Nuclear
The build-again story
▶Briefing7 Apr 2026
In one line
Britain is attempting to restart nuclear construction for the first time since Sizewell B completed in 1995, using a financing model that shifts construction risk to consumers, a regulatory system the government itself calls 'overly complex,' and an SMR programme that has yet to pour concrete.
The thesis
Nuclear is the only proven zero-carbon technology that provides firm, dispatchable baseload at scale. Britain needs it. The question is whether the institutional framework can deliver reactors at a cost consumers can bear and a pace that matters for decarbonisation.
The evidence is not encouraging. Hinkley Point C is years late and billions over budget. The government's response has been to layer new institutions — Great British Nuclear, a Nuclear Commission, a Regulatory Implementation Panel, an Advanced Nuclear Framework Pipeline — rather than simplify the underlying system. Each addresses a real problem. Together, they reproduce the complexity they were created to solve.
Nuclear's economics depend on political commitment over decades. A reactor that takes 10 years to build and 60 years to operate cannot be financed on market terms. The RAB model, CfD extensions, and government equity stakes bridge this gap — by transferring risk to consumers and taxpayers who have no exit if costs escalate.
Sizewell C and the RAB model
The Regulated Asset Base model (Nuclear Energy (Financing) Act 2022) allows Sizewell C to charge consumers during construction. Under Hinkley's CfD, EDF bore construction risk and consumers paid only once power flowed. Under RAB, consumers pay from day one. If the project overruns, the RAB grows and bills rise.
The logic: remove construction risk from developers, lower the cost of capital, reduce lifetime cost per MWh. DESNZ's 2025 generation cost estimates confirm nuclear LCOE is highly sensitive to hurdle rates — a 2 percentage point cut can reduce levelised cost by 20-30%. RAB achieves this by moving the risk, not eliminating it.
Sizewell C is a two-unit EPR replicating Hinkley's design. DCO granted 2022, now in pre-construction. The government holds a significant equity stake alongside EDF. Hinkley's strike price — £92.50/MWh in 2012, now over £130/MWh indexed — is the benchmark. Sizewell is supposed to be cheaper through replication, but Hinkley's cost trajectory (£18bn to over £30bn) undermines that argument. Replication benefits are real but depend on continuous build programmes, not one-off projects separated by decades.
The SMR programme
Great British Nuclear, established 2023, targets up to 24GW of new nuclear by 2050. The Advanced Nuclear Framework (March 2026) creates a government Pipeline for SMR, AMR and micro-modular projects. Developers submit plans on technology readiness, financing, siting, and operations. Pipeline membership provides a credibility signal to investors — not a guarantee. Projects must use uranium enriched below 20% U-235 and commence construction within 10 years. England and Wales only.
This addresses a real chicken-and-egg problem: developers cannot secure investment without government backing, cannot demonstrate viability without investment. No SMR has reached final investment decision in Britain. Rolls-Royce SMR is in Generic Design Assessment with ONR. The government has committed £300m for domestic HALEU supply chain including £196m to Urenco.
SMRs also face a €1.2bn third-party liability requirement identical to gigawatt-scale reactors — a per-MW insurance penalty that advantages incumbents. DESNZ is consulting on proportionate treatment.
The regulatory overhaul
In March 2026, the government accepted all 47 recommendations from the Nuclear Regulatory Review — the most significant structural reform in 20 years.
Key changes: ONR-DNSR merger by end-2028 (eliminating civil-military duplication). Nuclear Commission to resolve inter-regulator conflicts. Lead regulator model with ONR as default from March 2026. Expert panel to define tolerability of risk by June 2026. Environmental Outcomes Reports replacing EIA by December 2027. All targeted for delivery by end-2027.
Separately, National Policy Statement EN-7 (in consultation) sets planning policy for nuclear deploying after 2025. Without a designated NPS, every project faces higher planning risk — objectors can argue no established policy need. A 12-month planning delay on a £20bn project has a carrying cost in the hundreds of millions.
These are process reforms, not cost reforms. They address regulatory fragmentation. They do not address construction risk, supply chain depth, workforce availability, or the absence of a continuous build programme.
Why nuclear is structurally hard
Construction risk. First-of-a-kind EPRs systematically overrun. Flamanville: 12 years late, 5x over budget. Olkiluoto: 14 years late, 4x. Hinkley: tracking similarly. The only proven cost control is serial production (South Korea, China) — continuous programmes, not one-offs.
Political time horizons. A 2026 decision produces power in 2036. The government that approved it will not be in office. Every change creates policy risk, every review adds delay, every delay adds cost.
