Fusion startup Realta Fusion this week announced a deal with Madison Gas and Electric that will place one of the first grid-connected fusion power plants in the country in Wisconsin. The partnership comes as utilities around the world have been jockeying to court fusion startups, a courtship that says as much about utilities’ anxiety over future power supply as it does about fusion’s progress.
For founders and investors watching the sector, these tie-ups serve as a kind of real-world credibility check. A deal with a utility offers several advantages for a fusion startup, ranging from engineering support and permitting assistance to site selection for grid interconnection and land leases. For utilities, such deals give them early access to a technology with the potential to reshape the grid for decades to come.
To date, only a handful of fusion startups have announced deals with utilities, which makes agreements like this one so newsworthy.
Realta’s deal with Madison Gas and Electric will explore the construction of a 200-megawatt power plant — roughly enough capacity to power a small city — sometime in the mid-2030s. The utility also made an equity investment as part of the deal, though Realta did not reveal specifics and did not immediately reply to TechCrunch’s request for more information. The startup is currently converting an old Oscar Mayer factory in Madison to serve as its research and development facility.
In addition to funding, Realta gains access to interconnection sites, a key advantage as power providers and users scour the country for a place to hook up to an increasingly connected electrical grid. Realta will also receive engineering and technical assistance along with financing for the eventual power plant.
Utilities, which are typically cautious, weren’t always so forward: For decades, fusion power appeared to be just over the horizon, but for nearly as long it failed to deliver on its promises. In the last few years, though, fusion startups have made significant strides on both scientific and engineering challenges. Those advances, juxtaposed with soaring demand from AI data centers, have brought utilities to the table.
Fusion power offers a natural fit for many utilities, which have been tested by the growth of wind and solar. Both are cheap and clean, but they only generate power when the wind blows or the sun shines. And while batteries have offered a new tool to stabilize intermittent power flows from renewables, utilities have also been searching for fossil fuel-free alternatives that can provide consistent power 24/7, so-called baseload power plants. Fusion power plants, which are being designed to operate round the clock, must appear tantalizingly familiar to grid operators, even if their inner workings have a whiff of science fiction about them.
Among the few other fusion startups to ink a deal is Commonwealth Fusion Systems (CFS), which is perhaps the farthest along, given it’s now nearly two years into its partnership with Dominion Energy. CFS has agreed to lease land from Dominion for Arc, its first commercial-scale power plant. Arc will connect to the grid near Richmond, Virginia, and it’s expected to generate 400 megawatts of electricity. Google and Italian energy company Eni have both agreed to buy electricity from the power plant, which is expected to come online in the early 2030s.
On the other side of the country, Helion has been working with the Chelan County Public Utility District in Washington State for its first power plant, Polaris. The startup, which leases land from the utility, intends to turn on the 50 megawatt facility in 2028 to fulfill a deal to provide electricity to Microsoft.
In between Helion and CFS, Type One Energy is planning to build a 350-megawatt power plant on the site of a former coal plant near Oak Ridge, Tennessee, part of a larger deal the startup has with the Tennessee Valley Authority. The startup hopes to start supplying the grid with electricity from the Infinity Two power plant sometime in the mid-2030s.
Meanwhile, in Europe, Proxima Fusion is looking to rehab an old power plant site in southern Germany. In February, the company said it would build its first commercial power plant, Stellaris, on the grounds of an old fission power plant that is being decommissioned by RWE (one of Europe’s largest utilities, formerly a major operator of Germany’s nuclear plants) after Germany decided to pull the plug on the nuclear technology. RWE is also an investor in Proxima. The startup is aiming to turn on Stellaris in the late 2030s.
For now, the benefits of these deals are more tangible for startups, which gain access to expertise and real estate that might otherwise be costly or simply out of reach. It’s a capital-efficient way to de-risk a famously capital-intensive business.
For utilities, the potential rewards are farther afield though the payoff in terms of new power supplies could be significant.
Utilities are used to tackling projects with long timelines, though they aren’t accustomed to taking big risks, of which fusion power is one. Still, an underpowered grid would be an even bigger gamble. Better to bet now on a technology that promises to save their business years down the road. It might take a decade to build a commercial fusion power plant, and while that might seem like a long time, to utilities, it’s practically tomorrow.
