Market map: Fusion energy & enabling supply chain — the categories that will matter next

Global investment in fusion energy surged past £5.2 billion in cumulative private funding by the end of 2024, representing a 40% increase from 2023 levels and marking fusion's transition from pure research curiosity to investable technology category. For UK stakeholders—where the government has committed £650 million to the STEP (Spherical Tokamak for Energy Production) programme and hosts three of the world's leading private fusion ventures—the question is no longer whether fusion will become commercial, but which enabling technologies and supply chain categories will capture the greatest value in the 12–24 month window ahead.

Why It Matters

The fusion energy sector stands at an inflection point. In December 2022, the National Ignition Facility at Lawrence Livermore National Laboratory achieved scientific ignition—producing more energy from fusion reactions than the laser energy delivered to the target. This landmark, combined with advances in high-temperature superconducting (HTS) magnets, has compressed what was once a 30-year timeline into something approaching commercial viability within the 2030s.

For the UK specifically, fusion represents a strategic industrial opportunity. The UK Atomic Energy Authority (UKAEA) operates the world's largest fusion research facility at Culham, and the STEP programme aims to deliver a prototype fusion power plant by 2040. According to UKAEA projections, the UK fusion supply chain could support 40,000 jobs by 2040 and generate £1.3 billion annually in exports.

The 2024 Fusion Industry Association (FIA) survey documented 43 private fusion companies globally, up from 33 in 2022. Collectively, these companies employ over 4,500 people and have raised £5.2 billion in private capital. Critically, 78% of respondents expect to deliver fusion electricity to the grid by 2035, suggesting the industry has moved from laboratory curiosity to pre-commercial development.

However, this optimism must be tempered by engineering reality. No fusion device has yet achieved sustained net energy gain in a configuration suitable for power generation. The enabling supply chain—superconducting magnets, tritium breeding blankets, first wall materials, and remote handling systems—remains the critical path. The companies that solve these enabling technology challenges will capture disproportionate value regardless of which confinement approach ultimately prevails.

Key Concepts

Tokamak Architecture

The tokamak remains the most mature fusion confinement concept, using powerful magnetic fields to confine plasma in a doughnut-shaped (toroidal) chamber. The UK's STEP programme and Tokamak Energy both employ spherical tokamak designs, which achieve higher plasma pressure relative to magnetic field strength than conventional tokamaks. This compactness offers potential cost advantages but introduces engineering challenges in first wall materials and neutron shielding.

Stellarator Configuration

Stellarators use twisted, three-dimensional magnetic coils to confine plasma without requiring the induced plasma current essential to tokamaks. While historically dismissed as too complex to manufacture, advances in computational design and precision fabrication have renewed interest. The Wendelstein 7-X stellarator in Germany demonstrated record-breaking plasma confinement in 2023, validating the approach's potential for steady-state operation.

Inertial Confinement Fusion

Rather than magnetic confinement, inertial confinement fusion (ICF) uses powerful lasers or particle beams to compress and heat fuel pellets to fusion conditions. First Light Fusion, based in Oxford, employs a novel projectile-based approach that accelerates a projectile to hypervelocity, compressing a fuel target without lasers. This approach potentially offers simpler engineering and lower capital costs, though repetition rate and target manufacturing remain challenges.

Tritium Breeding and the Fuel Challenge

Tritium, the hydrogen isotope required for deuterium-tritium fusion, does not occur naturally in significant quantities. Global tritium inventory stands at approximately 25 kg, primarily from CANDU fission reactors in Canada. Any commercial fusion reactor must breed its own tritium by exposing lithium-containing blankets to fusion neutrons. The tritium breeding ratio (TBR)—the ratio of tritium produced to tritium consumed—must exceed 1.0 for fuel self-sufficiency. Achieving TBR >1.05 while maintaining blanket structural integrity under intense neutron bombardment remains one of fusion's most challenging engineering problems.

High-Temperature Superconducting Magnets

The single greatest enabling technology advance of the past decade has been the maturation of high-temperature superconducting (HTS) tape, particularly REBCO (rare-earth barium copper oxide) conductors. HTS magnets operate at higher temperatures (20-77K vs. 4K for conventional superconductors) and achieve higher magnetic field strengths, enabling more compact and potentially cheaper fusion devices. Commonwealth Fusion Systems demonstrated a 20-tesla HTS magnet in 2021, validating the approach for fusion applications.

