The Fusion Industry Association’s (FIA) report - The Fusion Industry Supply Chain: Opportunities and Challenges – has analysed the current fusion supply chain, projecting significant growth in demand for fusion suppliers over the coming years.
The survey of 26 private fusion companies calculated that the supply chain was worth over $500m in 2022 and is set to increase to over $7bn by the time companies build their ‘First of a Kind’ power plants. When the fusion industry reaches maturity, the supply chain is predicted to be worth trillions of dollars.
The fusion sector has made several breakthroughs in recent years, leading to a reliance on suppliers with requirements that include specialised precision manufactured components, such as high-powered magnets and laser components, heat management technologies, advanced materials, power electronics and semiconductors, and fusion fuel.
However, there are signs that some suppliers may not be ready to scale ahead of demand. Over half of fusion companies (58 per cent) said suppliers need to invest now to meet scaling ambitions, yet 70 per cent said their suppliers see building the capacity to meet future demand as too risky without committed orders.
Whilst many outside the industry have expressed concerns about the impact of geopolitics on critical fusion supplies, the report found limited concern about geopolitical supply risk.
“The projected growth of the fusion industry creates a huge business opportunity for current and new suppliers,” said Andrew Holland, CEO of the FIA. “It is clear that more long-term certainty is needed – through a mix of finance, regulation, risk-sharing mechanisms, and more communication – so suppliers are prepared to scale ahead of industry need.
“The fusion supply chain has a unique advantage as it is not reliant on rare materials only found in unstable countries, but on high quality manufacturing and specialist components that come from open economies. With appropriate private and public investment, fusion energy will one day provide a sustainable, reliable, and abundant form of clean energy to communities around the world.”
Recommendations made to address supplier reluctance include:
• Increase investment - public and private - into fusion to give confidence about the necessity of supplier scale.
• Experiment with risk-sharing financing to enable suppliers to invest in new capacity, such as through fusion investors making investments in key suppliers.
• Create online networks and an annual supplier event, to help communication and awareness between fusion companies and suppliers.
• Deploy standardisation and regulation to bring more certainty to the supply chain and confidence to make long-term investments.