10 billion yuan, the trillion-yuan energy giant wants to "create the sun"

In mid-July, over 100 scientists from around the world gathered at a hotel in the northeastern suburbs of Langfang, Hebei, to discuss how to "create the sun."

The conference was hosted by ENN Group (hereinafter referred to as "ENN"), which was previously labeled primarily as "a leading domestic natural gas company." However, its previously mysterious controllable nuclear fusion business made headlines in the first half of the year, suddenly bringing this traditional energy company to the main stage.

In April, ENN's next-generation controllable nuclear fusion device—"Xuanlong-50U"—achieved megampere-level discharge for the first time; in May, this globally leading device met all engineering design specifications; and the next-generation device "Helong-2" has completed its physical design, expected to be completed by 2027, with media reports stating that the investment will reach approximately 6 billion yuan.

"Xuanlong-50U" achieves megampere-level discharge

Since the principle of the sun is fusion reaction, controllable nuclear fusion is often referred to as "artificial sun." In 2023, the State-owned Assets Supervision and Administration Commission of the State Council explicitly regarded it as the only direction for future energy. According to estimates by Ignition Research, if controllable nuclear fusion is fully commercialized, it will become a market of at least $1 trillion by 2050.

The situation has completely changed; in a field where European and American companies have led for decades, many practitioners are astonished that a Chinese private company primarily engaged in natural gas sales can invest over 4 billion yuan in this endeavor.

Now, Liu Minsheng, the director of the ENN Energy Research Institute (hereinafter referred to as "the Institute"), who is overall responsible for the project, finds it hard to imagine. He does not mind describing the dozen or so partners who followed him when the controllable nuclear fusion project was initiated in 2017 as "outsiders."

In fact, everyone was also "forced" into this situation. In the first ten years after the establishment of the Institute, the main direction was to achieve "decarbonization" of traditional energy sources such as natural gas. Liu Minsheng candidly admits that the process was fraught with twists and turns; they realized that no matter how advanced laboratory technology innovations were, if they lacked market applicability, the path would be blocked.

This experience also transformed his thinking from a scientific mindset to a commercialization-oriented one. When deciding to enter the field of controllable nuclear fusion, which is filled with scientists, his only instruction to the team for a long time was to "handcraft" the device, deconstructing a high-tech physical problem from an engineering perspective. As a result, they ended up progressing faster; while the industry standard for device construction is 3 to 5 years, they even set monthly targets.

Some technical paths of controllable nuclear fusion have developed for decades but still lack clear explanations on some core logic. Is there a problem with that? When the team resolutely chose to focus on the hydrogen-boron fusion route in 2022, the core rationale for convincing ENN's founder Wang Yushuo was commercialization—although hydrogen-boron fusion has a high degree of difficulty, requiring the reactor to reach temperatures of 1 billion to 2 billion degrees Celsius to achieve combustion, the raw materials are unlimited, making the financial model completely feasible The new progress of "Xuanlong-50U" has already given them the opportunity to discuss commercialization. Before this, nuclear fusion was jokingly referred to in the industry as being trapped in the "eternal 50-year curse"—at any point in history, when mentioning the timeline for achieving controllable nuclear fusion, it has always been 50 years in the future.

"Our current generation of devices can reach 40 million degrees, and it's normal for everyone to be concerned, but the parameter design for the next generation of devices will be significantly improved—what if we achieve 1 billion degrees?" Liu Minsheng revealed that the original design for the next generation device "He Long-2" was 300 million degrees, but it is now likely to be raised.

He also believes in "timing, location, and harmony," stating that after doing research for so long, when in a good state, one must seize the opportunity.

For example, during the experiment in April, the engineering design was originally 500 kA. According to Dr. Shi Yuejiang, the chief scientist of the ENN fusion experiment, the theme of that day's experiment was not high current, but the state of the plasma wall was very good that day, prompting the team to change the experimental goal on the fly.

