The nuclear fusion industry is accelerating, thanks to recent technological breakthroughs enabling several companies to power commercial-scale fusion plants within the next five years, Wood Mackenzie said Friday.
According to the research firm, the number of operational fusion machines and projects in the pipeline have increased 15% and 53%, respectively, since 2022.
As one of the recent breakthroughs, Helion Energy's fusion machine reached a record plasma temperature of 150 million degrees Celsius, about ten times the temperature at the center of the sun.
The startup company expects to begin operations at its first fusion plant in 2028, backed by a 50-megawatt power purchase agreement with Microsoft (MSFT) and a potential 5-gigawatt deal with OpenAI.
Commonwealth Fusion Systems, meanwhile, aims to develop a grid-scale fusion generation plant in Virginia in the early 2030s, supported by a 200-MW power purchase agreement with Alphabet's (GOOG) Google.
Another fusion company, Inertia, plans to break ground on its first grid-scale pilot plant in 2030, having raised $450 million in financing in February.
"If the fusion companies can deliver working plants on that timeline, they will be able to keep pace with suppliers of small modular reactors, the new generation of fission plants," Wood Mackenzie said.
SMRs are expected to account for a large portion of the 523 GW next-generation nuclear capacity projected by 2050, although fusion plants will likely take some of the market, especially after 2040, according to the research firm.
Supportive policies and private sector involvement have been critical to fusion industry's expansion.
The US government's Advanced Research Projects Agency-Energy has recently announced a $135 million commitment to help advance related technologies, while private companies have raised around $10.5 billion globally to support the industry.
Wood Mackenzie projects that investments in fusion power will reach about $15 billion by the end of this year.
"Countries' efforts to reduce their reliance on imported oil and gas will add fresh impetus to the sector's growth," the research firm said, noting that a prolonged Middle East conflict could reduce regions' dependence on energy imports by half in 2050.
"Fusion power could make an initially small but growing contribution to that," Wood Mackenzie said.