Powering Growth: The economic opportunities unlocked by nuclear

Nuclear energy is having a renaissance. The benefits of a highly dense, secure, low-carbon power source look increasingly attractive to the future growth sectors that will play a crucial role in economies around the world.

Alongside the wide range of technologies that Energy UK represents, nuclear energy will be needed to meet growing demand as the UK electrifies its economy out to 2050. Power demand across the UK is forecast to almost double over the next 25 years. Data centres alone may need around 11 million homes’ worth of electricity in that time.^1,2

The economic opportunities of the future will depend heavily on digital services and Artificial Intelligence (AI). Securing investment in adequate low-carbon and cost- competitive generation to power this shift will be essential to attract international investment and enable growth.

Businesses operating across the economy are concerned about current energy costs and considering their future energy needs; many see nuclear energy as a potential answer to the problem. Recent announcements by technology companies in the US in particular – including Google, Microsoft and Amazon – demonstrate the importance of both existing and new nuclear technology to power these critical sectors, improve productivity and underpin wider growth.

The UK has a proud past of nuclear energy, which is now in the midst of renewal, with new plants under construction, innovative technologies on the horizon and opportunities ahead. I’m delighted to have worked with EDF on this report, highlighting nuclear power’s role in the UK’s energy system, its potential to support decarbonisation across the UK, and its contribution to the economy if the right steps are taken.

Dhara Vyas, Chief Executive, Energy UK

The UK is undergoing a fundamental shift in its energy system. The energy crisis showed we need more homegrown power with less reliance on gas imports. Achieving growth now, clean power by 2030 and net zero by 2050 requires a rapid expansion of low-carbon energy. Electricity demand is expected to rise significantly, from electrification of heat and transport and emerging needs such as AI and data centres. Alongside this, the Government aims to boost economic growth, productivity, and skills.

Against this backdrop, there has been a resurgence of interest in nuclear energy and its capability to provide clean, reliable, secure, ‘always on’ power that complements renewable energy and provides investment and quality jobs.

EDF’s five operating nuclear power stations are playing their part in decarbonising the energy system while strengthening the UK’s energy security and economic growth. Over their lifetimes, the existing stations have made a £123 billion contribution to the nation’s economy.

At EDF we’re proud to be leading Britain’s nuclear renaissance through Hinkley Point C, the country’s first new nuclear power station in a generation. The station will provide low carbon electricity for six million British homes for decades. It has a supply chain of 3,800 companies across Britain and has trained over 1,500 apprentices trained so far.

The lessons from Hinkley Point C are clear. ‘Build and repeat’, a proven design, helps to bring down costs. Its replica, Sizewell C, will generate the same amount of homegrown electricity and even more economic benefit. Sizewell C will support 70,000 jobs, with roughly 70% of the construction spend in the UK.

The impact is now. In the next five years Sizewell C will pump £8 billion into the UK supply chain and £3 billion of tax to the exchequer.

Today, we’re at a crucial juncture for UK nuclear. We look forward to the final investment decision on Sizewell C and decisions on the next steps on the small modular reactors (SMRs), as well as what comes next for both large and advanced nuclear projects.

Energy UK’s report highlights the huge opportunities of nuclear energy. We’re grateful to Energy UK for its work on this report and its enduring support for the nuclear sector.

Simone Rossi, Chief Executive, EDF UK

The UK has a proud history of nuclear energy and led the advent of civil nuclear. The world’s first commercial-scale nuclear power station was Calder Hall in Cumbria, operational in 1956. The country has been using atomic energy to keep the lights on ever since.

Calder Hall was part of the first generation of nuclear reactors known as Magnox. Between 1956 and 1971, 26 Magnox reactors started up across Great Britain, which had a combined capacity of around 4.2 gigawatts (GW).

Developments in technology led to a second phase of nuclear energy in the UK, with advanced gas-cooled reactors (AGR) able to generate far more electricity at much higher efficiencies than the Magnox reactors. Fourteen AGRs were built in total across seven sites, in addition to one pressurised water reactor (PWR) – totalling a capacity of almost 9GW. No new nuclear capacity has come into operation since the Sizewell B PWR in 1995.

The UK currently has five operational nuclear power stations: four of them housing two AGRs commissioned between 1976 and 1988, and Sizewell B.^3,4,5

All of the nuclear power stations currently generating in Great Britain are operated by EDF Nuclear Operations, of which EDF Group owns 80% and Centrica owns 20%, which took over the management of the plants in 2009. Since this time, it has invested more than £8 billion to extend lifetimes of the power stations.

New nuclear stations will be key for providing the additional capacity needed to help power the economy of the future. Hinkley Point C alone will provide about 7% of the UK’s electricity, equivalent to around six million homes. Sizewell C would then double this new capacity.^8,9

The National Energy System Operator’s (NESO) Future Energy Scenarios sees a range of 11GW to 22GW of installed nuclear capacity by 2050. Sizewell B and C, as well as Hinkley Point C will contribute around 7.6GW, meaning further steps must be taken to ensure the stable supply of electricity the UK will need in the future.^10,11

Given the UK’s strong history of nuclear capability, we are well suited to have an international competitive advantage in the nuclear renaissance taking shape around the world.

