Guidance

Energy Security Bill factsheet: Great British Nuclear (added 9 May 2023)

Updated 1 September 2023

Government’s ambition is to ramp up nuclear energy capacity in the UK to up to 24GW by 2050. Great British Nuclear (GBN) will help us scale up our nuclear programme and match global competition.

Why are we legislating?

Nuclear energy will play a key role in meeting the UK’s energy security and net zero ambitions. The government is committed to a programme of new nuclear projects beyond Sizewell C, giving industry and investors the confidence they need to deliver projects at speed. The aim of GBN is to facilitate delivery of this programme of new nuclear projects.

GBN will de-risk new nuclear development by, among other things, co-funding selected technologies through their development. This will provide greater certainty for investors to develop projects over the long term required to deliver new nuclear generation capacity onto the electricity grid.

We are legislating to ensure that GBN has the long-term operational mandate needed to carry out the role that government intends for it. The legislation will set out GBN’s role in facilitating deployment of nuclear reactors in Britain.

How the Bill will achieve this

Designation

The Bill will give the Secretary of State the power to designate a publicly owned company as GBN. Being a company, rather than a statutory corporation like the Nuclear Decommissioning Authority for example, means that GBN’s general powers will be derived from the Companies Act 2006. This ensures that GBN can do anything that a company can do in the nuclear sector, as long as it does so in line with objects set by government and the other provisions of the legislation. For example, GBN may set up subsidiaries to lead individual projects, which could be joint ventures with the private sector.

Role

GBN’s statutory role, as set out in the Bill, will be to facilitate nuclear generation projects, in furtherance of policy set by government. This reflects the intention that GBN will be a delivery body, helping implement government policies and its nuclear programme. While it may facilitate projects, including by providing information and expertise to government, it is government that will set the programme and related policies and take final decisions on all matters. Further, this reflects the intention to give GBN a long-term mandate and equip it to deal with a changing landscape so that that it remains fit for purpose as the nuclear industry evolves. GBN’s priorities and activities will be agreed between the sponsoring department and GBN as part of annual business planning, with relevant documents and reports publicly available in the interests of transparency.

Power of direction

To guarantee alignment with government policies and intentions, the Bill will give the Secretary of State the power to issue directions to GBN, with which it must comply, as well as guidance which it must have regard to. The Secretary of State will be required to first consult with GBN before issuing directions and guidance, ensuring that they are only used where they are necessary and appropriate, respecting GBN’s relevant expertise. Directions will be laid before Parliament and published to ensure appropriate levels of transparency and facilitate scrutiny.

Financial assistance

The Bill will give the Secretary of State the power to provide financial assistance to GBN. This funding will be critical to enabling GBN to co-fund technologies through their development, in line with the government’s commitment to take two final investment decisions next parliament. Provision of such assistance will need to comply with procurement law, subsidy control, and all other legal and regulatory requirements.

FAQ

Why do we need new nuclear?

Nuclear power is critical to Britain’s energy security and net zero objectives. It provides continuous power, which brings stability to the grid, offering a solid foundation for power generation on which renewable technologies can build.

It is very low carbon. Nuclear technology generates zero direct carbon or other greenhouse gas emissions and has one of the lowest life-cycle emissions rates among generating technologies.

It is a proven technology. Nuclear is a well-established technology with around 440 reactors operating globally in 50 countries. It is the world’s second largest source of low-carbon power, providing approximately 29% of the world’s low-carbon electricity in 2019.

It is energy dense. Nuclear produces a significant amount of energy from a very small land area. Hinkley Point C, for example, will power around 6 million homes from a just a quarter of a square mile.

We are not alone in this view. The Committee on Climate Change, the International Energy Agency and UN Economic Commission for Europe have all highlighted the role for new nuclear electricity generating capacity, in partnership with renewables, as a key element of achieving net zero.

What will GBN do?

GBN is tasked with facilitating delivery of government’s nuclear programme. Its focus will be to de-risk new nuclear development by co-funding projects at the critical early development stage and acting as an expert adviser throughout the process.

Having launched within the auspices of the current legal framework in March 2023, the first priority for GBN is to lead a competitive process to select the best Small Modular Reactor (SMR) technologies for investment. This commenced in April 2023, with market engagement as the first phase. The second phase – the down-selection process – will be launched in the summer, with an aim to assess and select the leading technologies by autumn. GBN will deploy government funding to support the development of these selected technologies.

GBN will also work with government on access to potential sites for new nuclear projects to achieve our long-term ambition.

While the initial focus for GBN will be on SMRs, it will support government consideration of further large Gigawatt-scale projects to help us deliver on our net zero goals.

How do we know this will be good value for money?

Nuclear projects are highly complex infrastructure projects. GBN will be funded to lead delivery of our programme of new nuclear projects. It will reduce the delivery risk of nuclear projects and have the potential to make substantial savings far beyond the cost in setting up a new body.

Nuclear projects require significant amounts of development and construction capital. Having a delivery body to propose and deploy development capital, structure financing arrangements and be involved in projects via development companies will improve industry confidence in the UK and reduce risks associated with nuclear projects.

Is this a nationalisation of the nuclear industry?

No. GBN will not be a state utility. It is intended to be an enabler for industry to achieve government’s ambition for nuclear energy. Its particular focus will be on de-risking the early stages in the development of nuclear projects.

Background

Britain was the world’s first civil nuclear nation, and nuclear energy has powered homes and businesses in this country for over 60 years. However, we have allowed our nuclear fleet to decline since the 1990s, from generating 28% of all UK electricity in 1997 to just 15% in 2021. This is expected to fall substantially in the coming years as existing reactors are decommissioned. Recent attempts by technology vendors to build new nuclear in Britain have made it clear that without state backing Britain will not be able to deliver on its commitment to nuclear, as set out in the Energy White Paper (2020) and the Net Zero Strategy (2021).

The British Energy Security Strategy was published in April 2022 in response to rising global energy prices following the invasion of Ukraine. It sets out how the UK will accelerate homegrown power, including an ambition for up to 24GW of new-build civil nuclear generating capacity by 2050. It committed to establishing a civil nuclear projects delivery vehicle – GBN –to help projects through every power stage of the development process and develop a resilient pipeline of new builds.

A scoping exercise took place over summer 2022 with a team of industry experts supported by civil servants and industry secondees, to develop recommendations to government on the proposed role of GBN. The March 2023 Powering Up Britain plans announced the launch of GBN and that it would commence work on the technology selection process. GBN is currently operating via an existing government company, British Nuclear Fuels Limited, subject to legislation being passed and commenced and consideration of the company to be designated under its provisions.

Further information

The following provide more information on GBN and the government’s wider strategy for nuclear energy:

• The Great British Nuclear website
• Powering up Britain (2023)
• Powering Up Britain: Energy Security Plan (2023)
• Powering Up Britain: Net Zero Growth Plan (2023)
• The British Energy Security Strategy (2022)
• Net Zero Strategy: Build Back Greener (2021)
• Energy white paper: Powering our net zero future (2020)
• The Ten Point Plan for a Green Industrial Revolution (2020)