🌍 Fusion powers ahead #189

Happy Monday!

SpaceX’s Starship isn’t the only thing taking off.

The nuclear fusion space is also seeing serious pedal to the metal. In the past month, two fusion startups, Longview Fusion Energy and Type One Energy, have announced construction and siting agreements for their pilots, marking the first signs of commercial progress. Both pilots aim to fully operate by the 2030s, although it remains to be seen whether or not these companies can overcome the sector’s challenges — such as securing adequate funding, overcoming engineering hurdles, and developing a reliable fuel supply — and meet those deadlines.

In other news, investments in small modular nuclear reactors (SMRs) have risen 60% over the last three years, while OPEC and the IEA’s oil demand forecasts are the most divided they’ve been since at least 2008. Plus, the first climate risk report from the EU is out.

In deals, $80m in modular direct air capture technology, $75m lithium-ion battery recycling, and a new $133m fund for deeptech early-stage companies.

Plus, we’re hiring! Sightline is looking for a Backend Engineer and a Research Intern.

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From science fiction to commercial fusion

In the past month, fusion startups have been heating up. Following engineering breakthroughs and capital inflows in recent years, some startups are taking their first steps towards commercialization. On March 8, Longview Fusion Energy announced an engineering, procurement, and construction (EPC) agreement with Fluor for the world’s first laser fusion pilot plant, aimed at starting operations in the early 2030s. Meanwhile in late February, Type One Energy announced a site for its stellarator fusion prototype machine — a shuttered coal plant — for the same time frame.

Partners matter. Neither Longview nor Type One have proven their technology yet (not that any fusion startup has), but they’re pursuing engagements with quality partners and setting ambitious (but non-binding) deadlines to get energy to the grid.
- Longview Fusion chose Fluor, a leading engineering and construction firm with deep experience in the energy industry, to help design its commercial laser fusion power plant. Plus, the tech is enabled by the scientific breakthroughs in fusion energy gain at Lawrence Livermore National Laboratory's National Ignition Facility (NIF).
- Type One is partnering with federal utility Tennessee Valley Authority (which is also building an SMR) and Oak Ridge National Laboratory, and using a decommissioned coal plant that already has steam turbines, reactor buildings, and electrical infrastructure helps drive down costs.
Step by step vs leapfrog. Compare this to the strategy of the highest-funded (more than $2bn raised) and best-known fusion company, Commonwealth Fusion Systems (CFS). It’s aiming for a comparable timeline but broken into stages. Its first device, SPARC, will not provide power to the grid, but instead allow CFS to de-risk any remaining engineering challenges before focusing on commercialisation.

Why now?

Technological and engineering advances. New computer modeling and high temperature superconductor (HTS) tape have helped make stellarators easier and cheaper to build.
Scientific breakthroughs. Experiments in December 2022 and July 2023 at NIF achieved what’s known as “scientific net energy gain” using lasers where for the first time a fusion device created more energy than it consumed.
Public and private support. In the past 5 years, private funding for fusion has risen to $4.1bn. Government support has also grown, with the US, UK, Germany, and Japan all releasing fusion strategies in recent years.
- In 2023, the US earmarked $1.4bn; Germany committed $1.1bn by 2028; and the UK is set to invest $827m by 2027.
- Regulation is moving in a favorable direction, with the UK and US to treat fusion devices like particle accelerators instead of fission reactors, which is much friendlier.

The Big Picture

On the plus side:

It’s showtime. After decades of being in the lab, the race is on to get to commercial scale. There’s an array of shots on goal — tokamaks, stellarators, and lasers, not to mention other approaches, like first-light fusion (projectile ICF), which also had record breaking results this month.

On the downside:

Missing money. These projects will need a lot of capital and neither has yet raised enough, great to sign contracts but that doesn’t mean it’s actually going to happen.
Significant engineering challenges remain. Both Longview and Type One need to develop a fuel cycle that currently doesn't exist, while building technologies never-before-built by the private sector.
Unclear timelines. Are these commitments real or just PR? The UK government’s own fusion project, STEP, is targeting the 2040s — is that because governments are slower than the private sector, or because they're not incentivised to make improbable claims?

