£120m fund launched to advance nuclear developments

The government has launched its £120m Future Nuclear Enabling Fund (FNEF) in a bid to fast-track nuclear energy proposals.

The primary objective of the FNEF is to help mature potential nuclear projects ahead of a government process to select the next schemes.

Interested parties are being invited to register their interest ahead of the formal bidding round, which is due to take place this summer.

The Department for Business, Energy & Industrial Strategy (BEIS) said it expected the fund to “support a limited number of nuclear projects”, to develop their design and business cases ahead of the government’s planned “selection process in 2023, with the intention that government will enter negotiations with the most credible nuclear projects”.

However, a BEIS report adds: “Any successful FNEF award will not influence whether projects can participate in the selection process in 2023 or whether they can receive any other government awards in the future.

“Additionally, those projects who choose not to bid for the FNEF, or bid and are unsuccessful, will not be excluded from the anticipated selection process in 2023 or consideration for other future government awards.”

The FNEF will be open to established nuclear market players and new entrants, including consortia, and may include technology vendors, developers, and/or operators.

To be eligible to apply to the FNEF, bidders must be UK-based or have a UK company branch if headquartered overseas. Bids must incorporate nuclear fission, which can be GW-scale, small modular reactors or advanced modular reactors.

Bidders must demonstrate ambition and present a credible plan for a commercial operation date by the early 2030s, as well as demonstrating that their proposal is a credible source of long-term on-grid electricity.

As announced in the British Energy Security Strategy in April, the “government’s long-term ambition is to increase the deployment of civil nuclear power to up to 24GW by 2050 – about 25% of our projected 2050 electricity demand – as well as taking one project to a Final Investment Decision (FID) in this parliament and two projects to FID in the next parliament, including small modular reactors, subject to technology readiness, value for money and relevant approvals”.

The government has previously said that development of EDF’s planned £20bn Sizewell C nuclear plant is currently favoured as the project to take to FID during this parliament.

In March, the government announced its intention to take a 20 per cent stake in Sizewell C. That came just two months after business secretary Kwasi Kwarteng announced an initial contribution of £100m to Sizewell C, with the aim of developing the project and boosting investor confidence.

The prime minster recently met with leaders in the nuclear industry for talks on future energy projects. Senior leaders from Balfour Beatty, Mace and L&G participated.

In October 2021, the government outlined how it plans to fund new nuclear power plant construction in the UK, with the adoption of a Regulated Asset Base (RAB) funding model. As per the model, UK energy bill payers would part-fund the construction of new plants through their energy bills, which, according to the government, would take the pressure off private investors and reduce the whole-life costs.

Seven out of eight nuclear power plants in the UK will be switched off by 2030. EDF is currently building Hinkley Point C, which is expected to be operational by 2026. Sizewell C could power the equivalent of six million homes.

Several development ideas for the Wylfa Newydd site on Anglesey are also in development, including proposals by Rolls-Royce to use the site for its small modular reactors.