Tennessee bets big on nuclear and fusion: Gov. Bill Lee announces $92.6M strategic energy investment

This week, Tennessee Governor Bill Lee delivered his seventh State of the State address,
in which he presented budget and legislative proposals. Among them, he introduced a $92.6 million effort to advance nuclear and fusion energy and position the state as a national leader in energy innovation. That includes funding for small modular reactors, workforce training, and a regulatory framework for fusion power.

“[Tennessee’s] ambition to lead in nuclear innovation is much bigger than just competing with other states—it’s about securing America’s future,” Lee said during his address to the Tennessee General Assembly.

Lee’s budget proposes a $50 million state grant to the Tennessee Valley Authority to support building a Small Modular Reactor (SMR). He’s also proposing $10 million to attract advanced nuclear technology companies, and $10 million in funding for vocational education programs to develop a nuclear energy workforce. Lastly, he said he’d allocate $2.6 million to develop a state regulatory framework for nuclear fusion.

Fusion Energy Partnership Advances

Gov. Lee’s announcement is timed with a pivotal agreement between Type One Energy, a Knoxville-based fusion energy company and Tennessee Valley Authority (TVA) to develop a fusion power plant. 

The project, named Infinity Two, aims to deliver a 350-megawatt fusion pilot plant by the mid-2030s using Type One Energy’s stellarator technology.

This cooperative agreement builds on Project Infinity, a collaboration launched last year by Type One Energy, TVA, and the U.S. DOE’s Oak Ridge National Laboratory (ORNL), with support from the state of Tennessee. 

Initially centered on deploying the Type One Energy Infinity One stellarator prototype in TVA’s Bull Run power plant. It has since expanded to include plans for commercializing fusion energy, including site studies, environmental reviews, and workforce development.

“Unleashing America’s energy potential will take all forms of generation including fusion,” said Joe Hoagland, TVA vice president Innovation and Research. “Energy security is national security, and we are focused on developing a technology, supply chain, and delivery model to build an industry that can power America and the world.”

Workforce and Economic Benefits

The partnership emphasizes workforce training to equip local communities with the skills needed to assemble, operate, and maintain fusion stellarators. Type One Energy, CEO Christofer Mowry, highlighted TVA’s expertise in power plant operations and licensing as critical to the project’s success.

“TVA brings us best-in-class power plant operations, maintenance, engineering, licensing, and even project planning and construction capabilities, all skills critical to success that we now don’t need to try and recreate,” Mowry said. “Instead, we can focus on completing the design of Infinity Two and testing it with the Infinity One prototype in TVA’s Bull Run plant. The ability for us to focus on developing and delivering the core stellarator technology materially derisks our path to fusion power plant commercialization.”

The project also explores repurposing retired TVA fossil fuel infrastructure, offering a sustainable path for energy transition while creating jobs and investment opportunities in the region.

A Vision for the Future

Governor Lee’s investment and the Type One Energy-TVA cooperative agreement highlights Tennessee’s bullishness on nuclear energy production. 

By fostering collaboration between public and private sectors, the state aims to lead the nation in developing clean, reliable energy solutions.

Disclosure: This article mentions a client of an Espacio portfolio company.