Small modular reactor: summary programme business case
Summary
DESNZ publishes the summary programme business case for Great British Energy - Nuclear's SMR programme. GBE-N received over £2.5 billion capital funding in the 2025 Spending Review for the first project and enabling activities. Wylfa on Anglesey was selected in November 2025 as host site for the first SMR, adding up to 1.5 GW. Funding model undecided but RAB is under consideration. Delivery will run through an operationally independent DevCo intended to attract private investment.
Why it matters
The document confirms the SMR programme is a fleet play: the first-of-a-kind project is explicitly framed as proof-of-commercial-viability for subsequent units, not as a one-off. The £2.5 billion is stated to cover one project plus enabling site work — meaning further Spending Reviews are required to fund a fleet. RAB under consideration signals consumer-funded financing (the Sizewell C model), which transfers construction risk to bill-payers before the plant generates. The DevCo structure matches the Sizewell C route: sovereign vehicle holds licences, attracts private co-investment, commercially insulated from day-to-day government. Overall programme costs are described as 'high level' — meaningful cost disclosure is deferred to future business cases.
Key facts
- •GBE-N capital funding: £2.5 billion+ from 2025 Spending Review
- •First SMR site: Wylfa, Anglesey (selected November 2025)
- •First project capacity: up to 1.5 GW
- •Peak construction jobs on site: up to 3,000
- •Delivery vehicle: operationally independent DevCo under GBE-N
- •Funding model: RAB under consideration, not decided
- •NESO full independence target: 1 October 2026
- •Programme phases: Phase 1 (enabling) → 2 (DevCo setup) → 3/4 (design, FID, stewardship)
Areas affected
Related programmes
Memo
What this is about
DESNZ has published the summary programme business case for Great British Energy – Nuclear's SMR programme. This is the formal HM Treasury Green Book justification for spending over £2.5 billion of public capital, allocated in the 2025 Spending Review, on the UK's first small modular reactor project at Wylfa on Anglesey. The document covers all five cases — strategic, economic, commercial, financial, and management — though at a level of detail that defers most hard numbers to future business cases.
The significance is structural, not technical. This document confirms that the government is treating the first SMR as a loss-leader for a fleet. The entire economic case rests on the assumption that building the first unit — expensive, slow, first-of-a-kind — will drive down costs for subsequent units through learning and modularisation. That logic is familiar from Hinkley Point C, where the same fleet argument was used to justify the strike price. The difference is that HPC's "fleet" (Sizewell C) took a decade to reach FID. Whether the SMR programme breaks that pattern depends on decisions this document explicitly leaves open.
Key points
£2.5 billion buys one project, not a fleet. The capital funding covers a single SMR project at Wylfa plus associated site enabling works. The document states that "additional capital spend will be confirmed at future Spending Reviews." Every subsequent unit requires a fresh fiscal commitment. The fleet is an aspiration, not a funded programme.
Up to 1.5 GW from the first project. This implies multiple SMR units on the Wylfa site — a single SMR is typically 300–470 MW depending on design. The phrasing "up to" is doing work: the actual capacity depends on which technology partner is selected and how many units the site accommodates.
Funding model undecided, but RAB is under active consideration. Paragraph 26 is the most consequential sentence in the document: "No decisions have yet been taken on a funding model, though consideration is being given to the Regulated Asset Base (RAB)." RAB means consumers pay during construction, before the plant generates a single electron. This is the Sizewell C financing model. It transfers construction risk — schedule overruns, cost escalation, technology failure — from investors and government to bill-payers. For a first-of-a-kind reactor design with no UK construction track record, that risk transfer is substantial.
The DevCo model mirrors Sizewell C. GBE-N will establish an operationally independent Development Company to hold licences, manage delivery, and attract private co-investment. This is the same corporate structure used for SZC: a sovereign-backed vehicle that gives private investors the comfort of government backing without direct government operation. The DevCo will eventually take over from GBE-N's Integrated Project Team, though the transition timeline is unspecified.
