Today Commonwealth Fusion Systems announced a strategic partnership with with Google which includes a power purchase agreement and an investment. This comes on the heels of Helion’s power purchase agreement with Microsoft in May of 2023. What should we make of these agreements?
Large tech companies like Google and Microsoft need increasing quantities of electricity to power data centers. They cannot afford to ignore the potential of fusion energy to supply part of that demand. These agreements are a demand signal in which tech companies are saying:
“We know we will need a lot more electricity in the future. There are a fixed and small number of primary energy1 sources from which we can make electricity. Fusion is one of them and has potentially very attractive characteristics. Therefore we cannot miss out on it.”
The details of these power purchase agreements are less important than they may seem. Timelines can shift, prices get adjusted, and the power initially delivered might change. What matters is that these agreements are unambiguous signals that the market is demanding electricity with the characteristics that fusion is promising.
These demand signals are driving investment into fusion. It’s not surprising, and it won’t be the last large investment by tech a company into fusion energy.
