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Budget to back carbon capture and new nuclear project spend

Chancellor Jeremy Hunt is expected to set out plans in this week’s Budget to ramp up investment in carbon capture projects and press ahead with selecting sites for a new generation of small modular nuclear reactor projects.

Recognising the urgency of the UK’s clean energy revolution, Hunt is expected to announce plans to commit to spades in the ground on these projects from next year.

No one country has yet pioneered the carbon capture market.

An unprecedented £20bn in investment over the next 20 years will drive forward projects that aim to store 20-30 million tonnes of CO2 a year by 2030, equal to the emissions from 10-15 million cars.

The Chancellor will also announce plans to boost nuclear power generation through the formation of Great British Nuclear, launching a competition for the first-generation small modular nuclear reactors.

Highlighting the fresh plan, Energy Security Secretary, Grant Shapps said: “Already a global leader in offshore wind power, we now want to do the same for the UK’s nuclear and carbon capture industries, which in turn will help cut the wholesale electricity prices to amongst the lowest in Europe.”

To ensure the UK steals the march, the Government will launch a Small Nuclear Reactors competition to attract the best designs from both domestic and international manufacturers with winners announced rapidly.

It will also match a proportion of private investment as part of this to ensure designs are ready to be deployed as soon as possible in the UK.

The government is already investing £210m into the Rolls-Royce SMR project, matched by private sector funding. Rolls’ Royce reactor design is currently being assessed by safety regulator, the Office for Nuclear Regulation.

The government body will select sites for potential nuclear projects, removing costs, uncertainty, and bureaucratic barriers for manufacturers as they develop their proposals. To support future sites for nuclear development, the Government will also be consulting on a new approach to nuclear site selection later this year.

To attract more investment into the sector, the Chancellor will confirm that nuclear power generation will be classed as “environmentally sustainable” under the green taxonomy regime. Green labelling nuclear will drive crucial investment into projects large and small.