SHANGHAI, July 24 (Xinhua) -- China has set up a state-owned fusion energy company in its latest drive to commercialize fusion power, aiming to harness an almost inexhaustible source of clean energy.

China Fusion Energy Co. Ltd (CFEC), a subsidiary of the China National Nuclear Corporation (CNNC), was unveiled in Shanghai this week with a registered capital of 15 billion yuan (about 2.1 billion U.S. dollars).

The newly-founded firm, positioned as an innovation driver for advancing China's fusion engineering and commercialization, is tasked with developing platforms for technological research and capital operations, the CFEC said.

China announced prioritized support for core future energy technologies in 2024, with a focus on nuclear fusion, in a bid to fast-track the transition of this cutting-edge technology from the lab to practical application.

Shanghai is doubling down on its nuclear ambitions, striving to build a world-class hub for nuclear equipment manufacturing and advanced fusion research and development, while securing double-digit annual growth for its nuclear power sector through 2025.

China Fusion Energy signed a cooperation agreement for a fusion innovation consortium with Shanghai Jiao Tong University, China Electrical Equipment Group, Shanghai Electric and Shenergy Group. Many of these local heavyweights in the traditional power generation sector are poised to secure market share in upstream and downstream fusion-related equipment.

CITIC Securities estimates that the global nuclear fusion device market could reach a scale of 2.26 trillion yuan between 2030 and 2035.

In March, a team from Energy Singularity in Shanghai achieved a breakthrough in high-temperature superconducting tokamak technology, with their magnet surpassing the previous record set by the Massachusetts Institute of Technology and Commonwealth Fusion Systems in the United States.

This Shanghai startup has announced a plan to complete its next-generation tokamak by 2027, targeting a 10-fold energy gain, a critical milestone for commercial fusion viability.

In addition to the eastern Chinese manufacturing hub, two inland provinces in China have significantly expanded scientific research and investment in the fusion energy sector.

East China's Anhui Province is actively constructing the Burning Plasma Experimental Superconducting Tokamak (BEST) in its capital Hefei, which is expected to demonstrate fusion electricity generation for the first time in history.

The massive facility, an upgraded version of the record-breaking Experimental Advanced Superconducting Tokamak currently operational at a research institute in the city, is also expected to be completed by 2027.

Fusion Energy Tech., the Hefei-based company building the BEST, is another large firm with majority state-owned capital stakes and a registered capital of 14.5 billion yuan. Chinese automaker NIO is one of its major shareholders.

Engineers there are aiming to construct a fusion engineering demonstration reactor, based on the BEST project. Commercial operations are projected to start somewhere between 2040 and 2050.

Separately, research and commercial entities in southwest China's Sichuan Province are exploring various technical routes to harvesting fusion energy, including tokamak, linear field-reversed configuration (FRC), inertial confinement and magnetically driven fusion.

Last Friday, a Chengdu-based fusion startup achieved plasma ignition in its FRC device, the HHMAX-901, marking a significant milestone toward scaling the technology for commercial use. Similarly, U.S.-based Helion Energy plans to adopt this approach and is expected to begin supplying power to Microsoft by 2028.

Earlier this month, the Sichuan provincial government released its plan to support the development of "controlled nuclear fusion" as a future industry.

A recent analysis by MIT Technology Review suggests that China's robust industrial base could allow its emerging fusion energy sector to "climb the learning curve much faster and more effectively" than its global competitors.

China's industrial might in thin-film processing, large metal-alloy structures and power electronics provides a strong foundation to establish the upstream supply chain for fusion, according to the article.

The journal specifically highlighted China's strengths in large-scale power electronics, which are also used in similar systems such as high-speed rail and renewable microgrids.

Zhou Lisha, a researcher at the China Enterprise Reform and Development Society, noted that the establishment of CFEC will boost the sector's technical and innovation capabilities, and propel the rapid development of the "artificial sun" industry.

Despite its promising prospects, CNNC, CFEC's parent company, has cautioned that controlled nuclear fusion is still in the developmental stage, with uncertainties and even risks of commercial failure.