Looking ahead, it’s going to be all about timing, timing, timing. Many people working in fusion are confident that the engineering challenges will be overcome in the coming years. But there’s a big difference between the 2030s and 2040s — both for climate impact, and for how fusion will compete against alternative firm power sources like SMRs/nuclear, geothermal, and LDES. If fusion doesn’t get electrons on the grid before the 2040s, it will be competing with much more mature and established technologies.

Thank you to Dr Melanie Windridge and Andrew Holland for their expert confinement of the issues.

Deals of the Week (3/11 - 3/17)

Late-Stage / Growth

🏠 Sealed, a Queens, NY-based smart home retrofits platform, raised $30m in Growth funding from Keyframe Capital Partners, CityRock Venture Partners, Cyrus Capital Partners, and Fifth Wall.

🛵 VOI, a Stockholm, Sweden-based electric scooter platform, raised $25m in Growth funding from Balderton Capital, Black Ice Capital, Creandum, Nineyards Equity, Project A Ventures, and other investors.

🔋 Lohum, a Greater Noida, India-based lithium-ion battery recycling platform, raised $14m in Series B funding from Singularity Growth, Baring Private Equity India, and Vyoman Indian.

⚡ Mapon, a Riga, Latvia-based fleet management software platform, raised $3m in Debt funding from Signet Bank.

Early-Stage

💨 CarbonCapture, a Pasadena, CA-based modular direct air capture technology platform, raised $80m in Series A funding from Prime Movers Lab, Alumni Ventures, Amazon Climate Pledge Fund, Aramco Ventures, Idealab, and other investors.

⚡ Quaise, a Cambridge, MA-based geothermal drilling technology platform, raised $21m in Series A funding from Prelude Ventures, Safar Partners, Mitsubishi Corporation, and Standard Investments.

🥩 ProteinDistillery, an Ostfildern, Germany-based plant-based food platform, raised $16m in Seed funding from Green Generation Fund and Startup Family Office.

🔋 Pure Lithium, a Boston, MA-based lithium metal electrodes developer, raised $15m in Series A funding from Oxy Low Carbon Ventures.

⚡ SUBLIME, a Paris, France-based biogas liquefaction technology platform, raised $13m in Seed funding from Crédit Mutuel Impact and PSL Ventures.

📦 Packfleet, a London, UK-based electric parcel courier service provider, raised $10m in Series A funding from General Catalyst, Creandum, and Voyager Ventures.

🧱 Furno Materials, a Palo Alto, CA-based retrofittable oxyfuel in cement plants platform, raised $6m in Seed funding from Energy Capital Ventures, Breakthrough, Cantos, Neotribe Ventures, and O’Shaughnessy Ventures.

⚡ Necture, a Vienna, Austria-based EV fleet management platform, raised $6m in Series A funding from SmartEnergy Innovation Fund, Smartworks Innovation, Speedinvest, and Verbund X Ventures.

🚗 Telo Trucks, a San Carlos, CA-based small electric vehicles manufacturer, raised $5m in Seed funding from Spero Ventures.

🛰 MarineLabs, a Victoria, Canada-based real-time coastal intelligence platform, raised $4m in Seed funding from BDC Capital and Seaspan Shipyards.

⚡ Suiso, a Sheffield, UK-based hydrogen generation technology platform, raised $4m from NPIF - Mercia Equity Finance.

🛰 Orbio Earth, a San Francisco, CA-based methane monitoring platform, raised $4m in Seed funding from Initialized Capital, Collaborative Fund, Y Combinator and the European Space Agency.

🔋 Anaphite, a Bristol, UK-based dry coating composites for batteries platform, raised $2m in Equity funding from Elbow Beach Capital, Bristol Private Equity Club, and Wealth Club and Grant funding from Investor Partnerships Future.

🥩 Opalia, a Montréal, Canada-based cell-based dairy platform, raised $1m from Hoogwegt Group, BoxOne Ventures, Cycle Momentum, Kale United, Natural Products Canada, and other investors.

Other

🔋 Li-Cycle, a Mississauga, Canada-based lithium-ion battery recycling platform, raised $75m in Convertible Note funding from Glencore.

🔋 Vianode, an Oslo, Norway-based sustainable anode materials manufacturer, raised $33m in Grant funding from Innovation Norway.

💨 Carbonova, a Calgary, Canada-based carbon nanofibers from CO2 platform, raised $6m in Corporate funding from Kolon Industries and NGIF Capital.

