Written statement on Technology Selection Process Launch - Jul 18

Secretary of State for Energy Security and Net Zero (Grant Shapps): In March this year, as part of the Powering Up Britain strategy, the government set up Great British Nuclear (GBN). GBN will deliver the government’s long-term nuclear programme, driving forward nuclear projects in the UK. The organisation’s first priority is to administer a competitive process to select the best small modular reactor (SMR) technologies from around the world.

This SMR Technology Selection Process (TSP) will underpin government’s commitment to two nuclear Project Final Investment Decisions (FIDs) during the next Parliament. It will support the government’s ambition to deliver up to 24GW of nuclear power in the UK by 2050. This would mean nearly a quarter of Great Britain’s total power demands being met by low-carbon, secure nuclear energy, supporting the UK’s energy security, and contributing to our net zero targets. It would rebuild a UK industry that was the envy of the world following the opening of the world’s first commercial nuclear plant at Calder Hall, Cumbria, in 1956, and can be again.

Nuclear power as a share of the UK energy mix has been reducing as older plants naturally retire. However, we are acting to reverse this trend. As a major first milestone, the government invested £700m in Sizewell C last year, representing the first state backing of a major new nuclear project in over 30 years This builds on the significant EDF investment in Hinkley Point C since 2016 and the government is now working in partnership with EDF to develop Sizewell C, towards our objective of achieving a FID this Parliament.

Beyond Sizewell, GBN will promote a programmatic approach both to nuclear technology selection and project deployment to drive further progress. This will not only give the supply chain the long-term certainty it needs to invest in homegrown capability and skills, it will in time offset plant retirements and strengthen UK energy independence. GBN now has in place an experienced interim executive team, including Simon Bowen as Chair and Gwen Parry-Jones as Chief Executive Officer. Since April, swift progress has been made on the Powering Up Britain commitment to gather market intelligence to inform GBN planning.

Today GBN launches the next phase of the SMR TSP and invites SMR vendors to register their interest. This is an important next step in identifying those companies best able to reach a project FID by the end of 2029, which could result in billions of pounds of public and private investment in SMR projects. It demonstrates the Government is delivering on its priorities to partner with the nuclear industry and jointly spearhead the future of nuclear technologies, to secure decarbonised and domestically-generated electricity to power the economy. The Government recognises the importance of moving quickly to uphold our energy security and net zero ambitions, and is seeking to deliver the fastest competition of its kind in the world.

The Contract Notice, published today, sets out an intention to enter into a development contract with those successful bidders, with the option of pursuing a project through FID to construction and subsequently operations, providing a route to market for successful bidders. In practice, this means offering chosen technologies an unprecedented level of support: funding to support technology development and site-specific design; a close partnership with GBN, which will be ready and able to provide developer capability; and support in accessing sites.

As a first step in this process, interested parties will be required to respond to a Selection Questionnaire. Once this stage is complete, GBN will down-select those technologies which have met the criteria, and then enter into detailed discussions with those companies as part of an Invitation to Negotiate phase. The Government will seek to decide as soon as possible which technology or technologies to support. This process is designed to afford government flexibility in the number of projects it chooses to support, and the ability to support successful projects through the construction phase subject to approvals and if this proves value for money.

This SMR TSP is a further significant step in the revival of nuclear power in this country. The government remains strongly committed to the full spectrum of nuclear technologies and is continuing to consider how all technologies could further contribute to UK energy security and meeting climate change targets.

As we seek to increase diversity across the pool of nuclear technologies available in the UK and to strengthen our nuclear sector supply chain, I can announce today up to £157m of grant funding awards across three existing nuclear programmes:

• Up to £77.1m from the Future Nuclear Enabling Fund, subject to due diligence of short-listed applicants, with details to follow shortly.

• Up to £58m to National Nuclear Laboratory, Ultra Safe Nuclear Corporation and the UK’s Nuclear Regulators for the development and design of a form of Advanced Modular Reactors (AMRs) and their fuels; and

• £22.3m from the Nuclear Fuel Fund which will enable eight projects to develop new fuel production and manufacturing capabilities in the UK. The successful companies are Westinghouse, Urenco UK, Nuclear Transport Solutions, and MoltexFLEX.

The government is going further by today committing to consult in the autumn on alternative routes to market for new nuclear projects, in addition to that provided by the TSP. Government is particularly keen to understand where GBN and the government could support the private sector to bring forward projects, and to further explore the role of nuclear energy in industrial decarbonisation as well as low-carbon heat and hydrogen production. The evidence received will help shape future policy and ensure that the UK’s nuclear programme is as comprehensive and inclusive as possible. Further details will follow on both this and the nuclear roadmap, which we have committed to publish by the end of the year and which aims to set out further next steps for civil nuclear.