First Wall Materials

The first wall—the plasma-facing surface of a fusion reactor—must withstand neutron fluences exceeding 10 MW/m², plasma heat loads, and erosion from energetic particles. Current leading candidates include tungsten (for its high melting point and low sputtering) and reduced-activation ferritic-martensitic (RAFM) steels for structural components. The UKAEA's Materials Research Facility at Culham is developing and testing advanced materials for STEP and commercial fusion applications.

Fusion Energy KPIs and Benchmarks

Metric	Current State (2025)	2030 Target	Commercial Threshold
Energy Gain (Q)	1.5 (NIF ignition)	Q >10	Q >25
Plasma Confinement (τE)	1-2 seconds	>5 seconds	>10 seconds (steady-state)
Tritium Breeding Ratio	Untested at scale	TBR >1.0	TBR >1.05
Neutron Wall Load	0.5 MW/m² (test)	1-2 MW/m²	>2 MW/m²
HTS Magnet Field Strength	20 Tesla	22-25 Tesla	Field stability >99.9%
Plant Availability	N/A (no plants)	30-50% (demo)	>80%
Levelised Cost of Electricity	N/A	£150-200/MWh (demo)	<£60/MWh
Capital Cost per MW	N/A	£15-25M/MW	<£5M/MW

What's Working

Private Sector Momentum

The private fusion sector has achieved remarkable technical progress. Commonwealth Fusion Systems (CFS), backed by over £2 billion in funding, is constructing SPARC—a compact tokamak designed to demonstrate Q >2 by 2026. Tokamak Energy, headquartered in Oxfordshire, achieved plasma temperatures of 100 million degrees Celsius in 2022 and is developing the ST80-HTS prototype, targeting commercial operation in the 2030s. TAE Technologies has sustained plasma for extended periods and is developing a non-radioactive hydrogen-boron fuel cycle that would eliminate tritium requirements entirely.

First Light Fusion achieved fusion in November 2022 using its projectile-based approach, becoming only the second private company globally to demonstrate fusion. The company is now focused on developing target manufacturing at scale, addressing a key commercial bottleneck.

Government Programme Acceleration

Government commitment has intensified. The UK's STEP programme represents the largest public fusion investment in UK history, with the West Burton site in Nottinghamshire selected for the prototype plant. The programme has already placed contracts worth over £200 million with UK supply chain companies, including Assystem, Atkins, and Jacobs.

The US Department of Energy launched a £720 million fusion milestone programme in 2023, providing matched funding for private fusion companies achieving specific technical milestones. The EU's Euratom programme continues to fund ITER contributions and supports domestic fusion startups through Horizon Europe.

Supply Chain Development

The enabling technology supply chain is maturing rapidly. SuperOx (Russia/UK) and THEVA (Germany) have scaled REBCO tape production, driving costs down from £600/kA·m in 2018 to approximately £150/kA·m in 2024. Vacuum vessel and cryogenics suppliers—including Chart Industries and Air Liquide—are adapting fission nuclear experience to fusion requirements.

The UK's Nuclear AMRC and Culham Centre for Fusion Energy are actively qualifying suppliers and developing manufacturing processes for fusion-specific components. UKAEA's Remote Applications in Challenging Environments (RACE) facility is pioneering the remote handling and maintenance systems essential for operating in fusion's radioactive environment.

What's Not Working

Timeline Realism

Despite accelerated investment, fusion commercialisation timelines remain uncertain. The Fusion Industry Association reports that company-stated timelines for first electricity generation range from 2028 to 2040, with significant clustering around 2032-2035. However, historical experience suggests fusion timelines consistently slip. ITER, the international tokamak project in France, is now expected to achieve first plasma in 2035—20 years behind its original 2016 target.

Materials Constraints

First wall and blanket materials represent the most significant unresolved engineering challenge. No material has been demonstrated to withstand the combined neutron damage, thermal cycling, and plasma erosion expected in a commercial fusion reactor. The 14.1 MeV neutrons produced by deuterium-tritium fusion cause atomic displacement damage that degrades material properties over time. Current estimates suggest blanket replacement every 2-5 years, imposing substantial operational costs and availability constraints.

