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Fusion energy: Delivering on the promise of carbon-free power

This article looks at the potential of nuclear fusion energy as a clean energy source while understanding its unique risks compared to traditional fuels.

21/05/2025 · 6 minute read

Nuclear fusion has long been viewed as the holy grail of energy production, offering a cleaner and more affordable alternative to traditional fuels while avoiding the creation of long-lived radioactive byproducts. There is a prevailing view that if humanity can successfully harness this technology, fusion energy could meet the world’s future electricity demands.

The Fusion Industry Association (FIA) 2025 policy conference held recently in Washington, DC, focused on concrete strategies to accelerate the commercialisation of fusion energy. Marsh attended the event, and below, we summarise some key takeaways.

Fission versus fusion

Both fission and fusion are reactions that generate large amounts of energy that can be used to produce electricity.

Fission is the process that powers nuclear power plants, where heavy atoms, such as uranium, split into several smaller atoms and release energy.

Fusion is the process that powers the sun. It works by heating and forcing lighter atoms together to make a heavier one, releasing enormous quantities of energy. The amount of energy produced from fusion is immense — approximately four times greater than that generated by nuclear fission reactions.

1. Fusion expected to become a usable energy source soon

While the concept of fusion energy has been around for decades, it is now emerging as a viable technology for electricity production. Currently, governments are backing 111 fusion projects. Power purchase agreements are in place to secure electricity from fusion generation sources by the end of the decade, with many other fusion energy companies aiming for commercialisation in the early 2030s. The momentum in the industry is unprecedented — and is accompanied by widespread collaboration, including a partnership between the UK and the US.

2. Fusion and fission risks differ

The risks associated with fusion are different from those of other forms of electricity generation, including coal and gas combustion, renewable energy production, and fission. Managing risks effectively requires an approach that is tailored specifically to the unique characteristics of fusion and, perhaps even more importantly, to what it is not. From a risk perspective, it is vital to emphasise that fusion and fission risks differ in several ways:

  • Fusion fuels are materially less hazardous than fission fuels: Nuclear power plants use nuclear fuels, primarily enriched uranium, which must be carefully controlled both before use and immediately prior to entering the reactor. After use, its byproducts require proper management. In contrast, many fusion power concepts use tritium as primary fuel, which is a less hazardous form of radioactive material. The beta particles released in its decay cannot penetrate the outer layer of skin and it has a relatively short half-life of about 12 years. Because tritium is deemed a low-level radioactive material, the traditional environmental liability market has provided coverage. On the other hand, nuclear power plants are insured through specialty nuclear insurance markets. It is also important to highlight that although tritium is found on Earth in low quantities, once operational most fusion energy plants will generate more tritium than they consume, producing additional fusion fuel in the process of generating electricity. Deuterium, also a fusion fuel, is abundant in seawater. Uranium, on the other hand, needs to be mined and enriched.
  • Fusion presents a lower property risk than fission: In a fusion plant, initiating a fusion reaction is difficult, and maintaining it presents engineering challenges. However, if any perturbation occurs, the fusion reaction stops and effectively turns itself off —  making it practically impossible to have a meltdown at a fusion reactor.
  • Fusion entails fewer regulatory requirements: As fusion technology is still in development, regulatory frameworks are evolving. However, the UK and the US have stated that fusion will not be regulated in the same manner as nuclear fission. The UK Government is amending the law to exclude fusion energy facilities from nuclear regulatory and licensing requirements. In the US, the ADVANCE Act endorsed the Nuclear Regulatory Commission's decision to classify the radioactive materials linked to nuclear fusion as “byproduct material,” which carries fewer regulatory obligations than the “special nuclear material” associated with fission reactors, such as uranium or plutonium.  

3. UK and US are at the forefront of fusion development

The US and UK are in lockstep in their approach to fusion, with regulatory certainty, financing mechanisms, and public-private partnership structures all contributing to the industry's growth.

The UK has a long history of fusion research and continues to support the industry’s expansion. The UK Atomic Energy Authority (UKAEA) established the STEP (Spherical Tokamak for Energy Production) programme to develop a prototype fusion power plant for commercial electricity generation; this will be built at the site of the West Burton coal-fired power plant in Nottinghamshire, with a shortlist of five bids recently announced by the UK Government.

Recently, the UKAEA unveiled a series of advancements in its £200 million Lithium Breeding Tritium Innovation (LIBRTI) programme, furthering the development of fusion energy. This initiative follows the announcement in the Autumn Budget 2024 of “significant support in 2025-26 for UK fusion energy research”.

Additionally, a facility designed to store and recover fuel used for nuclear fusion — reportedly the world's largest — is set to be constructed at the Culham Science Campus in Oxfordshire. The tritium fuel cycle facility, which will recover and reuse the particles, is expected to be completed by 2028.

The US Government has emphasised the need to prioritise nuclear fusion to maintain America's global competitiveness, and has announced US$107 million in funding for six projects within the Fusion Innovative Research Engine (FIRE) Collaboratives. These collaboratives aim to establish an innovation ecosystem for fusion energy science and technology by forming virtual, centrally managed teams. These teams will share a common objective of connecting the basic science research programmes of the US Department of Energy (DOE) Fusion Energy Sciences (FES) with the requirements of the expanding fusion industry.

Meanwhile, Japan has launched the FAST project, aiming to achieve fusion-based power generation by the end of the 2030s.

Risk management and insurance can support the development of the fusion sector

Fusion has the potential to alleviate global energy insecurity, making energy abundant and affordable for everyone, thereby unlocking opportunities for countries. And with the expansion of data centres and increased use of artificial intelligence (AI), there is an even greater demand for clean baseload power.

Risk management and insurance are essential for the development of the fusion sector. As initial projects are expected to be financed by banks and investors, they will have strict insurance requirements in the common terms agreement (the contract between the project lenders and the project company), particularly relating to defect exclusions and the breadth of cover for the fusion device.

A robust insurance market for fusion already exists, backed by insurers experienced in managing novel risks associated with the energy transition. In its Sustainability Report 2024, Lloyd’s further signalled support and options for fusion developers by confirming that the transition risk code — which allows syndicates to write transition risks up to an additional 5% of their forecast gross written premiums — can also be applied to fusion risks.

Marsh specialists are highly experienced in fusion energy projects. We possess in-depth knowledge of the international legal and regulatory frameworks governing related risks, as well as a comprehensive understanding of the complexities involved in the engineering, procurement, construction, and maintenance of fusion energy plants.

Our specialists leverage this experience to benefit the fusion industry by applying related concepts and a broad technical understanding of the unique fusion risk profile. We connect fusion operators, investors, and the insurance market to help accelerate the growth and development of the fusion sector and advance the global race toward net-zero targets.

Our people

Alastair Nicklin

Alastair Nicklin

Vice President, Power and Renewable Energy

  • United Kingdom

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Everett Hansen

Assistant Vice President, US Power & Renewables, Marsh Specialty

  • United States

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