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BFD Expert Voices - Climate Deals

BFD Expert Voices

Fusion energy developers are racing for scientific breakthroughs and much-needed capital, but Lowercarbon Capital partner Scott Hsu tells Axios opportunities abound in the moonshot technology's supply chain.

Why it matters: Fusion supply chain companies — from fuel producers to materials developers — need to start scaling now.

Driving the news: Hsu, a longtime Energy Department fusion expert, joined Lowercarbon this month to spearhead its investments in the moonshot energy sector.

Fusion's champions have said that most of the big technological challenges have been solved and that now it's mostly a matter of capital.

"I think they're referring to the plasma physics: getting to energy break-even plasma, which happened in 2022. There remain challenges — getting higher energy gains, sustaining that level of operation — but that was the hardest part.

The other challenges are the materials: handling the heat, the particle exhaust, the tritium-breeding fuel cycle. But they're not the same nature of challenge. They're closer to an engineering problem where capital becomes a more certain predictor of success."

Are we starting to see a gap between fusion technologies that have more promise than others?

"Being close to break-even does not assure you're the best commercial solution. We want to support the ones that are most scientifically mature, but it's not a slam dunk.

We don't want to close the doors on concepts that have more science to do. Capital alone does not assure any scientific breakthrough."

What's the mistake you most often encountered at the Energy Department from either founders or investors?

"When you're fundraising, you have to emphasize the optimistic half of the picture. You have to have ambitious timelines. That's hard to plan around without contingencies. Things always end up taking longer, costing more. Being realistic about that is important.

There's also a lot of noise out there: It's hard for investors to differentiate between significant breakthroughs versus incremental progress. It's easy to get paralyzed because you don't know what to believe."

"Fusion supply chain companies. There's legitimate financial opportunity. There's also a chicken-and-egg challenge. 

Fusion power isn't producing revenue, so it's hard to get fusion supply chain companies to go full bore into scaling. But if you look at a success-oriented schedule, if companies are successful with prototype demonstrations in the early 2030s, now is the time to start preparing our supply chain." 

Exclusive: Lowercarbon partner sees opportunity in fusion supply chains

Funders are eyeing balance sheets as much as published papers.

Photo illustration of Scott Hsu next to the L from the Lowercarbon Capital logo and blocks of colors.

Lowercarbon Capital partner Scott Hsu. Photo illustration: Axios Visuals. Photo: Courtesy of Lowercarbon Capital

Fusion energy developers are racing for <a class="gtmContentClick" data-vars-link-text="scientific breakthroughs" data-vars-click-url="https://www.axios.com/pro/climate-deals/2025/04/10/avalanche-energy-fusion-series-b" data-vars-content-id="011825cf-30cc-4c5c-90c6-5c9a13893947" data-vars-headline="Exclusive: Lowercarbon partner sees opportunity in fusion supply chains" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/climate-deals/2025/04/10/avalanche-energy-fusion-series-b" target="_self">scientific breakthroughs</a> and much-needed <a class="gtmContentClick" data-vars-link-text="capital" data-vars-click-url="https://www.axios.com/pro/climate-deals/2025/05/13/commonwealth-fusion-systems-b2-fundraise-arc" data-vars-content-id="011825cf-30cc-4c5c-90c6-5c9a13893947" data-vars-headline="Exclusive: Lowercarbon partner sees opportunity in fusion supply chains" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/climate-deals/2025/05/13/commonwealth-fusion-systems-b2-fundraise-arc" target="_self">capital</a>, but Lowercarbon Capital partner Scott Hsu tells Axios opportunities abound in the moonshot technology&#x27;s supply chain.Why it matters: Fusion supply chain companies — from fuel producers to materials developers — need to start scaling now.

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Exclusive: Lowercarbon partner sees opportunity in fusion supply chains

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