Eni, one of the world’s largest oil and gas companies, just agreed to buy $1 billion in electricity from a power plant being built by Commonwealth Fusion Systems. The deal is the latest to illustrate just how much investment Commonwealth and other fusion companies are courting as they attempt to take fusion power from the lab to the power grid. 

“This is showing in concrete terms that people that use large amounts of energy, that know the energy market—they want fusion power, and they’re willing to contract for it and to pay for it,” said Bob Mumgaard, cofounder and CEO of Commonwealth, on a press call about the deal.   

The agreement will see Eni purchase electricity from Commonwealth’s first commercial fusion power plant, in Virginia. The facility is still in the planning stages but is scheduled to come online in the early 2030s.

The news comes a few weeks after Commonwealth announced a $863 million funding round, bringing its total funding raised to date to nearly $3 billion. The fusion company also announced earlier this year that Google would be its first commercial power customer for the Virginia plant.

Commonwealth, a spinout from MIT’s Plasma Science and Fusion Center, is widely considered one of the leading companies in fusion power. Investment in the company represents nearly one-third of the total global investment in private fusion companies. (MIT Technology Review is owned by MIT but is editorially independent.)

Eni has invested in Commonwealth since 2018 and participated in the latest fundraising round. The vast majority of the company’s business is in oil and gas, but in recent years it’s made investments in technologies like biofuels and renewables.

“A company like us—we cannot stay and wait for things to happen,” says Lorenzo Fiorillo, Eni’s director of technology, research and development, and digital. 

One open question is what, exactly, Eni plans to do with this electricity. When asked about it on the press call, Fiorillo referenced wind and solar plants that Eni owns and said the plan “is not different from what we do in other areas in the US and the world.” (Eni sells electricity from power plants that it owns, including renewable and fossil-fuel plants.)

Commonwealth is building tokamak fusion reactors that use superconducting magnets to hold plasma in place. That plasma is where fusion reactions happen, forcing hydrogen atoms together to release large amounts of energy.

The company’s first demonstration reactor, which it calls Sparc, is over 65% complete, and the team is testing components and assembling them. The plan is for the reactor, which is located outside Boston, to make plasma within two years and then demonstrate that it can generate more energy than is required to run it.

While Sparc is still under construction, Commonwealth is working on plans for Arc, its first commercial power plant. That facility should begin construction in 2027 or 2028 and generate electricity for the grid in the early 2030s, Mumgaard says.

Despite the billions of dollars Commonwealth has already raised, the company still needs more money to build its Arc power plant—that will be a multibillion-dollar project, Mumgaard said on a press call in August about the company’s latest fundraising round. 

The latest commitment from Eni could help Commonwealth secure the funding it needs to get Arc built. “These agreements are a really good way to create the right environment for building up more investment,” says Paul Wilson, chair of the department of nuclear engineering and engineering physics at the University of Wisconsin, Madison.

Even though commercial fusion energy is still years away at a minimum, investors and big tech companies have pumped money into the industry and signed agreements to buy power from plants once they’re operational. 

Helion, another leading fusion startup, has plans to produce electricity from its first reactor in 2028 (an aggressive timeline that has some experts expressing skepticism). That facility will have a full generating capacity of 50 megawatts, and in 2023 Microsoft signed an agreement to purchase energy from the facility in order to help power its data centers.

As billions of dollars pour into the fusion industry, there are still many milestones ahead. To date, only the National Ignition Facility at Lawrence Livermore National Laboratory has demonstrated that a fusion reactor can generate more energy than the amount put into the reaction. No commercial project has achieved that yet. 

“There’s a lot of capital going out now to these startup companies,” says Ed Morse, a professor of nuclear engineering at the University of California, Berkeley. “What I’m not seeing is a peer-reviewed scientific article that makes me feel like, boy, we really turned the corner with the physics.”

But others are taking major commercial deals from Commonwealth and others as reasons to be optimistic. “Fusion is moving from the lab to be a proper industry,” says Sehila Gonzalez de Vicente, global director of fusion energy at the nonprofit Clean Air Task Force. “This is very good for the whole sector to be perceived as a real source of energy.”