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The development of the UK’s first mini nuclear reactors is moving forward after Government-owned firm Great British Energy Nuclear [GBEN] signed a landmark contract with the developers, ministers said. Announcing the deal with Rolls-Royce SMR on Monday, the UK government said it allows work to start immediately on creating three small modular reactors, which should be able to generate enough low-carbon electricity to power the equivalent of around three million homes. These are mini nuclear power stations that can be installed on site as prefabricated modules, with hopes the technology will be quicker to build than more traditional plants, such as Hinkley Point C, and can provide a new route to clean, homegrown power. Alongside the contract, the National Wealth Fund a government-backed investment organisation announced that it plans to invest up to £599 million to support Rolls-Royce SMR through the next stages in designing the SMRs. Ministers say it is the first formal contract for delivering SMRs in Europe and will support the government’s efforts to shift towards clean power, which it argues will bring down prices and boost the UK’s energy security at a time of growing geopolitical tensions. The project is expected to support some 3,000 jobs at peak constructions and thousands more across the UK’s supply chain, the government added. Rolls-Royce SMR was selected as the preferred partner for delivering the technology in June last year after a competitive process. The government then allocated £2.6 billion for the programme and later announced that the first SMR nuclear power station would be built at Wylfa in North Wales by GBE-N. Chancellor Rachel Reeves said the investment ‘will strengthen our energy security, create skilled jobs and help to build a new generation of homegrown nuclear technology that will power our economy for decades to come’. ‘We have the right economic plan one where growth and clean energy go hand-in-hand and one that will benefit everyone across the country,’ she added. Since June, Rolls-Royce has been working with GBE-N to finalise the contract, which will require the two to deliver the project against a set of key milestones, ministers said. This starts with site-specific design, regulatory engagement, and planning processes, before a final decision will be made to approve the capital investment to proceed with construction. Energy Secretary Ed Miliband said: ‘At a time of global instability, this is a major milestone for Britain’s energy security. ‘We are backing a British company to deliver our first small modular reactors creating a generation of good jobs, driving growth and providing clean, homegrown power for decades to come. ‘Our clean energy mission is the only route to getting off the rollercoaster of fossil fuels and take back control of our energy independence.’ Simon Roddy, chief executive of GBE-N, said: ‘This agreement is a landmark moment for the nuclear industry. ‘Supporting skills, innovation and growing our industrial capability is essential to this partnership, and will ensure the UK is well-placed to deliver the next generation of nuclear infrastructure.’ To support the British nuclear industry more widely, GBE-N said it has already awarded over £350 million in contracts across the supply chain this year. Oliver Holbourn, chief executive of the National Wealth Fund, called the announcement a ‘significant moment for the future of our nuclear industry’. ‘The development and deployment of Rolls-Royce SMR’s technology here in the UK will create thousands of jobs and pave the way for an affordable, cleaner, and more secure energy system,’ he said. Earlier this year, the Treasury-owned organisation said it would base its strategy around growth opportunities which support the government’s green energy agenda and focus on several priority industries, including nuclear, hydrogen, AI and life sciences. The financing announced on Monday marks its second financing in nuclear following its lending to the Sizewell C nuclear power plant project that it announced last summer. In addition to its contract with GBE-N, Rolls-Royce SMR is the preferred SMR technology partner for the Czech utility CEZ, with plans to provide up to 3GW of low-carbon energy for the Czech Republic. Chris Cholerton, chief executive of Rolls-Royce SMR, said: ‘This contract unlocks the delivery of our first three units at Wylfa and brings certainty to the UK SMR programme. ‘With plans for up to six further units in Czechia, this announcement makes Rolls-Royce SMR the only company with multiple commitments in Europe.’ Rolls-Royce Holdings PLC shares fell 1.5% to 1,248.80 pence each on Monday afternoon in London. By Rebecca Speare-Cole, PA Sustainability Reporter Press Association: Finance source: PA Copyright 2026 Alliance News Ltd. All Rights Reserved.
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