Future Outlook and Commercial Viability

This episode of the Business is sponsored by PWC. Markets are shifting. teechnology and AI are reshaping industries. Druption is unavoidable Staying ahead and finding new opportunities for growth demands bold moves. This is where PWC makes things happen Working with you, combining the industry expertise, data insights, AI capabilities and business change experience. to help you reinvent and lead from the front PWC accelerates what's possible so you can turn vision into value. Discover more at pwc. co. uk Welcome to the business. I' Domic O Conll Times columnist and the business correspondent on Times Radio Tech companies and governments are increasingly excited about what could be the holy grail of energy, nuclear fusion teechnology that promises unlimited clean power It sounds too good to be true, and maybe it is. The technical hurdles to making it a reality are formidable Today I'm joined by two experts and players in the world of Fusion, doctor Moundy Winrid, an academic expert and founder of Fusion Energy Insights, an organisation that tracks industry developments and by Warwick Matthews, Chief executive of one of the leading private fusion companies in the UK, Tkomac Energy Thank you both for joining us on the business. Thank you. It's a pleasure be here. Fantastic to be here with you Melie, if I could start with you, and thanks again for coming on the programe People know about nuclear power. It's been around for a very long time But when we talk about fusion, we're talking about something different. It's nuclear power But it's not nuclear power as we know it. What is it? Yeah, it's actually a completely different technology. so not nuclear power as we know it at all. Fusion is actually the reaction that powers the sun and the stars. So it's happening all the time in the universe. The universe is energy of choice. you could say, if you want to know about the science of it, it's actually instead of Traditional nuclear fission, which is the splitting a part of nuclei or the core of atoms, it's actually the joining together. So fusion is the coming together of really small particles to make larger particles, and this releases huge amounts of energy. Let's go into that a little bit more. So existing nuclear power stations are what are called fission. You get these big unstable heavy atoms and they break apart if you do things to them. What you're doing here is getting very small of hydrogen Sticking them together to make another element and in the process you release lots of energy That's right. But it's difficult to do, isn't it? That sounds quite simple, but how do you actually do it? Yeah, it's really hard to do because as I said, it's the process that happens in the centers of stars. So you really need to create stellar conditions. It doesn't happen naturally on Earth like fission. When you say stellar don't mean really nice. You're really good. You mean you mean Literally like a star. Literally stellar conditions, like the centers of stars. That's where fusion happens. And so if you want to do that on Earth you have to make the conditions that are found in the centers of stars. And that's why it's really, really hard to do. because They're really hot for starters. You got to find some way of making it. How hot are we talking about? So the center of the suun is about fifteen million degrees, but to do fusion on Eth, you need it over one hundred fifty million degrees. ten times hot million degrees. That's right. Yes. And you need to hold it like that. So you can only heat something to that temperature if you can isolate it away from the sides of whatever container you have to use becausewise It will hit the walls and the walls will get melt will melt and the Gas will get cold So you have to isolate it in order to actually reach those temperatures in the first place. What about pressure? Because I imagine in the center of the sun, there's a lot of gravity in there, things are really squeezed together tightly. Is that one of the conditions you need as well? Yeah, you need to have the particles close enough and dense enough and hot enough. so moving around really fast for long enough fusion reactions to occur. this is the criteria for fusion. So when you started off by explain, it sounded quite simple, just joining two things together. I just push them together. But now it sounds really hard However The other confusing thing about this is that people thought in the past that they had done it and they were wrong. And I'm thinking about the efforts, particularly in the UK in the nineteen fifties, they thought they'd cracked it Yeah, they thought that there was a machine called Zeta, which was running in the nineteen fifties and they were working on making fusion reactions. And I think in the early stages of research, they thought that doing fusion would be fairly easy because doing fission was fairly easy But that's because fusion happens naturally on Earth. so all they had to do was trigger the reaction and it would happen. whereereas fusion requires these really, really extreme conditions. And so yeah, they thought when they were making the Ceta machine that they were able to get to the conditions that they needed, but they didn't actually have the technology to measure temperatures and things like that as well