The government is set to provide up to £56m for the research and development of advanced modular reactors (AMRs), also called small or mini nuclear reactors, over the next three years.
The funds will go towards studies to assess the feasibility of the innovative designs and boost their development.
Mini reactor concepts aim to be cheaper and more flexible than large-scale nuclear power plants, like Hinkley Point C. For instance, a consortium led by Rolls Royce has said their design could produce 440 megawatts of electricity, which is enough power to supply a city the size of Leeds, at £60 per megawatt hour, which is two-thirds the price of recent large-scale nuclear plant.
In a speech at the Nuclear Industry Association (NIA) conference today, energy minister Richard Harrington said a finance group would report back by the spring on smaller scale designs, identifying any barriers to investment and how they might be overcome.
"I will also be considering what further steps government might take to support smaller reactor designs and maximise the benefits to the UK supply chain," he said.
With nearly half of Britain's electricity capacity set to shut down by 2030, mini reactors could play a vital role in meeting the UK's future energy needs, but critics have said developers will not necessarily be able to cut costs low enough to make the plans viable.
Harrington also set out the next steps to allow large new nuclear projects to apply for planning consent after 2025.
“Today’s announcements recognise the importance of industry driving innovation, supported by government, so the sector continues to compete at the very highest level, not just in the UK but globally," said business secretary Greg Clark.
“Helping to put the UK at the forefront of future technologies which have the potential to create value and jobs across the whole UK are core objectives of our industrial strategy.”
A further £86m was announced today for fusion research at the Culham Centre for Fusion Energy in Oxfordshire.
The NIA welcomed the announcements, which it said was a "strong signal of commitment to and confidence in an industry that is integral to supplying the low carbon, secure and reliable power system we need in the future".
Tim Yeo, chairman of New Nuclear Watch Europe, said while the announcements were welcome, "in many respects [they] do little to solve the immediate challenge facing new nuclear projects in the UK".
"Negotiating a competitively priced strike-price, which must come in under the much criticised Hinkley Point C deal, is a red line for consumers and government officials," he said, adding that the easiest way to achieve that would be for the government to provide financial support.