Eni Signs $1 Billion Deal for Fusion Power from Commonwealth Fusion Systems, Paving Way for Fusion Energy Market Development

Fusion power firm Commonwealth Fusion Systems (CFS) has secured a deal worth over $1 billion with Italian energy giant Eni for electricity generated by its first fusion reactor, set to be constructed near data center hubs in Richmond, Virginia. The 400-megawatt facility, named Arc, is slated for completion in the early 2030s according to CEO Bob Mumgaard.

This agreement marks CFS’s second such deal, following Google’s announcement in June that it would purchase half of the reactor’s output. Details about the power coverage and timeline of the Eni deal remain undisclosed by both parties.

In an interview last week, Mumgaard disclosed that CFS’s demonstration-scale Sparc reactor in Devens, Massachusetts is nearing completion at 65%, with plans to activate Sparc later in 2026. The company remains on track to fulfill this timeline.

CFS’s fusion reactors employ the tokamak system, utilizing D-shaped superconducting magnets to confine and compress superheated plasma. This creates a reaction where particles collide, forming new atoms and releasing energy in the process. CFS continually updates scientific communities on its advancements and has conducted extensive simulations to identify potential obstacles.

Although CFS expects Sparc to produce more power than required for fusion reactions, the company will only confirm success once Sparc is operational. This development is expected to deplete a considerable portion of the nearly $3 billion raised by CFS thus far, including an $863 million Series B2 round announced three weeks ago. Notable investors in this round include Nvidia, Google, Breakthrough Energy Ventures, and Eni.

The partnership with Eni raises questions regarding potential delays or issues with the reactors’ performance. Mumgaard explained that the agreements are structured to strike a balance between penalizing and collaborating, acknowledging the unique challenges of developing first-of-a-kind technology.

Google has expressed intentions to utilize Arc’s electricity for powering its data centers, while Eni, one of the world’s largest oil and gas companies, does not currently operate U.S. facilities demanding such energy levels. Eni’s director of technology, R&D, and digital, Lorenzo Fiorillo, revealed that the power will be sent to the grid for resale.

However, electricity generated by Arc, being a first-of-its-kind reactor, is expected to be expensive. Eni may incur losses trading this power on the grid rather than generating profits. This agreement, however, serves primarily as a means to establish a price for fusion power and secure additional funding for building Arc.

Mumgaard confirmed that the power purchase agreement provides CFS with the necessary certainty regarding power distribution, pricing, and other related aspects. This information will enable the company to engage financial investors in project financing discussions for the plant’s construction.