UK Nuclear Regulatory Reform: Taskforce Recommendations and Implications for Investors

The Nuclear Regulatory Taskforce (the “Taskforce”), commissioned by the prime minister and led by John Fingleton, an economist and former chief executive of the Office of Fair Trading, has published its final report, proposing reforms to the UK nuclear regulatory framework. The Taskforce’s proposals include establishing a unified Commission for Nuclear Regulation and addressing regulatory fragmentation, siting restrictions, environmental consenting and legal challenge risk. This analysis focuses on several of the changes proposed which have direct implications for investment decisions and project economics.

In a strategic steer issued to the nuclear industry, the prime minister stated that the principle of Fingleton’s recommendations are accepted and committed to implementation within two years (subject to timelines for primary legislation). The details of how the recommendations will be implemented remain to be confirmed. Full implementation will require both primary and secondary legislation with government potentially prioritising particular recommendations with a view to expediting the implementation timeline.

Assessment of Current Framework

The Taskforce identifies five regulatory challenges: 

• fragmented oversight across multiple regulators;

• regulatory decisions that are disproportionate to the risks involved; 

• process-focused legislation;

• policy indecision; and 

• insufficient industry incentives, 

contributing to what it describes as a “culture of complacency and extreme risk aversion” across the sector.

The Taskforce characterises its proposals as a “coherent blueprint for a ‘radical reset’ of the UK’s nuclear regulatory system” and a “direct response” to the aforementioned challenges. The extent to which these recommendations are implemented could have material implications on the investment landscape for UK nuclear projects, including development timelines and cost estimates.

Key milestones proposed by the Taskforce include a strategic steer from government (which has now been issued), an interim lead regulator model by March 2026 and the eventual establishment of a Commission for Nuclear Regulation by the end of 2027. 

Consolidating Regulatory Structures

The UK’s regulatory framework for nuclear currently involves multiple regulators considering the same sites or projects, which the Taskforce claims can lead to duplication and inconsistencies. To tackle this, the Taskforce proposes a staged approach to regulatory consolidation. 

• Reforms would begin, by March 2026, with the simplification of regulatory functions. This is intended to establish a system where, as far as possible, one regulator is responsible for each hazard type or regulatory function, potentially saving time and cost for duty holders. The government has stated that the strategies, operating plans and performance measures outlined in its strategic steer must be “embedded now”, seemingly an indication of support for substantive reform in the short-term.

• The Taskforce then intends that an independent Commission for Nuclear Regulation is established by the end of 2027. The Commission would comprise five full-time members presided over by the Chief Nuclear Inspector.

• The Commission would "formalise collective decision making and leadership" and have oversight across nuclear safety, security, safeguards, environment, planning and defence domains. It would possess statutory powers operating in parallel with those of existing regulators. The Commission would act as a final sign-off authority for substantial regulatory decisions. It would intervene only in substantial, novel or complex matters and would be able to rapidly convene expert advice to do so.

• The suggested remit for the Commission includes resolving deadlocks between regulators, deciding on certain planning applications and defining acceptable risk levels. The Taskforce intends that the Commission would have clear lines of accountability and secondary duties to promote speed and cost-effectiveness – an attractive prospect for nuclear investors if implemented successfully.

• Given the timescale involved in statutory establishment of a Commission, it is proposed that by March 2026 a “lead regulator” would be formally appointed for significant projects. The ONR would be the default lead regulator. This is intended as an interim measure prior to the establishment of a Commission for Nuclear Regulation and is envisaged to implement as much of the Commission model as possible without statutory footing.

Modernising Regulatory Standards

1. Updated Nuclear Site Criteria

   Current regulations for the location of nuclear sites under the Semi-Urban Population Density Criteria (“SUPDC”) and Radiation (Emergency Preparedness and Public Information) Regulations 2019 (“REPPIR19”) are considered by the Taskforce to apply unsuitably uniform requirements regardless of the proposed reactor’s scale or underlying technology. In the new National Policy Statement for Nuclear Energy Generation (“EN-7”) which was laid in Parliament in November, these existing siting criteria were retained, though EN-7 remains subject to ongoing review by the Secretary of State. The government has further noted in its strategic steer that its Planning and Infrastructure Bill includes a number of reforms to support future nuclear deployment.

   The Taskforce recommends updating site assessment criteria to reflect modern reactor safety characteristics, creating a pathway for development of semi-urban power stations. For investors pursuing industrial co-location strategies (where small modular reactors supply industrial facilities or data centres) these proposals have the potential to enhance the UK’s regulatory competitiveness and investment pipeline. 

2. Design Standardisation Benefits

   Through our work on the Sizewell C (“SZC”) project, which recently reached financial close, we know that the benefits of replication can be huge. The government has likewise stated in its strategic steer that it wants to see maximal replication between SZC and Hinkley Point C (“HPC”). EDF has estimated that the HPC replication strategy adopted by SZC will deliver 20% in cost savings. As an illustration, whilst the first two emergency generators at HPC cost £38 million, the next six cost half of that amount at £19 million each, and at SZC none of the development or certification work will need to be repeated, meaning all its emergency generators will be at the lower price. The successful adaptation of the EPR design to meet British regulatory requirements for HPC is estimated to save "tens of thousands of hours" of engineering work for SZC, and the benefits of replication have also been recognised on-site at HPC where the second reactor unit was completed 106 days faster than unit one, demonstrating the series effect in action.

