Creating a fusion power plant is no small feat, with physicists and engineers dedicating decades to the endeavor. However, recently, fusion startup Zap Energy reevaluated its strategy and determined that constructing a fission power plant might be a quicker path to success.
Why the shift?
“Fission and fusion share many challenges,” explained Zap’s new CEO Zabrina Johal to TechCrunch. “These technologies are closely related in terms of hurdles.”
Zap is one of the well-funded fusion startups, having raised $300 million. This partial shift has surprised many, even if fission and fusion have synergies.
The decision gains clarity when considering the spike in energy demands from AI data centers, projected to nearly triple by 2030. While tech companies need electricity now, fusion power plants capable of supplying the grid are years away from deployment.
“There’s a power shortage for the required data centers,” Johal stated. “This realization pushed us to expedite our timelines and provide grid-relevant solutions.”
Two Approaches to Atom Splitting
Fission is already commercially viable, unlike fusion which involves combining light atoms like hydrogen to release energy. A notable fusion experiment recently produced more energy than what was needed for ignition, but it falls short of practical power plant requirements. Fission, on the other hand, involves splitting heavy atoms like uranium and has been utilized since the 1950s.
Despite extensive experience, building cost-effective fission reactors poses significant hurdles. Fission startups focusing on small modular reactors (SMR) hope that mass production will reduce costs, though this remains to be proven and may take a decade.
Johal forecasts that Zap could begin earning from its new fission venture within a year. “Generating electrons isn’t our core strategy,” she noted. Revenue sources could include federal support from the Department of Defense and Department of Energy, as well as milestone payments and reserved production capacity for high-energy-consuming companies, she said.
Such milestone payments could provide an interesting revenue model for Zap and other energy startups.
This model resembles ASML’s strategy with Intel, TSMC, and Samsung for developing extreme ultraviolet lithography (EUV), where these companies effectively financed ASML in exchange for future EUV machine production capacity.
However, there is a critical difference between Zap’s and ASML’s initiatives. ASML was the sole contender for EUV, while in energy, tech companies have multiple technologies and suppliers from which to choose. Zap will need to showcase a remarkable fission solution to stand out.
Potential clients can begin evaluating Zap’s upcoming fission plans. Their reactor design is based on the 4S model, a molten salt-cooled design initially developed by Toshiba and Japan’s power industry research institute. Although unbuilt, Johal states the design has “no IP complications.”
Johal believes demand in the 2030s will be strong, ensuring Zap has numerous clients despite their delayed entry compared to other fission startups. “In the near term, there won’t be enough reactors,” she observed.
The Financial Path
For Zap’s fission strategy to succeed, it must generate revenue or secure new investment.
Considering Johal’s remarks on governmental funding and milestone payments from major energy consumers, revenue presenting itself first is logical. Developing a reactor is costly, and creating a second concept isn’t free. The more funds, the better.
Zap isn’t alone in exploring secondary businesses for revenue. Commonwealth Fusion Systems and Tokamak Energy sell superconducting magnets to other fusion entities, while companies like TAE and Shine Technologies engage in nuclear medicine.</p