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Nuclear power plant suppliers in anticipation of big profits

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Nuclear power plant suppliers in anticipation of big profits

The fusion power plant industry is facing rapid development in the coming years
(photo: Tokamak Energy)

Suppliers of fusion power plant equipment do not want to risk money and expect solid guarantees of future profits, according to an analysis of the nascent industry, where a number of countries are pouring investment.

The Fusion Industry Association (FIA) published a report on the state of the supply chain in the sector, according to which the market for equipment in this area will grow tens and hundreds of times in the coming years. At the same time, the majority of suppliers in the supply chain are unwilling to invest independently in production expansion and expect firm guarantees of their operations.

The study covered 26 private companies developing fusion reactors and related equipment, as well as 34 companies producing components for fusion plants. They are all members of the FIA.

Analysis of the responses showed that supply chain costs reached $500 million in 2022. By the time the first fusion power plants are operational, the value of supply chains will grow to $7 billion and exceed trillions of dollars once full-scale fusion power production begins .

At the same time, such dynamics and mind-boggling numbers of future revenues could not force suppliers to immediately start expanding their production capacity. The FIA ​​notes that supplier companies need firm guarantees of future revenue, for which a number of steps need to be taken in both the private and public sectors.

Approximately 70% of surveyed equipment developers say their suppliers refuse to invest in production expansion without standing orders. At the same time, more than half of them confirm that future progress requires investment today.

“The projected growth of the fusion industry creates huge business opportunities for existing and new suppliers,” said FIA Executive Director Andrew Holland. “It’s clear that more long-term security is needed – through a combination of funding, regulation, risk-sharing mechanisms and more proactive communication to ensure suppliers are prepared to stay ahead of industry needs.”

The association believes that independence from the procurement of rare minerals and metals, most of which are mined in areas of permanent military conflict, is a unique feature of the supply chain for fusion equipment. Fusion components require highly organized production that can only be found in open economies.

In order to increase the activity of suppliers, it is necessary to take a number of measures. In particular, both public and private investment in industry must be increased. This can be done through risk-sharing financing experiments to enable suppliers to invest in new capacity.

There is also a need to establish networking communities and hold annual supplier events to promote communication and awareness between fusion companies and suppliers. Finally, standardization and regulation are needed to improve supply chain security and confidence in long-term investments.

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