🔩 Steels under fire

Alpha, the demonstrator Proxima Fusion wants to switch on in 2031, will need 20,000km of superconducting tape, the metal strip wound into the magnets that hold its plasma. Faraday Factory Japan, which calls itself the world's largest producer, has shipped over 8,000km to all of fusion in 7 years. A machine that does not yet exist wants 2.5 times that, and each Stellaris, the power plant meant to follow it, would need twice as much again.

Hence the €140m tape factory Proxima wants in Lower Saxony by the end of 2029, half of it public money. The state government pledged €21m in September, and the rest of the public half, like the site, is still to be found. In late October Proxima signed in Tokyo with Fujikura, a Japanese incumbent, to study making the tape in Germany, where nobody yet makes it at scale. A company that has never sold a kilowatt-hour is going after the material it depends on most, and that factory, rather than the reactor, is what governments should be paying for.

In July Proxima raised €411m at a €2.4bn valuation, led by London's XTX Ventures and East X Ventures, alongside RWE, the German utility partnering on its first plant, and more than 10 European backers, from German public funds KfW Capital and SPRIND to Balderton and Zurich's redalpine. It was a European record. Yet America's Commonwealth Fusion Systems (CFS) has raised 5 times the €650m Proxima has gathered in 3 years. The new round goes into Alpha, and it pays off only if the machine works.

A power plant needs far more than magnets. It needs tritium, one of its two fuels, which no machine can yet make for itself, and steels that survive neutron bombardment. In June the Fusion Industry Association, the sector's trade body, found 48% of companies it surveyed worried about the fuel cycle, and asked governments to fund the suppliers developers cannot carry alone.

If Alpha slips to 2040, the Lower Saxony tape will still find buyers: in September CFS ordered more than 10,000km from Fujikura. Grid operators and MRI makers would take it too if the price fell, and only volume will bring it down. The plant is a bet on the sector, whichever company comes out ahead. If the whole field stalls, Lower Saxony is left with idle production lines, and that is the risk it signs up for.

Asking taxpayers for €70m to back a start-up valued at €2.4bn will strike some as obscene. But it is the spending a fund will not make and a state can: paying for capacity before anyone knows the final customer. Germany put more than €1bn into Wendelstein 7-X at Greifswald, a research reactor built never to produce electricity, and Proxima was spun out of the Max Planck institute that runs it. The Lower Saxony plant can be defended without betting on Proxima. Few investments in fusion can say as much.