IP Group plc (LON:IPO), which develops world-changing science and technology businesses across life sciences, technology and cleantech, has noted that portfolio company First Light Fusion Ltd has confirmed that it has achieved fusion which has been independently validated by the UK Atomic Energy Authority.
This is the first time fusion has been achieved using a projectile-based approach, harnessing the unique target technology developed by First Light. Projectile fusion is a new approach to inertial confinement fusion that is simpler, more energy efficient, and has lower physics risk. First Light has achieved fusion having spent less than £45m, and with a rate of performance improvement faster than any other fusion scheme in history.
IP Group believes achieving this world-first will at least result in an initial doubling of the value of the Company with recent comparatives and third party valuation work suggesting a doubling to quadrupling may be achieved at the next funding round.
Our preliminary assessment, based upon the lower end of the range, implies a carrying value of the asset that will generate an initial net fair value gain of at least £57m (or approximately 5 pence per share). As at December 31 2021, IP Group’s undiluted beneficial holding of 27.4% in First Light was valued at £57.3m.
Greg Smith, Chief Executive Officer of IP Group, said: “Following the success of Oxford Nanopore, Ceres Power and others, this is another example of IP Group having helped establish a business with the potential to have enormous impact and supporting it over many years to a significant inflexion point. In this case, we helped found First Light in 2011 with the belief that its differentiated technology had the potential to provide a much cheaper route to fusion energy. Hitting the fusion milestone is a hugely important step on that journey and we’re delighted for the team at First Light and are extremely proud of their achievements. We continue to have strong conviction in the Company and the potential its technology offers.”
First Light believes its ‘projectile fusion’ approach offers the fastest, simplest and cheapest route to commercial fusion power. Instead of using complex and expensive lasers or magnets to generate or maintain the conditions for fusion, First Light’s approach compresses the fuel inside a target using a projectile travelling at tremendous speed. The key technology in First Light’s approach is the target design, which focuses the energy of the projectile, imploding the fuel to the temperatures and densities needed to make fusion happen.
To deliver this fusion result, First Light used its large two-stage hyper-velocity gas gun to launch a projectile at a target, containing the fusion fuel. The projectile reached a speed of 6.5 km per second before impact. First Light’s highly sophisticated target focuses this impact, with the fuel accelerated to over 70 km per second as it implodes, an increase in velocity achieved through its proprietary advanced target design, making it the fastest moving object on earth at that point. First Light’s equipment is relatively simple, built in large part from readily available components. First Light believes this approach accelerates the journey towards commercial fusion power as there is a large amount of existing engineering that can be reused to realise its proposed plant design.
First Light is advancing plans for a “gain” experiment (more energy out than in) and also expects to partner with existing power producers to develop a pilot plant using its unique fusion approach. First Light is working towards a pilot plant producing ~150 MW of electricity and costing less than $1 billion in the 2030s. The Company is working with UBS Investment Bank to explore strategic options for the next phase of its scientific and commercial development.
Dr Robert Trezona, Head of IP Group Cleantech, said: “Achieving a fusion reaction using projectile-driven inertial confinement is a world first. We understood the potential of the hydrodynamic simulation tools invented in the University of Oxford over 10 years ago and have backed the company all the way since then. First Light’s ability to model their system has allowed them to identify a route to practical fusion energy using projectiles to provide the confinement energy for the fusion plasma. This is more efficient and allows simpler hardware to be used, such as a gas gun. Demonstrating fusion with this approach is an extraordinary achievement from a top rate scientific team and it has happened at a fraction of the cost of other fusion programmes. We remain extremely excited by its potential and look forward to the next phase”.