Energy: Italian industry wins contracts worth more than 1.2 billion for fusion reactor

ENEA - Università Cattaneo study of the impacts of the ITER project

With contracts awarded worth more than 1.2 billion for the world’s first fusion power plant, Italian hi-tech industry players mark a fresh breakthrough − while bolstering their leadership role within the ambit of the ITER, International Thermonuclear Experimental Reactor project, in progress at Cadarache (France), with more than 50% of the tenders for hi-tech content components for Fusion for Energy (F4E) – the agency that manages the European unit for construction of ITER –, as noted by the journal, Rivista ENEA Energia Ambiente e Innovazione.

The latest issue – which has just been published online – asked some of the key European fusion players to bring us up to date on this major scientific and technological challenge (and step toward production of clean, sustainable, waste-free energy).

“The Italian companies were awarded products and service supplier contracts, the value of which ranks second only after France’s if we factor in civil engineering works and infrastructures”, says Johannes Schwemmer, F4E director.

This is a major achievement given the fact that the works are assigned following competitive bidding procedures whereby the most successful bid is subject to technical-economic conditions and the rules and principles governing EU public-sector bargaining practices. Schwemmer cited the following as instances of excellence: De Pretto Industrie (DPI), Ettore Zanon (EZ), SIMIC, OCEM Power Electronics, Angelantoni Test Technologies (ATT), ASG Superconductors, Walter Tosto and Ansaldo Nucleare (heading a 100% Italian consortium, Ansaldo Nucleare has been awarded a major contract for assembly of ITER, the latest over time, enabling a value in excess of the 1.2-billion ‘threshold’).

According to Schwemmer, the marked competitiveness of Italian firms within the field of fusion is the fruit not only of an “ability to innovate, developed over the years” but also the presence of “top quality” national research institutions, “with very positive impacts on growth and employment”. Other sector protagonists, such as Ambrogio Fasoli, the president of the EUROfusion consortium and Sergio Orlandi, heading ITER’s engineering and plants department, note “decidedly valid industrial know-how”.

“It’s not out of national pride, but ITER has an Italian tricolour heart. Much of the sophisticated technology required to respond to this scientific and technological challenge, worth some 20 billion euros, comes from engineers and industrial partners from Italy, whose rallying cry is excellence. This is the best of the best in a dynamic Italy, that works, and that can implement effi­cacious, efficient models”. Orlandi adds that ITER – which sees the participation of China, Japan, India, South Korea, Russia, the USA and the EU, plus Switzerland – has been more than 60% completed. Indeed, next year, assembly work begins, and production of the first plasma is expected for 2025.

This issue of the Energia Ambiente e Innovazione journal also focussed on the first study which assesses ITER not only in terms of economic, social and employment feedbacks, but also strategies, vision and processes of innovation. The study was conducted by Paola Batistoni, Gloria Puliga and Raffaella Manzini, researchers from ENEA and LIUC (Libero Istituto Universitario Carlo Cattaneo, or Carlo Cattaneo University). They explain how the benefits gained by Italian firms are to be seen as a longer-term phenomenon. Of the sampled group of 26 companies that were awarded ITER contracts from 2007 onwards, 93% declare that they have developed innovative technical know-how: new processes (73%) and new products or patents (14%). 67% have adopted new organisational and production standards, and nearly all have invested either locally or within their region (e.g. contracting out certain services or the production of components).

They have all recruited fresh personnel (highly qualified, mainly engineers). Approx. 90% of the enterprises studied claimed that working for ITER has boosted their reputation considerably. 73% announced that they have acquired new customers. 47% of these companies are linking up (or are attempting to link up) with new sectors such as airspace, biomedicine and superconductivity. Only a few concerns have accessed new marketplaces.

Apparently, the biggest challenges are faced by SMEs hoping to use the know-how they have acquired in new sectors. While the big names say that ITER has opened the doors to new lines of business activity, the smaller players frequently fail to access such lines of business on their own. Economically and financially speaking, participation in ITER has generally been beneficial, particularly with regard to strategic planning. The management and top management teams interviewed for the purposes of the ENEA-LIUC study all claimed that they had gained a greater awareness of the true skills-bases and capacities of their companies, boosting approaches and prospects for future development.

Above all in SMEs, gaining ITER contracts engendered a new corporate vision and greater awareness of an ability to compete even against the larger players. Investment in equipment also grew, and a teamwork approach was developed with other partners (above all, with suppliers including those involved in non-ITER projects). Alliances have been forged also among competing companies and universities or higher-education institutes. From the financial angle, participation in ITER seems to have paid off, given the encouraging trend displayed by the indica­tors used: EBITDA/sales ratio (EBIT = earnings before interest, tax, depreciation and amortization). Analysis indicates that involvement in the project leads to a +3.86 rate of change for the EBITDA/sales ratio (significance = 0.042). This result gains yet further in significance on comparison with data from the competition: 40% of the companies analysed presented with performance ratings in excess of the mean value for the sector. The ROA trend (return on assets: current profits prior to financial charges divided by total assets), too, was encouraging above all for medium-sized enterprises (however, it is to be noted that this finding emerges only some years after commencement of collaboration).