Fusion: full 'steam' ahead

Hello hello,

Sadly I did not succeed in spotting a jaguar last week in Belize, but night hikes in the jungle were still replete with scorpions, tarantulas, toads and frogs, possums, many a bird, and much more. In lieu of a successful jaguar sighting, what I can offer four more new poems of mine, published in various online lit mags → here, here, here, and here.

On the climate, sustainability, and energy front, last week saw a raft of news in the fusion space in particular, alongside plenty of updates on the usual fare of AI, the war in Iran and its impact on global energy markets, and more. Let’s hop to it, shall we?

ONE STORY IN A SENTENCE AND A CHART

• As per reporting and polling from Heatmap News, Americans’ attitude towards data center development has shifted markedly for the worse in recent months, so much so that more than 60% support a moratorium on new data center development nationwide (see second link), just as top AI companies prepare to IPO, I might add. Link. Link.

NEWS, DATA, AND HEADLINES

• Helion, based out of Everett, Washington, raised a $465 million Series G round at a $15.5 billion post-money valuation. Thrive Capital led; new investors included Lux Capital, Alta Park Capital, Anti Fund, and others alongside returning investors like Lightspeed. The company is developing magnetic-confinement fusion power plants that generate electricity directly via electromagnetic induction (so, in this case, no steam turbines, unlike what this newsletter’s headline would suggest.) Helion has now raised $1.5 billion and is, from my vantage point, a frontrunner in terms of fusion developers with respect to who actually has a credible shot at producing power for a customer by 2030. Link.

• The WMO is warning there’s an 80% chance an El Niño event forms before September and a 90% chance it does before November. Similarly, the climate science community is concerned we may be in for the strongest El Niño so far in the 21st century, which, layered on top of an already-elevated global temperatures, risks triggering intense droughts, heatwaves, floods, and wildfires. Link.

Energy market x Iran war updates

• Iran-U.S. ceasefire negotiations collapsed again after Tehran announced it was suspending talks in response to Israel's expanded offensive in Lebanon. Iran also threatened to re-close the Strait of Hormuz and the Bab al-Mandeb Strait and launched a deadly attack on a Kuwaiti airport this week. Oil prices were up again earlier this week, then fell again later in the week, and are up again to start the new week as of this writing; there’s little in the way of a discernible short-term reason for this seesaw! The main takeaway at this point for any given week has been that little is changing overall and that oil markets will remain quite constrained for much of the year at rhis rate. Link. Link. Link.

• U.S. commercial crude inventories have fallen to their lowest level since 2004, dropping 8 million barrels to 433.7 million. Meanwhile, to transit the closed Straight of Hormuz, some ships ferrying LNG and other fuels have started “going dark,” i.e., stopping all data transmission, prior to entering it to avoid detection (second link). Link. Link.

• In the vein of cataloging some illustrative downstream consequences of the ongoing oil market constraints, here’s one for this week: California's Air Resources Board voted to grant up to $4 billion in free allowances to oil refiners and industrial polluters to ease compliance with the state's 13-year-old cap-and-trade program and reduce affordability pressure given the spike in oil prices this year. The decision is predictably drawing criticism from the more climate-concerned analysts, economists, and policymakers out there, who have underscored the irony of California’s supposed status as a leader on climate and environmental regulations. Link.

More fusion news

• Focused Energy, based out of Germany, closed an oversubscribed $240 million Series A led by RWE to develop inertial-confinement fusion technology. The company aims to build its first demonstration system, Lighthouse, at a former RWE nuclear site. SPRIND, Prime Movers Lab, and the European Innovation Council Fund also invested. Link.

• Pacific Fusion, a Fremont, California based inertial confinement fusion company, unveiled a subscale pulser prototype that it claims successfully released 440 gigawatts in an 80-nanosecond burst. That milestone brings the company closer to beginning construction on its demonstration facility, which it will start building in New Mexico later this year. Link.

