WASHINGTON, July 21 (Reuters) - Global fusion energy

investment grew by $2.64 billion in the year since last July, an

industry group said in an annual industry survey on Monday, but

companies said they need much more money to take the industry

commercial.

The investment rise took place in places including the

United States, the EU, Japan, China and Britain and was the

highest since 2022.

Total funding since 2021 for the 53 fusion companies in the

survey by the Washington-based Fusion Industry Association, is

now nearly $9.77 billion, a five-fold increase. This year's

investment was a 178% jump from the more than $900 million

raised last year.

"The acceleration of capital, even when the global economy

has tightened, is a signal of maturing investor confidence,

technological progress, and a rapidly coalescing supply chain,"

said Andrew Holland, FIA's CEO.

Fusion, which fuels the sun and stars, is in the

experimental stage on Earth, but could one day generate enormous

amounts of energy that emits virtually no greenhouse gas and

without generating large amounts of long-lasting radioactive

waste.

Physicists work to replicate fusion reactions by forcing

together light atoms with technology including lasers or giant

magnets. Tall hurdles to commercialization include lowering the

amount of energy needed to spur reactions, getting reactions to

occur continuously, and systems to transmit the energy.

The survey does not count public funding for public fusion

projects, which China is believed to the world leader in.

Venture arms of traditionally fossil fuel companies Chevron ( CVX )

and Shell and Siemens Energy and

Nucor ( NUE ), the largest U.S. steel producer, were some of the

investors.

The investment hike has benefited from a boom in power

demand from artificial intelligence and data centers. Google

said last month it had struck a deal to buy power from

a Commonwealth Fusion systems plant in Virginia which hopes to

generate power by the early 2030s.

Despite the funding jump, 83% of respondents said they still

consider getting investments challenging. Fusion companies said

they would need an additional $3 million to $12.5 billion to

bring their first pilot plants online, with a median response of

$700 million.

The total of $77 billion that respondents said they would

need is about eight times more than has been committed by

investors. Expected industry consolidation could reduce the

total investment needed, the survey said.

(Reporting by Timothy Gardner; Editing by Lincoln Feast.)