commonwealth fusion systems books a $1b+ power deal for its future fusion reactor

Commonwealth Fusion Systems Secures Over $1 Billion in Power Sales to Eni

Commonwealth Fusion Systems (CFS) has reached an agreement to provide Italian energy firm Eni with power valued at more than $1 billion from its pioneering fusion reactor.

Reactor Location and Timeline

The planned power facility will be situated near Richmond, Virginia, an area with a high concentration of data centers. Arc, the 400-megawatt fusion reactor, is projected to become operational in the early 2030s, according to CEO Bob Mumgaard.

This deal marks the second of its kind for CFS. Previously, Google committed to purchasing half of the reactor’s energy output.

Progress on Sparc Reactor

CFS’s initial power plant, the demonstration-scale Sparc reactor located in Devens, Massachusetts, is currently 65% complete, Mumgaard revealed to reporters last week.

The company anticipates activating Sparc later in 2026, and maintains it is “on track” to meet this goal.

“The construction of Sparc is intended to provide valuable experience in building a nearly full-scale system,” Mumgaard explained. “Arc will represent the first in a series of reactors supported by a supply chain optimized for large-scale production.”

CFS’s Technological Approach

CFS is broadly recognized as a frontrunner in the fusion energy sector. Its reactor design utilizes the tokamak, a well-researched system employing D-shaped superconducting magnets to contain and compress superheated plasma.

Within this plasma, particle collisions generate new atoms and release energy. CFS consistently shares updates with the scientific community and conducts extensive simulations to identify and address potential challenges.

Financial Considerations and Funding

CFS anticipates that Sparc will produce more energy than is needed to sustain the fusion process itself. However, definitive confirmation of its functionality awaits the reactor’s completion.

This is expected to consume a substantial portion of the nearly $3 billion in funding the company has secured, including a recent $863 million Series B2 round.

Investors in this round included Nvidia, Google, Breakthrough Energy Ventures, and Eni.

Deal Structure and Risk Mitigation

The agreements with Google and Eni are designed to balance accountability with collaboration, Mumgaard stated. Partners acknowledge the inherent challenges of developing a novel technology and industry.

“There’s an understanding that pioneering a completely new technology and industry won’t be without hurdles,” he said. “No partner anticipates simply abandoning the project if initial results aren’t immediately successful.”

Eni’s Utilization of the Power

Google intends to utilize Arc’s electricity to power its data centers. However, Eni, a major oil and gas company, currently lacks U.S. operations requiring such a significant energy volume.

Lorenzo Fiorillo, Eni’s director of technology, R&D, and digital, confirmed that the power will ultimately be fed into the electrical grid.

Essentially, Eni plans to resell the generated power.

Economic Implications and Future Financing

Given that Arc is a first-of-its-kind reactor, the electricity it produces will likely be costly. Eni may incur losses from trading this power on the grid rather than realizing a profit.

The primary purpose of this agreement is likely to establish a benchmark price for fusion power and attract further investment for the construction of Arc.

Mumgaard acknowledged this, stating that the power purchase agreement “provides certainty regarding the destination and price of the power, which enables us to present a compelling package to financial investors for project financing and explore options for funding the plant’s construction.”