© Supplied by Rolls-Royce SMR Funding for a £2.5 billion small modular reactor (SMR) programme will come from the GB Energy budget, Treasury documents confirm.
Heralding a “new golden age of nuclear”, the Labour government said it had selected Rolls-Royce SMR following a design competition, which attracted multiple bids.
The government also announced that state-owned Great British Nuclear, which ran the SMR competition, would become Great British Energy – Nuclear (GBEN).
Treasury documents released as part of this week’s spending review confirmed that the £2.5bn budget for the SMR programme would come from £8.3bn that the Labour government set aside last year for its flagship GB Energy venture.
As a result, more than 30% of Aberdeen-headquartered GB Energy’s budget for this parliament will go towards the Manchester-based Rolls-Royce SMR programme.
Potential deployment sites identified for the programme are located across the North West of England and Wales.
Questions over GB Energy strategy
In its founding statement for GB Energy, the government had said it would explore how “Great British Energy and Great British Nuclear can best work together, including considering how Great British Nuclear functions can be aligned with Great British Energy”.
© Supplied by Rolls-Royce SMRHowever, in its election manifesto Labour made no mention of nuclear energy in relation to its flagship GB Energy proposal.
The manifesto said GB Energy “will partner with energy companies, local authorities and co-operatives to install thousands of clean power projects, through a combination of onshore wind, solar and hydropower projects”.
Prior to the election, Labour leader Sir Keir Starmer also said floating wind would be the “priority” for GB Energy’s first investment.
GB Energy chairman Juergen Maier has also spoken of potential investments in wind farms, tidal power, green hydrogen and carbon capture.
The spending review announcement comes after reports earlier this year that Labour could cut GB Energy’s budget to finance an increase in defence spending.
While it appears a significant chunk of GB Energy’s £8.3bn initial budget will be spent on nuclear SMRs, Energy Voice understands the company is still considering an investment in the Green Volt floating wind project in Scotland.
But with GB Energy now left with around £6bn to spend until 2029, two thirds of which is set aside for financial transactions including loans and equity investments, questions remains over its future investment plans.
GB Energy – Nuclear
Rolls-Royce had submitted its SMR design as part of a government-run competition to deliver a new nuclear power plant by the mid-2030s.
SMRs are smaller than traditional nuclear power plants, typically with a power output of up to 300 MW, and are designed to be built under factory conditions.
Industry advocates say SMRs provide a lower cost, more flexible option, with the factory-built modular designs also opening the potential for exports.
The International Energy Agency projects that the global SMR market will reach nearly £500bn by 2050.
However, critics remain sceptical that SMRs will reduce energy costs compared to renewable sources and have raised safety and environmental concerns.
A 2024 report from the Institute for Energy Economics and Financial Analysis (IEEFA) found SMRs are “still too expensive, too slow to build and too risky to play a significant role in transitioning away from fossil fuels”.
