In his Spring Budget, Jeremy Hunt said the Government will launch a Great British Nuclear scheme to “bring down costs” and “provide opportunities” in the supply chain with a view to nuclear power providing 25 per cent of the UK’s electricity generation by 2050.
He also launched a competition for small modular reactors (SMRs), which will be funded if the technology is proven to be viable, and he reiterated an announcement made in the autumn to invest £700m in Sizewell C nuclear power station planned in Suffolk.
Mr Hunt also said that he wants to invest up to £20bn to help develop carbon capture usage and storage (CCUS) technologies. These are designed to suck up carbon from the emissions from major polluting industries, such as the steel, glass or power. However, none of the new money for CCUS that Mr Hunt has promised will come before the next election, after which he may no longer be Chancellor. He said that he hopes that the money can help a sector which he said could support up to 50,000 jobs.
“We are world leaders in renewable energy so today I want to develop another plank of our green economy, carbon capture usage and storage,” Mr Hunt said.
Tom Gilbey, an equity research analyst at Quilter Cheviot, said that by reclassifying nuclear power, the Government is opening up a host of investment opportunities for the sector.
Mr Gilbey added: “Nuclear can be marmite topic when it comes to energy investment, but the Government has nailed its colours to the green mast by classifying it as ‘environmentally sustainable’. Ultimately this source of power is going to be needed if we want to get to net zero. Small modular reactors seem to be the preferred option, both in terms of pleasing residents, but also in getting up to scale quickly.
“The target of 25 per cent of electricity being created by nuclear power is ambitious, but if the last year has taught us anything, it is that these alternative sources of power will be critical if we are to achieve a secure flow of energy that is not at the behest of geopolitical issues.
“By reclassifying nuclear power, it opens up a whole host of investment opportunities for the sector, especially at a time where some countries are decommissioning their nuclear reactors.”
However Sue Ferns, the Prospect union's senior deputy general secretary, said: “While the long overdue launch of Great British Nuclear and green labelling for nuclear are welcome, the Chancellor’s announcements today have not met the scale of President Biden’s Inflation Reduction Act and the EU’s Green Deal Industrial Plan. Without comparable investment, the UK risks being left behind in the race for good green jobs and investment."