UK Targets Nuclear Comeback Amid Challenges

The U.K. was the birthplace of commercial nuclear energy, but it now generates only a small portion of its electricity from it-major investments are underway to change this.

sarah

Dec 6, 2025 - 14:14

UK Targets Nuclear Comeback Amid Challenges

The U.K. was the birthplace of commercial nuclear energy, but it now generates only a small portion of its electricity from it—major investments are underway to change this.

The country once had more nuclear power stations than the U.S., USSR, and France combined. It was a global producer until 1970, but hasn't completed a new reactor since Sizewell B in 1995.

Today, the country is not crowned a leader in atomic energy, but rather the most expensive place in the world to build a nuclear project.

According to the latest data from the International Energy Agency, nuclear energy will account for just 14% of the U.K.'s power supply in 2023, lagging behind its European peers and far behind France (65%), which is the leader.

The goal is to change this and have a quarter of the U.K.'s electricity come from nuclear sources by 2050. Nuclear is considered a good bet, as gas is a low-carbon, consistent energy source that can serve as a baseload to supplement intermittent sources like renewables.

"There's been a very clear momentum," said Doreen Abeysundra, founder of consultancy Fresco Cleantech. This is partly due to geopolitical tensions, which have brought energy security and independence to the public agenda.

However, the U.K.'s Nuclear Regulatory Taskforce called for immediate reforms after identifying "systemic failures" in the country's nuclear framework. It found that fragmented regulations, ill-conceived laws, and weak incentives held the U.K. back as a nuclear powerhouse. The government has pledged to implement the taskforce's guidance and is expected to present a plan to do so within three months.

Big or Small

U.K. The UK is placing its bets on both proven large nuclear projects and smaller, next-generation reactors called Small Module Reactors (SMRs).

The British company Rolls-Royce has been selected as the country's preferred partner for SMRs, which are essentially containerized nuclear reactors designed to be built in a factory. Many incorporate passive cooling technologies, which supporters say make them safer and cheaper.

Nuclear power has long been criticized by environmentalists due to radioactive waste and disasters like Chernobyl. In fact, the UK's first commercial plant, Windscale, melted down in 1957, becoming the worst nuclear accident in history.

Most SMRs use light water reactor technology – think of the planned large-scale nuclear plant, Sizewell C, which Abeysundra said has simply been "scaled down" – which is tried and tested.

Other designs, called "advanced" reactors, are more experimental. For example, those that replace the cooling solution or solvent typically used in the process of separating and purifying nuclear material.

The U.K.'s first SMR will be located in Wylfa, Wales, although no completion timeline has been provided. This site will have three SMRs, with more to be added over time.

In September, the country signed a deal with the U.S. to build stronger commercial ties on nuclear power and simplify licensing for firms building on the other side of the Atlantic.

However, Ludovico Capelli, portfolio manager for listed infrastructure at Van Lanschot Kempen, said, "First of all, at the moment, not a single SMR is actively generating less than four revenue-generating units. They will all be in the 30s at the most."

He said that although SMRs are a "game changer" due to their ability to power individual factories or small towns, the days of their commercial operation are still a long way off. He further added that from an investment perspective, "it's still a bit scary."

Paul Jackson, EMEA Global Market Strategist at Invesco, said, "To secure the large baseload needed to meet the disruption of renewable energy, we're still looking at large power stations."

SMRs "probably" have a role to play—"they could clearly be faster"—but their rollout will take time, Jackson said, raising doubts about the U.K.'s ability to become a leader in nuclear, as France and China are already far ahead.

The U.K. government body Great British Energy-Nuclear is identifying a site for another large plant, having already secured one in Gloucestershire in the west of England and another in Wales.

U.K. A spokesperson for the government's Department for Energy Security and Net Zero said, "We are reversing a legacy of no new nuclear power to usher in a golden age for nuclear, securing thousands of good, skilled jobs and billions in investment." They added, "Sizewell C will provide the equivalent of six million homes with clean electricity for at least six decades, and the UK's first small modular reactors at Wylfa will power the equivalent of three million homes, delivering energy security."

Innovation in Funding

The U.K. has a strong legacy to build on. It introduced new funding mechanisms to make large-scale nuclear projects investable, making them less dependent on direct government funding, such as Contracts for Difference, which was used for Hinkley Point C.

This mechanism guarantees a fixed price for generated electricity over a long period of time to reduce the risk of investing in an industry known for running over time and budget. Hinkley Point C was initially expected to cost £18 billion (about $24 billion), but the bill gradually increased.

Cappelli said of nuclear investment, "It fixes one part of the equation, price risk," but the other risk is construction delays.

The Regulated Asset Base (RAB), first used for nuclear at Sizewell C, attempts to address this. Investors begin receiving payments the day they write a check for a nuclear project, not the day it begins operation. Sizewell C is expected to cost £38 billion to build.

Private market investors are increasingly interested in next-generation nuclear as a way to meet growing energy demands from AI, resulting in several young companies attempting to build facilities. Perhaps the most famous is Oklo, a U.S. firm that was taken public by a special purpose acquisition company (SPAC) founded by OpenAI's Sam Altman.

Nucleo, a U.K.-based company with a candidate for an Advanced Modular Reactor that uses lead for cooling, moved its headquarters from London to Paris in 2024—a strategic move to deepen its presence in Europe. At the time, it told World Nuclear News that it still intended to build nuclear power in the U.K. by 2033. It plans to launch a commercial reactor in 2019, but the firm has since scaled back its British efforts.

Meanwhile, Tokamak Energy and First Light Fusion are based in the U.K. They both focus on nuclear fusion, the process of combining atoms to generate electricity, although the technology hasn't yet emerged from the lab. All of today's nuclear power comes from fission, where atoms split. In June, the U.K. announced £2.5 billion for the world's first fusion prototype. The Next Generation of Engineers

The U.K. faces challenges accessing the right talent, which is crucial to effectively scale projects. The country is known for its world-class universities and technical know-how, "but it's mostly bookish knowledge," said Capelli of Van Lanschot Kempen.

"We need real expertise on the ground, and perhaps we lack that because we haven't been doing it for very long," he said.

For Abeysundra, there's one area where the U.K. stands out: its mindset. "There's a lot of knowledge, innovation, and a 'can-do' attitude here, which I don't see as much in other countries," he said, pointing to the U.K.'s leading role in the Industrial Revolution and the establishment of offshore wind energy.

The U.K. government, in its Clean Energy Jobs Plan released in October, identified nuclear energy as a key element of the future clean energy workforce, while its National Roadmap for Nuclear Skills, scheduled for 2024, focuses on apprenticeships, PhDs, and upskilling mid-career workers. Industry-led initiatives like the Energy Skills Passport also help oil and gas workers acquire green skills.

Securing the Supply Chain

Perhaps the most difficult issue, however, is the supply chain.

Uranium, used to power nuclear reactions, is dominated by just four countries, including Russia. According to the World Nuclear Association, global demand for uranium could increase by nearly a third by 2030 and more than double by 2040, further increasing dependence on a select few countries and putting pressure on developers.

The U.K. government has allocated funding to build a supply chain and is committed to stopping nuclear fuel imports from Russia by 2028. Cappelli explained that fuel for Sizewell C will come from European or "Western suppliers."

However, the question arises for him: how safe is nuclear power really? Cappelli continued, "We have to build nuclear power plants, but we also have to build a value chain."

He said that nuclear power requires workers, expertise, and funding, but the supply chain is also crucial. Otherwise, "we'll have the same problems we had with gas," pointing to the U.K.'s dependence on a single supplier. Instead of gas, it will be with uranium.