LONDON — The budget of the U.K.’s new publicly-owned power company Great British Energy has been raided to fund a longstanding government commitment to develop mini nuclear reactors.
Labour’s manifesto committed to spending £8.3 billion over five years on GB Energy to “deliver clean power” projects across the country.
But its budget for investing in renewables like wind and solar is now less than £6 billion, after Rachel Reeves’ spending review assigned £2.5 billion of its funding package to develop small modular reactors (SMRs) — small-scale nuclear power plants that will be quicker and easier to build than traditional plants — including through a government partnership with Rolls-Royce.
The SMR program, run by government agency Great British Nuclear (GBN), dates back to 2023 and the previous Conservative government.
Rolls-Royce was announced as the government’s partner this week, alongside the £2.5 billion investment figure. GBN was rebranded Great British Energy–Nuclear and is newly described as an “allied company” to GB Energy.
Spending review documents published Wednesday state that “Great British Energy and Great British Energy–Nuclear will invest more than £8.3 billion over this parliament in homegrown clean power.”
Two government officials denied that the decision amounted to a cut to GB Energy’s budget, pointing to a reference in the company’s founding statement that raised the possibility of GBN’s functions being “aligned” with the new company.
A third government official said the decision had come “very last minute” in the days before Reeves’ spending review. The officials were granted anonymity to speak freely about the decision.
The documents also show that £4 billion of GB Energy’s budget is categorized as “financial transaction” funding, which means it can be used for grants and minority investments in clean energy, but which cannot be used to own and operate projects.
The third government official said this would limit the firm’s freedom and amounted to an attempt by the Treasury to assert control over the fledgling public energy firm.
The Treasury declined to comment on the record.
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