From 300 kA, it was gradually raised to 800 kA, and the entire monitoring room was extremely tense, with everyone discussing whether they would burn out the device. Shi Yuejiang and ENN's chief scientist Peng Yuankai discussed with Liu Minsheng, "He was bold and said it would be fine, and if there was a problem, he would take responsibility, pushing it to 1 MA." The experiment was successful, and Peng Yuankai recalled that this decision was absolutely correct; when the long journey reached "that day," it depended on whether you dared to act.

This clear turning point greatly accelerated the entire process. Liu Minsheng is no longer afraid to discuss counting down to "2035" in public. Before that, ENN still needs to iterate two generations of devices, and on the generation of devices after "He Long-2," they need to fully realize the commercial demonstration reactor.

Just a week after the meeting in July, China Fusion Energy Co., Ltd. was established, with a registered capital of up to 15 billion yuan, and shareholders including China National Nuclear Corporation, China Petroleum Kunlun Capital, Shanghai Future Fusion, China Nuclear Power, Zhejiang Energy Power, and the National Green Development Fund.

Although they are facing the "national team," Liu Minsheng is not troubled at all. "We are not worried about investment funding at all; if a technological route can achieve a key breakthrough, it is possible for the market to invest more funds." In his world, controllable nuclear fusion is too significant, and he welcomes more resources to be invested.

In 2024, when Liu Minsheng reports to the group, he proposed to transform the research institute into an "ecological R&D organization," not relying solely on internal resources but seeking to obtain more leading experimental platforms and R&D resources globally through cooperation. "Generally speaking, corporate research institutes are rarely this open; our team of 300 people is relatively advantageous compared to many companies, but the gap between that and the capabilities we need for what we want to do is too large; we must 'borrow globally,'" he said.

01 From "Low Carbon" to "No Carbon"

When the research institute was first established in 2006, the industry found it "strange": what is the necessity of technological research and development for a natural gas company? Those who do not understand ENN may find it hard to imagine the level of crisis awareness in this company with an income scale exceeding 100 billion yuan In 1993, ENN introduced pipeline natural gas to the Langfang Development Zone, which is also its current headquarters. It is considered the first private enterprise in China to enter the urban public utility sector. Subsequent public utility reforms and the "West-to-East Gas Transmission" project allowed ENN to obtain gas operating rights in hundreds of urban areas across the country.

However, as the business was thriving, Wang Yusuo raised the famous "ENN Three Questions": "What will ENN sell in 10 years when it may be constrained by resources? Urban gas sales are difficult to brand; what will ENN be in 20 years? When the franchise rights expire, what will ENN do in 30 years?"

To some extent, the establishment of the research institute was aimed at answering these three questions. Although there was little disagreement within ENN about this matter, there was no clear direction on what to do, and the search for direction lasted for one to two years.

ENN attended the first Fusion Industry Forum hosted by ITER.

"Low carbon" has become a consensus. Wang Yusuo raised the issue of clean future energy and the security of energy supply early on. To some extent, the core goal of the research institute is to develop low-carbon energy products.

For a long time, the team explored various forms of carbon capture technology. "Carbon capture technology is mature, but we haven't done it. What happens after capturing carbon? It requires significant costs to bury it, fix it, or convert it; we have researched all these options."

At that time, carbon capture technology was very immature, with almost "zero foundation" in the country. Only a few large petrochemical companies had relevant solutions, none of which were ideal. However, the team was "confident" because it was a hot field, and many technological paths were logically feasible.

At that time, the entire team leaned towards a "scientist's logic." Liu Minsheng said that new technology planning, research and development management, milestone management, and team management were all immature. "So the main approach was to 'try various things.' If something looked good, we would try it. In hindsight, some directions could have been dismissed from a market logic perspective, but at that time, our capabilities and vision were lacking."

This state continued until 2016. During this period, the research institute had long since expanded beyond the natural gas sector, involving various forms of new energy such as photovoltaics, bioenergy, and gasification.

