Commonwealth’s $84mn funding round brings fusion step closer
Fusion energy, it’s often sai...
Massachusetts Institute of Technology spin-off Commonwealth Fusion Systems intends to develop commercial fusion energy.
Fusion energy, it’s often said, has been twenty years away forever. The technology, which differs from conventional nuclear power by fusing rather than splitting atoms, has utopian associations of infinite, low cost, clean energy, capable of powering humanity into a new future. That’s if it can ever be commercialised, of course.
Nuclear fusion, the process which powers the Sun, has repeatedly been demonstrated here on earth, only always requiring more energy put in than is put out, making it quite useless for power generation.
Commonwealth Fusion Systems has entered the race (or is it a marathon?) to crack this central nut. It is developing high-temperature superconducting magnets as part of its development of what it hopes to be the world’s first net-energy-gain fusion system, which it calls SPARC, in collaboration with MIT’s PLasma Science and Fusion Center. 2021 is the target to demonstrate a successful magnet, from which the company intends to springboard to a successful reactor and then a power plant known as ARC.
Its approach has won it significant backing since its foundation in 2018, with almost $200mn raised. Its latest Series A2 round has brought in $84mn from lead investor Temasek Holdings, Singapore’s sovereign wealth fund, as well as numerous others including The Engine, Starlight Ventures, Schooner Capital, Safar Partners, Moore Strategic Ventures, Khosla Ventures, Hostplus, Future Ventures and Equinor.
The company said it would use the funding to grow its capabilities in eventually offering fusion power plants, fusion engineering services, and HTS magnets.
"Even in these challenging times, we are thrilled to have this group of new investors including a global investment company and a world-leading energy company committed to the long-term investment in commercial fusion, enabling CFS to remain aggressive in building the first net-energy fusion machine as fast as possible," said Bob Mumgaard, CEO, CFS, in a press release. "This funding is further evidence of a growing fusion industry and the important transition that is taking place as fusion expands from public-funded research to the private companies that will drive commercial fusion to market to help solve climate change."
5 Mins With ... Tim Mendelssohn, CEO of Spark
Tell us about Spark, how the business started and your objectives?
In early 2019, we launched Spark Commodities (Spark), based in Singapore and backed by Kpler, the industry-leading commodities data & analytics provider, and EEX, a world-renowned global exchange that is part of the Deutsche Boerse Group. The goal was simple; to redefine how commodity markets trade, beginning with creating an LNG freight index. The reality was that we were taking on some of the biggest, most established players in a multi-billion dollar part of the energy industry. However, a strong combination of shareholder support and a strong, in-house developer team gave us the foundation to make an impact. We’ve now got over 200 companies on the platform, 1000+ users and have recently listed our contracts on ICE.
How can modern startups compete with established legacy operators and what are the benefits and limitations for new enterprises?
While we don’t have the legacy of our competitors, we compete by building an organisation that is designed to respond to the market. If you logged into Spark two years ago, and then logged in now, you would see a fundamentally different platform. This iterative approach means we can deliver what our customers need, deploying modern technologies in a more powerful way that adds greater value. The challenge is that you have to build trust through strong, continued and sustained delivery and execution. When your competitors are 100+ years old, well funded and have hundreds of employees, there are no second chances.
We hear a lot about 'customer centric' operations, what does that mean to Spark in the context of the technical industry?
We take customer data to form robust indices that the market can use when managing risk. When creating and developing both the platform and our indices, we must ensure our products are both accurate and valuable. The only way to do this is listening continuously and iterating as the market and their respective needs evolve.
How important are partnerships in attracting and sustaining business?
Without our partnerships, we’d join the long list of companies with good ideas but limited validation. Partnerships, in the form of shareholder structures, collaboration with exchanges (in our case ICE) and developing relationships with key customers demonstrates validation and our ability to add real value. Without this, it’s hard to transition from an idea to a functioning business.
What role will digital transformation play in the energy transition and achieving net zero targets?
It’s a vast subject but conceptually, an increase in digital offerings will facilitate greater transparency, which in turn should lead to greater trust, greater adoption and therefore faster adoption of transition-focused solutions. I believe that transparency will act as a natural accelerant to the process and we aim to be part of that process.