After its pioneering of the world’s first full-scale commercial nuclear power station in 1956, the UK has more recently seen its nuclear capacity decline, and the rate of nuclear power plant closures has outstripped the opening of new ones. Indeed, the most recent nuclear power station built in the UK is Sizewell B, which opened in 1995, although the ‘green light’ was given for the construction of Sizewell C in June 2025. As a result, in contrast to many other large economies, the UK currently relies comparatively little on nuclear power. For instance, France continues to generate approximately 65–70% of its energy from nuclear sources, compared to approximately 15% in the UK. And China, Russia, South Korea, Canada, Ukraine, Spain and Japan all produce more TWh from nuclear power than the UK.
However, recent events have signalled changes in the UK’s approach, intended to contribute to increasing UK nuclear power generation. A press release published by the UK government in September 2025 hailed the arrival of a “new ‘golden age’ of nuclear” with a ‘joint development agreement’ between US-based X-Energy and UK-based FTSE 100 company Centrica. According to the announcement, Centrica would help deploy the US company’s Xe-100 advanced modular reactors in the UK, beginning with the deployment of 12 80-megawatt reactors at a site in Hartlepool. According to Centrica’s CEO, Chris O’Shea, the Hartlepool project would cost approximately GBP 10bn and require government backing in the form of a construction levy on consumer bills. The aim is to begin producing electricity in the mid-2030s.
The commercial deal between X-Energy and Centrica was part of the wider ‘Atlantic Partnership for Advanced Nuclear Energy’, which endeavours to accelerate the development of nuclear power and the building of new power stations. It builds on existing UK and US collaboration, including between Rolls-Royce and BWXT on space nuclear development programmes.
In July, Centrica announced another strategic investment in the UK’s nuclear infrastructure by acquiring a 15% stake in Sizewell C, the new 3.2GW nuclear power station under construction in Suffolk. In addition, in early September, the energy company confirmed further life extensions for the two UK nuclear power stations in which it holds a 20% share. More recently, the Financial Times reported that the UK Government was in talks with EDF and Centrica to extend the life of Sizewell B till 2055 , in an effort to bridge a gap in nuclear generation before new nuclear plants come online.
Centrica is not the only UK corporate giant to become heavily involved in nuclear power. Rolls-Royce has overseen a successful turnaround of the venerable UK business in recent years. Part of this change in fortune relates to the demand associated with its Small Modular Reactor (SMR) technology. In June 2025, Rolls-Royce became the first company in the UK given the chance to build a small nuclear power reactor after being selected as the ‘preferred bidder’ to partner with Great British Energy, a government-owned renewable company established by the Great British Energy Act in May 2025. As a result, it is perhaps unsurprising that Rolls-Royce welcomed “the [recent] commitment of the US and UK Governments to accelerate the deployment of advanced nuclear technologies”.
This nuclear turn coincides with waning fortunes elsewhere in the UK energy market. Drax Group, which produces approximately 10% of the UK’s renewable power at a power station in North Yorkshire, saw its shares temporarily decline after the Financial Conduct Authority (FCA) opened an investigation into its financial reports. The Company, which also saw the UK Government halve its subsidies in February 2025, has long come under scrutiny from environmental groups that question its renewable credentials, given that it produces energy by burning wood pellets imported from the US, which in turn drives electricity turbines. More recently, Great Britain’s energy regulator, Ofgem, announced the appointment of an independent auditor to carry out an external audit of Drax Group’s annual profiling data and associated reporting to assess the Company’s international supply chain and whether it is complying with its legal obligations under the Renewables Obligation scheme.
Despite this, the Company’s share price has increased c.50% over the past year, with some commentators highlighting the surging demand for data centres – an opportunity that it was quick to move into, with the Company intending to build a data centre at its Drax power station site near Selby.
Nuclear power and ESG
For some markets, nuclear power has traditionally been – and in some remains – the unwanted stepchild of the energy transition. For instance, the German Green Party (Alliance 90), which during the past few decades has become one of the largest of its kind in Europe, grew out of anti-nuclear sentiment in the 1980s and has generally been steadfast in its opposition to the use of nuclear power. In 2011, the German Government, under Chancellor Angela Merkel’s coalition, announced that it was to close the country’s nuclear power stations following the Fukushima Nuclear Accident in Japan. Indeed, the scars of the accident are still felt in Japan itself, with many shareholder proposals put forward at Japanese energy companies during the 2025 proxy season and in previous years asking them to withdraw from nuclear power generation.
Conversely, some markets have concluded that nuclear energy will prove essential to the energy transition, and consequently, to environmental and social concerns. This has been illustrated recently by the UK Government’s commitment to invest in the nuclear sector as part of its Spending Review 2025.
Moreover, some articles have suggested that many ESG-conscious investors have changed their approach in recent years, with sustainability or climate-focused funds more willing than before to invest in nuclear power. According to Morgan Stanley, the surge in power demand worldwide, partly as a result of AI data centres and the electrification of different industries, has led to a smaller number of investors excluding nuclear energy from their portfolios:
“Investors are showing relative openness to nuclear power, especially when looking at exclusion policies. As of December 2024, only 2.3% of total assets under management adopted a policy to exclude investments in nuclear power […] That means nuclear power assets are now better accepted than alcohol (2.9% exclusions), military contracting (4.7%) and gambling (5.1%).”
Similarly, in September 2025, David Coombs, Head of Multi-Asset Investments at FTSE 250 investment manager Rathbones, stated that “as recently as four or five years ago, nuclear was a no-go zone. But now it’s clear that it has to be part of an energy strategy. You can’t store the energy produced by wind or solar.”
It seems even nuclear accidents cannot halt growing demand for nuclear power, with Microsoft signing a 20-year deal to purchase power from the Three Mile Island plant when it reopens in 2028, despite it being the site of US’ largest nuclear accident in 1979, in order to feed the energy needs of its AI data centres.
As a result, it appears that the recently renewed enthusiasm for nuclear power in the UK mirrors a similar trend in a number of other markets, driven by the demands of energy strategies, consumption and economic growth. This in turn seems to have been echoed by changes in investor sentiment, with many of the concerns historically articulated about the use of nuclear power as an energy resource being sidelined in favour of energy investment opportunities.
By: Tom Inchley