However, there was already a consensus internally—these technologies were insufficient to solve the "low carbon" problem in the goals; either the technical efficiency was low, the scale was small, or they could not form a competitive advantage.

Every August, following ENN's anniversary, the research institute's technology conference would be held. The theme for 2016 was clear: summarize the past ten years and plan for the next ten years.

"When we established the research institute, our vision was to make the carbon dioxide emitted from natural gas cleaner and to solve the source problem of natural gas. The big direction was towards clean energy, but after ten years, we still couldn't solve it. We could only 'optimize,' not achieve anything disruptive," Liu Minsheng said. "The new plan should not be about 'patching things up.' The future energy we need should improve by one or two orders of magnitude, not just a few tens of percent improvement that can be achieved today or tomorrow." The management of ENN proposed to boldly change the goal to "carbon-free" in a more forward-looking manner, which was quite daring, although the research institute had already begun some explorations at that time. "Following the previous natural gas industry chain, it is absolutely impossible to reach the 'carbon-free' step. But if others complete carbon-free, then our so-called low-carbon will be revolutionized. Should I wait for you to take my place, or should I take the initiative to change myself?"

They discussed two directions: one was to seek from the sky, learning from the fusion energy of the sun; the other was to dig from underground, which means deep geothermal energy.

In fact, there was not much internal disagreement about this "big shift," but more discussions based on whether the technology could be realized. Because ENN's business had also undergone some changes in 2016, not only selling natural gas, but also the comprehensive energy service that ENN referred to as "pan-energy," which had already gained momentum—targeting scenarios such as parks and buildings, ENN provided a complete set of solutions from equipment, software to services.

At that time, there was a saying in the industry that "compact nuclear fusion" could be achieved at the size of a table. "If that’s the case, it would completely connect with our business. We have so many scenarios, and in 20 years, once the equipment is upgraded, we can fully achieve carbon-free." Liu Minsheng said this is "distributed energy."

At that time, he was involved in an investment project, where a retired professor from the University of California, Los Angeles wanted to create a controllable nuclear fusion device the size of a tire. The internal verification felt good, and they even invited him over for communication. However, he felt something was off, so he applied to go to the United States for verification, after all, it was an initial investment project worth hundreds of millions.

After staying in the U.S. for more than a month, the other party kept delaying his access to the laboratory. Later, he was no longer afraid of offending people and insisted on checking the data, only to find that the other party had actually made a calculation error.

This was the state ENN faced in the unfamiliar nuclear fusion track at that time. After Liu Minsheng returned to China, the research institute decided to do it themselves.

02 "Outsider"

In the research institute, Liu Minsheng was one of the earliest to jump out of the "scientific thinking." He had a straightforward temper and was anti-bureaucratic. In his words, "I don't have a good relationship with others; when others are bureaucratic, I always end up 'fighting.'"

Those who have worked on projects with him were very convinced of him. Although he was not yet the director of the research institute, he managed the most projects, some of which were core projects that reported directly to Wang Yusuo.

He was good at closing the loop commercially and had a quick mind. If some previous projects were not prepared to continue investing, it was equivalent to "dying," but he would find ways to "handle" these businesses and intellectual properties, and could recover part of the invested costs.

However, nuclear fusion was different from previous projects. "Previous project cycles were very short, at most a two-year gamble. Even if this year's project didn't make money, the year-end bonus would still be better, and everyone was willing. But nuclear fusion is different; it takes 20 years or 30 years. Who is willing to work with you?" Initially, Liu Minsheng was just pulling together a "makeshift team," many of whom have now become responsible persons, simply trusting his research and development management leadership.

When the project started in 2017, the team could not come up with a plan, let alone a technical route and commercial closure. Liu Minsheng felt that they needed to first build the foundational capabilities But how to build with a group of "outsiders"? In fact, Liu Mingsheng already has an idea - a hand-rolled device, constantly trying and making mistakes. Therefore, he is not just randomly pulling people in, but has assembled relevant personnel from an engineering perspective: digging for system control talent from the energy management business; nuclear fusion requires vacuum technology, which overlaps with some equipment in photovoltaic production lines, so he sourced people from there.

