Industry Partnerships: Collaborating for Fusion Success with Andrew Holland, Fusion Industry Association, and Nick Walkden
In our recent podcast series, The Fusion Frontier: Investing in Tomorrow’s Energy, we spoke to experts in fusion energy and investment to dig deeper into the potential of fusion as a clean energy source, why investors invest in fusion, and some of the risks and opportunities along the way.
In Episode 6, we spoke to Andrew Holland, CEO of the Fusion Industry Association (FIA) and Nick Walkden, who was the UK Director of the FIA when we spoke, to understand the importance of industry partnerships and collaboration for fusion.
Here are 3 key insights from the conversation.
1. Partnerships are crucial to accelerating fusion research and building a fusion ecosystem, to solve the challenges of fusion efficiently
Nick says: “fusion has been a collaborative endeavour since day one. In the 1950s, and the 1960s, it was a real beacon for international scientific collaboration in an era where that wasn't common.”
Partnerships form a new relationship or area of collaboration between different organisations, as Andrew says the collaboration "accelerates fusion research by using existing resources that are out there” – the knowledge and skills already exist but it is the relationships that are newly built.
Nick says: “partnerships work because in a partnership you can bring together the best bits of different partners’ capabilities in order to reinforce something that becomes stronger than the sum of its parts. We see that in public private partnerships and we see that in partnerships between industry actors”.
Partnerships come in all shapes and sizes and it is important to let all types of partnership flourish. As Nick says “for a sector like fusion, we really shouldn't place any limitations on what partnerships can look like. They can be as little or as simple as a conversation and an agreement to work in a sort of combined collaborative way, right up to an incorporated joint venture. We really shouldn't place restrictions on what that might look like because a really healthy industry is an industry full of collaboration and partnership.”
One of the core aims of the FIA is to increase public-private partnerships for fusion to support the growth of the industry. Public-private partnerships are crucial because they allow private industry to benefit from the research and funding within universities and national labs.
2. Public-private partnerships drastically reduce the risk in fusion development and delivery by incentivising private fusion companies
Public-private partnerships reduce risk in three ways:
· Financial risk: historically there hasn’t been sufficient funding for fusion to solve all the scientific and technological challenges, plus build demonstration devices. Public-private partnerships help to reduce financial risk for private companies by bringing government funding in which allows the company to continue focusing on delivering benefits to other investors (e.g. shareholders). Government funding into a company can also incentivise further private investment.
· Technical risk: large technical challenges remain in the pursuit of large-scale commercial fusion energy and there are limited resources to solve the challenges in commercial timescales. Public-private partnerships help to reduce technical risk because they offer a basis by which collaboration occurs to solve challenges together, so that not every separate fusion endeavor (whether public or private) needs to solve every technical issue on their own. It is much more efficient.
· Resourcing risk: with limited people and resources to solve the challenges of fusion, partnerships help to share the skilled people. Initiatives such as the Fusion Skills Council in the UK are essential in planning for the future fusion workforce.
3. Each government approaches public-private partnerships and the risk of fusion in different ways. Investors need to understand these to leverage the best opportunities
The UK has a strong national fusion programme thrust through the UK Atomic Energy Authority.
Whereas the US set up a milestone-based programme in 2023, where government funding is given once particular goals are achieved. The goals are pre-set and so is the funding amount the government will give once that goal is reached. Through this model the government is protected because if the goal is not met then the government does not pay any money and if the goal is achieved the money is paid and it is a fixed cost that is agreed beforehand. The private sector want to take part in such a programme because they believe that they can deliver faster and cheaper than the public sector could and they are willing to take the potential risk of not delivering in the pursuit of the public funding for achieving certain goals. It’s a new form of public-private partnership.
Nick says: “I think there are some things that the UK can learn from the US and probably some things that the US can learn from the UK. One area that has been really transformative to the US program and probably laid the foundation for everything that's come was the ARPA-E Program and the approach the program took between public-private partnership as that really stimulated a lot of the fusion development that we see… there's a Fusion Industry Programme in the UK that sets challenges, but it's not quite as innovation focused and not quite as commercially focused as the US.”
Japan’s fusion programme recognises the value of partnerships and has funding support for both large scale public projects and also “significant investment support to the private sector start-up ecosystem, as well as the large private sector suppliers” says Andrew.
And finally…
Andrew says: “as much as possible, it's about driving new investment by having government money to encourage further private money. In this way, you can build a private fusion enterprise that is doing things that are in the public good. So using government dollars to build a fusion industry, something that is really critical for the future of our economies and our national security.”
Nick says: “ultimately, I think fusion is one of those things that is just too big. It's just too big for everybody to be doing it on their own.”