Fusion energy and the UK's industrial strategy

18 April 2017

Tokamak Energy has highlighted the contribution fusion energy can make to the UK's new industrial strategy and how government policy can support its rapid development and large-scale commercial deployment. In an 'open letter' sent to World Nuclear News, Tokamak Energy's chief executive, David Kingham, outlined his response to the government's Building our Industrial Strategy: Green Paper that sets out how it proposes to build a modern, research and development-led economy for a 'global Britain'.

Tokamak Energy is an Oxfordshire, England-based private company accelerating the development of fusion energy by combining two emerging technologies - spherical tokamaks and high-temperature superconductors.

"At Tokamak Energy, we treat this pursuit of fusion energy as an engineering challenge and a business opportunity. Our business model is based on agility and 'open innovation' - working collaboratively with universities, research laboratories and other businesses whilst ensuring that we retain the ownership of crucial intellectual property," Kingham said.

"This is made possible by our place within a cluster of fusion expertise based around the Culham Centre for Fusion Energy. We have learnt from pioneering research at Culham, using compact spherical tokamaks and have now progressed our research to the stage where we are aiming to generate sustainable fusion energy for commercial deployment by 2030. We are now working closely with colleagues at Culham Centre for Fusion Energy, despite government policy not yet fully recognising the contribution that fusion energy research in the private sector can make in developing a commercially viable source of abundant clean energy."

Such "clusters" of like-minded businesses and research institutes should be a key component of the UK's future industrial strategy, Kingham said, "as they can create positive benefits, especially in the burgeoning fusion industry".

Tokamak Energy has welcomed the comment of Greg Clark, secretary of state for Business, Energy and Industrial Strategy (BEIS), that the industrial strategy must be about creating the right conditions for new and growing enterprises to thrive, not protecting the position of incumbents, Kingham said. Through the sharing of facilities, business clusters can attract and develop appropriate skills and build up the critical mass of capabilities necessary to solve big challenges, he added.

The Culham fusion cluster provides an excellent example of how to do this, he said, helping to grow a new industry and create positive benefits for the UK's economy post-Brexit.

"I believe that such a model should be taken and used across many different industries to achieve success and growth in the high-tech industries, where the UK government envisages our future industrial success lies.

"Yet this is quite difficult for the government to achieve as it does require an early commitment to promising new areas. To overcome this difficulty, the government should favour sectors, such as fusion, that are strongly supported by publicly funded science and then add extra support to those ventures that are able attract private investment," Kingham said.

This is being done "to some degree", he said, with the funding of the first wave of challenges from the Industrial Strategy Challenge Fund. "This is a welcome move, but there is a need to ensure that the ISCF does not focus on backing only technologies that are already well advanced in their development."

The ISCF was announced by Prime Minister Theresa May at the 2016 CBI Annual Conference. Innovate UK and Research Councils are now gathering input from industry and the UK research base on how this cross-disciplinary fund can best support UK industries and the country's science base.

Kingham said another effective policy intervention to support the UK's most ground-breaking and innovative clusters would be to allocate additional funding to existing funds that effectively support the priorities of the proposed industrial strategy. For example, the government could build on the success of the Rainbow Seed Fund - an early-stage venture capital fund focused on promising technologies developed at the UK's publicly-funded research establishments, he said.

The Rainbow Seed Fund is backed by BEIS and the fund's partners are eight publicly funded research bodies, including the Science and Technology Facilities Council, the Biotechnology and Biological Sciences Research Council, the Natural Environment Research Council and the Defence Science and Technology Laboratory. The fund is independently managed by venture capital company Midven.

The government should also consider enhancements to R&D tax credits for companies with up to 500 employees and should "do away with the arbitrary limits" on the Enterprise Investment Scheme for R&D intensive businesses, Kingham said. For example, R&D intensive businesses are currently allowed to raise only £5.0 million ($6.3 million) per year under the Enterprise Investment Scheme and the "lifetime" total they can receive is limited to £20 million.  This unnecessarily limits the growth of some of the UK's most promising companies, he added.

"With government support via these policies, innovative companies and sectors that are still working in the experimental development stage can encourage private investment and improve their ability to raise the capital needed for growth," he said. "With such growth, clusters of expertise can form across the country, forming the foundations of the UK's future R&D-led economy."

Researched and written
by World Nuclear News