Baseload vs volatile markets. Nuclear generates flat, 24/7. With growing renewables, wholesale prices swing between high (no wind) and zero or negative (surplus). A nuclear plant running during negative prices destroys value. CfD insulates generators but at consumer cost.
The market test. Would private investors build nuclear without government support? The answer is no. Every nuclear project in Britain depends on administered prices, government equity, or consumer-funded construction. The cost-benefit calculation is made by government, not capital markets. The system value arguments — displacing gas, providing security, sustaining industrial capability — are real, but none tells you the right price.
What to watch
Sizewell C RAB parameters. Strike price and cost-sharing bands will determine actual consumer cost.
SMR FID. First project through the Pipeline to ministerial approval and construction commitment.
Regulatory delivery. 47 recommendations, 2027 deadline. ONR-DNSR merger needs legislation. The Nuclear Commission must resolve conflicts, not escalate them.
Nuclear output. Generation hit a record low in 2025 as AGR stations closed. Sizewell B is the only remaining plant. If it needs a lifetime extension, the CfD eligibility consultation becomes immediately relevant — cost falls on consumers.
EN-7 designation. Until the NPS is formally adopted, every new project carries planning risk.
▶Timeline
▶Open consultations (1)
DESNZ seeks evidence on nuclear third party liability limits for Small Modular Reactors and Advanced Modular Reactors, which by default face the same €1.2bn liability requirement as gigawatt-scale plants by 2027. The consultation runs until 1 June 2026 and covers both electricity-generating SMRs and non-electric applications like hydrogen production or industrial heat. Current liability arrangements require operators to secure insurance cover up to their liability limit, with lower limits available only for prescribed lower-risk sites.
▶High impact (4)
Government accepts 47 recommendations from the Nuclear Regulatory Review to consolidate nuclear regulation, merge ONR and DNSR by 2028, and establish a Nuclear Commission to resolve regulatory conflicts. Implementation commits to delivery by end-2027 subject to legislative timelines, with a Nuclear Regulatory Implementation Panel to hold government and industry accountable.
DESNZ launches the Advanced Nuclear Framework enabling privately-led SMR, AMR and MMR projects through a government Pipeline process offering limited endorsement and potential revenue support. Projects submit detailed plans across technology, finance, siting, and operations for structured assessment by DESNZ and Great British Energy-Nuclear. Pipeline membership provides a statement of credibility, access to discussions on CfD-style revenue support and high-impact low-probability risk protections, plus potential National Wealth Fund investment.
DESNZ proposes extending CfD eligibility to existing nuclear plants seeking lifetime extensions, requiring legislation changes to enable subsidised investment in plant refurbishments. The consultation runs until early 2025 with no specified implementation timeline. This would apply CfD strike prices to plants that currently operate merchant, potentially covering substantial refurbishment costs at Sizewell B and other AGR stations nearing end of design life.
DESNZ opens consultation on National Policy Statement EN-7, which will set planning policy for nuclear power stations deploying after 2025. The NPS replaces outdated planning guidance and determines how Planning Inspectorate assesses Development Consent Orders for new nuclear projects. This affects all nuclear development beyond current committed projects like Hinkley Point C and Sizewell C.
▶All publications (19)
DESNZ publishes Clean Power 2030 tracking metrics showing clean generation share, clean demand share, and emissions intensity. Annual data in GWh and percentage shares.
Energy Trends Q4 2025 and full-year 2025. Renewables reached a record 52.5% share of electricity generation (152.5 TWh). Wind hit 30.0% (87.1 TWh) and solar rose 37% to a record 20 TWh. Nuclear fell to a record low — low carbon share barely moved from 64.6% to 64.8%.
DESNZ launched an interactive map showing clean energy projects supported by government funding since July 2024, including National Wealth Fund and Great British Energy investments. The map displays investment amounts and job figures for featured projects. More projects will be added as they are announced.
DESNZ seeks evidence on nuclear third party liability limits for Small Modular Reactors and Advanced Modular Reactors, which by default face the same €1.2bn liability requirement as gigawatt-scale plants by 2027. The consultation runs until 1 June 2026 and covers both electricity-generating SMRs and non-electric applications like hydrogen production or industrial heat. Current liability arrangements require operators to secure insurance cover up to their liability limit, with lower limits available only for prescribed lower-risk sites.
DESNZ seeks evidence on whether nuclear third-party liability treaties designed for large reactors should apply unchanged to SMRs and AMRs, or require alternative arrangements. The consultation explores liability frameworks under the Paris/Brussels Conventions and CSC for advanced nuclear technologies. No specific changes are proposed — this is evidence-gathering to inform future policy.
