Microsoft Makes Its First Nuclear Fusion Deal

(Bloomberg) -- Microsoft is entering into a power purchase agreement with fusion startup Helion Energy, the companies announced Wednesday. This is the tech giant’s first-ever deal with a nuclear fusion company.

Helion has plans to brings its first fusion plant online by 2028, with the goal of generating at least 50 megawatts of energy. Microsoft will buy some of that power, though it will make up less than 1% of Microsoft’s total portfolio of power purchase agreements for carbon-free energy, which currently stands at 13.5 gigawatts. 

The deal is meant to help Microsoft achieve its goal of being carbon negative by 2030. Helion, for its part, is building its seventh working prototype and is expecting to demonstrate the ability to produce electricity in 2024, according to a company statement. No company, however, has achieved commercially-viable fusion energy. The US government lab that made the biggest fusion breakthrough late last year has failed to replicate its results in five subsequent experiments. 

Despite these headwinds, Brad Smith, Microsoft Vice Chair and President, said in a statement that the company is “optimistic that fusion energy can be an important technology to help the world transition to clean energy.” 

Fusion isn’t the only unproven technology Microsoft has been investing in. The company has also poured money into buying carbon dioxide removal services. Both it and fusion require heavy initial investment to jump start growth and bring down costs. Large tech companies like Microsoft and Stripe have been leading the way, especially in purchasing carbon removal services. 

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“We are really excited to not only be a first mover in the market, but working with others to get them to come in with us,” Microsoft’s Chief Sustainability Officer Melanie Nakagawa told Bloomberg. The company has procured 1.4 million metric tons of removal services in 2022 and has a goal to reach 5 million tons by 2030.

Despite the company’s efforts to reduce its carbon emissions, the report detailed that Scope 3 emissions — those associated with Microsoft’s suppliers and customers — increased by 0.5% in 2022. Customers using Xbox consoles, steel and concrete used in data center construction and silicon chip manufacturing are among the biggest contributors to those emissions. 

“For so many other companies and other CSOs, this is a common challenge for all of us, so we really want to give some visibility around how we’re thinking about the challenge,” Nakagawa said of trying to reduce the company’s Scope 3 emissions. 

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Overall, despite the fact that Microsoft’s business grew by 18% year over year in 2022, its overall emissions declined by 0.5%.