The economic case relies on system modelling, not project economics. The value-for-money assessment is based on power system modelling — what the additional 1.5 GW of firm low-carbon capacity is worth to the system — rather than on the project's standalone economics. This is the standard approach for nuclear business cases (SZC used the same method), but it means the project does not need to be commercially viable on its own terms. The non-power benefits (jobs, supply chain, regional growth) are listed alongside the system value, which is how governments justify projects that would not attract private capital unaided.
Overall costs are "high level." The document acknowledges that programme costs will be "refined in future business cases." For a summary business case, this is normal. But it means the £2.5 billion figure cannot be read as a total project cost. It is the first tranche of public funding. The total cost of a 1.5 GW SMR fleet at Wylfa — including construction, financing, fuel, decommissioning — is not disclosed.
Technology partner not named. The document refers to a "Technology Partner" throughout but does not identify the selected SMR design. The commercial case describes a "phased, collaborative contracting model with stage-gate off-ramps," which suggests the technology selection process is still live or the announcement is being held separately.
3,000 peak construction jobs. Described as "initial estimates." No breakdown between on-site and supply chain, no indication of duration, no comparison with the counterfactual (what those workers and that capital would produce elsewhere).
What happens next
The immediate next steps are Phase 1 (capability building and enabling workstreams) and Phase 2 (DevCo setup). The Development Consent Order preparation is already scoped as a programme enabler, which means planning and licensing work will proceed in parallel with technology selection and detailed design.
The critical decision is the funding model. If RAB is confirmed, Ofgem will need to establish a new regulated asset base — a process that took years for Sizewell C. If an alternative model is chosen (CfD, direct government equity, or a hybrid), the commercial structure changes fundamentally. This decision will be the subject of a future business case and likely a separate consultation.
Further Spending Reviews will determine whether the fleet materialises. The 2025 allocation funds site preparation and one project. Units two, three, and beyond require fresh commitments from future Chancellors — commitments that will compete with every other claim on public capital.
The technology partner announcement, the funding model decision, and the DCO application are the three milestones to watch. Until all three are resolved, the programme remains a statement of intent backed by first-tranche funding, not a committed fleet.
Source text
Department for Energy Security and Net Zero (2026) Small Modular Reactor Programme Summary Programme Business Case © Crown copyright 2026 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open- government-licence/version/3. Where we have identified any third-party copyright information you will need to obtain permission from the copyright holders concerned. i Contents Executive Summary __________________________________________________________ 1 Strategic Case ______________________________________________________________ 2 Economic Case _____________________________________________________________ 4 Commercial Case ___________________________________________________________ 5 Financial Case ______________________________________________________________ 6 Management Case __________________________________________________________ 7 Small Modular Reactor Programme: Summary Programme Business Case 1 Executive Summary 1. The programme business case (PBC) defined the Small Modular Reactor (SMR) programme’s strategic intent, delivery approach, scope, rationale, expected benefits, risks, commercial strategy, resource needs, and governance framework. It also sought approval in principle for very initial programme enabling activities. Small Modular Reactor Programme: Summary Programme Business Case 2 Strategic Case 2. Nuclear is critical to achieving net zero affordably, providing stable, low-carbon power that complements renewables and strengthens energy security. The government has commissioned the Strategic Spatial Energy Plan and continues to review how much nuclear capacity will be required by 2050 to meet net zero and energy security targets at least cost. The assumption at this stage, based on previous modelling and external estimates is that significantly greater nuclear capacity will be required than is currently in the operating and active nuclear project pipeline. 