By Adam Treger

Energy is a national security domain of increasingly critical importance. Every facet of our modern defence and economic capabilities relies on a stable, abundant, and secure energy supply. Our future is inextricably linked to AI, which is unprecedented in its energy demand. The Russia–Ukraine conflict saw Russia cut its supply of oil and gas to Western Europe while simultaneously targeting key Ukrainian energy infrastructure. Meanwhile, the West is falling behind China in energy generation: between now and 2040, US generation capacity is projected to grow from 1 to 2 TW, while China’s will increase from 3 to 6 TW (1 TW can power roughly 800–1,000 million homes). Nuclear power is the only low-emission, cost-efficient, and consistently generating solution to overcome this shortfall.

At first glance, the publication of the 2025 Spending Review spells good news for the UK’s nuclear landscape, with £14.2bn earmarked for investment in Sizewell C, the first state-backed nuclear plant since 1988. However, in reality, this is another example of wasteful government spending. HM Treasury is stepping in to backstop one of the world’s most expensive nuclear projects—estimated to cost £40bn—a project which will not begin generating electricity for another decade. When Sizewell C does eventually come online, its substantial cost (assuming no delays or overruns like those seen at Hinkley Point C, now expected to cost £46bn) will mean it produces electricity at £170–186 per MWh over its lifespan. This compares to Ofgem’s latest forward electricity delivery price—the wholesale price at which energy companies buy electricity—of £78 per MWh. If Sizewell C were operational today, it would run at a significant loss, despite being subsidised by the taxpayer.

It is encouraging, therefore, that the Spending Review has also allocated £2.5bn to build the UK’s first Small Modular Reactor (SMR), in partnership with Rolls-Royce. This new advanced nuclear technology operates on a smaller scale than conventional plants but is far more efficient. The Rolls-Royce SMR project is estimated to cost closer to £2bn and could produce electricity at £40–60 per MWh. It may also come online as early as 2032, ahead of Sizewell C. While it is laudable that the government is backing British companies at the frontier of nuclear innovation, this raises further questions about whether investing in Sizewell C represents value for money compared to backing additional SMR projects. Perhaps the technical risk of an emerging technology has shaped the government’s conservative posture toward SMRs, favouring expensive, large-scale conventional plants.

Government spending on SMR projects is a small but meaningful step toward achieving energy security. However, the real key to advancing the UK’s nuclear future lies in creating a fertile regulatory environment for private investment in advanced nuclear technologies. Since leaving the European Union, the UK has had the ability to set its own regulatory regime. This Brexit dividend, squandered by successive governments, must now be used to create a world-leading nuclear framework to attract both leading SMR technologies and foreign investment to the UK. Great British Energy – Nuclear’s upcoming framework for assessing proposals presents the perfect opportunity to begin this process. If executed correctly, the UK could see its first new SMR operational before the end of the decade—even ahead of the Rolls-Royce project.

Great British Energy – Nuclear should look across the Atlantic for policy inspiration. In late May, US President Donald Trump signed four Executive Orders aimed at reinvigorating the US nuclear sector. One calls for a major overhaul of the Nuclear Regulatory Commission by streamlining certification, enabling standard licences, updating outdated safety models, and balancing safety with economic and security benefits. Another seeks to bolster the US nuclear industrial base, while a third reforms reactor testing at Department of Energy facilities.

The fourth order, titled “Deploying Advanced Nuclear Reactor Technologies for National Security”, mandates the Secretary of Defense to establish an Army-led programme to site and operate an SMR on a domestic military base by 30th September 2028. The order stipulates that exclusions to the National Environmental Policy Act should be made to expedite permitting. The US military are experts in small nuclear reactors, as these power their entire submarine and aircraft carrier fleets. It is rumoured that three companies have been shortlisted to provide this SMR, including X-energy, whose Series B round was led by C5 Capital in 2021.

The UK should aspire to follow suit. We, too, have nuclear expertise within the military thanks to our nuclear-powered submarines and could streamline regulatory and environmental processes for reactors built on Ministry of Defence bases. This presents a unique opportunity for a public-private partnership with some of the world’s most advanced SMR companies. If this model were rolled out across all bases—including those abroad—the energy supply of our military’s critical national infrastructure would be secured. The targeting of energy infrastructure during the Russia–Ukraine conflict has underscored the importance of dispersing sources of power generation. An SMR on each base would provide such dispersion, while large, conventional plants like Sizewell C would present immediate, high-value targets.

The recent Strategic Defence Review recommends building “energy infrastructure on the Defence estate… [in order to] reduce the department’s energy bills and risk, add to National Grid resilience, and provide income streams for the Government”. This is typical small-scale British thinking: a focus on marginal financial gains and grid support rather than the critical issues of innovation and the energy resilience of military bases. Compare this with the entrepreneurial “animal spirits” seen in Trump’s Executive Orders, and the growing gulf between the US and UK nuclear sectors becomes clear. It explains why the UK is a follower rather than a leader in this space.

The UK must take inspiration from the US and strive to become a leader in nuclear—beginning with a world-class regulatory regime. Billions spent on Sizewell C may make a good headline, but that money would be better used elsewhere. Our future lies in SMR technology. If the government fails to embrace this shift, it puts our national security at risk.