A new dawn for nuclear: UK Government backs Sizewell C and Rolls-Royce SMRs

On 10th June 2025, the UK Government unveiled a landmark investment package for the nuclear industry as part of the 2025 Spending Review, with Ed Miliband declaring the investments will usher in “a golden era of nuclear power”. The investment package comprises:

1. £14.2 billion towards the construction of Sizewell C nuclear power station on the Suffolk coast.
2. £2.5 billion investment pledge for the programme to develop and deploy Small Modular Reactors (“SMRs”) in the UK.

This marks the most significant nuclear funding commitment in decades (the latest plant to become operational in the UK was Sizewell B in 1995) and a tangible policy move towards expanding UK nuclear, which the Government teased earlier this year (Nuclear power: is the UK back in the race?).

Sizewell C

The Sizewell C power station – which is planned to incorporate two 1,630 MWe EPR (European Pressurised Reactor/Evolutionary Power Reactor) reactors and replicate the design used as part of the project at Hinkley Point C – is designed to generate enough electricity to power six million homes. The Government claims that their £14.2 billion investment will create 10,000 jobs (including 1,500 apprenticeships) during the peak of the construction phase. The Government also expects 70% of supplier contracts feeding into Sizewell C to go to British suppliers and hopes this will stimulate UK supply chains across a variety of sectors.

Whilst the funding is welcome, the Government has made it clear that this investment relates to the next four years of the project’s development only. This potentially creates uncertainty for investors over the longer-term, but we hope that the Government’s clear determination and commitment to expanding the UKs energy supply, including through nuclear, provides sufficient comfort to investors considering investment in the project. The Final Investment Decision (“FID”) on the funding model for Sizewell C is due to be issued in late summer of 2025.

SMRs

The second element of the Government’s double-barrelled announcement was that Great British Energy – Nuclear has selected Rolls Royce SMR as their preferred bidder to partner with to develop and deploy a number of Small Modular Reactors (“SMR(s)”). The initial investment will consist of at least three reactor units, each rated around 470 MWe, which will collectively be able to power approximately three million homes. The Government anticipate that this investment will generate 3,000 new skilled roles.

SMRs have been a hot-topic for several years, being seen as a solution to some of the problems larger nuclear projects present. By focusing on modular construction techniques, designing reactors for faster build times, reducing the physical scale of plants and working with advanced technologies (for example cooling technologies which do not require large bodies of water to be situated adjacent to the reactors); SMR projects require less upfront funding and shorter overall project lengths. The lower upfront capital requirements and shorter project lengths could mitigate the lack of long-term investment certainty which other projects in the industry battle with.

Our thoughts

These investments go beyond injecting capital into specific projects, and we expect that they will stimulate the wider nuclear industry as well as the supply-chain and connected industries.

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