Commonwealth Fusion Systems Secures $1 Billion Deal with Eni for Power from First-of-its-Kind Fusion Reactor, Aiming to Establish Fusion Power Pricing and Attract More Funding
Fusion energy company Commonwealth Fusion Systems (CFS) has secured a deal worth over $1 billion with Italian energy giant Eni for power from its first fusion reactor, tentatively named Arc. The 400-megawatt reactor is slated to be built near data centers in Richmond, Virginia, with an expected commissioning in the early 2030s according to CEO Bob Mumgaard.
This agreement marks CFS’s second such power purchase deal following Google’s commitment to buy half of the Arc’s output earlier this year. Although neither party disclosed specifics regarding the extent and timeline of the energy supply, Mumgaard confirmed that the demonstration-scale Sparc reactor in Devens, Massachusetts is currently 65% complete, with plans to switch on Sparc by the end of 2026.
CFS’s leadership position in the fusion industry stems from its tokamak-based reactor design, which uses D-shaped superconducting magnets to confine and compress superheated plasma for energy production. CFS has been actively sharing updates on their progress, conducting extensive simulations, and addressing potential challenges.
The completion of Sparc will serve as a crucial test for the company, as it is anticipated to generate more power than required to sustain fusion reactions. However, CFS acknowledges that the outcome remains uncertain until Sparc is fully operational, potentially consuming a substantial portion of the nearly $3 billion in funding raised so far, including an $863 million Series B2 round announced recently.
The partnerships with Google and Eni raise questions about potential consequences if there are delays or unforeseen issues with the reactors’ operation. According to Mumgaard, the agreements aim to strike a balance between accountability and collaboration, as both parties recognize the challenges inherent in pioneering an entirely new technology.
While Google has signaled its intention to utilize Arc’s electricity for powering data centers, Eni – one of the world’s largest oil and gas companies – lacks U.S. operations requiring such substantial energy volumes. Eni’s Lorenzo Fiorillo revealed that any electricity produced by Arc will be sent to the grid and subsequently resold.
However, given that Arc represents a first-of-its-kind reactor, the generated electricity is expected to be expensive. It is likely that Eni would incur losses trading this power on the grid rather than earning profits. The partnership appears intended to establish a price point for fusion power and secure additional funding for the construction of Arc.
Mumgaard further emphasized that the power purchase agreement provides CFS with financial certainty, enabling them to engage with potential investors for project finance discussions regarding the financing of the plant.