Homes and businesses in the UK are currently subject to some of the highest domestic and industrial energy costs compared to major economic competitors. The UK’s reliance on imported gas during the energy crisis of 2022 has also shown the impact the volatile nature of fossil fuel markets had on prices for homes and businesses.

Building more low-carbon electricity sources is vital for the UK’s future economic growth to keep energy prices stable, and for the country to remain an attractive destination for investment. This is also crucial for businesses already operating in the UK. With its stable output profile, nuclear generation can help avoid certain system costs associated with transmission and energy balancing. Nuclear also helps to provide system inertia – the steady spinning of its generators helps to maintain a stable grid frequency.¹²

The price of nuclear energy is generally stable as most of a nuclear power plant’s costs are incurred in the construction phase.¹³ With fossil fuel power, fuel costs can account for over half the total cost of the electricity produced, meaning prices can fluctuate significantly. The more low-carbon generation there is on the electricity system, the more customers are shielded from volatile international markets. Additionally, price stabilisation mechanisms, such as Contracts for Difference (CfDs) or once implemented, the Regulated Asset Base (RAB) for new nuclear, offer further price certainty for customers.

Figures 1 and 2: average proportion of producing electricity from gas and nuclear across IEA nations (Source: IEA)

Because of its stable output, nuclear generation can help avoid certain system costs associated with transmission and energy balancing

Job creation and regional development

The nuclear energy sector relies on, but also creates, a highly skilled workforce and significant supply chain domestically and internationally. As the Government continues to develop Invest 2035 – the UK’s industrial strategy – the highly skilled nature of the supply chain and workforce could be an important lesson for the rest of the economy and regional development.¹⁴

The sector directly employs more than 64,000 people and 211,000 jobs are reliant in some way on its activities.¹⁵ At Hinkley Point C alone, 23,500 construction jobs have been created and over 60% of the value of the project is going to UK-based suppliers. £5.3 billion has now been spent directly with businesses across the South West helping to increase the nearby town of Bridgwater’s productivity so it is now 10% higher than the surrounding area.¹⁶

If built, Sizewell C would further enhance nuclear energy’s contribution to the UK economy by delivering 70% of its construction value to UK companies and supporting at least 70,000 high-quality jobs across the UK, with £4.4 billion expected to be spent in the east of England alone across the construction period and at least one-third of the peak construction workforce of 7,900 is expected to come from the local area.^17,18

Capital investment powering industrial growth

Nuclear energy requires billions of pounds of private and public investment. In a global race to electrify energy systems and power future economic sectors critical to growth, retaining and attracting private capital will prove crucial.

While powering the UK’s homes and businesses for decades, the existing nuclear fleet has also made a £123 billion contribution to the economy.¹⁹ This impact, whether through nuclear investment directly or indirectly through powering regions and the country, will continue as the UK electrifies.

The economy is undergoing a dramatic change, from data centres, to gigafactories, to electric arc furnaces in heavy manufacturing and significant use of batteries across other areas. Many of these new areas will require significant amounts of always-on electricity, which nuclear energy can help provide.

Export opportunities and supporting energy- intensive businesses

Much progress has been made to build up the necessary workforce and supply chain required to deliver Hinkley Point C. It is vital that momentum is maintained through commitments to future large-scale nuclear generation projects so that the industry can remain viable long-term. This will ensure the sector continues to contribute to economic growth across the UK and increased exports in areas such as waste management where the UK already exports its services.

In the medium term, the UK has the potential to become a global leader in all forms of nuclear, from micro to large scale.^20,21 Companies involved in the design, manufacture and operation of these technologies could create a significant export market that would support the UK and other economies around the world as they in turn electrify.²²

All forms of nuclear have a role to play. Micro and SMRs, for instance, are energy-dense but would be smaller and quicker to build than large power stations, which makes them suitable for energy-intensive businesses such as manufacturers and data centres. Last Energy, for example, is developing micro nuclear power plants that can be used to power local industrial users. The company uses existing technology but is modular in design, meaning the number of units can be scaled up or down, depending on need.²³

Big technology companies are increasingly investing in nuclear energy through Power Purchase Agreements (PPAs) with both existing and new nuclear at different scales to meet the energy demands of their future AI and data centre operations. In the US, technology firms are entering into PPAs with both existing and refurbished large-scale nuclear firms as a low-carbon alternative to gas turbines for their power supply. A 20-year PPA with Microsoft enabled the reopening of the Unit 1 reactor at the Three Mile Island nuclear power plant in Pennsylvania.²⁴

Also in the US, Amazon is investing over $500 million in SMR projects, partnering with Dominion Energy, Energy Northwest and X-Energy for their development. Google has signed a PPA with Kairos Power for the delivery of six to seven SMRs, which will provide 500MW of capacity by 2035. While these agreements have so far been limited to the US, there is an opportunity for the UK to capitalise on ‘big tech’ investment in nuclear with stronger Government commitment to the sector.

