The United Kingdom, a pioneer in commercial nuclear energy, aims to reclaim its glory days and unlock a new era of nuclear power. However, this ambitious goal comes with significant challenges, especially considering the country's historic struggles in the nuclear sector.
The UK's nuclear journey began with great promise. Once upon a time, it boasted more nuclear power stations than the US, USSR, and France combined, and was a global leader in atomic energy production until the 1970s. But since then, progress has stalled. The last new reactor to come online was Sizewell B in 1995, and today, the UK faces the daunting task of catching up with its European peers, who have made significant strides in nuclear energy generation.
The UK government is determined to turn this around and has set an ambitious target: by 2050, a quarter of the country's power is to come from nuclear sources. Nuclear energy is seen as a reliable, low-carbon energy source that can provide a consistent baseload to complement intermittent renewable energy sources.
"There's a clear momentum building," says Doreen Abeysundra, founder of Fresco Cleantech. This momentum is driven, in part, by geopolitical tensions that have pushed energy security and independence to the forefront of public agendas.
However, the UK's Nuclear Regulatory Taskforce has identified "systemic failures" in the country's nuclear framework, highlighting fragmented regulation, flawed legislation, and weak incentives as key issues. The government has committed to implementing reforms, with a plan expected within the next three months.
The UK is taking a two-pronged approach, investing in both large, traditional nuclear projects and smaller, next-generation reactors known as Small Modular Reactors (SMRs).
British company Rolls-Royce has been chosen as the preferred partner for SMRs, which are essentially containerized nuclear reactors designed for factory manufacturing. Many SMRs incorporate passive cooling techniques, which proponents argue make them safer and more cost-effective.
Nuclear energy has long faced criticism from environmentalists due to concerns about radioactive waste and disasters like Chernobyl. The UK's own Windscale plant, which suffered a meltdown in 1957, remains a stark reminder of the potential risks.
SMRs, with their smaller scale and potential for on-site manufacturing, offer a more flexible and potentially safer alternative to traditional nuclear plants. Most SMRs use light water reactor technology, similar to the planned large-scale Sizewell C plant, but on a smaller scale. Other, more experimental "advanced" reactor designs are also being explored, including those that use alternative cooling solutions or solvents in the process of separating and purifying nuclear materials.
The UK's first SMR project will be located at Wylfa in Wales, although a timeline for completion has not yet been announced. The site is expected to house three SMRs, with potential for expansion over time.
In September, the UK signed a deal with the US to strengthen commercial ties on nuclear power and streamline licensing for firms looking to build on the other side of the Atlantic.
Despite these efforts, some experts remain cautious. Ludovico Cappelli, portfolio manager of Listed Infrastructure at VanLanschot Kempen, notes that while SMRs have the potential to be "game changers," none are currently producing electricity under commercial operations. From an investment perspective, this lack of proven commercial success is a cause for concern.
Paul Jackson, Invesco's EMEA global market strategist, adds that while SMRs offer flexibility, large power stations are still needed to provide the consistent baseload required to offset the intermittency of renewable energy sources.
The UK government body Great British Energy-Nuclear is tasked with identifying sites for additional large-scale plants, having already acquired one in Gloucestershire and the site in Wales.
"We are reversing a legacy of stagnation to unlock a new era of nuclear power," a spokesperson for the UK government's Department for Energy Security and Net Zero told CNBC. "Sizewell C will provide clean electricity for six million households for at least six decades, and the UK's first SMRs at Wylfa will bring energy security to three million homes."
The UK's strong legacy in nuclear energy provides a solid foundation for these ambitious plans. The country pioneered innovative funding mechanisms, such as the Contract for Differences used for Hinkley Point C, to make large-scale nuclear projects more investable and less reliant on direct government funding.
The Regulated Asset Base (RAB) mechanism, first used for nuclear at Sizewell C, further de-risks investments by guaranteeing a fixed price for electricity generated over a long period, even if construction delays occur.
Private market investors are increasingly interested in next-generation nuclear as a way to meet soaring energy demands driven by AI, leading to a surge in young companies trying to build out facilities.
The UK's advanced modular reactor hopeful, Newcleo, which uses lead for cooling, moved its headquarters from London to Paris in 2024, a strategic move to deepen its European footprint. While Newcleo still plans to have a commercial reactor operational in the UK by 2033, the firm has scaled back its British efforts.
The UK is also home to Tokamak Energy and First Light Fusion, both focused on nuclear fusion - a process that generates power by combining atoms. While fusion technology has yet to leave the lab, all current nuclear power comes from fission, where atoms are split.
The UK government recognizes the importance of nuclear energy in the future clean energy workforce and has released a Clean Energy Jobs Plan and a national roadmap for nuclear skills, focusing on apprenticeships, PhDs, and upskilling mid-career workers.
However, one of the biggest challenges the UK faces is access to relevant talent and expertise, crucial for effectively scaling nuclear projects. While the country boasts world-class universities and technical know-how, real-world expertise in nuclear energy is lacking due to the long hiatus in new nuclear power plant construction.
"What we need is practical, on-the-ground expertise, and that's something we're probably lacking because we haven't been actively involved in the nuclear sector for a very long time," Cappelli explains.
Abeysundra believes the UK's strength lies in its mindset and innovative spirit. "There's a wealth of knowledge, innovation, and a can-do attitude here that I don't see as much elsewhere. The UK has a history of trailblazing, from the Industrial Revolution to the establishment of offshore wind energy."
The final and perhaps toughest challenge is securing the supply chain. Uranium, the fuel used in nuclear reactions, is dominated by just a few countries, including Russia. With global demand for uranium expected to rise significantly by 2030 and more than double by 2040, the UK will need to ensure a reliable and diverse supply chain to support its nuclear ambitions.
The UK 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, but Cappelli cautions that this still leaves the UK vulnerable to supply chain issues, similar to those experienced with gas.
"We need to build not just the nuclear power plants, but also the entire value chain," Cappelli adds.
The UK's journey to unlock a new golden age of nuclear power is fraught with challenges, but with the right reforms, investments, and talent, it may just be possible.
