DOE Milestone-Based Fusion Development Program

Overview

The Milestone-Based Fusion Development Program is a U.S. Department of Energy (DOE) initiative designed to support private-sector efforts to commercialize fusion energy. Administered by the Office of Fusion Energy Sciences (FES), the program establishes public-private partnerships where funding is disbursed not upfront, but as companies achieve pre-defined, rigorously verified technical and business milestones. This performance-based model is intended to de-risk private investment, foster innovation, and accelerate the timeline for a U.S.-based fusion pilot plant. The program represents a strategic shift in federal fusion funding, moving to complement foundational science research with a targeted, commercially-oriented development track. Its structure is modeled on NASA's successful Commercial Orbital Transportation Services (COTS) program, which catalyzed the commercial spaceflight industry.

Program Structure and Mechanism

The program's core mechanism is the performance-based payment agreement. Unlike traditional research grants, which fund proposed work, this program funds verified results. The process begins with a competitive selection in which companies propose a series of milestones leading toward a fusion pilot plant design. These milestones cover the full spectrum of development, including:

Physics and Engineering Design: Finalizing the design of a fusion device capable of achieving net energy gain, including magnet systems, vacuum vessels, and plasma heating and control systems.
Component Prototyping and Testing: Fabricating and testing critical sub-systems, such as high-temperature superconducting (HTS) magnets, power conversion systems, and materials for the tritium breeding blanket.
Supply Chain Development: Establishing robust supply chains for specialized components and materials.
Siting and Licensing: Making progress on site selection and navigating the regulatory pathway for a future power plant.

Each milestone is associated with a specific payment value and has clear, objective completion criteria. Before a payment is released, the company must submit evidence of completion, which is then verified by a team of experts from DOE national laboratories, universities, and federal agencies. This structure provides accountability and ensures that public funds are directed toward tangible progress. The program requires awardees to secure significant private co-funding, ensuring that government support is matched by private capital and market confidence.

Historical Development

The concept of a milestone-based program for fusion gained traction in the late 2010s and early 2020s, driven by two parallel trends: the rapid growth of the private fusion industry and a strategic re-evaluation of the national approach to fusion energy. A pivotal 2021 report from the National Academies of Sciences, Engineering, and Medicine (NASEM), titled Bringing Fusion to the U.S. Grid, formally recommended the creation of a public-private partnership program to support the development of a fusion pilot plant by the 2035–2040 timeframe [1].

This recommendation was translated into policy through bipartisan legislation. The Energy Act of 2020 authorized the DOE to establish such a program, and the CHIPS and Science Act of 2022 provided further authorization and emphasized the goal of a U.S.-based fusion energy industry. In September 2022, the DOE issued a Funding Opportunity Announcement (DE-FOA-0002833) officially launching the program [2].

After a competitive review process, the DOE announced the selection of eight companies in May 2023 [3]. The initial awards totaled $46 million for the first 18-month budget period, with the potential for significant follow-on funding contingent on congressional appropriations and company performance. The selection of a diverse portfolio of concepts, including both magnetic confinement fusion (MCF) and inertial fusion energy (IFE) approaches, was a key feature of the initial awards.

Current Status

As of early 2026, the Milestone-Based Fusion Development Program is in its initial execution phase. The eight selected companies are working toward their first sets of milestones, which were negotiated in late 2023 and early 2024. These early-stage milestones focus on maturing designs, retiring key technology risks, and preparing for the construction of major prototype systems. The DOE, supported by experts from institutions like Princeton Plasma Physics Laboratory (PPPL) and Oak Ridge National Laboratory (ORNL), is actively engaged in the verification process for these milestones.

The program operates in parallel with the DOE's broader portfolio of fusion research, including support for foundational science and major international projects like ITER. The Fusion Industry Association (FIA) has reported strong industry support for the program, highlighting its role in validating technical roadmaps and attracting private capital [4]. However, the program's long-term success is dependent on sustained and increased congressional appropriations, which remain a subject of annual budget negotiations. The initial funding of $46 million is considered a starting point, with significantly more capital required to see multiple companies through to a pilot plant design.