3. The government’s strategy is to build a nuclear programme that incorporates a range of technologies. Alongside the SMR programme, the government is seeking to complete Hinkley Point C (HPC) and has reached a final investment decision (FID) on the Sizewell C (SZC) project. In addition, the government has published the Advanced Nuclear Framework to provide a route to market for private small and advanced modular reactor projects. 4. GBE N was established in 2023 to deliver, enable, and advise on the government’s nuclear programme. Its purpose is to accelerate the deployment of clean, secure power to support UK energy security and economic growth. 5. The SMR programme, with its ambition to bring forward one of Europe’s first SMR fleets, will play a crucial role in meeting these objectives. 6. A fleet-based approach to SMR deployment is key to unlocking the full value of SMRs by leveraging learning and modularisation to drive cost and schedule reductions, incentivise manufacturers to invest in UK supply chains, and build investor confidence. Furthermore, private investment can help increase the scale of future deployments while reducing reliance on public funding. 7. The programme will achieve its aim by delivering the first-of-a-kind (FOAK) project to demonstrate the commercial viability of SMRs; ensure the project is set-up to attract private investment to support delivery (subject to future policy decisions); build UK capability for future deployment; and strengthen UK supply chains where it supports delivery. 8. In November 2025, Wylfa on Anglesey in North Wales was selected to host the UK’s first SMR project. The project will provide clean, secure energy and create significant economic opportunities for North Wales and the wider UK. Each SMR project will drive UK economic growth through: a. Increasing energy security: Through providing greater nuclear capacity the project reduces consumer and business exposure to volatile international oil and gas markets. b. Building Supply Chain Capacity: Alongside SZC and HPC, the programme will create a nuclear project pipeline that will increase investment in the UK supply chain. Small Modular Reactor Programme: Summary Programme Business Case 3 c. Creating High Quality Jobs: Initial estimates suggest the project could support up to 3,000 jobs on site during peak construction, and thousands more across the supply chain. d. Regional Growth: The regions where the project and related factories are located will benefit from significant investment. 9. To lay the foundations for a fleet that could attract private investment, the initial project will prioritise activities that enable future projects and build investor confidence. This includes safely delivering the initial units at pace and maximising learning between units. 10. Constraints and dependencies of the programme include dependency on realistic timelines, stable policy, policy decisions on funding and financing approaches, and a capable supply chain and workforce. It also requires streamlined planning, strong governance, stakeholder engagement, and alignment with national energy strategy. 11. A successful programme would result in SMRs providing clean, secure power – delivered faster and cheaper per unit and able to attract private investment. The UK has the capability to realise fleet benefits, accelerating future delivery, attracting supply chain investment, and making a significant contribution to the Growth Mission. Small Modular Reactor Programme: Summary Programme Business Case 4 Economic Case 12. Analysis indicates that delivering an SMR programme is likely to represent value for money, driving economic growth through increasing energy security and supporting UK supply chain growth. 13. The programme’s end benefits are low carbon energy on the grid, energy system savings, energy independence, energy system resilience, attractiveness to private investment, job growth, and UK supply chain capability. 14. The SMR programme will undertake initial enabling site work beyond the scope of the initial project - this seeks to retain the option of the site’s full potential being unlocked (subject to future decisions). Intermediate benefits will be monitored to guide benefits-led decisions. 15. The initial project will add up to 1.5GW of reliable, low-carbon power to the UK energy system, enhancing energy security and resilience while reducing reliance on imported energy. In line with the analysis done for SZC, power system modelling has been conducted to assess the value of the project over time. Initial modelling outputs suggest the project represents positive marginal value for money to the system with adjustments for uncertainty, risk and optimism bias applied. This modelling sits alongside the non- power system benefits, which include the potential to support ~3,000 jobs on site at peak construction, stimulating regional growth at the site and factory locations. Overall, the result is a robust value for money case for the SMR programme. 16. The programme’s critical success factors include alignment with strategic objectives, delivering strong public value, affordability within likely funding, supplier attractiveness and capability, ease of delivery, and enabling faster, lower-cost deployment of future SMR fleets. 