The U.K.’s Ambition to Revive Nuclear Energy
The United Kingdom once held a prominent position in the global nuclear energy landscape, boasting more nuclear power stations than the United States, the Soviet Union, and France combined. However, since the completion of Sizewell B in 1995, the country has not built a new reactor. Despite this, nuclear energy still plays a role in the U.K.’s power supply, contributing 14% in 2023. The government aims to increase this share to 25% by 2030, with a vision of unlocking a “golden age of nuclear.”
The U.K. was the birthplace of commercial nuclear energy, but today it generates only a fraction of its power from this source. While the country once led globally, it now faces challenges in becoming a nuclear powerhouse again. One of the biggest hurdles is the high cost of building nuclear projects, making the U.K. the most expensive place in the world for such endeavors.
Nuclear energy accounted for just 14% of the U.K.’s power supply in 2023, according to the International Energy Agency, falling behind European peers like France, which relies on nuclear for 65% of its electricity. The U.K. is now pushing for a significant increase in nuclear capacity, viewing it as a low-carbon, reliable energy source that can complement intermittent renewables.
“There’s a very clear momentum that has been observed,” said Doreen Abeysundra, founder of consultancy Fresco Cleantech. She attributed part of this momentum to geopolitical tensions, which have shifted public focus toward energy security and independence.
However, the U.K.’s Nuclear Regulatory Taskforce highlighted systemic failures in the country’s nuclear framework, including fragmented regulation, flawed legislation, and weak incentives. The government has committed to implementing the taskforce’s recommendations within three months.
Going Big – or Small
The U.K. is diversifying its nuclear strategy, investing in both large-scale projects and smaller, next-generation reactors known as small modular reactors (SMRs). British company Rolls-Royce has been selected as the preferred partner for SMRs, which are essentially containerized nuclear reactors designed for factory manufacturing. These reactors use passive cooling techniques, which supporters argue make them safer and cheaper.
Despite their potential, SMRs face challenges. Most designs use light water reactor technology, similar to the planned Sizewell C plant, but scaled down. Other experimental designs involve different cooling solutions. The U.K.’s first SMR will be at Wylfa in Wales, though no timeline has been set for its completion.
In September, the U.K. signed a deal with the U.S. to strengthen commercial ties in nuclear power and streamline licensing for firms operating across the Atlantic.
However, “the first thing is, there is not, at the moment, a single SMR actively producing electricity under four revenues. They will all come at best in the 30s,” said Ludovico Cappelli, portfolio manager of Listed Infrastructure at Van Lanschot Kempen. While SMRs could be a game-changer, their commercial operation is still decades away, making them a risk for investors.
To secure the baseload needed to offset renewable intermittency, the U.K. is still looking at large-scale power stations. Paul Jackson, Invesco’s EMEA global market strategist, noted that while SMRs may have a role, they will take time to roll out, casting doubt on the U.K.’s ability to lead in nuclear, as countries like France and China are ahead.
The U.K. government body Great British Energy-Nuclear is identifying sites for additional large-scale plants, having already acquired one in Gloucestershire and another in Wales. A spokesperson for the Department for Energy Security and Net Zero stated, “We are reversing a legacy of no new nuclear power being delivered to unlock a golden age of nuclear, securing thousands of good, skilled jobs and billions in investment.”
Innovation in Funding
The U.K. has pioneered innovative funding mechanisms to make large-scale nuclear projects investible. One such mechanism is the Contract for Differences, used for Hinkley Point C, which guarantees a fixed price for electricity generated over a long period. This helps de-risk investments in an industry known for delays and budget overruns.
The Regulated Asset Base (RAB) model, first used at Sizewell C, allows investors to get paid from the day they fund a project, rather than when it starts operating. Sizewell C is expected to cost £38 billion to build.
Private market investors are increasingly interested in next-generation nuclear, driven by rising energy demands from AI. Companies like Oklo, a U.S. firm backed by OpenAI’s Sam Altman, are exploring new opportunities.
Newcleo, a U.K.-based advanced modular reactor company using lead for cooling, moved its headquarters to Paris in 2024, aiming to deepen its European footprint. Although it still plans to launch a commercial reactor in the U.K. by 2033, the company has scaled back its British efforts.
Meanwhile, Tokamak Energy and First Light Fusion, both based in the U.K., are focused on nuclear fusion, a process that combines atoms to generate power. Though still in the lab stage, the U.K. has allocated £2.5 billion for a world-first fusion prototype.
The Next Generation of Engineers
The U.K. faces challenges in accessing relevant talent, crucial for scaling nuclear projects. While the country has world-class universities and technical know-how, real on-the-ground expertise is lacking, according to Cappelli. “What we need is real on-the-ground expertise, and that we are probably lacking for the simple reason that we haven’t been doing it for a very long time,” he said.
For Abeysundra, the U.K. stands out for its mindset. “There is so much knowledge, innovation, and that can-do attitude, which I don’t see as much in other nations,” she said, citing the U.K.’s historical trailblazing in the Industrial Revolution and offshore wind energy.
The U.K. government has positioned nuclear energy as a key element of the future clean energy workforce, launching the Clean Energy Jobs Plan in October. Its national roadmap for nuclear skills, set out in 2024, focuses on apprenticeships, PhDs, and upskilling mid-career workers. Industry-led initiatives like the Energy Skills Passport support oil and gas workers in gaining green skills.
Securing the Supply Chain
Perhaps the toughest challenge is the supply chain. Uranium, the fuel used in nuclear reactions, is dominated by just four countries, including Russia. Global demand for uranium could rise by nearly a third by 2030 and more than double by 2040, according to the World Nuclear Association.
The U.K. government has allocated funding to build up the supply chain and has committed to preventing the import of nuclear fuel from Russia by 2028. Fuel for Sizewell C will come from European or “Western suppliers,” noted Cappelli.
However, he raised concerns about the security of nuclear energy. “We have to build nuclear power plants, but we need to build the value chain,” he said. Workers, expertise, and funding are required for nuclear energy, but the supply chain is also key. Otherwise, there will be “the same issues that we had with gas,” a nod to the U.K.’s reliance on a single supplier. Instead of gas, it will be with uranium.