as we did They thought they detected neutrons which is one of the things that you get out of the reaction. When you join deuterium and tritium, types of hydrogen together you make helium and a neutron. And so by looking for neutrons, people can see whether they've fusion they deticted these neutrons, thought they'd done it, and then rather embarrassingly they had to row back on. Yeah,'t they weren't the correct There's a particular energy of neutron that gets released and they hadn't actually done fusion. And so sadly, it wasn't as easy as people thought in the early days They didn't really know enough about it. It was really the early stages of research. Now we know a lot more about it and it's taken decades to get there. Just before I come to your work, just to sort of bring us up to speed on the context of this. So we know the basic science of an IN is very difficult to do. It's an enormous challenge, so governments were doing it. But in the last ten years there's just been this rush of private money.s thing which is really different in the last decade or so Yeah, so the picture has completely changed in the last decade or so. but even in the last five years, it's been changing very quickly. And I'd say there are four things that have changed over the last ten years to change the picture of fusion. One of them is the science is fairly mature. So that's not to say that everything is solved. It's definitely not. There are still some big challenges on the way to commercial power plant, but in terms of the understanding of the plasma physics, so the actual science of what's going on, we have a very good understanding now of the plasma physics. So mature science and then enabling technologies technology is completely different. and so the capabilities are completely different. And then private investment started coming into the field, as you said, which has really changed, I would say the mindset of fusion. So it's moving from a scientific mindset of how do we make the physics work to a commercial mindset of how do we make a power station or something that's actually commercial offering, something that's economic And then the final factor, I think is important is also energy security or climate change. So both of those things provide a driving factor. Unfortunately less so the climate change because that's been known about it for a long time. But energy security it's really, really key. When people start when energy supplies are threatened, like for example, the Ukraine warar, People think we need a source of energy that's secure and Fusion could do that. Tally right now. with I right now with I Absolutely. Warick, let's talk about Toerac. Yeah. There There's a cluster of startup companies in the UK, which you're probablyably one of the leading ones. Just tell us how Tkomac came about. Yeah, so we're going back to two thousand nine. so the company is actually seventeen years old started with two founders who were working at the UK Atomic Energy Authority and they spun out from there With a goal that was to pursue a specific architecture of fusion device, a magnetic cage called a Tokomac. This is originally a Russian idea. The Tkamak is a Russian design. It's where we get our name from. Yeah. Tkomac is Russian. Yeah. Yeah, that is holding Do mean donough nutles No It stands for Trooidal ni camera and magnetets Nikatushka, which means this is why we have Mal room. That's why you It means torooidal chamber magnetic coils In Russia. In Russian Russia.. it's a Russian acronym for the shape of the thing you're building which has now become like a recognised. the most established, the most researched fusion R and D device The founders pursed one of those, but a spherical one. so You mentioned that a toroidal machine is like a doughnut. A spherical toerax is a bit more like an apple or a cord apple shape. So they pursued that for inherent benefits from a plasma physics point of view and their view that that would lead to the most cost effective Tkomec machine. At that point set up a dual track of technology development. One of those tracks was fusion R and D on the TkMac. Back in twenty fifteen, we had a first superconducting TkMac, but we then moved on to the machine that we operate today still, which is called ST forty, spherical Tkomac with a forty centimeter major radius. That's the distance from the center column to the part of the plasma in the device And that is a copper magnet system very, very high performance short pulse machine. I think there's various things we should explain here. First of all, what is the plasma that you create? What is plasma? Plasma is is actually the fourth state of matter It's an electrically charged gas. so people know about the states of matter. You know, we have solids, liquids, gases, and you move between those by heating them up And so you give a gas more energy, then you can actually strip electrons away from the center nuclei of the atoms. and so then you have these charges moving around So it's a certain special kind of gas. I've actually seen it at your headcff have. Yeah it's quite unearthly. this sort of wraith swirling in the the magnets. But magnets, you have to keep it away from the sides of the reactor So how do the magnets do that? Indeed So just to finish on ST forty because there was an important point meelanie