The first thing he did was invite experts from Princeton University in the United States to give lectures. After the lecture, he discussed cooperation with them: "According to your concept, can I replicate it? We don't have the ability to propose new ideas, but we can realize others' ideas."

"Not just from the U.S., but also from Europe; one company can replicate a set. First, follow their lead, complete the engineering, see where the problems are, and conduct experiments to check the data." He approached Wang Yusuo and proposed to build the device, and he wanted to build five or six sets. "He asked me what the significance of building this thing was. I said that for a team to build capability, we can't just talk empty words; we can only initially build it through this method. He eventually agreed. Without the trust and vision of the chairman (Wang Yusuo), we wouldn't have been able to take this step."

Starting was difficult; the team didn't even know how to create a vacuum, but this process was much faster than the outside world imagined. Some devices were "rolled out" in two to three months, and by 2018, this state of learning while practicing had basically ended. At that time, the devices built had very low parameters, and their physical and scientific research value was also very low, but this process allowed the team to get their foot in the door.

"In hindsight, it all seems easy; it depends on whether the team's learning ability can improve that quickly." Liu Mingsheng stated that this stage cost a total of 20 to 30 million yuan, and he is very proud because the results produced were more than those of similar companies that raised billions in financing.

"Where is the luck in this? We are not starting from zero to one; we have already accumulated a lot of practice in battery, new materials, energy storage... The research institute already has a wealth of experience, and although it's not a nuclear fusion device, we know how to organize and promote it, depending on how you reuse previous experiences."

After building five or six small devices, the bottleneck became very obvious, insufficient to determine the future direction. In October 2018, Liu Mingsheng led the team to start building larger devices, and it still didn't take too long; the team, which had doubled in size, completed it in about ten months. This device, which lacked supporting heating and diagnostics, was still a "semi-finished product," but it already had its own name "Xuanlong-50," marking the first milestone for the research institute.

At that time, he also began to consciously consider localization; the localization rate of this generation of devices had approached 90%. For example, in the heating device, ENN could procure from three foreign companies at that time, but he chose to collaborate with domestic institutions to study how to apply existing microwave technology from radar and other fields to nuclear fusion devices, for which they had to invest tens of millions in R&D expenses each year.

There are many similar examples. From a long-term perspective, Liu Mingsheng believes that supply chain localization is of strategic importance, and some domestic companies have provided significant support after learning about their vision. "There is a coil that a company helped us make, and they didn't haggle much over costs," Liu Mingsheng said

03 Transition

The team gradually added many professionals and began to transform into a "regular army," but the problems became even larger and more numerous than in the early stages.

Liu Minsheng encountered a typical case of "outsiders and insiders clashing." The original team was more engineering-minded, while most of the newly introduced experts were more specialized in the physical aspects. "Each has their own professional opinions, which all seem quite reasonable, but they are not unified and look down on each other." The process of integration gave him a headache.

This was most evident in vacuum technology. Nuclear fusion ultimately requires adding fuel to a chamber and removing impurities, but to what extent should it be cleaned? The experts provided a parameter, but Liu Minsheng vaguely felt something was wrong because they had tried internally several times and found it simply impossible.

"The experts said to achieve 10 to the power of negative 8 Pascals, but in actual research, we could barely reach 10 to the power of negative 7 Pascals. Achieving the experts' requirements in such a large chamber is simply impossible; this is based on data references from outside the nuclear fusion specialty." To verify his judgment, he specifically invited teachers from other research institutes in China to give lectures. "I asked them how much vacuum is needed, and the answer was that achieving 10 to the power of negative 5 Pascals is sufficient for discharge."

Liu Minsheng said that with the team's capabilities at that time, if they had insisted on following the experts, they might not have achieved anything even now. "Other research wouldn't need to be done. You would find that for decades, the focus has been on solving vacuum packaging issues rather than fusion problems. In the end, it turned into a scientific mindset, hoping to do better, but the main issue isn't there; the core breakthroughs shouldn't be about this."