   Under current regulations, each nuclear project requires separate regulatory approvals, even where identical designs are deployed. The Taskforce recommends that EN-7 be amended to give greater weight to design standardisation. Adverse effects arising from the adoption of a standardised design should not justify regulatory refusal except in exceptional cases. Once a reactor design receives regulatory approval for an initial site, it is proposed that subsequent projects deploying identical designs should benefit from a strong policy presumption in favour of consent, with matters already resolved not being reopened absent exceptional reasons. If implemented, this proposal would make the case for replication (successfully deployed for Sizewell C) even more powerful by removing duplicative regulatory assessments. Changes like this will further enhance the investment case for developers pursuing multiple projects using the same nuclear technologies. The government’s strategic steer further emphasises that UK regulators should work closely with trusted overseas regulators and recognise credible assessments from international partners, an approach particularly important for enabling the import and export of small modular reactor and advanced modular reactor technologies.

   Separately, to improve planning efficiency across nuclear projects generally, the Taskforce recommends establishing a centralised Development Consent Order discharge unit by June 2026. This dedicated government team would coordinate and expedite the discharge of planning conditions for nuclear development projects.

Reducing Regulatory Burdens

1. Reformed Environmental Approvals and Costs

   The Taskforce notes that developers are frequently faced with long delays while waiting for environmental permitting decisions. Under the Environmental Permitting (England and Wales) Regulations 2016 (the “Regulations”), permit applications should typically be decided within three or four months or are deemed as refused, giving the opportunity to appeal. However, the Taskforce claims that delay is routinely opted for by applicants to avoid souring regulatory relations or commencing an appeal. It is claimed this leads to significant increases in project costs. The Taskforce recommends amending the Regulations to establish mandatory decision timelines of 42 days, with one 56-day extension permitted. Applications not decided within these timeframes would become subject to appeal to the Secretary of State, who must decide within 30 days. 

   The Taskforce also proposes legislative amendments to allow developers to comply with environmental conservation regulations through a substantial up-front contribution to a new nature fund administered by Natural England. This approach could allow developers to avoid a lengthy period of environmental surveys and mitigation studies, converting an open-ended liability into a quantifiable upfront cost, with the intention of having fixed fees across the nuclear estate.

2. Mitigating Legal Challenge Risk

   The Taskforce proposes several measures that appear to have the effect of mitigating the risks investors face when a nuclear project encounters legal challenges from third parties. Any such reforms would be enacted following consultation with the Lord Chancellor.

   Currently, when a legal challenge to a nuclear project is unsuccessful, the costs which claimants must pay to project developers are capped (at £5,000 for individuals and £10,000 for organisations). The Taskforce considers that these caps act as a form of subsidy that may encourage weak claims against projects (that may nevertheless lead to significant delays). To combat such claims, it is proposed that claimant cost caps are adjusted upwards for inflation and double in size at each stage of a claimant’s appeal. Where the court deems that judicial review has been misused, it is also proposed that costs protection be removed.

   The Taskforce also recommends government indemnification provisions to protect developers from damages incurred while proceeding with projects during judicial review proceedings. Additionally, it is proposed that amendments to Civil Procedure Rules are made to limit interim injunctions to encompass only irreversible works directly related to challenge grounds.

3. Regulation of Decommissioning Sites

   Current rules require costly nuclear-grade assessments for low-risk activities long after operations end. The Taskforce proposes progressing secondary legislation (known as the Proportionate Regulatory Control regime) to enable earlier transfer of sites away from the nuclear site licence regime to regular environmental regulation. This could facilitate more proportionate regulatory treatment once high-hazard activities cease on nuclear sites undergoing decommissioning, allowing for quicker and cheaper onsite activity and thereby reducing ongoing liability and compliance costs for investors. The Nuclear Decommissioning Authority estimates potential savings of £45 million for one site under these proposals. The Taskforce’s report extrapolates this to £6 billion across all sites.

Strategic steer and Implementation 

The prime minister has announced an acceptance of the principle of all the Taskforce’s recommendations and issued a strategic steer to the nuclear sector (as requested by the Taskforce). In the strategic steer, the government has committed to complete implementation of the Taskforce's recommendations within two years, subject to legislative timelines on elements requiring primary legislation.

However, the form of the government’s legislative and regulatory implementation of the Taskforce’s recommendations remains to be seen in more granular detail. Interested parties should monitor specific responses from government to the Taskforce’s recommendations as an indication of implementation priorities. 

Against a backdrop of increasing recognition that nuclear power is a critical component of the energy transition, the Taskforce’s recommendations are more important than ever to support what may become a golden age for nuclear in the UK energy system.