FDCE Participant Spotlight: Juan Andres Garcia Alvarez

Juan Andres Garcia Alvarez is a participant in the Financing and Deploying Clean Energy Certificate Program (2024-2025 cohort), expanding his expertise in energy finance with a particular focus on fusion energy. He is examining what lessons can be drawn from the policies of renewables and hydrocarbons, their technological transitions, project finance, and market innovations to enable fusion.

His professional background spans growth equity and debt finance, capital markets, and entrepreneurship, with experience in strategic investments across industrial supply chains at GE Capital, capital markets with a high-growth fintech platform, and as the founder of two entrepreneurial ventures, most recently for electric-powered two-wheelers. His career has focused on scalable capital strategies and implementations. 

Although not a scientist by training, Juan Andres has dedicated significant time to deepening his understanding of fusion science. He has visited national laboratories, toured testing facilities, and engaged directly with fusion and plasma physics centers and companies. His commitment to the field extends to formal study - taking plasma physics courses alongside graduate students to build the technical foundation necessary to navigate the complexities of fusion finance.

In this conversation, Juan Andres details the financial challenges and opportunities within the fusion sector. From the difficulty of pricing risk to the evolving role of government and private capital, he offers insights on how innovative funding methods and commercial partnerships can usher fusion as a viable carbon-free energy asset class. As the industry moves toward commercialization, he discusses the key financial breakthroughs that must occur in the coming years to make fusion a reality.

 

1. Setting the Stage: Why Fusion Finance is Unique

 

Fusion energy has long been seen as "the energy of the future"—but always just out of reach. From a finance perspective, what makes fusion so challenging compared to other energy investments?

 

Fusion is in a unique position because it straddles both a technological and financial inflection point. Unlike solar or wind, which followed a more traditional path of gradual commercialization, fusion still faces significant scientific and engineering hurdles. That uncertainty makes it difficult to apply conventional financial models. Like other early infrastructure projects in energy and climate tech, fusion is taking steps toward scalability. Until we reach a point where we have consistent net energy gain in energy power generation and de-risked commercialization pathways, fusion will remain perceived as a high-risk investment by traditional infrastructure-scale capital. 

Another challenge is the capital intensity. These are not small-scale projects - fusion power plants will require substantial upfront investment, estimated in billions of dollars, with untested development and maintenance timelines. As fusion progresses, we will have a better sense of fusion’s cost structures and economies which would be crucial to understand relative to those of renewables and fossil-fuel based alternatives. 

While fusion has the potential to be a game changer, it remains a complex and challenging endeavor. Just like systems change, fusion requires a range of actors collaborating across their value chains and potentially beyond their interest, to realize its transformative potential in the energy transition. 

 

2. Risk & Investment Strategy

 

Investors struggle to price risk in fusion projects. What are the biggest financial risks, and how can they be mitigated to attract more capital?

 

The biggest risks in financing fusion are technological, regulatory, and market related. First, there’s the scientific risk—will the approach being pursued by a given company actually work? Then, there’s the engineering challenge—can it be built at scale and operate reliably? From a regulatory standpoint, it is worth highlighting the progress in the US and UK toward a risk-appropriate fusion framework that will foster the industry’s growth. Market-wise, the question is whether fusion can be cost and profit competitive with existing energy sources.

To mitigate these risks, we need a mix of patient capital, public-private partnerships, government support and funds, as well as innovative commercial partnerships and capital structures. This combination will help bridge the funding gap while ensuring that technical milestones and scientific breakthroughs are effectively commercialized.

 

Do you think we’re at an inflection point where fusion is moving from speculative investment to a legitimate asset class? Why or why not?

 

I think we’re getting closer, and I certainly think that waiting years to engage asset managers and institutional investors is not an option – it needs to happen now. The more than $9 billion of cumulative private investment to date, alongside continued public funding, suggests that fusion is increasingly being taken seriously. We’re also seeing more technological validation across fusion technologies, pilot plants designs moving forward, and companies like Commonwealth Fusion Systems, Type One Energy, Helion Energy, and the UK’s STEP program announcing plans for demonstration and commercial fusion plants. The momentum is certainly building up. While addressing the risks is crucial, it is equally important to explore how financing models can evolve to support fusion energy’s commercialization.

 

3. Financing Models & Market Trends

 

We’ve seen government-backed loans and Power Purchase Agreements (PPAs) accelerate renewables. Could similar mechanisms work for fusion, or will it require an entirely new approach?

 

PPAs have worked well for renewables because the technology has been proven, and banks can underwrite predictable cash flows. Investor skepticism about expected returns is common across all electricity generation technologies. In many cases, financial support, subsidies, and incentives have served not only to make renewable projects viable but also to make profitability more visible to investors.

Fusion, on the other hand, is still an emerging technology. It would be valuable for companies like Google, Amazon, Facebook, Apple, and Microsoft to demonstrate tangible financial commitments to the fusion industry. Beyond signing PPAs, the industry needs to attract hyperscalers to invest directly at the project level. The key will be structuring investments to account for both the long development timelines and the uncertainty surrounding the delivery of electrons to the grid at scale. 

 

4. Government vs. Private Sector Roles

 

How do you see the role of governments evolving in fusion energy finance? Should they continue funding R&D, or should they act as an "anchor customer" to de-risk private investment?

 

The government, academia, and scientists across our national laboratories have played a fundamental role in identifying and addressing scientific gaps, as well as funding early-stage fusion R&D. This support needs to continue and be strategically enhanced. As fusion progresses toward commercialization, the government’s role will remain critical, shaped by evolving policies and priorities. This could take the form of government-backed loans, loan guarantees, and strategic federal or state funding offered by an agency, backstops for long-term PPAs, tax incentives, and more. By doing so, governments can provide the certainty needed to attract larger amounts of private and institutional capital.

 

5. Looking Ahead: The Future of Fusion Finance

 

If fusion is to become commercially viable, what financial milestone or breakthrough needs to happen in the next 5–10 years?

 

One of the biggest financial milestones will be securing the first commercial-scale demonstration plant with a credible financing structure. That means not just proving the science and engineering works but also showing that a fusion plant can deliver power to the grid at a competitive price. When major debt  and institutional investors, such as banks, sovereign wealth funds, pension funds, insurance companies, or infrastructure investors, begin allocating capital to fusion, it will be a clear signal that the market is maturing.

Another key breakthrough will be regulatory and policy changes at both the federal and state levels that reward clean energy generation, regardless of the underlying technology. This would unlock additional financial incentives, like what we’ve seen with renewables, making fusion projects more attractive for deployment.

 

Closing Thoughts

 

I appreciate the opportunity to discuss fusion finance—it’s a field that’s evolving rapidly and will require input from a diverse range of stakeholders. Yale’s  Financing and Deploying Clean Energy program has been an invaluable foundation for tackling these challenges, combining academic rigor with real-world application. In fact, we recently completed a fantastic module on Project Finance, which has helped me think critically about how these financial tools can support early-stage energy infrastructure technologies like fusion.

As fusion progresses, we’ll need expertise from all fields - academics, scientists, engineers, policymakers, and financiers - to transform scientific breakthroughs into commercial reality. While renewables will remain essential, firm baseload power is a crucial component of the clean energy transition, and fusion could play a significant role in this future. As I joked with FDCE Delivery Associate Trent Cummings, perhaps one day the program will evolve into Financing and Deploying Carbon-Free Energy—a reflection of the growing need for a diverse, technology-neutral energy strategy.  

It’s an exciting time, and I look forward to seeing how we can bridge the gap between innovation and financial viability to make fusion a reality. Thank you for the conversation!