New Funds

Elaia, a Paris, France-based investment firm, announced the launch of a $133m fund that invests in deeptech early-stage companies.

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In the News

The last three years saw a 60% increase in pipeline for Small Modular Nuclear Reactors (SMRs), driven by interest from heavy industrial players. This pipeline represents 22GW of projects with over $157bn in potential investments. Although the vast majority of the world's SMRs are not yet under construction, the first SMR was activated last year, marking an important milestone for the industry.

In a promising yet gloomy step forward, the EU issued its first climate risk report, which found there were steep consequences ahead if no action was taken by the bloc. The report mentioned particular regions were especially vulnerable, such as Southern Europe to wildfires, low-lying coastal regions facing flooding, and heat as the top issue overall. It further stated that Europe’s technology and policy deployment was not on pace with these growing risks.

In a race to secure critical minerals onshore, the US DOE offered a $2.26bn loan to Lithium Americas Corp. to develop the country’s largest lithium deposit in Nevada. This is the largest-ever loan to a mining company from the DOE’s Loan Programs Office, and the plant is expected to produce 40,000 metric tons per year of battery-grade lithium carbonate for use in EV batteries. Indigenous American tribes objected to the location of the mine, but lost a legal case last year to block its construction.

New York State completed its first offshore wind farm off of Long Island. South Fork Wind is fully operational and delivering power to over 70,000 homes and businesses in the area. This is the first commercial-scale project in the US to be completed, and marks a huge milestone for an industry hard hit by inflation and high interest rates.

OPEC and the IEA are the most divided on oil demand since at least 2008, according to a new Reuters analysis of the last 16 years of monthly reports. The gap in demand between these two organizations’ reports, around 1% globally, reflects competing worldviews about the pace of the energy transition — and could have dire consequences in terms of potential investments and effort put into the transition.

Shell further weakened its 2030 energy transition goals. The company cited expectations of continued gas demand, particularly LNG, leading to rolling back some of the decarbonization goals it had previously laid out. In addition to scaling back its 2030 goals, it completely scrapped the 2035 target for net zero, and introduced a target to cut emissions from oil sales instead. [See full report here].

The DOE is getting busy with carbon removal programs. The three programs include: the Voluntary Carbon Dioxide Removal Purchasing Challenge, a $35m Carbon Dioxide Removal Purchase Pilot Prize, and Carbon Negative Shot Grant Funding Opportunities. Google has further agreed to match the programs’ funding for companies and projects that win. These policies and prizes aim to accelerate technologies like DAC and simultaneously bolster the carbon market in the US.

Amazon announced it bought a nuclear powered data center campus in Pennsylvania from power company Talen Energy for $650m. One driver for the increase in data center electricity demand: the use of generative AI. One report shows that if Google were to integrate generative A.I. into every search, its electricity use would rise to around twenty-nine billion kilowatt-hours per year — more than is consumed by many countries, including Kenya, Guatemala, and Croatia. Meanwhile KW Sidewalk Infrastructure Partners issued a call to action paper on data center flexibility and sustainability.

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Opportunities & Events

📅Latin America Climate Finance Accelerator: Register for the Climate Finance Accelerator's virtual events on March 19-21st for an opportunity to join networking spaces and learn about climate innovation, low-carbon infrastructure, and impact investment in Latin America.

📅 ChangeNOW Summit: Register for the ChangeNOW Summit in Paris from March 25-27th for an opportunity to connect with thousands of other climate professionals, attend insightful workshops, and discover innovative climate solutions.

📅 Climate Career Week: Register to attend the Terra.do Climate Career Week from March 25-29th to join others in five days of free virtual programming and meet leading climate founders, investors, and experts in the climate tech industry.

💡 Climate Challenge: Apply to the THRIVE Climate Challenge by March 29th for a chance to receive a $100k investment from THRIVE and join their 2025 global accelerator for startups advancing the biofuels value chain, on-farm energy, and water stewardship.

💡 Biomimicry Accelerator: Apply to the Biomimicry Institute Fifth Ray of Hope Accelerator Cohort Class by May 3rd for opportunities to access robust training, networking, and $15,000 in non-dilutive funding for nature-inspired startups addressing environmental challenges.