He specifically called the experts, "Let's put this aside for now; if it really doesn't work, we can adjust later." As he said, the vacuum did not restrict subsequent experiments, and now achieving 10 to the power of negative 6 Pascals allows the device to operate normally.

"I try to stay focused and tackle the core issues first, which also leads us to have some ideas that differ from others. I only work on the core because the difficulty of breakthroughs is already very high and consumes a lot of resources. If others want to pursue certain ideas, we can fund the R&D, and once they are developed, we can use them together." At that stage, Liu Minsheng was already instilling the mindset of "working backward from commercialization" into the team. Shi Yuejiang mentioned that the team was fully focused on the direction of commercialization, which was different from other domestic research institutes and involved a lot of basic research.

The reason the ENN team was able to accelerate the R&D pace was not unrelated to this, but it also pushed them onto a more challenging path.

The "Xuanlong-50" was officially put into use in 2019, and by 2020, Liu Minsheng felt something was off. The team had applied some new ideas to this device, achieving breakthroughs in certain points, but more was still at the engineering level, and the physical design was not that detailed.

"Following this line of thought, the theoretical logic was not clearly articulated, and there was no significant progress visible from the experimental results." However, there was still some progress, and he couldn't directly deny it, so he continued to use this device for experiments.

But Liu Minsheng left a "backdoor." He specifically recruited some young backbones from the research institute to discuss the route after open discussions. By that time, the research institute had already established some foundation, both in professional technology and commercial logic, which had improved significantly from the initial stage. This discussion lasted for a year and a half, and the entire research institute effectively walked on two legs, with the original single-point breakthroughs still ongoing, while this group of young backbones directly opened up new paths On July 7, 2022, Liu Mingsheng felt it was time for a summary report, and he directly threw out the conclusion—abandon the original route. Surprisingly, most people agreed with him; the opposing opinions were not focused on technology but rather on the idea of holding on a bit longer, given the significant investment.

"In the first half, when I mentioned overturning the previous direction, everyone was somewhat puzzled," Liu Mingsheng said. "In the second half, I reorganized the entire logic, summarized what capabilities the team had accumulated, and explained that the new route had enough continuity with the original. We weren't entirely wrong, but we needed to avoid the mistakes from before." After his explanation, everyone basically agreed.

From that day on, ENN Energy began to focus on hydrogen-boron fusion.

04 Iteration

At that time, domestic research institutions were almost entirely focused on deuterium-tritium fusion, and the trend was largely similar internationally.

However, Liu Mingsheng felt that "the problem is quite significant": "After so many years of research in fusion, it has never truly commercialized, indicating that the difficulty is certainly high, and the directional issues may have a significant impact on this."

The team had run through many scenarios, but none added up. According to him, in the fuel for deuterium-tritium fusion, deuterium is unlimited, but tritium is scarce, costing 6 million yuan per gram. "Even if it drops to 100,000 yuan per gram, it still makes no sense." Moreover, the neutrons produced by deuterium-tritium fusion are an order of magnitude higher than all current nuclear fission neutrons.

Hydrogen-boron fusion, on the other hand, completely aligns with commercialization logic, with unlimited raw materials costing only a few thousand yuan per ton, and the reaction process produces alpha particles, which are non-radioactive.

ENN Energy hydrogen-boron fusion device control hall

The biggest advantage of deuterium-tritium fusion is that the reaction conditions are easier to achieve, requiring much lower temperatures than hydrogen-boron fusion. Purely from a research perspective, this is a more feasible path.

"It's like when you want to cook with coal, you use a lighter to burn paper to ignite the coal because paper burns easily; you don't see anyone directly burning paper to cook. This is our biggest difference from others; we are doing fusion, and we are igniting coal, not paper. The costs simply don't add up," Liu Mingsheng said.

