General Fusion CEO Greg Twinney stands in front of the LM26 device, in Richmond, B.C., on May 3.Jennifer Gauthier/The Globe and Mail
Last week was a momentous one for B.C.-based General Fusion, as it conducted a successful test of the machine it hopes will lead to the development of a commercial scale fusion reactor.
That was Tuesday.
By Friday the company had laid off at least one quarter of its staff and reduced operations in response to a capital shortfall that puts its plans at risk as competitors in the United States and elsewhere push ahead with their own efforts to develop fusion power.
“The last thing we want to do is slow things down and lose this race,” said Greg Twinney, the company’s chief executive officer.
In an open letter issued on Monday, General Fusion announced it is actively seeking new funding from private and government partners to address a situation it described as both unexpected and urgent.
Mr. Twinney told The Globe and Mail the company is seeking US$125-million in additional funding to complete development of its LM26 device and achieve the 100-million-degree temperatures needed to cross “scientific break-even” – a threshold that means the machine would be capable of producing more energy than it absorbs to ignite nuclear reactions.
Such an achievement would set the stage for building a working reactor that is double the size to prove the viability of the technology as a method of commercial power generation.
But with resources running out and investors limiting their risk in an uncertain financial climate, General Fusion says its path has become much more challenging.
“We need to weather the short term to unlock the potential of the company in the longer term,” Mr. Twinney said.
The stakes could hardly be higher. General Fusion has emerged as Canada‘s champion in a global effort to harness the same form of energy source that makes the sun shine. If successful, it would be a transformative technology that provides virtually limitless, carbon-free electricity.
The practical hurdles remain enormous but governments and private investors around the world have committed about $8-billion to more than 40 companies seeking to develop commercial fusion, according to the U.S.-based Fusion Industry Association.
Over the past 20 years, General Fusion has raised about US$350-million in financing, with about three quarters of that coming from private investors and one quarter from public sources – primarily the federal government through Canada‘s Strategic Innovation Fund.
But the current geopolitical environment – including the Trump administration’s fondness for traditional fossil fuel industries – and shaky markets for early stage technologies have eroded the company’s ability to raise additional capital. Investors have been “stepping back and moving a lot slower than previously,” Mr. Twinney said.
Mr. Twinney said General Fusion is seeking US$125-million in additional funding to complete development of its LM26 device and achieve the 100-million degree temperatures needed to cross 'scientific break-even.'Jennifer Gauthier/The Globe and Mail
General Fusion‘s existing investors are looking for the company to bring in new sources of capital, he said. That could include financing that cuts the valuation of the company with new investors setting conditions while earlier backers who don’t participate see their stakes sharply diluted.
“We’re going to have to be flexible on valuation to raise the capital we need during this opportunistic time” for investors willing to put up the needed funds, Mr. Twinney said. “There’s going to be a burden carried by existing investors that don’t participate for sure.”
He said the company is also looking to re-engage with the federal government “at the highest levels” in the aftermath of last week’s election.
“We’re an important technology for Canada,” Mr. Twinney said.
Axel Meisen, president of the Fusion Energy Council of Canada, which includes both industry and academic partners, said Ottawa and the government of British Columbia will need to act quickly to arrive at a decision on whether to support General Fusion materially or not.
“It will be a test for the newly elected federal government to consider how to make such decisions,” he said.
Dr. Meisen added that General Fusion‘s dilemma could have consequences for hundreds of specialized workers across an industry that is still in its embryonic stages in Canada and is receiving more support in other countries.
“If General Fusion scales down significantly, it will result in a loss of expertise not only at General Fusion but also supplier industries and related research centres,” he said.
Monday’s announcement is the latest twist in a winding journey for the company co-founded in 2002 by physicist Michel Laberge, who sought to revive an approach to nuclear fusion that was shelved in the 1970s. Now called “magnetized target fusion,” the method includes using a metal sheath to momentarily contain and then rapidly compress plasma to reach the temperatures and pressures needed to initiate fusion reactions.
The approach is different from those pursued by other companies, including Commonwealth Fusion Systems of Massachusetts, which had raised more than US$2-billion by last year – the largest capitalization in the industry to date – to build a small tokamak reactor that uses superconducting magnets to confine plasma.
After years of development in B.C., General Fusion announced an agreement with the U.K. Atomic Energy Authority in 2022 to build its own demonstration reactor in Oxfordshire. However, those plans were put on hold a year later when the company said it was focusing on building a new machine in Canada – the LM26 – to prove out its technology.
The machine is not designed to generate electricity because it only uses deuterium, an isotope of hydrogen, rather than the deuterium-tritium mix that can deliver a higher energy return. But it is the precursor to a full scale fusion reactor that the company envisions as its ultimate goal.
During last week’s test, the LM26 machine successfully compressed and heated deuterium plasma that was injected into a solid lithium liner. The next milestone, which Mr. Twinney said could be achieved in a matter of months, is achieving temperatures in the plasma of 10 million degrees. Prior to downsizing, the company said it was on track to achieve 100 million degrees, needed to ignite fusion reactions, at some point next year.
“The quicker we can get capital in, the quicker we can get back to growth and demonstrating these milestones,” Mr. Twinney said. “We need urgent capital to keep the momentum going.
Editor’s note: This article has been updated to correct the reference to magnetized target fusion.