• Xcimer Energy, based out of Denver and also focused on intertial confiment fusion, activated its Phoenix laser system, which it claims is the world's largest privately owned laser. Featuring a 38-meter core capable of generating over 1 kilojoule of energy. Xcimer is betting that more powerful, less complex lasers can help make a commercially viable inertial confinement fusion-based power plant a reality. That’s not where my money is at, however; I see magnetic confinement approaches as more likely to yield scalable commercial power generation in the future. Link.

• Avalanche Energy, a developer of compact fusion reactors based out of Tukwila, Washington, is the latest clean power generation company to pursue an IPO, even as it (like other energy companies on or seeking public market listings) has yet to sell a watt of power to a customer. This week, word got out the company has hired Jefferies to prepare for a potential IPO later this year. Link.

Elsewhere in energy and electrification

• China installed the containment dome on its latest reactor at the Lianjiang nuclear power plant in Guangdong province, a routine but meaningful construction milestone. China has roughly three dozen conventional, light-water fission reactor under development right now (half of all capacity under construction worldwide), whereas the U.S. has none (it only has two reactors under development at all, and those are SMRs). The U.S. still has the largest nuclear fleet in the world, but that may well not be true in 2050. Link.

• The U.K. also reached a noteable milestone at the long-delayed Hinkley Point C fission power plant (which will feature 3.2 gigawatt of capacity via two reactors once completed), where the second reactor pressure vessel was lifted into place this week. Link.

• In an effort to raise the dead (or at least the dying), the Trump admin announced up to $850 million in coal support via the Defense Production Act, including $425 million to expand capacity at 13 existing coal plants, $75 million for a new West Coast coal export terminal, and $350 million toward the first new U.S. coal plants in over a decade (one in Alaska, one in West Virginia), plus upgrades to Puerto Rico's Guayama facility and a Maryland plant that closed in 2024. Link.

• Fervo Energy provided an update (directly in my email inbox) regarding a recent incident at its 500 MW Cape Station geothermal power plant, which is currently under construction, noting it contained the flow of fluid and that there were no injuries, no environmental damages, nor any needed pause construction. The company is still targeting first power at Cape Station by late this year.

• FERC approved Constellation Energy's request to transfer grid interconnection rights from its Eddystone gas plant to the Three Mile Island site, clearing a major obstacle for its planned 2027 restart (and rebrand as the “Crane Clean Energy Center”). The decision overrides an earlier PJM warning that had pushed the restart timeline to 2031. Link.

• Urenco, the British- and Dutch-government-owned nuclear fuel enricher, announced plans to expand capacity at its National Enrichment Facility in New Mexico (the only commercial uranium enrichment plant in the U.S.) by ~50%, in what it described as a multi-billion-dollar commitment to domestic nuclear fuel supply chain resilience. Link.

Policy

• The U.K. government set a draft target to cut emissions 87% below 1990 levels by 2040. Energy Secretary Ed Miliband framed it as protection against fossil fuel price shocks, though the proposal faced swift opposition and debate regarding just how much that will require across many sectors and from tax payers. The proposal still requires parliamentary approval by the end of June. Link.

• New York, New Jersey, Connecticut, Maine, Massachusetts, Rhode Island, and Vermont filed suit against the Trump administration over its agreement to reimburse TotalEnergies nearly $1 billion for walking away from two offshore wind leases, alleging the deal violates federal law and misuses taxpayer funds. Link.

• The Trump administration is dismantling the Ocean Observatories Initiative, a $368 million deep-sea monitoring network with an annual operating budget of $48 million. Since 2016, it has helped track and monitor coastal currents, oceanic carbon absorption, marine ecosystems, and the Atlantic Meridional Overturning Circulation (AMOC), in particular. The National Science Foundation has already started sending ships to remove more than 900 instruments anchored off Oregon, Washington, Alaska, North Carolina, and the Irminger Sea. Losing this infrastructure, which isn’t that expensive in the grand scheme of things, imperils not just the U.S.’s, but the world’s capacity to understand how climate change is impacting oceanic systems like AMOC. Considering its scale and the increasing scientific consensus that it’s at severe risk of weakening, AMOC is becoming a focal point of concern both in climate circles and outside of them. The Trump admin’s move here is probably best understood not as a cost saving measure but as an admission that climate change is impacting systems like AMOC and that they’d prefer people not to know or think about that fact, lest it cause voters to demand more action. Link.

