The government announced on 11 June 2025 that Rolls-Royce has been selected to build small modular nuclear reactors (SMRs), following what it called a "rigorous" two-year competition1. The announcement came as part of the UK spending review, which also confirmed £8.3bn in funding for Great British Energy (GB Energy) and the linked GB Energy, Nuclear1.
The spending review set out funding for the SMR programme within the GB Energy, Nuclear allocation. According to the Guardian, GB Energy will "effectively lose £2.5bn" to the allied nuclear company, cutting the amount it has to spend on wind, solar and other technologies1. The Financial Times reported the same figure, saying GB Energy "has been handed the £2.5bn bill" for small nuclear plants1. The spending review also gives GB Energy an extra £300m in support for offshore wind supply chains, and confirms up to £80m for port investment to support floating offshore wind deployment in Port Talbot in Wales, subject to final due diligence1.
Separately, the chancellor announced ahead of the spending review a £14.2bn investment in the planned Sizewell C new nuclear power plant in Suffolk1. The plant is being jointly developed by the UK government with French state-owned utility firm EDF Energy1. Each new plant will have a capacity of 3.2 gigawatts (GW), enough to power six million homes, and during its construction Sizewell C will provide 10,000 jobs, including 1,500 apprenticeships, according to the government1. Sizewell C is due to be funded under the "regulated asset base" (RAB) model and so will not receive a Contracts for Difference1.
On home energy efficiency, the spending review confirmed the pledged £13.2bn in funding for the warm homes plan, covering spending between 2025-26 and 2029-301. The government says this will help to cut bills by up to £600 per household through energy efficiency measures, heat pumps, solar panels and batteries1. It will see around one-fifth of the nation's housing stock upgraded by 2029, although to a varying degree1. £5bn of the £13.2bn total is set to come from "financial transactions", likely to mean loans rather than capital spending1. Further details for the warm homes plan will be confirmed in October, the spending review says1.
"It's also very important that millions of customers will see a direct benefit from today's announcements. By reaffirming the funding to improve the energy efficiency of millions of homes and supporting the switch to cleaner heating alternatives, customers can expect warmer and more comfortable homes, cleaner air and cheaper bills, showing how the energy transition can improve their daily lives."
| Measure | Funding confirmed |
|---|---|
| Warm homes plan | £13.2bn (2025-26 to 2029-30) |
| GB Energy and GB Energy, Nuclear | £8.3bn |
| Sizewell C | £14.2bn |
| Offshore wind supply chains (GB Energy) | £300m |
| Port Talbot floating offshore wind | Up to £80m |
Why it matters for households
The warm homes plan funding is the part of the spending review with the most direct bearing on household energy use. The government says the £13.2bn will cut bills by up to £600 per household through energy efficiency measures, heat pumps, solar panels and batteries1. Around one-fifth of the nation's housing stock is expected to be upgraded by 2029, though the spending review says this will be "to a varying degree"1. The £5bn share described as "financial transactions" may take the form of loans rather than grants, which has been highlighted as a point of difference in how the money reaches homes1.
The nuclear announcements concern electricity generation rather than individual properties. Sizewell C's 3.2GW capacity is described as enough to power six million homes1. The SMR programme under GB Energy, Nuclear is at selection stage, and no site, construction timetable or output figures for the Rolls-Royce reactors appear in the reporting1. The funding shift within GB Energy means less of that body's allocation is directed to wind and solar than its manifesto pledge implied1.
What happens next
The government will publish its "carbon budget delivery plan" in October 2025, and will legislate for the seventh UK "carbon budget" by June 20261. Further details for the warm homes plan will be confirmed in October, the spending review says1.