UK and US government agencies are rewriting how they fund private fusion companies, replacing straightforward grants with joint ventures and milestone-based funding.
In the UK, that has meant new joint ventures between the national fusion authority and private companies. In the US, it means tying federal funding directly to technical milestones companies have to hit before they get paid.
“When we talk about public-private partnerships, we’re talking about trying to do something more specific together, where both parties bring something different to the table and try to construct something new,” said Heather Lewtas, interim chief development officer at the UK Atomic Energy Authority (UKAEA). “You’re actually working with a goal, and together you’re trying to do it.”
UKAEA launched two joint ventures over the past year built on that principle. One, with French utility EDF, pairs UKAEA’s tritium expertise from the Joint European Torus (JET) with EDF’s industrial manufacturing experience to commercialize the fusion fuel cycle. A second, with TAE Technologies, combines UKAEA’s neutral-beam experience from JET with TAE’s own intellectual property.
“We’re not industry, and we shouldn’t be trying to do that part,” Lewtas said. “But together, both sides bring what the other doesn’t have, and we have a much better chance of commercializing.”
Jennifer Arrigo, senior advisor at the US Department of Energy’s (DOE) Office of Fusion, described partnerships within the department as running along a spectrum. At one end is a solicitation with a private sector cost share. At the other are deals shaped from a shared need with every actor at the table from the start.
“What we’re moving towards are true partnerships, where there are deep value propositions on both sides, and it’s a process of shaping the partnership together, starting from a shared need,” Arrigo said.
Linda Werner, head of fusion at St1, a Nordic energy transition company whose fuel stations are a familiar sight across the region, said that starting point matters because it signals commitment before a project takes shape.
“Having a partnership between the private and public sector as a starting point shows that this is a priority,” Werner said. “That’s the first signal we want to see, that both parties are engaged and committed.”
She said industry also carries its own obligation once a partnership begins, taking on commercial and industrial risk and translating a shared roadmap into steps both sides can explain to each other.
“We have a big obligation in these partnerships, taking on industrial and commercial capital and working out how this will function in reality,” she said. “Getting a common language, and dividing the responsibilities and roles, is a job in itself.”
Funding only on milestones
The panel was held at the UK Fusion Forum 2026 on September 15 in London. Organized by the Fusion Industry Association and sponsored by UKAEA, the session was titled “Public-Private Partnerships: Catalysing Growth” and moderated by Valerie Jamieson, fusion cluster development manager at UKAEA.
Arrigo described the DOE’s own answer to that challenge in fusion, a milestone program that ties funding directly to technical progress.
“Our keystone public-private partnership program is the milestone program,” she said. “Private companies propose technical milestones, and they only get the DOE share of the funds once they meet that milestone.”
Setting it up required DOE to re-examine its own legal authorities and processes, including how it handles intellectual property. Arrigo said the lesson was that good faith on both sides matters as much as the paperwork itself.
“One lesson learned is that it takes longer than we expect once you start writing down those details,” she said. “It’s important to have good faith on both sides to get to an appropriate outcome.”
Arrigo said the value had to be clear on both sides of the deal. For DOE, that meant supporting multiple technical approaches across the US fusion industry. For companies, it meant earning a DOE stamp of approval through the negotiated milestones.
She said an unplanned benefit of the program was the technical expertise the milestone review boards brought to companies, giving them direct access to national laboratories, universities and international collaborators.
“National labs are a national asset, the crown jewel of our research ecosystem,” she said. “They are the ones out there every day, engaging with companies and identifying the technical opportunities.”
That funding model has not solved every friction point. Robbie Scott, chief scientist at the UK Programme of Laser Inertial Fusion Technology for Energy (UPLiFT) at the Science and Technology Facilities Council (STFC), said UK government procurement remains one of the clearest obstacles to faster deals.
“UK government procurement rules need to be revised. It’s a nightmare trying to buy anything in the public sector,” Scott said. “Revising that would be very helpful for big projects like STEP (Spherical Tokamak for Energy Production), and for us.”
Lewtas said UKAEA’s own early joint ventures bore the brunt of that learning curve, working out which government checks and approvals were required before later deals moved faster.
“Don’t underestimate how quickly we are learning how to do this properly and at pace,” she said. “Next time, we knew when to ask and what we needed to agree upfront, and it sped things up.”
Arrigo said DOE faces a similar internal challenge as it shifts from funding research to supporting commercialization directly.
“We need to rethink where we are in terms of the transition from research to commercialization,” she said. “DOE has a lot of experience with commercialization in other parts of the department, so it’s about rethinking the processes we use for deployment.”
From lab to industry
Scott said the split between public and private responsibility becomes clearest once a concept has been proven and needs to scale.
“The role of national labs, and potentially universities, should be to develop the technologies to prove the concept,” he said. “After that, it should be sent into industry, one way or another.”
He pointed to the US National Ignition Facility (NIF), a laser fusion project run by the government’s Lawrence Livermore National Laboratory, as the model he wants the UK to follow for its own inertial fusion program.
“NIF is a good example of this. They spent 50 years developing laser fusion from concept to getting Q greater than one,” he said, referring to a reaction that produces more energy than it consumes. “Instead of giving Livermore a load of money to develop inertial fusion energy itself, there was a scheme to encourage private companies to work with the national lab. That’s a really good model.”
Scott, whose own UPLiFT program develops UK laser fusion technology, said he wants that model applied closer to home, tied to a UK strategic need that already has government backing.
“I would like to see the UK investing in power-level inertial fusion,” he said. “The UK has strategic defense needs that likely involve high-energy lasers, similar to NIF, so working across government could develop national fusion capability while meeting those needs.”
Asked what these partnerships will have made possible by 2036, panelists gave four different answers:
A cross-concept supply chain serving every fusion technology, not just one, according to Lewtas
Q economic greater than one, the point at which fusion becomes commercially viable, according to Scott
A Nordic role in the wider fusion supply picture, according to Werner
Electrons reaching the grid, which Arrigo said would not happen without both sectors working together
Lewtas said the clearest sign of a working partnership is when it removes a problem from a fusion developer’s list entirely.
“Have we taken things off the plate of the fusion developers, so that they do not have to worry about it, that they know it can be there when they need it,” she said. “Has TAE UK made it so that if you need a neutral beam, you can buy one, no problem, you don’t have to worry about it?”
DOE’s milestone program is now being tested against its next phase of commercialization funding, while UKAEA and its partners continue expanding the joint ventures built over the past year.