raised earlier, temperature ST forty took plasma over one hundred million degrees Celsius in twenty twenty two It's gone on to set records with plasma performance and the future for that machine is actually working on UK and US government backed programs to continue research but it is a copper magnet machine and a copper magnet machine, when you put a lot of energy into a structure made of copper, you can create a magnetic field in the center of that structure And in the center of that, in aut topomac you have the plasma when you put energy into copper that has resistance It gets hot really quickly. And that's one of the reasons we're limited to a very short pulse because otherwise you would melt the magnetic cage. And what the magnets are doing is holding this wrriing plasma in place correct. So it doesn't touch the sides. Correct. You're manipulating the plasma. And manipulating and shaping the plasma, yeah. So with changes to the control system ten thousand times a second, you know, easy stuff to do like that You've got to get away from copper You got to get away from copper. Yeah. And the reason you get away from copper is If you want a machine that is a long pulse or continuously operating It can't melt. So good wouldn't be good feicture no. So along comes the other topic of superconductors. A superconductor, I'd never leave home without a piece of that material. It's like got it in my pocket This has been around the world many times, so it's really beaten up and I wouldn't advise using it But this is the material that we use to make superconducting magnets It is called high temperature superconducting tape. Itself, it is remarkable because it's pretty thin. It's about seventy microns thick and only two microns, so two percent of a human hair thickness is the superconductor. But that can carry thousands of amps of current To get to a superconducting state, that means it has at that point, zero electrical resistance. And superconductors have been around for a long time, known as low temperature superconductors They have zero electrical resistance when you take them to almost absolute zero. Kelvin minus two hundred and seventy degrees This tape conducts at about a hundred Kelvin too take it to its highest performance, we're down around twenty And to achieve that cooling is actually very easy. You call it a high temperature superconductor. It's a relative relatively high temperature. But if you can make a magnet out of one of these things, then The sky is the limit for the power of the magnetic field itself. Correct. Yes, As you take this material down in temperature, the ability to make extremely strong magnetic fields just builds and builds. So we at Toomac Energy have now been making superconducting magnets for over ten years to make a compact H use a machine. You have to have high temperature superconductors. You have to have the field strength that they can provide, and there isn't an alternative. So where we've seen other industries have picked this up and thought, well, we could use this for power transmission or something along those lines. They've dropped it when their technology development program failed. They broke a lot of things and they went to the alternative we didn't have an alternative. So the team got together, They set out thirty challenges of why this would not work, and why it would fail And they overcame those challenges one by one over a period of about three years. We then could make extremely high field magnets. We have magnets that have gone to twenty six Tesla. Tesla is a unit of magnetic field doesn't mean much to everybody But twenty six Tesla, if you converted that to a pressure Most people get the fact when you go deeper in water, the pressure increases That would be twenty kilometers underwater. That would be twice. What will you getting a couple magnets ST forty is about two Tesla. So thirteen times more powerful. Or is it a logarithmic scale? It's one hundred billion times more power. go Yes., exactly. muchuch, much, much more powerful. C we just because one of the things when I did't go around the Tkomac facility There was a guy making these high temperature superconducting magnets putting together together And I said, So how does high temperature superconductivity work? And he was clearly like a PhD in advanced nucleysis. And he looked at me and giggled and said beyond the understanding of science. And I quite like that because actually I don't think anyone really knows how these things work. Yeahah, there's still a lot of research going on to that into that topic. I'm not a magnet physicist myself, but the way I understand it, it's something like they join hands. don't they like the cooper pairs, the electrons join hands and that enables them to like run through and You know, without resistance, but still being investigated. this is the ToMac approach, which is being done by of companies around the world. There are other ways, there are other approaches aren't there? What are they? Yes, so there are a number of different ways of confining the plasma, you could say. So magnets is one thing. You create very strong magnetic fields. and at plasmas because they have free charge particles moving around in them They generate their own magnetic field. And if you've ever played with fridge magnets, you know that magnetic