Is nuclear power the way forward for data centres?

We recently wrote about the Government’s ambition for the UK to shape the AI revolution (see our article here and the Government’s publication of its AI Opportunities Action Plan). To facilitate this, the Government intends to encourage the build out of data centres in designated “AI Growth Zones”. These supercomputers will require huge amounts of power. Some large data centres can consume as much electricity as a small town and measured megawatts. However, constraints on power supply, due largely to insufficient UK grid connections, threaten ambitions for the industry.  In order to source power supply the Government is advocating nuclear power in the form of small and advanced modular reactors (SMRs) as the answer (see its recent press release). 

As part of the wider consultation on a new National Policy Statement (NPS) for nuclear generation (EN-7), to replace the 2011 NPS (EN-6) as guidance for the development of nuclear generators as Nationally Significant Infrastructure Projects (NSIPs) (see below), the Government is also introducing reforms which will enable the build out of SMRs, for the first time. The idea is that these small reactors will be located alongside energy intensive industrial sites like data centres, avoiding the need for connections from the grid. 

The deployment of SMRs is still very much at technical assessment stage with the Government’s expert body, Great British Nuclear (GBN), considering designs from four companies, GE Hitachi, Holtec, Rolls Royce SMR and Westinghouse as part of a competition process. GBN considers that the designs, each of which is proceeding through the UK’s regulatory process, are viable options for development. It will decide on the absolute best technologies later in the year. It is however confident that these SMRs could play a key role in the UK’s future energy mix. 

The main purpose, however, of NPS EN-7 is to provide guidance for large scale nuclear reactors to be built at appropriate locations across the entire country rather than, as is currently permitted, only at eight specified locations. This should not only incentivise investment but is part of the Government’s drive to de-carbonize the UK’s energy supply and improve the UK’s energy security. The Government intends to adopt a criteria-based approach for future sites in order to enable development at other suitable locations – dependent on factors such as population density, proximity to military activities, flooding and access to suitable sources of cooling. 

Currently, developments for nuclear generation over 50 megawatt (electric) are to be treated as NSIPs subject to the development consent order process. The Government previously consulted on whether those projects with less than 50 megawatt (electric) generating capacity (such as SMRs), as well as those generating heat, should be brought within the NSIP regime, but has advised that it intends to retain the existing threshold – to encourage SMRs with the flexibility to be brought forward at a local level. 

Therefore, once GBN has completed its assessment and decided on the best SMR technology, and the NPS EN-7 guidance has completed its parliamentary stages and received ministerial approval, the stage will be set not only for the furtherance of large-scale nuclear developments as NSIPs, but crucially, SMR deployment will be available to be co-located with data centres.  This will provide the data centre and AI industry with the means to overcome the grid connection constraints currently faced by the industry.   

The Government launched its consultation on the nuclear generation NPS (EN-7) on 11 February, which closes on 3 April 2025.