Small modular reactors in the UK: what Wylfa means for your business

The UK's first small modular reactors will be built at Wylfa, on the north coast of Anglesey. Rolls-Royce SMR signed the contract with Great British Energy Nuclear (GBE-N) in April 2026 for three reactors, which together should produce at least 1.4GW of electricity. A final investment decision is due in 2029, and the first reactor is expected to start generating in the mid-2030s.

That's too late to bring business electricity prices down this decade. However, businesses are already paying towards new nuclear power through a levy on their electricity bills, so it's worth understanding what's being built and how it's paid for before you sign your next contract.

What is a small modular reactor?

A small modular reactor (SMR) is a nuclear power station built mostly from parts made in a factory. The parts are transported to site and put together there, rather than the whole station being built from scratch on site. Because every unit uses the same design, each one should be quicker and cheaper to build than the last.

"Small" is relative. Each Rolls-Royce SMR is a pressurised water reactor, the same basic technology as Sizewell B, with an output of 470MW. Rolls-Royce says that's enough to supply the equivalent of around a million homes. For comparison, Hinkley Point C has two reactors with a combined output of 3,260MW.

The government is backing SMRs because each project needs less money upfront, and because they should be faster to build once the factory process is up and running. However, this hasn't been proven in the UK yet. No Rolls-Royce SMR is operating anywhere, so Wylfa will be the first. The Office for Nuclear Regulation (ONR) is also still assessing the design. Every new reactor design has to pass this generic design assessment before it can be built in the UK, and the final stage, which began in July 2024, was originally due to finish in August 2026.

Why was Wylfa chosen?

Wylfa has produced nuclear power before. Its Magnox station started generating in 1971, and when its last reactor shut down in December 2015, it was the final Magnox reactor still operating anywhere in the world. The site already has a high-voltage grid connection and access to seawater for cooling, and the area has a local workforce with nuclear experience.

The old Wylfa Magnox station, seen across Cemaes Bay from Llanbadrig in October 2022. Photo: Mike Parker, CC BY-SA 2.0.

Since the old station closed, several plans for the site have come and gone. Hitachi bought Horizon Nuclear Power in 2012 and planned a large new station called Wylfa Newydd, but it suspended the project in January 2019 and pulled out completely in September 2020. In January 2021, Shearwater Energy proposed a hybrid project at Wylfa that combined NuScale small modular reactors with wind power and hydrogen production. Shearwater said the scheme could deliver 3GW and start generating as early as 2027, but it didn't go ahead, and the company was dissolved in December 2024.

The government bought the Wylfa and Oldbury sites from Hitachi for £160 million in March 2024. On 13 November 2025, it confirmed Wylfa as the site for the UK's first SMRs, backed by £2.5 billion of funding. Oldbury, in Gloucestershire, is being considered for future projects.

When will the Wylfa reactors be built?

GBE-N and Rolls-Royce SMR signed the contract on 13 April 2026. It covers the design work for the site and early site preparation, and it allows Rolls-Royce SMR to order parts that take a long time to manufacture. At the same time, the National Wealth Fund committed up to £599 million to Rolls-Royce SMR.

The next major milestone is the final investment decision, which is expected in 2029. If the project gets the go-ahead, the first of the three reactors is expected to start generating in the mid-2030s. GBE-N estimates the project will support around 3,000 jobs on site at its peak, and it wants at least 70% of the SMR fleet's value to come from UK suppliers. By June 2026, it had awarded nearly £900 million of contracts since 2023, with more than 70% going to UK-registered companies.

Not everyone on Anglesey supports the project. The local campaign group PAWB opposes it and has raised concerns about how the island could be evacuated in an emergency.

How does Wylfa fit with the UK's other nuclear plans?

According to EDF, nuclear power supplied about 12% of the UK's electricity demand in 2025, from nine reactors at five stations. Most of these are old. The four advanced gas-cooled reactor stations, Heysham 1, Heysham 2, Hartlepool and Torness, are all due to close by 2030. Sizewell B is the exception, as a deal agreed in July 2026 extends its life by 20 years to 2055.

This leaves a gap. Around 2030, most of today's nuclear output stops, and only the first unit at Hinkley Point C is due to replace it within that timescale. Until Sizewell C and the Wylfa SMRs are running, more of the UK's round-the-clock power will need to come from gas, imports and storage.

Will small modular reactors make business electricity cheaper?

Not before the mid-2030s, and even then it isn't guaranteed.

Most of the time, gas-fired power stations set the UK's wholesale electricity price, because they're usually the last generators needed to meet demand. The more nuclear power there is on the grid, the less often gas sets the price, which should make prices steadier. For businesses, that's the main long-term benefit, as it reduces exposure to gas price shocks like the one in 2022.

The cost of the electricity itself is another matter. Nobody knows yet what power from Wylfa will cost, and the government hasn't said how the project will be funded. It could follow Sizewell C and use the regulated asset base (RAB) model, or it could use a Contract for Difference, like Hinkley Point C. Either way, the cost will end up in the non-commodity part of your bill, which covers the levies and charges added on top of the wholesale price.

What does new nuclear cost businesses now?

Businesses are already paying towards new nuclear, even though none of it is generating yet.

The Nuclear RAB levy was added to electricity bills on 1 November 2025 to fund Sizewell C while it's being built. It started at 0.3455p per kWh, which works out at about £345 a year for a business using 100,000kWh, and about £1,730 a year for a site using 500,000kWh. Businesses with a valid Energy Intensive Industries (EII) exemption certificate don't have to pay it. You can read more in our guide to the Nuclear RAB levy.

Hinkley Point C is funded differently. EDF carries the construction risk and will be paid a guaranteed strike price of £92.50 per MWh, in 2012 prices, once the station is generating. These payments are funded through the Contract for Difference levy on bills, so they'll start to appear from around 2030. Our guide to CfD auctions and strike prices explains how this works.

Will new levies affect my energy contract?

That depends on the type of contract you're on. On a pass-through contract, new levies appear on your bill as soon as they start. On a fixed contract, it comes down to the terms. Some suppliers absorb new government charges, while others can pass them on during the contract, so it's worth checking the wording before you sign. Our guide to non-commodity costs explains the other charges on a typical business bill.

Nuclear levies are only a small part of a business electricity bill today, but they're likely to grow as Sizewell C, Hinkley Point C and eventually Wylfa get closer to generating. When you next compare business electricity prices, we'd recommend asking whether each quote includes the Nuclear RAB levy and what happens if a new levy is introduced during the contract.

How can Purely Energy help?

If you'd like to know how nuclear levies affect your business, or want help lowering your energy costs, contact us on 0161 521 3400 or info@purelyenergy.co.uk. Alternatively, get a quick quote and we'll show you exactly what's included in each price.