The government is exploring new funding models for nuclear and Carbon Capture Usage and Storage (CCUS) projects, announcing up to £18 million for the development of small modular reactors (SMR).
An additional £40 million in funding has also been announced through the Advanced Modular Reactor (AMR) programme.
This is despite nuclear generation being overtaken by renewables in Q2 of this year and concerns over the possibility of early closures of nuclear plants, with both Hunterston B and Hinkley Point B offline.
The Department for Business, Energy and Industrial Strategy (BEIS) has also set out proposals to explore the use of a Regulated Asset Base (RAB) approach to funding, with the aim of attracting significant private investment for future nuclear power.
The RAB approach is currently used by the electricity, gas and water networks. In the case of a nuclear RAB, suppliers would be charged as users of the electricity system and would be able to pass these costs onto consumers.
BEIS also suggested the RAB approach could be applied to CCUS, with a model similar to the Contracts for Difference scheme.
Other CCUS announcements included £170 million for deploying both carbon capture and hydrogen networks in industrial clusters and plans to recycle oil and gas infrastructure for use in CCUS.
BEIS also announced £26 million in funding for CCUS last month, £4.2 million of which was for the first industrial-scale Carbon Capture and Utilisation demonstration plant.
Business and Energy Secretary Greg Clark said net zero will require action across all areas of society to ensure emissions are cut and a “vibrant and innovative” economy that captures the economic benefits of clean growth is built.
“This new funding model has the potential to help UK industry seize the global challenge of the low carbon transition by building the infrastructure we need, while offering value for money for consumers and taxpayers.”