Microsoft and Helion Energy on Wednesday announced a historic agreement that could pave the way to the world’s first fusion power plant.
Helion plans to build the commercial facility in Washington state, where the companies are headquartered. The goal is to get the plant running by 2028.
Engineers for decades have chased the promise of fusion energy — a potentially limitless source of carbon-free power. There are demonstration fusion reactors running or under construction around the world. But none of the commercial devices — including Helion’s reactors — have been able to produce more electricity than they require to operate, let alone generate enough power to send to the grid. Some in the clean energy industry are skeptical it will ever work.
However, if Helion is successful — and serious hurdles remain — it could have massive benefits long term as clean energy’s “Holy Grail” is finally achieved.
“Fusion energy has incredible potential to empower people all over the world.”
– Scott Hsu, U.S. DOE lead fusion coordinator
“This is bigger than just Helion,” co-founder and CEO David Kirtley told GeekWire. “This shows more broadly that fusion is transitioning from science experiments and science projects demonstrating key physics to now building products and building commercial power plants.”
Helion and Microsoft have signed a power purchase agreement in which the software and cloud computing giant agrees to buy electricity from the fusion startup once the facility is generating power. Microsoft needs clean electricity to fuel the operations of its more than 200 energy-hungry data centers internationally. Up to this point it has relied primarily on wind and solar power, which has limitations: the wind doesn’t always blow and the sun sets.
“Helion’s announcement supports our own long term clean energy goals and will advance the market to establish a new, efficient method for bringing more clean energy to the grid, faster,” said Brad Smith, vice chair and president at Microsoft, in a statement.
That market spans companies worldwide and in the Pacific Northwest includes Helion, Zap Energy, Avalanche Energy and General Fusion. All have raised significant sums from notable venture capitalists. Helion’s investors include OpenAI CEO Sam Altman of ChatGPT fame and Facebook co-founder Dustin Moskovitz, while others have support from tech titans Bill Gates and Jeff Bezos.
Scott Hsu, U.S. Department of Energy senior advisor and lead fusion coordinator, cheered the technology’s potential for lowering power costs and providing secure energy globally. Experts internationally warn that the planet needs to slash carbon pollution in the next quarter-century to avoid the worst climate scenarios.
“Fusion energy has incredible potential to empower people all over the world,” Hsu said by email. “If commercial fusion energy becomes available by the end of this decade, it could ease all the various possible pathways to [carbon] net-zero by 2050.”
Challenging path to commercialization
Helion has momentum but a slate of daunting challenges lie ahead. The startup is finishing construction this year of Polaris, its seventh-generation fusion device. The reactor in Everett, Wash., should start operating in 2024. The expectation is that any technical difficulties will be overcome and Polaris will produce net electricity, demonstrating the viability of Helion’s commercial product.
The Sun — the ultimate fusion machine — produces an abundance of power. To translate the process to an Earth-sized scale, engineers need to build a device in which they can create and sustain a super-heated gas called plasma. Within the plasma, light atomic nuclei can be smashed together and fuse, producing energy. The system must also efficiently capture the energy for the electrical grid. Kirtley said Helion’s technology will have that capacity.
But even before that claim gets tested with Polaris, the Helion team will be launching work on its first-of-a-kind commercial facility. To get there, the company has 156 employees and expects to grow to 200 by year’s end, plus subcontractors.
To pay for the project, Helion has raised $577 million in venture capital, with an additional $1.8 billion that’s unlocked if the company hits milestones with Polaris. Altman, who is also Helion’s board chairman and former president of Y Combinator, is responsible for at least $375 million of the investment. The deal brings together another Altman-led company with Microsoft; the tech giant earlier this year inked “a multiyear, multibillion dollar” investment in OpenAI.
The new reactor will be the same size as Polaris, and include additional hardware and technology for putting energy on the grid. It should be able to produce at least 50 megawatts of power following a yearlong ramp up period (by comparison, the average wind farm in Washington has about a 150 megawatt capacity). The device will be housed in a 30,000-square-foot building. The company hasn’t announced its precise location.
The commercial project will largely be licensed and regulated by the state Department of Health, which previously approved three of Helion’s test devices. The U.S. Nuclear Regulatory Commission delegated authority to the state for radiation safety oversight decades ago. The process is expected to be faster and more straightforward than what’s required for traditional nuclear plants powered by fission, or the splitting of radioactive elements, which poses more serious health and safety risks than fusion.
The Helion facility also needs to connect to the electrical grid. The clean energy company Constellation is a partner in the deal and will manage the power transmission and operate as the power marketer.
Amy Roma, a nuclear regulatory lawyer and head of the global energy practice at the law firm Hogan Lovells, agrees there are obstacles for Helion and others in the sector.
But Roma also sees the necessary elements for success coalescing: technological milestones are being met, there’s government support of the sector and regulations taking shape, and there’s an influx of funding and ready customers.
“All the pieces,” she told GeekWire, “are coming together nicely.”
Risks and benefits of partnership
Right now, Kirtley is feeling the timeline pressure.
“Our goal is to very shortly announce a site for this so that we can begin moving earth so that we can build that first power plant,” he said.
The power purchase agreement requires Helion to start generating electricity on a set schedule — or pay financial penalties to Microsoft and Constellation. While the agreement carries a risk to Helion, it also unlocks essential benefits, Kirtley said.
The deal creates more confidence that the plant will be built, which bolsters commercial partnerships and strengthens supply chain connections. Having a customer for the electricity is a key component to winning approval for grid connections.
Andrew Holland, CEO of the Fusion Industry Association, hopes the partnership will ignite broader interest in the sector.
“This announcement should underscore the excitement about fusion and encourage policymakers and investors to know that fusion is no longer simply a science experiment, but will soon be ready,” Holland said by email.
Helion started this journey a decade ago. Its trio of co-founders includes Kirtley, a University of Michigan graduate, plus Chief Technology Officer Chris Pihl and Director of Research George Votroubek, both graduates of the University of Washington.
The agreement between Helion and Microsoft began with conversations five years ago with the cloud company’s data center group. The companies have worked closely, Kirtley said, to conduct technical diligence and ensure Helion’s approach would match Microsoft’s energy needs.
The Redmond, Wash. tech company has committed to using climate friendly power around the clock by 2030, which requires reliable clean energy sources beyond wind and solar. The company is also working with partners to develop large-scale hydrogen-powered generators for data center backup.
Microsoft already has power purchase agreements for more than 13.5 gigawatts of clean power that’s being produced in 16 countries, according to its latest Environmental Sustainability Report. By comparison, Washington state’s largest dam, the Grand Coulee Dam, can generate about 6.8 gigawatts of power.
The demand for clean energy of course extends well beyond tech companies and data centers. Helion is already looking past Polaris and the 50 megawatt plant to building larger facilities for additional customers. If Helion and others succeed, fusion could play an essential role bolstering a clean energy grid, providing desperately needed reliable power for industrial processes and manufacturing, and energizing transportation such as maritime shipping.
“Fusion has cross-industry applications that can be very widespread,” said Roma, the nuclear attorney. If it can be efficiently harnessed, “it will revolutionize the energy industry and the clean power industry.”