fields like repel each other. and so you can actually use the magnetic field from the the magnets to push the plasma away from the walls. So that's how the magnetic concept works. You can also use lasers. So laser fusion is very different. It's called inertial confinement fusion as well. and that gets a small pellet of fuel smaller than a peppercorn blasts it from all sides with hundreds of lasers and it compresses crushing it down to high temperatures and high pressures and fusion reactions can occur that way. And then there are other ways that are kind of a combination of these two are somewhere in the middle of often we call it magneto inertial. so you might use a magnetic field and a bit of inertia and there are different approaches that people are using. There was a big breakthrough last year at Livermore twenty twenty two was a gosh twenty where they actually, for the first time, using a laser system got more energy out of a fusion process than they put in Could you explain that a bit? because I would have thought, well, if you get it going, sure you're going to get more out. Yeah, mean and it's a pretty fundamental benchmark, isn' it? have more energy to actually have a generator rather than just something that sucks up energy? Yes. But the important distinction there is that it's a scientific break even And what that means is so you have to put a lot of energy into the pellet itself. so the laser beam energy that's going into the pellet heats it up and squashes it together. And so they got more fusion energy out than the energy that went into the pellet to crush it. So not more energy out than like the whole plant, for example, that's what we would call engineering break evenven, and that's another step beyond that needs to be achieved is to get more energy out of the fusion reactions than actually drives the plant But it was a really big scientific breakthrough, the first time that people had actually got more energy out than they put in to drive the fusion reactions. Would it be fair to say though that most of the research money or most of the private money is going into some kind of magnetic attainment thing Or is it split pretty evenly I think most of the money goes into magnetic fusion. There's quite a bit that goes into the magneto inertial, which is the combination approach. Increasing amounts since the Lawrence Livermore breakthrough have gone into inertial fusion, but still less, I'd say than magnetic more money has gone into magnetic confinement fusion. Where are you at T about, Warx? you have this ST forty.. Are you going to make a bigger one? We do not have plans to make a bigger one because we changed our business approach quite significantly in twenty twenty three and the clue being in the business part of it. and this is a business podcast We have great support of magnetic confinement fusion clearly, and we are working to support programs around the world, but it is playing that supporting role. That's both in public and private partnerships, but where we're seeing governments and industry come together. to form consonsortia to build fusion plants But we're not dependent on raising the billions of private funding to fund our own machine T date Private fusion has raised about fourteen billion dollars. which sounds like a lot for fusion. It's massive for fusion, but it's not actually that much in the greater scheme of things and in the greater scheme of energy. And in order to get to fusion, we're going to need to raise hundreds of billions to build the power plants that are necessary. And even in magnetic confinement fusion, which is the approach type that has raised the most money It still raised less than ten percent of the money that would be needed to get to a power plant So there's a long way to go in terms of the money that needs to be raised to build these power. you've confronted that We basic challenge and said, oK, we have some of the enabling technologies, we'll concentrate on them instead Kind of Yeah. I think we still play a role with a deep fusion knowledge, expertise, incredible device that supports future programms In addition to that, we purchased a company, we brought a company into our family last year called Ridgeway machines And they make the best machines in the world to produce the products that we design So what are those products? One is We're becoming a magnet system partner for other fusion programms. An example of that would be us securing the contract to be the system partner for theTEP programe. That's really That's the UK government program. That's the UK's next big commitment to build a fusion pilot plant And then just a week ago, we announced a partnership with Type One Energy, a US fusion company. But with Type O and combination of ACom, big engineering program company, P putting together a consortium with the target of building a private stellarator, another type of magnetic confinement fusion machine in the UK So when you have over a decade of working with these and not only being able to make high field, robust magnets, but the fastest, lightest, most modular way of building magnets There's a lot more we can do and there are a lot more industrial applications of those So one of our markets is fusion and helping other fusion companies and government programs get there faster. But we've also taken