Microsoft-backed nuclear fusion company Helion has commenced work on its first fusion power plant in Chelan County, Washington.

The Orion project is set to deliver power to Microsoft data centers in the state by 2028, should development remain on track. The cloud provider signed the world's first Power Purchase Agreement (PPA) for nuclear fusion back in May 2023, with Microsoft expected to offtake up to 50MW of capacity following a one-year ramp-up period.

“Fusion represents an inspiring frontier in the world's pursuit of clean and abundant power,” said Melanie Nakagawa, CSO & CVP Energy, Connectivity, and Sustainability at Microsoft.

“While the path to commercial fusion is still unfolding, we're proud to support Helion's pioneering work here in Washington state as part of our broader commitment to investing in sustainable energy.”

The project will connect to Washington's primary power delivery networks, allowing it to “connect to the exact same grid just upstream of the Microsoft data centers," Kirtley told Reuters.

The company is currently working on its prototype project, dubbed Polaris, housed in Everett, Washington, where the company aims to build the necessary components needed for the Orion project.

Helion has already built six fusion prototypes, with its latest Trenta, the first privately-funded fusion device to reach commercially-relevant fusion conditions, achieving a fuel temperature of 100 million degrees Celcuis, the generally agreed operating temperature for a commercial fusion plant.

“Today is an important day – not just for Helion, but for the entire fusion industry – as we unleash a new era of energy independence and industrial renewal,” said David Kirtley, Helion’s co-founder and CEO. “Since we founded the company, we have been completely focused on preparing fusion technology for commercialization and getting electrons on the grid. Starting site work brings us one step closer to that vision.”

The fusion firm still needs to secure the final permits from the state government to allow for the project's energization, but said it remains on track to deliver power by 2028.

Helion is also backed by Sam Altman and, in January, announced the successful raise of $425 million in a Series F round. Last year, Altman-owned OpenAI was reportedly in talks to purchase "vast quantities" of power from Helion.

Earlier this month, Google joined Microsoft in signing a 200MW PPA with rival fusion firm Commonwealth Fusion Systems. The power will be supplied from Commonwealth’s inaugural ARC plant. The plant has a planned capacity of 400MW, and is projected to deliver its first power to the Virginia grid in the early 2030s.

Unlike nuclear fission, which generates energy by splitting heavy atomic nuclei, nuclear fusion produces energy by merging light nuclei into heavier ones. If made commercially viable, fusion could offer an almost unlimited long-term energy source.

Yet, several challenges could hinder its progress. Most notably, high capital investment, extreme thermal stresses, and the technical difficulty of containing high-energy plasma. These issues have cast doubt on near-term deployment, with most forecasts pointing to commercialization dates in the 2040s.