From the outside it looks like an ordinary warehouse. But inside this unassuming building, in Hod Hasharon central Israel, is one of the most ambitious energy projects in the Middle East,

Researchers at NT-Tao have joined an elite group of around 35 private start-ups that are trying to build a commercial fusion reactor.

Nuclear fusion is the reaction that powers our Sun and the other stars in the universe. It's the process of fusing two hydrogen atoms together which produces immense amounts of energy. If it can be harnessed here on Earth, then it promises abundant, cheap and emission-free electricity.

Late last year researchers at the US National Ignition Facility (NIF) in California made a breakthrough. Scientists conducted the first controlled fusion experiment to produce more energy from the reaction than that supplied by the lasers which sparked it.

Despite that success, there are still many challenges to overcome before a fusion reactor is producing electricity for your home.

Researchers are using different approaches to overcome those hurdles.

One way of achieving fusion is to heat hydrogen isotopes to hundreds of millions of degrees, until they become so energetic they break apart into a whirling state of matter called plasma.

That plasma can then be contained by powerful magnetic fields - an approach known as magnetic confinement fusion.

There are different ways to arrange the magnetic field. In a device known as a tokamak the plasma is confined by magnets that form a doughnut-like shape. In a stellarator the plasma is sent on a twisting path through the machine.

At NT-Tao, the approach involves combining those two approaches, the tokamak and stellarator.

"Without giving away our secret power, what we can say at this point is that NT-Tao is taking the best of existing tokamak technology and the best of existing stellarator technology," says chief executive Oded Gour-Lavie, who founded NT-Tao in 2016 with Boaz and Doron Weinfeld.

"We are refining those technologies to make a new design that will operate at significantly higher plasma density, giving us the ability to generate a fusion reaction with a much smaller footprint than most of the other solutions under development," he adds.

So NT-Tao is betting that by using denser plasma, its reactor core can be smaller and so can all the other engineering around it.

The goal is for the company's Modular Fusion Reactor to be the size of a shipping container. That would be radically smaller than other fusion projects.

For example, in the UK a government-backed prototype fusion plant is being planned for a site spanning 300 hectares (740 acres) that currently hosts a coal-fired power station.

He sees NT-Tao reactors providing electricity in places that might not have access to the grid, powering desalination plants, mines, or charging electric cars.

"The shipping containers can be stacked or manoeuvred to bring clean energy to any area that requires it," says Mr Gour-Lavie.

Building any kind of working fusion reactor is incredibly challenging, but to make a compact version adds an extra layer of difficulty.

Despite the magnitude of the hurdles, NT-Tao has attracted high-profile investors.

Last year NT-Tao made headlines when Honda invested in the company - making Honda the first car company to invest in fusion energy. Including the funding from Honda, NT-Tao received over $28m (£23m).

Honda is betting that NT-Tao's plan for a relatively small reactor will allow it to build test reactors more quickly.

"Honda has high expectations for the future of NT-Tao, a company with advanced fusion energy technology," said Shinji Aoyama, director and senior managing executive officer of Honda, in a press release in February.

"Honda believes that fusion energy technology will be a breakthrough technology for affordable, stable, clean energy, and we envision this technology will become increasingly important as electrified vehicles become more popular," he said.

Money has been flooding into fusion projects in recent years. A 2022 report by the Fusion sector Association says fusion companies have declared over $4.7bn of private funding to date, plus an additional $117m in grants and other funding from governments.

Some of the start-ups say they are confident they can get the power going by the end of the decade.

But many remain cautious about the prospects for fusion technology.

Arthur Turrell, author of The Star Builders: Nuclear Fusion and the Race to Power the Planet, says that existing nuclear power plants that split atoms in a process known as fission are the best bets for now.

"Nuclear fission is currently the safest large-scale source of energy on the planet and competitive with the best renewables. You don't need much fuel, you don't need that many people to run it once it's built, and you only need a relatively small site.

"Of course there have been rare meltdowns in reactors and it's understandable people are worried about that," he says, referring to disasters such as Fukushima and Chernobyl.

The safety issue is one of the attractions of fusion technology.

"It's really safe," says Mr Turrell. "There is no chance of a meltdown in nuclear fusion as it works in a completely different way. I have done a tour in a lot of these facilities and the worst thing people are worried about is falling off ladders."

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Bracha Halaf, the former chief scientist at the Israeli Ministry of Energy, is cautious.

"There's still a long way to go, and numerous challenges in order to stabilise, control and configure the prototypes that can demonstrate a continuous small fusion reactor," she says.

As you might expect, Andrew Holland, chief executive of the Fusion sector Association, is more optimistic that someone will clear the hurdles to building a fusion power plant.

"Fusion will change the world. It is the ultimate energy source. Not all companies will be successful in commercialising fusion, but the industry itself is both inevitable and game changing."

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