A major shift is underway in the UK’s energy strategy as Rolls-Royce secures nearly £600 million in funding to develop Small Modular Nuclear Reactors (SMRs).
The investment marks a significant moment not just for the company, but for the country’s long-term clean energy ambitions.
The funding, worth up to £599 million, comes from the UK’s national wealth fund. It will support the development and design of SMRs at Wylfa, a site located on the island of Anglesey, also known as Ynys Môn in Wales. This location has a long history with nuclear power, having operated reactors from 1971 until its closure in 2015.
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The new plan aims to bring nuclear power back to the site, but in a more modern and efficient way.
SMRs are a new type of nuclear technology designed to be built in factories rather than constructed entirely on-site. This approach is expected to reduce costs, speed up installation, and make nuclear energy more flexible and scalable. Instead of massive, one-off plants, these smaller reactors can be produced in numbers and deployed where needed.
The UK government sees this as a key step toward cleaner energy and reduced reliance on fossil fuels.
The Chancellor, Rachel Reeves, said the investment will strengthen the country’s energy security and create skilled jobs. She emphasized that this move will help build a new generation of homegrown nuclear technology capable of supporting the economy for decades.
“This investment strengthens our energy security, creates skilled jobs and builds a new generation of nuclear technology,” she said.
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The project is also expected to create around 1,000 jobs, boosting local employment and supporting the wider economy.
The Wylfa site has seen previous redevelopment attempts. In 2020, Hitachi abandoned plans to build a new nuclear power station there after failing to reach an agreement with the UK government over funding.
However, the site was later acquired in 2024 by Great British Energy, Nuclear, clearing the way for new development. Now that the latest agreement is in place, work on the SMR project can begin immediately.
Rolls-Royce has been selected as the UK’s preferred developer for SMR technology, a decision that reflects growing confidence in the company’s capabilities. The company holds a majority stake in Rolls-Royce SMR, with additional backing from international partners, including Qatar’s sovereign wealth fund, France’s BNF Resources, and the Czech utility CEZ.
The company is already expanding its global ambitions. Its SMR technology is also planned for deployment at Temelín in the Czech Republic, highlighting the potential for exports and international collaboration.
Tufan Erginbilgiç, CEO of Rolls-Royce, described the funding as a defining moment.
“This is a critical milestone for our business and for the UK,” he said. “It gives us the certainty we need to move forward and opens the door to deploying a global fleet of SMRs.”
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Tom Greatrex, CEO of the Nuclear Industry Association, called it a historic step for clean power and industrial growth. He highlighted the broader impact on jobs and investment, particularly in Wales.
“This marks the beginning of a significant new phase for the project and for the people of Ynys Môn,” he said. “It will bring thousands of jobs and attract major investment while securing reliable, low-carbon power.”
The funding itself will be provided as a loan. According to the national wealth fund, it will be repaid once Rolls-Royce begins deploying its SMR units or through refinancing in the future.
The national wealth fund, based in Leeds, was officially launched in 2024. It is owned by the UK Treasury but operates independently. Its goal is to drive investment into clean energy and support economic growth.
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The UK government’s growing focus on nuclear energy reflects a broader strategy. By combining low carbon emissions with reliable energy output, nuclear power is being positioned as a key part of the country’s future energy mix. At the same time, SMR technology offers the potential to create a new export industry, giving the UK a competitive edge in global energy markets.
With funding secured and contracts signed, the project at Wylfa is moving from planning to action. For Rolls-Royce and the UK, this could mark the beginning of a new chapter in nuclear energy, one built on smaller, smarter, and more scalable solutions.
