Financing new nuclear
Kick starting a new era of low-carbon nuclear energy
Britain’s plans to become a clean-energy superpower and boost nuclear power depend on small modular reactor (SMR) technology that’s never been built in the UK before.
Developing it, in partnership, are Great British Energy – Nuclear and Rolls-Royce SMR. First-of-a-kind ideas need pioneering solutions – not just in tech, but finance too.
Financing and building small modular reactors, and the start-up companies founded to develop them, is a complex job and demands a specialist funding solution to secure the long-term investment needed.
Deloitte and Agilia Infrastructure Partners acted as lead financial advisers to the Department for Energy Security and Net Zero (DESNZ) in the negotiation of a £599m financing instrument to support the progression of SMR technology and accelerate its deployment by Rolls-Royce SMR.
"Supporting the nuclear ambitions of the Department for Energy Security and Net Zero, National Wealth Fund and Great British Energy – Nuclear, Deloitte and Agilia advised on a financing solution that’s paving the way for faster development and deployment of Rolls-Royce SMR's technology."
Elysia Merza, Director, Deloitte UK
How is the UK funding small modular reactors?
After a competitive process supported by Deloitte, Great British Energy – Nuclear (GBE-N) and Rolls-Royce SMR have entered a formal partnership to deliver the UK’s first three small modular reactors (SMRs).
They’ll be at the heart of the new Gwyndod Power Station, Anglesey. Derived from the old name for the region’s dialect, Gwyndodeg, the title was chosen to honour the identity of the island’s people.
Planned to be operational by the mid-2030s, the new station will be built next to Anglesey’s existing Wylfa Nuclear Power Station, selected by the government as the location of the UK’s first SMR nuclear power station.
Once built, each reactor is expected to generate 470 megawatts of stable low-carbon electricity – enough to power the equivalent of around a million of today’s homes.
With the government providing £2.6 billion to fund the project, the new SMR power plant will also bring thousands of jobs and boost regional and national economies.
With so much clean energy and economic potential at stake, funding SMRs in a way that supports the UK’s energy transition while enabling swift progress is vital.
“The pre-revenue capital needed to enable any supplier to get this complex tech off the ground is significant, and the development time is expected to be several years,” says Elysia Merza, a director at Deloitte.
“Traditional funding models aren’t designed for long development cycles like this. To support progress while managing risk in the right way, we had to come up with a new approach.”
Supporting the UK energy transition
Deloitte and Agilia have successfully acted as lead financial advisor to DESNZ.
Together, we advised DESNZ on designing and successfully negotiating a £599m financing instrument to accelerate the deployment of Rolls-Royce SMR’s small modular reactor (SMR) technology.
Our role included providing comprehensive advisory and due diligence services for this instrument.
“Up front capital is essential for this project as many contracts have to be put in place to build it,” Elysia explains.
“In this case, the innovative financial mechanism provided by NWF is now in place to cover some of the critical upfront costs involved in designing the reactors, navigating regulatory approvals and establishing factories and UK-based supply chains.”
From plan to power
Applying knowledge from other sectors that require long-term investment up front, Deloitte’s specialists in energy infrastructure brought expertise from developing sustainable technology solutions, like carbon capture and storage and hydrogen development, to the challenge.
The result is a new solution that matches the SMR programme’s ambition and is enabling the government’s superpower vision and a cleaner, more sustainable future.
“It’s been a privilege to support this agreement, which is a transformative step towards achieving the UK’s clean power ambitions and delivering a first-in-country SMR,” Elysia concludes.
“This finance mechanism is more than just a contract – it’s a catalyst for change.”