Tritium Supply Bottleneck

The global tritium supply is insufficient to support multiple large fusion reactors simultaneously during their startup phase (before breeding achieves self-sufficiency). Each reactor requires 1-2 kg of tritium inventory, and current production from CANDU reactors provides only 0.5-1 kg annually. UKAEA estimates that global tritium production must increase 5-10x to support commercial fusion deployment, requiring either dedicated tritium production facilities or accelerated deployment of breeding blanket technology.

Regulatory Uncertainty

Fusion occupies an uncertain regulatory position. In the UK, the Energy Act 2023 established that fusion will be regulated under an adapted nuclear regulatory framework distinct from fission. However, detailed regulatory guidance on licensing, waste classification, and decommissioning requirements remains in development. Similar regulatory ambiguity exists in the US, EU, and other jurisdictions, creating uncertainty for project developers and investors.

Key Players

Established Leaders

Commonwealth Fusion Systems — The MIT spin-out has raised over £2 billion and is constructing SPARC, a compact high-field tokamak in Massachusetts, USA. Their HTS magnet technology sets the industry benchmark.

Tokamak Energy — Oxfordshire-based company pursuing compact spherical tokamaks. Has demonstrated 100 million degree plasma and secured £250 million in funding. Targeting commercial electricity by the mid-2030s.

TAE Technologies — California-based company with over £1.2 billion in funding, developing a hydrogen-boron fuel cycle that would eliminate radioactive tritium. Their field-reversed configuration offers a path to aneutronic fusion.

General Fusion — Canadian company backed by Jeff Bezos, pursuing magnetized target fusion using mechanical compression. Building a demonstration plant in Culham, UK, strengthening the UK's position in the sector.

ITER Organisation — The international tokamak project in France, funded by 35 nations including the UK (via Euratom historically). Despite delays, ITER will provide invaluable operational data for all tokamak developers.

Emerging Startups

Helion Energy — Washington-based company using pulsed magnetic compression to achieve fusion, targeting direct electricity conversion without steam turbines. Has secured a power purchase agreement with Microsoft.

First Light Fusion — Oxford-based company using projectile-driven inertial confinement. Achieved fusion in 2022 and is developing scalable target manufacturing for commercial plants.

Zap Energy — Seattle startup developing sheared-flow Z-pinch confinement, a simpler approach that requires no magnets. Has raised over £200 million and demonstrates plasma stability exceeding theoretical predictions.

Xcimer Energy — US company developing laser-driven inertial fusion using proven excimer laser technology, offering an alternative to the NIF approach with potentially lower costs.

Renaissance Fusion — French startup developing stellarator designs with simplified coil manufacturing using liquid metal conductors.

Key Investors and Funders

Breakthrough Energy Ventures — Bill Gates-founded climate fund has backed Commonwealth Fusion Systems, Helion, and TAE Technologies.

Chevron Technology Ventures — The oil major has invested in Zap Energy and TAE Technologies as part of energy transition hedging.

UK Research and Innovation (UKRI) — Provides grant funding through the Industrial Strategy Challenge Fund and supports STEP through UKAEA.

Temasek Holdings — Singaporean sovereign wealth fund has backed Commonwealth Fusion Systems and General Fusion.

UK Infrastructure Bank — Potential financing source for UK fusion projects under its net zero mandate.

Examples

STEP Programme Site Selection and Supply Chain Development: In October 2022, the UK government selected West Burton in Nottinghamshire as the site for the STEP prototype fusion power plant. The decision triggered immediate supply chain mobilisation, with UKAEA issuing contracts for early-stage design and engineering services worth over £200 million. Local content requirements mandate significant UK manufacturing participation, establishing domestic capability for future export opportunities. The programme aims for first operation by 2040 with 100 MW net electrical output.

Tokamak Energy's ST80-HTS Demonstration: Tokamak Energy's spherical tokamak programme achieved a critical milestone in March 2022, producing plasma at 100 million degrees Celsius—hotter than the sun's core. The ST80-HTS device, currently under construction, will demonstrate integrated high-temperature superconducting magnets with spherical tokamak plasma physics. The company has secured partnerships with UK universities and supply chain companies, including agreements for specialised vacuum vessel fabrication and remote handling systems.

First Light Fusion's Inertial Approach Validation: In November 2022, First Light Fusion became only the second private company globally to achieve fusion, using their novel projectile-driven approach. The Oxfordshire-based company's method accelerates a projectile to 20 km/s, creating extreme compression without lasers. The approach potentially offers lower capital costs and simpler engineering than laser-driven ICF. First Light is now focused on developing electromagnetic launch systems and target manufacturing processes for commercial-scale repetition rates exceeding one target per second.