However, hydrogen-boron fusion is also bound to be difficult, corresponding to massive investments and extreme uncontrollability. This decision was proposed by a private company whose main business is not nuclear fusion, so one can imagine the pressure they had to bear. "At one point, someone proposed a deuterium-tritium fusion plan, and there were significant internal disagreements. Your business would be lost, and you wouldn't even do it as well as foreign companies; you'd have to 'copy' them," Liu Mingsheng said.

At the meeting in July 2022, the team only ran through a rough commercial logic without detailing it. They were still quite unfamiliar with hydrogen-boron fusion, unsure how to qualify and quantify it, how large the future device should be, what the power output would be... A series of questions were continuously escalated through discussions held every two weeks, which continued until mid-2023.

It was also at this juncture that the entire research institute decided to focus on nuclear fusion, no longer investing research resources in other tracks, as they would soon face a "war" on the scale of billions of yuan Liu Minsheng decided to launch a new device, named "Xuanlong-50U," and the team set a strict deadline—completion must be achieved by December 30 of the same year.

Nio's fusion experimental device "Xuanlong-50U"

On the surface, the changes between the two generations of devices are limited; the major change is increasing the magnetic induction intensity from 0.5 Tesla to 1.2 Tesla, and replacing the core heating device with another type. "The first-generation device was based on designs from over a decade ago, and the physical design was not solid. The second-generation device is completely different; the upgrades in engineering parameters may seem small, but because there is detailed physical design behind it, along with engineering parameters, we can quickly make breakthroughs, and that is the core," Liu Minsheng said. The "Xuanlong-50U" was set up in just about two months, and in the first half of this year, all physical indicators exceeded the design values.

During that phase, the team worked in shifts around the clock. When it came to engineering implementation, Liu Minsheng required technical personnel and engineering staff to work together, resolutely avoiding "two separate approaches," and insisted that they stay on-site every day to solve practical problems.

The "Xuanlong-50U" has already become one of the leading devices globally, with the project budget increasing from tens of millions to billions. It is normal for the team to be "nervous," fearing mistakes while also desiring stability. There was significant internal debate regarding experimental parameters; Liu Minsheng wanted to set the parameters to exceed engineering specifications, with many indicators already surpassing physical requirements. However, under such circumstances, the device is prone to damage. In some foreign laboratories, coils have burned out due to increased experimental parameters, resulting in repairs that took over ten years and are still not fully completed.

"Some older scientists told me to prioritize safety. I said I would rather burn it. Why? If you don't push to the engineering limits, you won't know where the problems lie. I once calculated for the team that while burning out all the coils would certainly incur losses, if we could reach extreme parameters, it would provide better support for the next generation of parameters, potentially saving tens of billions," Liu Minsheng said.

However, the device did "burn" once last year, and Liu Minsheng did not hold anyone accountable; instead, he analyzed the reasons and began repairs. The team worked overnight to come up with a solution, and the next day, they had the supporting manufacturers on-site, resulting in repairs completed in just two weeks.

In the industry's consensus, Nio is already considered one of the core players, with almost no company or research institution able to match its iteration speed—building a device in one year, completing experiments in three years, and then entering the next generation device cycle. More commonly, it takes 3 to 5 years to build a device, and a generation of devices needs to operate for over ten years.

With the goal of commercial application by 2035 in mind, it is necessary to not only solve the iteration of two generations of devices but also to address a large amount of supply chain and supporting work. "Time is tight, and the requirements for each generation of iteration are very high."

However, having come this far, regardless of how external competition changes, he has fewer concerns now. When asked by reporters about "what Nio's ideal ecological niche in the fusion field is," Liu Minsheng said that the market scale for nuclear fusion is too large, so large that a few companies cannot sustain it. "As long as our technology level is high, whether we act as suppliers or service providers, that will be sufficient." This article is authored by: Ma Jiying, Miao Shiyu, source: China Entrepreneur Magazine, original title: "100 Billion Yuan, the Trillion Yuan Energy Giant Wants to 'Create the Sun'"

Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at one's own risk