Notable Implementations

The inaugural cohort of eight companies represents a broad range of fusion concepts and technological approaches:

Commonwealth Fusion Systems (/companies/commonwealth-fusion-systems): Developing a compact, high-field tokamak based on HTS magnets. Their milestones focus on advancing the design of their SPARC-class device toward a commercially relevant pilot plant, ARC.
Helion: Pursuing a pulsed, non-ignition magneto-inertial fusion concept that aims for direct energy conversion. Their milestones involve achieving key plasma performance targets in their next-generation devices.
TAE Technologies: Developing an advanced beam-driven field-reversed configuration (FRC) device, which uses a linear, non-tokamak geometry.
Zap Energy: Advancing the sheared-flow-stabilized Z-pinch, a concept that does not require magnetic field coils.
Type One Energy Group: Focused on a stellarator design, aiming to leverage its inherent steady-state operational advantages.
Focused Energy: Developing an inertial fusion approach using high-power lasers, building on progress from the National Ignition Facility.
Realta Fusion: Creating compact mirror-based devices for industrial heat and power applications.
Xcimer Energy: Pursuing an inertial fusion concept based on a novel, high-efficiency excimer laser driver.

This diverse portfolio is a deliberate strategy by the DOE to mitigate risk by exploring multiple pathways to commercial fusion energy.

Open Challenges

Despite its promising structure, the program faces several significant challenges. The most immediate is funding uncertainty. The total cost to develop multiple pilot plants is estimated to be in the tens of billions of dollars, and the program's future depends on Congress appropriating funds that are orders of magnitude larger than the initial $46 million [5]. Without a clear, long-term funding commitment, companies may struggle to plan and execute multi-year development campaigns.

A second challenge is the technical complexity of verification. Evaluating whether a complex physics or engineering milestone has been truly met requires deep and objective expertise. The DOE must maintain a robust and impartial verification team capable of assessing a wide variety of fusion concepts, from tokamaks to Z-pinches, without bias.

Finally, the program's success is tied to the broader ecosystem. Progress in areas like materials science, tritium fuel cycle technology, and regulatory frameworks is critical. While the milestone program incentivizes companies to address these issues, many foundational challenges require parallel, federally-supported basic research that falls outside the scope of any single company's roadmap.

Outlook

Over the next 5 to 15 years, the Milestone-Based Fusion Development Program is positioned to be a central driver of fusion commercialization in the United States. In the near term (5 years), the program's success will be measured by the ability of the initial cohort of companies to meet their milestones, retire key technical risks, and attract substantial private follow-on investment. It is likely that some companies will succeed while others may fail or pivot, and the DOE may hold new competitions to bring additional companies into the program.

Looking out 10-15 years, the program's ultimate goal is to enable at least one, and ideally several, companies to finalize the design of a fusion pilot plant and be prepared to begin construction in the early to mid-2030s. This would position the U.S. as a leader in fusion energy. The program's trajectory will be heavily influenced by both technical breakthroughs from the participating companies and the consistency of federal funding. If successful, the model of a milestone-based public-private partnership could become the standard framework for developing advanced energy technologies.

References

Bringing Fusion to the U.S. Grid — National Academies of Sciences, Engineering, and Medicine (2021)
DE-FOA-0002833: Milestone-Based Fusion Development Program — U.S. Department of Energy (2022)
U.S. Department of Energy Announces $46 Million for Commercial Fusion Energy Development — U.S. Department of Energy (2023)
The Global Fusion Industry in 2023 — Fusion Industry Association (2023)
A new paradigm for fusion development — Physics Today (2023)
Statement of Dr. Scott C. Hsu, Lead Fusion Coordinator, before the House Committee on Science, Space, and Technology — U.S. House of Representatives (2023)
Powering the Future: A Bold Decadal Vision for Commercial Fusion Energy — White House Office of Science and Technology Policy (2022)