Action Checklist

Monitor STEP programme procurement announcements for supply chain opportunities; UKAEA maintains an active supplier portal with upcoming tender notifications.
Evaluate HTS conductor supply chain positioning; the REBCO tape market is consolidating and early partnerships with SuperOx, THEVA, or emerging producers offer strategic advantage.
Assess tritium handling and processing capabilities; organisations with nuclear site licences and tritium experience will be essential partners for all fusion developers.
Track regulatory developments through the Office for Nuclear Regulation and Department for Energy Security and Net Zero; fusion-specific guidance will shape project economics.
Consider materials testing partnerships with UKAEA's Materials Research Facility; validating component performance under fusion-relevant conditions requires specialised facilities.
Engage with the UK Fusion Cluster and regional groupings (West Burton Energy Cluster) for networking and market intelligence.
Evaluate remote handling and robotics capabilities; the radioactive environment of fusion reactors requires all maintenance to be performed remotely.
Model power purchase agreement structures for fusion electricity; Helion's agreement with Microsoft provides a template for pre-commercial offtake.

FAQ

Q: When will fusion electricity actually reach the grid in the UK? A: The STEP programme targets first electricity by 2040, which remains the most credible near-term pathway for UK fusion power. Private companies including Tokamak Energy and General Fusion (building in the UK) target commercial demonstration in the mid-2030s, though these timelines carry significant technical risk. The 2030s will likely see demonstration-scale fusion plants operating, with commercial deployment scaling in the 2040s.

Q: How does fusion compare to fission on cost and safety? A: Fusion offers inherent safety advantages: no chain reaction risk, limited on-site radioactive inventory, and waste with shorter half-lives (decades vs. millennia for fission). However, cost competitiveness remains unproven. Industry projections target levelised cost of electricity below £60/MWh at scale, competitive with offshore wind, but this requires achieving capital costs below £5M/MW—an order of magnitude reduction from current estimates for demonstration plants.

Q: What is the UK's competitive advantage in fusion? A: The UK hosts world-leading expertise through UKAEA at Culham, which has operated tokamaks since the 1980s and achieved multiple fusion records. The STEP programme provides a domestic anchor customer for supply chain development. Three leading private fusion companies (Tokamak Energy, First Light Fusion, General Fusion's UK facility) are based in the UK. The regulatory framework established by the Energy Act 2023 provides clarity for developers. Combined, these factors position the UK as a potential leader in fusion commercialisation.

Q: Is tritium supply a showstopper for fusion deployment? A: Tritium scarcity is a genuine constraint but not necessarily a showstopper. The current global inventory of approximately 25 kg could fuel the startup of 10-20 fusion reactors if breeding blankets achieve target performance. UKAEA and private developers are actively developing breeding blanket technology to achieve tritium self-sufficiency. Additionally, some companies (TAE Technologies, Helion) are pursuing alternative fuel cycles that avoid tritium entirely, though these approaches face their own physics and engineering challenges.

Q: Which enabling technology categories offer the best investment opportunity? A: High-temperature superconducting conductors represent the most immediate opportunity, with the market for fusion-relevant REBCO tape projected to grow from £150 million to over £1 billion by 2035. Remote handling and maintenance systems, tritium processing, and advanced diagnostics also offer high-value niches with limited current competition. For longer-term positioning, first wall materials and breeding blanket technology remain unsolved problems where breakthrough solutions would command substantial value.

Sources

Fusion Industry Association, "The Global Fusion Industry in 2024," Annual Survey Report, July 2024.
UK Atomic Energy Authority, "STEP: Spherical Tokamak for Energy Production," Programme Documentation, updated January 2025.
National Ignition Facility, "Ignition Achievement Announcement," Lawrence Livermore National Laboratory, December 2022.
International Energy Agency, "Fusion Power," Technology Report in Energy Technology Perspectives 2024.
Tokamak Energy, "Company Technical Progress Report," Corporate Communications, March 2024.
First Light Fusion, "Fusion Milestone Announcement," Press Release, November 2022.
Department for Energy Security and Net Zero, "Fusion Energy: Policy Statement and Regulatory Framework," UK Government, 2023.
Commonwealth Fusion Systems, "SPARC Progress Update," Technical Documentation, September 2024.