In the long term as costs fall over time and regulatory issues are resolved, SMRs and micro reactors may be an important tool in powering industry, in addition to the existing role provided by large-scale stations.

Clean hydrogen to power industry

In the coming years, UK businesses will require significant amounts of hydrogen to decarbonise their operations. Low-carbon hydrogen can be produced using nuclear energy which can then be stored for power generation or used in industrial processes, shipping or freight transport.

Sizewell C, for instance, plans to provide hydrogen to Freeport East to provide clean fuel for freight, public transport and heating. Freeport East is a green energy cluster serving the green hydrogen, clean maritime fuel, smart grid and offshore wind industries.

Decarbonising heat in industry

Nuclear offers a way to provide low-carbon energy beyond ‘just’ electricity generation. Nuclear power stations produce immense amounts of heat which can be turned into ways to decarbonise nearby buildings and industry (called ‘cogeneration’). It also means a nuclear plant can be used more flexibly, by switching between electricity generation and cogeneration applications.²⁵

Nuclear fusion

Nuclear fusion is an exciting opportunity that the UK is in a world-leading position to develop and export. West Burton power station in north Nottinghamshire will be home to the Spherical Tokamak for Energy Production (STEP) prototype fusion energy plant.²⁶ The UK Government recently announced a £20 million investment into ’Starmaker One’ – a British fusion investment fund expected to leverage £100 million into the UK.²⁷

These technological developments offer a significant potential for growth in both high-tech jobs here in the UK, supply chain development, and growing exports of nuclear technology and expertise.

References

1 NESO (2024), Future Energy Scenarios 

2 NESO (2024), Future Energy Scenarios 

3 An advanced gas-cooled reactor (AGRs) is a British design of nuclear reactor that use graphite as the neutron moderator and carbon dioxide as coolant. AGRs were developed from the Magnox type reactor and are the second generation of British gas-cooled reactors. 

4 A pressurised water reactor (PWR) is a type of nuclear reactor where the water used in the primary circuit is kept under high pressure to prevent it from boiling. It is the most common type of reactor in use globally, alongside boiling water reactors (BWR). Both PWR and BWR are classified as light water reactors because they use ordinary water as both a coolant and a neutron moderator.

5 DESNZ (2024), Digest of UK Energy Statistics: Electricity, Power Stations in the UK

6 DESNZ (2025), Energy Trends: UK electricity 

7 EPRs are a type of pressurised water reactor (PWR). The design of the UK EPRs that will be built at Hinkley Point C improve on the previous PWR design to improve safety and efficiency, reduce uranium fuel use, and produce almost a third less long- lived radioactive wastes compared with water reactors in operation today.

8 Power Technology (2023), Hinkley Point C nuclear power station 

9 DESNZ (2024), Further steps to prepare Sizewell C for construction 

10 Note: Sizewell B is currently undergoing a review to extend its life from 2035 to 2055. EDF (2024), Investing in Sizewell B’s long-term future

11 NESO (2024), Clean Power 2030 

12 NESO, What is inertia?

13 BBC News (2013), UK nuclear power plant gets go-ahead 

14 Department for Business & Trade (2024), Invest 2035: The UK’s modern industrial strategy 

15 Nuclear Industry Association (2023), Delivering Value: The economic impact of the civil nuclear industry 

16 EDF (2024), Socio-economic Impacts Report 2024 

17 Sizewell C (2025), UK suppliers benefitting from £2.5bn in Sizewell C contracts as project celebrates first year of construction 

18 EDF (2022) Sizewell C 2022 employment & training prospectus

19 Economic Insight (2025), Economic Impact of EDF’s Nuclear Fleet from 1976 to 2024

20 Small modular reactors (SMRs) follow the same physical principles as traditional nuclear reactors: nuclear fuel (enriched uranium) undergoes nuclear fission, heating coolant which in turn boils water to produce steam used to move electricity- generating turbines. 

21 Advanced nuclear reactors (AMRs) that are likely to be the next generation of modular nuclear technology, will be capable of using broader spectrum of nuclear fuel including material currently classified as spent fuel waste. 

22 Emerging designs for SMRs use liquid metals, molten salts, or gases as coolant instead of water and consume recycled or composite fuel. 

23 Last Energy homepage 

24 US Energy Information Administration (2024), Data center owners turn to nuclear as potential electricity source 

25 The Royal Society (2020) Nuclear in a low-carbon future 

26 UK Atomic Energy Agency (2022) West Burton selected as home of STEP fusion plant 

27 DESNZ (2025) Government kickstarts £100 million fusion investment 

28 NESO (2024), Future Energy Scenarios 

29 NESO (2024, Future Energy Scenarios 

30 House of Commons Science, Innovation and Technology Committee (2023), Delivering nuclear power enquiry found new for a much clearer and strategic plan which involved commitments from a wide range of stakeholders for new gigawatt-scale nuclear; advanced nuclear technologies; fusion; financing; skills; regulation; and decommissioning and waste management.