magnets into non fusion applications from science, medical itation. and we're taking that very very robust superconducting technology into a non maget application which is very, very efficient power distribution demanded by next generation data centers. So Melanie said there's fourteen billion dollars being raised for fusion The tech companies are spending about seven hundred billion dollars on dat centers. Yeah. So that's quite a big addressful marker and If I could build a data center with your superconductors in it, isn't it a much cheaper data center It is. Despite the fact that this is a new material and the costs of it are being driven down day by day by new entrants coming into that market and scaling At its current price point, if you built a large data center, it would still be fifty percent cheaper, total cost of ownership to go with a superconducting setup because it wouldn't get hot. It doesn't produce heat. That's right. You use ninety eight percent less copper in the data center Copper is a looming problem. We are about ten million tonons per year short of copper in the mid twenty thirties But probably the biggest impact for a hyperscaler or a data center company is for every megawatt you put in, you get ten percent more compute power That is the measure that eclipses all the others So we are starting to see data centers with this challenge of power density where Once upon a time, a data center used to demand one megawatt of energy Now the one megawatt is demanded by the rack inside a gigawatt scale data center And if you try and move that with copper or a traditional conductor, it just doesn't work, frankly industry needs to step into superconductors We're starting to get that pull from Microsoft, Amazon, and the industry is spooling up and we aim to play a key part in that. That could be an enormous market for you couldn't it Yeah, it's incredible size market yeah. Who funds your company at the minute? I remember David Harding. the founder of Man, one of the big hedge funds and now Winton Capital. Yeah. He was involved. So he's he's kind of your Jiff Bizos stroke Bill Gates figure. is he still in? Absolutely yes, yeah. He's still a very engaged investor and observer of our board actually. So I'd best describe this as for the first twelve years or so of our company, there was some institutional investment, like legal in general as an investor mostost of the money came from ultra high net worth individuals, of which there were four key individuals And little known, in fact, I am okay to say it, but Lord Wolfson is our biggest shareholder. So the CEO of NX He's Simon Wolson the Chief execive of Nix, exxactly.. Since then, we raised some money in twenty twenty three and we brought in some key strategic investors. One of those is Furacower Electric. They're a Japanese company For producer of HTS tape as we call it And they decided to invest in the company in twenty twenty three. And that's a good reason why two of our magnet applications outside of fusion are both in Japan We also brought in lingoto invested in us in twenty twenty three and a range of other strategic investors. What do you think about the future for funding? Will you do a few more rounds of private funding? Could you ever be a public company, do you think We definitely could be a public company. Yeah. We have the prospects with a business that we've built to not just be a binary outcome. We are building a business, We're building revenue now that's based on layers of revenue coming from Government programs, coming from non fusion applications, coming from power distribution So You know that multi layered revenue is a lot of shops on goal derisks our business. It also allows us to grow a profitable business on the back of this So yes, we see that's definitely in our future. A tech company looking to listen a public market You'd have to the States wouldn't you There are options for a tech company. the most chosen option is NSdAQ That's supposed to be. The big government projects, because up until this big flood of money came in, it was really a government game fusion The one that everyone used to talk about before Brexit was ETA What is I? It is absolutely colossal, isn't it? if you actually go and visit it? Yeah, I was there just the other week actually and seeing it, it is colossal. Where is it? It's in the south of France, near Aixxon Provence So ETA is a worldwide collaboration of a number of different partners from around the world. So if I can remember the seven partners, you've got the EU, U.S, Japan, India Korea, China China, Russia. Yeah Russia is?. Yeah it's a worldwide collaboration. It's been in existence for decades sorry to say. And it's building a huge Tkamak, like a huge Tkamak. So it preree existed, let's say, the private wave of fusion. So because it's this big worldwide collaboration, it's been very bureaucratic and very delayed And it's probably One of the main reasons why the private fusion industry sprang up because there are a lot of researchers out there getting frustrated about the fact that fusion was taking so long and the world was pinning its hopes on this one project But since then The private fion industry has grown up and ETater is still in existence. It's still under construction now. It's big now, I mean you can see it. pieces are coming from