around the world. Whatever is the ultimate model, the Fusion Industry Association believes that fusion should be the province of innovative investor-backed companies, not just large government programmes.”
Jonathan Milne neglects to mention that there is nearly 70 years of failed attempts to achieve viable fusion energy, and there needs to be a little more understanding what justifies genuine possibilities of success right now.
There seems almost an air of desperation with respect to finding new energy sources here. The government thinks offshore gas fields will appear as a consequence of removing exploration restrictions. NZ First went so far as to have drilling for rock hydrogen mentioned in its policy. And now we have home-grown nuclear fusion.
It would be great of course if it could be done. However, if they want New Zealand research funding then they can’t just knock on a political door and expect a special handout. The way to go would be to submit an application to the MBIE Endeavour Fund for peer review, and see how it goes.
In the meantime, the immediate issue of fluctuations in our intermittent renewable power are best met by expanding less spectacular but reliable energy storage technologies.
There has been an enormous amount of money from Europe put into developing Fusion Energy, but with still a way to go. NZ doesn’t have that amount of money needed for something that others have spent mega amounts on, with no commercial result.
Yes, the reference in the article to governments spending “at least $246 million” is clearly an error. The ITER project in southern France is in the order of $20 billion, for example. Also, the idea of a “micro fusion reactor” should ring warning bells. It brings back memories of 1989 when there was an excited announcement of “cold fusion” in a test tube. Not the sort of thing that taxpayer funding should go toward without evidence of prior experimental success.