The UK Department for Business, Energy & Industrial Strategy (BEIS) on has announced the launch of a £120 million ($147m) Future Nuclear Enabling Fund (FNEF) to support development of new nuclear energy projects, stimulate competition in the industry and unlock investment across the UK. The FNEF will help to realise the government’s ambition to approve eight new reactors by 2030, as committed to in the British Energy Security Strategy in April. It will provide targeted, competitively-allocated government grants which will help nuclear construction projects, including small modular reactors (SMRs), to attract the private investment they need to help make them a reality.
Launching the Fund from Wylfa nuclear power station in Anglesey, Business and Energy Secretary Kwasi Kwarteng said: “Our new GBP120 million fund will push forward our plan to deploy a new fleet of nuclear power stations as part of a British nuclear renaissance.
By encouraging new companies to come forward and build in Britain, we can spur greater competition in the market to cut development costs so consumers benefit in the long-term. Nuclear is central to our long-term plan bolster the UK’s energy security with cheaper, cleaner, home-grown power, while creating thousands of high-skilled jobs across our country.
Energy Minister Greg Hands said the fund “is expected to support industry investment in nuclear, offer opportunities to projects in every region of the UK and create high-skilled jobs, as well as boosting the resilience and capability of UK nuclear supply chains”.
The government asked interested parties to register their interest in bidding for funding and inviting further information on potential future projects. It also invited nuclear stakeholders, who are not planning on bidding, to provide information from their experience that will help to mature fund design ahead of opening the bid window in summer 2022.
In addition, the government appointed Simon Bowen as the Industry Adviser to BEIS tasked with leading and helping to drive forward government proposals for a new Great British Nuclear (GBN) vehicle. The GBN, announced in April in the British Energy Security Strategy, will be charged with helping nuclear projects through the development process and realising the government’s ambition of generating up to 24GW of nuclear-sourced energy by 2050.Through the GBN body, the government expects to initiate the selection process in 2023 for further UK projects, with the aim of opening negotiations with the most credible projects “to enable a potential government award of support as soon as possible, including but not limited to the Wylfa site”.
BEIS said the FNEF is intended “to provide targeted support to address barriers to entry to the UK market by providing competitively-allocated grant funding to nuclear projects with credible proposals”. The government expects to concentrate funding on a small number of projects and aims to start awarding funding in the summer of 2022.
The government intends to take one project to a Final Investment Decision (FID) this Parliament and two projects to FID in the next Parliament, including SMRs, subject to value for money and relevant approvals. “This is not a cap on ambition, but a challenge to the industry to come forward and compete for projects and aim to come online this decade,” BEIS noted. “Depending on the pipeline of projects, these ambitions could see our nuclear sector progressing up to eight more reactors across the next series of projects, so we improve our track record to deliver the equivalent of one reactor a year, rather than one a decade.” This is in addition to existing investment of over GBP2 billion this Parliament in new nuclear, including GBP100 million to support the development of Sizewell C, and GBP210 million to develop SMRs.
BEIS noted that the UK has eight designated nuclear sites: Hinkley, Sizewell, Heysham, Hartlepool, Bradwell, Wylfa, Oldbury and Moorside. “To facilitate our ambitious deployment plans we will also develop an overall siting strategy for the long term without impacting the robust safety, security and environmental protections offered by UK regulatory regime.” Government will work with the regulators to understand the potential for any streamlining or removing of duplication from the consenting and licensing of new nuclear power stations, including possibly new harmonisation on international regulation. “We will also collaborate with other countries to accelerate work on advanced nuclear technologies, including both SMRs and advanced modular reactors (AMRs).