Investment in nuclear fusion: positive trend but still far behind renewables
By 2023, investment in nuclear fusion grew by 28% despite investors' caution. Public funding increases by 131% and fusion commercialisation is expected to be supported by the governments of the US, Japan and Germany
by Lab24
2' min read
2' min read
Over $6 billion. This is the global amount in 2023 of funding for nuclear fusion companies. This is a laughable portion compared to the $500 billion of global investment in renewables. However, when it comes to a technology still in its infancy like nuclear fusion, one should look at the trend rather than the amount;
Compared to last year, total investments in fusion players grew by 28% despite the fact that fears over inflation, high interest rates and the economic slowdown have led investors around the world to be more cautious;
Looking at the components of this positive trend, we highlight the growing role (+131% year-on-year) of public funding. In early 2023, the governments of the US, Japan and Germany announced specific new programmes to support the commercialisation of fusion. These programmes vary widely in their objectives and funding levels, but there is a clear trend for greater public involvement in the sector;
However, not all that glitters is gold. In 2023, the annual growth of total financing in the sector was one-fifth of what it was in 2022. The smaller the total amount and size of individual deals. In 2022, six companies active in nuclear fusion had received funding of more than USD 200 million each. Last year, there were only two financings of more than $100m;
The new funds were mainly targeted at early-stage companies. That is, traditional venture capitalists felt comfortable investing in mergers, but mostly with 'Seed' or 'Series A' investments. This is a challenge for more mature companies in the sector, which are not only capital-intensive but also have a value chain of rare and highly specialised components.
