A UK nuclear fusion company has suffered a massive write-down in its value after pulling the plug on plans to build its first reactor.
First Light Fusion, based in Oxford, has seen 60pc wiped off the price of shares after one of its key backers, IP Group, slashed the company’s price tag from £236m a year ago to £100m.
It comes after the nuclear group abandoned plans for a prototype power plant based on its “projectile fusion” technology because of a lack of funding.
The technology involves a 5p-sized projectile being fired at a fuel cell at extreme speeds using electromagnets to generate a powerful reaction and simulate collisions at extremely high speeds, such as those in space.
Instead of building its own plant, First Light plans to supply other nuclear power companies with one of its inventions, called an “amplifier”, which houses a nuclear fuel capsule and boosts the power of fusion reactions.
The group has burned through tens of millions of pounds trying to bring its technology to fruition.
Fusion technology has been seen as the “holy grail” of nuclear scientists for decades, who believe that by fusing atoms together they can mimic the processes that produce energy at the centre of the sun, providing limitless power on Earth.
But the technology has eluded Western scientists for decades despite billions of dollars in research.
In January, the Government announced £410m in funding for fusion research with a view to the UK developing a working prototype fusion power plant by 2040.
However, China has recently claimed a series of fusion breakthroughs in the technology. Its experts were able to generate an “artificial sun”, with temperatures at over 100 million degrees Celsius, for 17 minutes using one of its reactors, double the previous record.
Beijing is also building a vast, experimental laser-fusion plant, which will use lasers to heat nuclear fuel to generate a reaction.
Last year, the Fusion Industry Association, the industry trade body, warned that the UK “risks ceding dominance in one of the most important industries this century” to Beijing.
In its accounts, IP Group said First Light Fusion “continues to pursue alternative funding options”. It said it expected to “announce developments soon on that front”.
The decision to ditch its original plan will allow First Light Fusion to be more “capital light”, the nuclear group said in March, while licensing its inventions would generate more revenues. The company said it had recently secured the first tranche of a new funding round.
Mark Thomas, First Light Fusion’s chief executive, said: “We have been very pleased with the response to our strategy pivot, moving to an enabler of inertial fusion while rapidly accelerating revenues.