around the world. and what's interesting is that they're starting to engage or over the last three years, have been starting to engage with the private sector because they've realized that it's going to turn on quite late. it's going to really turn on in the twenty thirties by which time many private fusion companies are hoping to have demonstrated energy break evenven and maybe even demonstrated first electricity is there a danger of becoming white elephant Well, I think in order to address that, They've been starting to engage much more with the private sector. There's a lot of research that has gone into that. So all the private fusion companies really are building on foundations of plasma physics that have gone into ETA have been funded by bodies that have been working towards ETA And so there's a lot of information there, like foundational information. There's also now a lot of knowledge and know how about constructing these mega projects. And as Piatro Barabasski, the director General will say, there's also a lot of no how notot there that it's really important to capture. Fusion is going to be a research program, you could say for a while. evenven as we commercialize The first power plant is not going to be the best power plant. So there's going to be a lot of learning that can be done and improvement that can be done over time. I think it's really important that the private sector drives it now and creates a commercial product as soon as possible. But the research that's being done at ETA could still go into refining machines down the line. So I don't think it's the end of the road for research Let's just cover off STip quickly. Sip happened funnily enough after Brexit and it's kind of an eier in the UK It's a different kind of concept as a spherical Tamac whichich is something it's a concept that the must reading your homework I think, were it? Yeah was planning in Yeah, there was also a spherical tokomac at Cullum called Mast. So yeah, it was shared homework, I think. Yeah. So StT's going to be a British government led thing to build a Tkamac. I don't I don't think the government would like to say that's a government led. It was sort of initiated in that come out of the Culum UKAA laboratory, but it's being delivered by a company that is now called UK Fusion Energy, which is a private company, but it government started, but the idea is to become more and more private sector and to develop the industry around the program. And this is actually really interesting in terms of a company strategy because The UK is very different to the US, where the US has the majority of private fusion companies. and so they have a milestone based public private partnership where they're trying to incentivize private companies and there's competition there and there's investment going in. The UK doesn't have that many private companies, and it doesn't have the same risk appetite amongst the investment community to do that kind of thing. The way that the UK is doing it, the strategy that the UK goovernment has come up with is to fund a flagship project, which is stTEP and to kind of coalesce an industry around that. the supply chain, the workforce, all is going to have to grow up around this project. And so The Japanese are following a similar kind of model actually, like bringing the industry together. And that's what's going to be really important for UK competitiveness and economic growth going forward is to have this this wider industry. This episode of the businessiness is sponsored by PWC. Every leader is looking for that next opportunity for growth. It requires bold action, but the path forward isn't always clear This is where PWC comes in from transforming your operations and supercharging your workforce to building resilience and more Working with you side by side to bring the deep tech and AI expertise, strategic insight and industry knowledge empower you to reinvent Create new value and lead from the front PWC accelerates what's possible so you can turn vision into value. Discover more at pwc. co. uk. You both been very generous with your time, I're going to put you on the spot before you wrap up Would you put your life savings on there being a commercial fusion power station within a decade No, I wouldn't. notot a commercial, fully commercial power station within a decade. In twenty years? In twenty years I hope so, but I don't think I'd put my life savings on anything like that. I think Fusion is still an exploration. That's what makes it exciting. It makes it a huge opportunity for people who want to get in early because energy transitions historically have created enormous value for the companies that got in early, but it's still an exploration. We don't know fundamentally what's going to happen. There are private companies that have plans out the technology in the twentyenties. We're hoping to see first electricity in the twenty thirties. Hopefully we'll see the first power plant, a pilot plant by. late thirties into the twenty forties, but it's never been done before and we don't know exactly how long this is going to take, but I would say it's a huge opportunity for people who get involved. I would say that it is coming partnerships are being fored now, the infrastructure is being built out now. The opportunities for the supply chain to come in are now