Government kickstarts £100 million fusion investment

Today (3 April) the government has announced £20 million to kickstart ‘Starmaker One’ – a British private fusion investment fund that will help fusion businesses and start-ups in the sector grow and commercialise at scale. 

It is expected the upfront investment will unlock further investment from the private sector as the fusion industry grows – helping cement the UK as a world leader in the technology and creating highly-skilled jobs.  

Fusion uses the same process that powers the sun by combining two forms of hydrogen and heating them at extreme temperatures, releasing vast amounts of energy. 

Companies in the UK have often identified lack of access to capital as a barrier to scaling up and commercialising their businesses. An injection of cash from government will give the private sector confidence to invest in fusion, developing its vast potential as an unlimited source of energy and ensuring the UK continues to compete in the global fusion race.  

The funding boost will help small fusion companies provide training for their workforce in key areas such as physics, engineering and chemistry. It will also support companies to develop technologies and capitalise on the opportunities of fusion energy in markets such as magnetics, industrial AI, robotics, healthcare, transportation and energy storage.  

Fusion already supports thousands of jobs in the UK, in regions such as Nottinghamshire, Oxfordshire and South Yorkshire, with thousands more to follow as the technology advances. Fusion is a key industry sector in the Oxford-Cambridge Growth Corridor with independent research from London Economics showing that every £1 invested in fusion it benefits the economy by nearly £4. 

Energy Secretary Ed Miliband said:  

This government is taking back control of Britain’s energy by driving for clean homegrown power through our Plan for Change.  

Fusion has the potential to provide us with energy security, whilst attracting the best technologies to our shores and training up the next generation of British scientists and engineers.  

We are backing both nuclear and fusion power, and today we take a step forward in growing this exciting industry.

Science Minister and Oxford-Cambridge Growth Corridor Champion, Lord Vallance said: 

Fusion energy is a technology with enormous potential, and an industry in which the UK is already well established. 
 
This investment will help to unlock the funding the fusion industry needs to grow, which will boost regions across the UK such as Nottinghamshire and South Yorkshire, and in Culham in Oxfordshire, the epicentre of UK fusion.

Energy Minister Kerry McCarthy, said:  

This investment is our Plan for Change in action – we are backing British pioneers to secure the clean energy of the future while supporting jobs today, from scientists and welders to engineers and construction managers.  

As countries around the world recognise the huge potential of fusion, breakthroughs in this technology are happening thick and fast, and we want to keep the UK at the forefront of the global race by helping projects to innovate and grow here, in turn driving economic growth.

Investment in Starmaker One signals the first early-stage fusion energy venture capital fund outside the US and the first of its kind to partner with government as an investor. Investing in fusion technology will pave the way to delivering a clean safe, secure and abundant baseload energy, helping to meet rising energy demand in the years ahead. 

This investment will give industry cash upfront to grow their businesses and supply chains. It follows on from a government commitment for a record level of £410 million, announced in January, for UK fusion research and collaboration with other countries to develop clean, unlimited power and drive economic growth. 

Successful deployment of fusion energy would be globally transformative and allow the UK to export the technology to a global fusion market expected to be worth trillions of pounds in the future.

This notice is for information only and does not constitute an invitation to invest. The fund is not available to retail investors. 

Notes for editors  

• Starmaker One is a limited partnership in which the government is a cornerstone investor. The fund has potential to raise between £100 million and £150 million overall (including the £20 million from DESNZ) for investment into fusion-related technology
• East X Ventures will act as fund manager. Government will receive a share of any returns made by the partnership
• East X Ventures is the venture capital arm of East X, a London based quantitative systematic research and investment firm operating across global commodity markets.  East X Ventures invests in early-stage, science-led companies with high-growth, world-scale potential
• The funding comes from the government’s existing Research and Development budget for 2024/2025.