17. Programme risks stem from the early-stage maturity of the SMR initiative, with key uncertainties around site characteristics and FOAK technology. Small Modular Reactor Programme: Summary Programme Business Case 5 Commercial Case 18. The commercial structure is as follows: a. Delivery Scope: Covers SMR plant construction, temporary works, and associated developments. GBE-N leads on site ancillaries and enabling works; the Technology Partner co-delivers SMR units, with GBE-N oversight. b. Delivery Capability: GBE-N will adopt a Development Company (DevCo) model to ensure operational independence, be able to attract private investment, and manage delivery. The DevCo will hold licences, secure financing, and operate the plant. c. Procurement Pipeline: There will be future procurements to enable the SMR programme. d. Commercial Strategy: Addresses contract interdependencies, market engagement, risk allocation, and contract management. 19. The key delivery elements are: a. SMR Plant: Includes Nuclear Island, Conventional Island, and Balance of Plant. b. Associated Developments and Site Ancillaries: Enabling infrastructure e.g. highways as well as the structures and facilities needed for construction but removed at project end. c. Site Operations: Encompasses site development, licensing, and safety case development. d. Fuel Strategy: GBE-N and the Technology Partner will co-develop a long-term fuel supply plan. e. Nuclear Operator: This will be a separate process. 20. The delivery model for the SMR programme will be to establish an operationally independent DevCo to lead delivery, hold licences, and attract private investment. Until this is established, GBE-N is building internal capability through an Integrated Project Team, combining in-house governance development with external expertise through a ‘make’ and ‘buy’ approach. This structure supports regulatory compliance, investor confidence, and a smooth transition to DevCo leadership. 21. The commercial strategy for the SMR programme addresses key risks like supply chain capacity and FOAK complexity, adopting a phased, collaborative contracting model with stage-gate off-ramps and tailored incentives. Small Modular Reactor Programme: Summary Programme Business Case 6 Financial Case 22. GBE-N received over £2.5 billion in capital funding through the 2025 Spending Review, enabling public funding for one SMR project and associated site enabling activities. 23. This funding supports early design, mobilisation, and site operations, with detailed annual cost breakdowns showing phased investment across key activities. 24. Overall programme costs are currently high level and are expected to be refined in future business cases. 25. The programme enablers include site licensing (e.g. Development Consent Order preparation) for development of the site, potentially beyond what is required for the project. It also includes site preparation. Additional capital spend will be confirmed at future Spending Reviews. 26. No decisions have yet been taken on a funding model, though consideration is being given to the Regulated Asset Base (RAB). Small Modular Reactor Programme: Summary Programme Business Case 7 Management Case 27. The SMR programme’s governance and management approach remains consistent with the programme’s scale and objectives. The programme’s Senior Responsible Owner, initially within DESNZ, will transfer to GBE-N at the appropriate milestone. 28. GBE-N’s Integrated Project Team is responsible for delivering the SMR project and will be stood up in a standalone DevCo. Governance includes monthly reporting to GBE-N and DESNZ, with escalation routes to senior boards and ministers. 29. The programme is structured into phased delivery: a. Phase 1 focuses on capability building and enabling workstreams b. Phase 2 initiates DevCo setup and assurance c. Phases 3 / 4 support design, FID preparation, and DevCo stewardship. d. Core activities across all phases include continuous improvement, and programme definition. 30. The SMR programme is subject to usual Government assurance, in line with being part of the Government Major Projects Portfolio. 31. The SMR programme manages benefits, risks, and change through structured, government-aligned processes. Benefits are being developed per the National Infrastructure and Service Transformation Authority (NISTA) guidance, with a focus on fleet deployment to optimise long-term value. 32. The SMR programme has the appropriate risk and change management mechanisms in place, in accordance with government best practice. This publication is available from: www.gov.uk/government/publications/small- modular-reactor-summary-programme-business-case If you need a version of this document in a more accessible format, please email alt.formats@energysecurity.gov.uk. Please tell us what format you need. It will help us if you say what assistive technology you use.