Commonwealth Fusion Systems has entered into an agreement to supply the Italian energy giant Eni with over $1 billion in electricity generated from its inaugural fusion reactor.
The facility is set to be constructed near Richmond, Virginia, an area with one of the nation’s highest concentrations of data centers. According to CEO Bob Mumgaard, the 400-megawatt fusion reactor—named Arc—is anticipated to become operational in the early 2030s.
This marks the second such contract for Commonwealth Fusion Systems (CFS). In June, Google committed to purchasing half of Arc’s output. Neither CFS nor Eni disclosed the specific amount of power covered by the agreement or detailed its timeline.
Last week, Mumgaard informed reporters that construction of CFS’s first demonstration-scale reactor, Sparc, located in Devens, Massachusetts, has reached 65% completion. The company has previously stated its intention to activate Sparc toward the end of 2026, and Mumgaard confirmed, “we’re on schedule to achieve that.”
“We built Sparc largely to gain firsthand experience with constructing an almost full-scale system,” he explained. “Arc will be the first of many, supported by a supply chain designed for large-scale production.”
CFS is widely seen as a frontrunner in fusion technology. Its reactor utilizes the tokamak design, which relies on D-shaped superconducting magnets to contain and compress superheated plasma. In this environment, particles fuse, producing new atoms and releasing energy. The company regularly shares updates with the scientific community and conducts comprehensive simulations to identify and address any challenges.
CFS believes Sparc will demonstrate the ability to generate more energy than is needed to maintain the fusion reaction. However, the company acknowledges it won’t have definitive proof until Sparc is operational. Completing this phase will likely consume a significant portion of the nearly $3 billion raised so far, including an $863 million Series B2 funding round announced three weeks ago. Investors in that round included Nvidia, Google, Breakthrough Energy Ventures, and Eni.
This leads to the question: what happens to CFS’s deals with Google and Eni if there are delays or if the reactors do not function as intended?
According to Mumgaard, the contracts are crafted to balance accountability and partnership. He noted that the partners “recognize the hurdles that come with pioneering new technology.” He continued, “No one here expects a completely new technology and industry to be invented, and then just walk away if it’s not ready on a specific date.”
While Google has suggested it will use Arc’s electricity for its data centers, Eni—among the world’s largest oil and gas firms—doesn’t operate in the U.S. at a scale requiring so much power.
“Ultimately, the electricity will be fed into the grid,” said Lorenzo Fiorillo, Eni’s head of technology, R&D, and digital.
In essence, Eni intends to sell the power onward.
However, as Arc is the first reactor of its kind, the electricity it produces is expected to be costly. Eni is more likely to incur losses from selling this power than to make a profit.
Instead, the main purpose of this deal is probably to help set a benchmark price for fusion energy and attract additional investment for Arc’s construction.
Mumgaard acknowledged this point. He explained that the power purchase agreement “provides clarity on where the electricity will go and at what price, which enables us to approach more financial backers and discuss what it will take to fund the project.”