• In response to the above, the European Commission announced OceanEye Europe, a program designed to increase its contributions to the global ocean observing system such that it has a 35% share by 2035 and to secure 35% of the market for ocean observation technologies generally. Europe is particularly exposed to risks associated with AMOC’s weakening; in a scenario where AMOC fully collapses, temperature differentials between northern and southern Europe could spike by up to 4° C (7° F). Hence, it’s not surprising they’d pony up for more monitoring infrastructure to support more foundational scientific understanding of whether and to what extent AMOC is weakening already, modeling of future AMOC trajectories and associated risks, and early warning systems. Link. Link.

• The European Commission is also taking Ireland to court over widespread illegal peat extraction, alleging there’s been ongoing, sizeable bog cutting and extraction without securing the requisite permissions or environmental impact assessments, in violation of EU habitat protection laws. Peatlands are highly concentrated stores of carbon; when mined, they readily release both carbon dioxide and methane emissions. Link.

More on data centers

• To stay competitive in the AI race and to deploy more compute capacity as quickly as possible, Meta has apparently been putting tens of thousands of chips in tents (125,000-square-foot tents, that is) at its New Albany, Ohio data center campus. The ‘strategy,’ reminiscent of Tesla's 2018 tent-manufacturing playbook, has reportedly cut compute buildout time in half, although I doubt that trying to keep data center operations cool in tents versus, say, a building, is the most efficient set-up per se. To power the chips and the rest of the requisite infrastucture, Meta inked a 10-year deal with Williams to build a pair of 200 MW off-grid natural gas-fired power plants. Both the make-shift nature of this approach and its reliance on natural gas as opposed to cleaner energy and/or energy storage, is emblematic of companies willigness to cut corners to scale AI right now. Link.

• Meanwhile, New York's legislature passed a one-year moratorium on large data center development, giving the state time to develop regulations around energy and water use. Whether Governor Hochul will sign the bill is TBD. Link.

• A JPMorgan analysis found that more than 60% of U.S. AI data center capacity planned for 2027 is not yet under construction, with another 7% already delayed, as power constraints, permitting fights, and supply chain backlogs slow the buildout. Link.

• A new United Nations University report also found that global data centers consumed 448 trillion watt-hours of electricity last year (more than all but 10 countries) and produced ~208 million tons of CO2 emissions (about half a percent of global totals). Link.

Other noteable financing rounds

• Gigascale Capital, based out of Palo Alto, closed its first institutional fund at $250 million. It will invest in early-stage companies rebuilding the physical economy (think clean energy, grid infrastructure, advanced manufacturing, and physical AI). Link.

• Spiro, based out of Dubai, raised $215 million in equity financing from investors including Impact Fund Denmark for its electric motorcycles and battery-swapping infrastructure. Link.

• InCharge Energy, based out of Los Angeles, raised a $46 million round led by S2G Investments to expand into distributed energy management generally (battery energy storage systems, solar, and electrical distribution infrastructure) to support reliability across its EV charging network reliability. The company already manages more than 30,000 EV charging and other energy assets across North America for commercial fleets, school districts, and municipalities. Link.

• Gigaton, based out of London, raised a $26 million Series A led by Plural to use AI to simulate industrial process behavior and autonomously adjust plant controls to reduce fuel use and emissions across cement, steel, glass, and chemical production. Link.

• Terra AI, based out of Palo Alto, California, raised $20 million in Series A funding to use AI to improve subsurface mineral analysis for critical minerals exploration. Khosla Ventures led. Link.

• Red Metals, based out of Charleston, South Carolina, raised a $10 million seed round led by Gigascale Capital to develop an integrated copper refining process that converts scrap feedstocks directly into finished copper products, eliminating the multi-step intermediate chain of conventional refining. Future Ventures, JB Straubel (founder and CEO of Redwood Materials, co-founder of Tesla), and my team at Climate Capital also invested. The company plans to invest $70 million in a Charleston facility as it scales. Link.

Ciao,

— Nick