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24 September 2025

UK-US Nuclear Energy Deal – The Challenges And Opportunities Explained

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Herbert Smith Freehills Kramer LLP

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The Atlantic Partnership for Advanced Nuclear Energy ushers in new regulatory and commercial collaboration between the UK and US aimed at rapidly accelerating...
Worldwide Energy and Natural Resources

The Atlantic Partnership for Advanced Nuclear Energy ushers in new regulatory and commercial collaboration between the UK and US aimed at rapidly accelerating nuclear energy deployment

Governments who recognise nuclear's potential and act decisively can position themselves at the forefront of the energy transition and technological progress. The UK-US deal underlines this shared imperative."

Paul Butcher, Director of Public Policy and Nuclear regulatory expert

The partnership, announced on 15 September 2025, introduces mechanisms for joint regulatory review, streamlined approvals, and ambitious timelines, with reactor design sign-offs targeted in two years and nuclear site licensing in one. Accompanying this regulatory shift are major commercial announcements featuring advanced modular and micro reactors, supported by private investment and government initiatives.

Meeting grid, data, and industrial needs

The ability of advanced nuclear technologies to provide a large supply of decarbonised power for data centres and industry is galvanising interest from policymakers, developers and investors.

Power demand continues to increase. Modern data centres, especially those supporting AI, must operate without interruption. Grid reliability and consistent power are essential. Whereas data centres formerly used less than 10 MW, today's facilities can exceed 100 MW with  GW centres planned.

Solar and wind are intermittent generation sources and require energy storage and significant amounts of land. Nuclear energy provides baseload power around the clock. Small Modular Reactors(SMRs)and Advanced Modular Reactors(AMRs), while potentially more expensive per MW than gigawatt (GW)-scale plants, offer significant potential benefits: faster build times, expanded siting options, and flexible operation modes, making them well-suited for delivering quicker grid benefits and nth-of-a-kind fleet economies of scale. AMRs can be tailored to diverse locations and grid needs, acting in a way which is complementary to large scale renewables, including designs that add storage, produce hydrogen and supply direct industrial heat.

The Atlantic Partnership for Advanced Nuclear Energy: Overview

The partnership establishes a formal framework for UK-US cooperation, focusing on:

  • Joint regulatory collaboration:
    UK and US nuclear regulators will coordinate closely, assigning lead roles for designated aspects of project reviews and mutually recognising each other's assessments, while retaining independent legal decision-making through rigorous due diligence.
  • Streamlined Approvals:
    The partnership targets a two-year timeline for reactor design approvals and one year for site licensing, leveraging one nation's assessment to inform the other and so reducing duplicative regulatory effort.

This gives both the UK Office for Nuclear Regulation (ONR) and the US Nuclear Regulatory Commission (NRC) expanded influence within each other's regulatory processes, reinforcing and (and going substantially beyond) earlier MoUs that included Canada.

Though fission technology is at the core, the agreement also covers fusion energy, with coordinated experimental programmes and a scheduled jointly hosted Global Fusion Energy Policy Summit in the US in 2026.

Regulatory timelines: Challenges and opportunities

The partnership sets new delivery benchmarks for regulatory approval, which will be immediately tested by newly proposed commercial projects. To put the ambition, and challenge, into context:

For the US, the NRC's approval of the NuScale Power LLC US460 SMR met the 24-month timeline, reflecting US progress following recent substantive reforms.

Achieving these goals will require further streamlining and harmonisation, especially in the UK, where broad regulatory reform is underway.

Key commercial developments

Major UK and US nuclear investments were announced alongside the new partnership:

  • Rolls Royce SMR: following its  selection as the technology provider for the UK's first commercial Small Modular Reactor (SMR) in June, Rolls Royce  announced the commencement of its US regulatory approval process.
  • Radiant and Urenco: A contract for high-assay low-enriched uranium (HALEU) to support US microreactor deployment. This is  part of wider efforts to end Russia's prior position as the only commercial producer of HALEU.
  • X-Energy and Centrica: A  joint development will deploy 12 advanced modular high temperature gas reactors (HTGRs) adjacent to Centrica and EDF's existing Hartlepool nuclear site, targeting 960MW by the mid-2030s and a 6GW fleet.HTGRtechnology aligns with the  UK's strategic prioritisation for advanced modular reactors due to its technological maturity, its ability to produce heat for hard to abate industrial processes and the production of more efficient hydrogen and synthetic fuel.
  • Holtec International, EDF UK, Tritax Management: Plans for £11 billion SMR-300 deployment at Nottinghamshire to power a 1GW data centre.
  • Last Energy and DP World: A micro modular reactor project for the London Gateway port and business park.
  • TerraPower and KBR: Evaluating UK sites for Natrium reactor deployment to provide flexible energy.

UK nuclear: innovating for private finance, but the Nuclear Regulatory Taskforce is right that a radical reset in other areas is necessary to match its ambitions

We are proud to have advised EDF on almost all aspects of the development of Hinkley Point C (HPC) and  La Caisse on its 20% investment in Sizewell C (SZC), the UK's first new nuclear generating stations since 1995. These projects helped preserve nuclear expertise and supply chains, vital for the UK's continued participation in the next phase of the global nuclear renaissance.

With HPC, SZC, and an active SMR programme, the UK now has one of the largest nuclear pipelines in terms of capacity. Its innovations, successfully designed to encourage private finance, and its funded decommissioning programme, designed to ensure sufficient reserves over the operational life to protect taxpayers, may be of interest to governments seeking privately financed nuclear projects.

In April 2025, the UK Government established the Nuclear Regulatory Taskforce, recognising the need for improved regulatory frameworks. The taskforce's  interim report, published in August 2025, identified six areas for a “radical reset” to accelerate regulation, improve efficiency, and reduce costs, including the need for:

  • greater proportionality in the application of regulatory standards across nuclear, environmental, planning, and permitting regimes;
  • simplification and consistency in nuclear regulation; and
  • international harmonisation of standards.

The RAB Model: Reducing risk and attracting investment in UK infrastructure

The Regulated Asset Base (RAB) model originated in the UK, initially linked to the privatisation and ongoing investment in utility and network businesses. It was successfully adapted for large-scale greenfield infrastructure projects, notably the  Thames Tideway Tunnel, and subsequently for the UK's carbon capture utilisation and storage programme and the Sizewell C nuclear project.

The RAB model enables projects to generate revenue during construction, allowing debt to be serviced as incurred, rather than capitalised, and permitting equity investors to earn returns from the outset. It also provides for the sharing of construction risk between the project, its contractors, and consumers. Combined with a government support package to mitigate low probability, high-impact risks, these features contribute to a reduced cost of capital.

US nuclear: Radical regulatory streamlining is well advanced

US legislative reforms and bipartisan support have accelerated licensing for advanced reactors, SMRs and microreactors. Under President Biden, the ADVANCE Act (2024) was passed to simplify regulatory processes and lower the costs associated with advanced nuclear projects. In May 2025, President Trump issued executive orders focused on further accelerating regulatory procedures and called for a quadrupling of nuclear capacity by 2050.

The US is already in an enviable position to deliver on the ambitious regulatory timelines established by this partnership. The deal offers the UK tangible incentives to muster the significant political will to drive its own reforms based on the Nuclear Regulatory Taskforce's work."

Paul Butcher, Director of Public Policy and Nuclear regulatory expert

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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