Chancellor Jeremy Hunt has stressed the need to increase nuclear power and deemed such energy “environmentally sustainable”.

Hunt said the UK has increased the proportion of electricity generated from renewables from under 10% to nearly 40% but argued the need to increase capacity in nuclear as it is “vital to meet our net zero obligations”.

Delivering his Budget statement on 15 March, he said: “Because the wind doesn’t always blow and the sun doesn’t always shine, we will need another critical source of cheap and reliable energy. And that is nuclear.”

To encourage the private sector to invest in the UK’s nuclear programme, he confirmed that, subject to consultation, nuclear power will be classed as “environmentally sustainable” in the country’s green taxonomy, “giving it access to the same investment incentives as renewable energy”.

In November, Hunt announced the UK’s first state-financed investment in Sizewell C, a planned nuclear power station for Suffolk. Once built, Sizewell C is expected to generate low-carbon electricity for at least 60 years and will employ 900 people.

At the end of 2022, the government invested almost £700m in Sizewell C.

Darryl Murphy, head of infrastructure at Aviva Investors, the asset management arm of the composite insurer, told MPs on 16 November that there has not been an opportunity around nuclear but described Sizewell C as “a very important opportunity”.

At an evidence session at the Welsh Affairs Committee, he said: “I think we have to recognise that there is a degree of coupling, to the point that if Sizewell is a success, it will breed success going forward.”

Another commitment to boost the country’s nuclear energy capacity is the Great British Nuclear programme, which the chancellor said “will bring down costs and provide opportunities across the nuclear supply chain to help provide up to one quarter of UK electricity by 2050”.

Additionally, the chancellor said he is launching the first competition for small modular reactors. 

“It will be completed by the end of this year and if demonstrated as viable we will co-fund this exciting new technology,” he said. 

Small modular reactors are emerging technology, and no country has yet to deploy one, the Treasury explained last week, ahead of the Budget delivery: “To ensure the UK steals the march, the Small Nuclear Reactors competition is expected to attract the best designs from both domestic and international manufacturers with winners announced rapidly. The government will also match a proportion of private investment as part of this to ensure designs are ready to be deployed as soon as possible in the UK.”