DESNZ publishes updated levelised cost estimates (LCOE) for electricity generation technologies, with significant upward revisions for offshore wind and gas plants due to supply chain pressures and commodity price increases. Solar and onshore wind costs remain relatively stable. Hurdle rates increase 1-2 percentage points across all technologies, while carbon price assumptions no longer converge to the social cost of carbon, reducing long-term costs for gas generation.
The Chancellor's Mais Lecture outlines a strategy for investment-led growth through an 'active and strategic state', including energy security measures and industrial policy. Key energy commitments include lifting the onshore wind ban, investing in offshore wind and nuclear (Sizewell C, small modular reactors), and implementing the Fingleton Review to accelerate nuclear deployment. The government claims these measures have reduced gas imports by 17% since 2021 and enabled a £117 average reduction in the energy price cap.
UK Industrial Fusion Solutions appoints ILIOS as construction partner for the STEP Fusion programme at West Burton under a £200 million contract. The consortium will act as principal design and build contractor for the prototype fusion plant, managing all construction aspects through to planned operation in 2040. Construction is expected to support up to 8,000 onsite jobs at peak.
Government accepts 47 recommendations from the Nuclear Regulatory Review to consolidate nuclear regulation, merge ONR and DNSR by 2028, and establish a Nuclear Commission to resolve regulatory conflicts. Implementation commits to delivery by end-2027 subject to legislative timelines, with a Nuclear Regulatory Implementation Panel to hold government and industry accountable.
Government accepts Nuclear Regulatory Taskforce recommendations to streamline nuclear planning and regulation, with all reforms to be completed by end-2027. The taskforce found an 'overly complex' and 'bureaucratic' system that favoured process over outcomes. New £65.6m funding will train 500 doctoral students across 4 intakes, quadrupling current nuclear PhD numbers.
DESNZ has commissioned an independent review of the Nuclear Decommissioning Authority (NDA) led by Dr Tim Stone, focusing on strategic planning, project delivery, and financial management. The review runs January to Autumn 2026 and was mandated by HMT as a condition of the 2025/26 spending settlement. The NDA manages decommissioning of civil nuclear legacy sites with taxpayer funding.
DESNZ publishes quarterly data showing UK renewable electricity generation reached 35.5 TWh in Q3 2025, up 7.4% year-on-year, driven by 2.9 GW of new solar capacity and 1.0 GW of offshore wind. Total UK energy production hit a record low at 21.2 million tonnes oil equivalent, down 2.5%, with nuclear generation falling 28% due to maintenance outages. Renewables achieved 54.7% of electricity generation, just below Q2's record.
DESNZ launches the Advanced Nuclear Framework enabling privately-led SMR, AMR and MMR projects through a government Pipeline process offering limited endorsement and potential revenue support. Projects submit detailed plans across technology, finance, siting, and operations for structured assessment by DESNZ and Great British Energy-Nuclear. Pipeline membership provides a statement of credibility, access to discussions on CfD-style revenue support and high-impact low-probability risk protections, plus potential National Wealth Fund investment.
DESNZ is reviewing three nuclear installation regulations from 2017-2018 that govern prescribed sites, insurance certificates, and excepted matters. The post-implementation review seeks feedback on whether the regulations meet objectives and if less onerous alternatives exist. This is routine regulatory review, not policy change.
DESNZ proposes comprehensive cost recovery fees for energy infrastructure planning applications to replace current non-cost-reflective charges. The fixed fee model aims to generate revenue for resourcing planning decisions, with annual fee reviews and potential indicative timescales for applications without statutory deadlines. Consultation responses are due by spring 2026 with implementation following.
DESNZ proposes extending CfD eligibility to existing nuclear plants seeking lifetime extensions, requiring legislation changes to enable subsidised investment in plant refurbishments. The consultation runs until early 2025 with no specified implementation timeline. This would apply CfD strike prices to plants that currently operate merchant, potentially covering substantial refurbishment costs at Sizewell B and other AGR stations nearing end of design life.
DESNZ launches a call for evidence to inform a Nuclear Regulatory Taskforce examining defence and civil nuclear regulation. The consultation seeks case studies, historical data, and evidence for regulatory reform from industry stakeholders. No specific reforms are proposed — this is evidence-gathering to inform future taskforce recommendations.
DESNZ opens consultation on National Policy Statement EN-7, which will set planning policy for nuclear power stations deploying after 2025. The NPS replaces outdated planning guidance and determines how Planning Inspectorate assesses Development Consent Orders for new nuclear projects. This affects all nuclear development beyond current committed projects like Hinkley Point C and Sizewell C.
DESNZ begins scoping for a new Fusion Energy National Policy Statement to streamline planning consent for commercial fusion facilities. This is the first of two consultations, focusing on policy approach before drafting the actual NPS. The consultation runs for 8 weeks from May 2024.