Post: Spending Review: Key climate and energy announcements

Spending Review: Key climate and energy announcements

On 11 June, UK Chancellor Rachel Reeves unveiled the 2025 Spending Review (SR). In the Commons speech Reeves said “energy security is national security”, noting the vulnerability of the UK to the energy price hikes in the wake of Russia invading Ukraine in 2022. Reeves emphasised making energy technologies “built here and owned here” and ensuring “towns and cities which powered the last industrial revolution will play their part in our next industrial revolution to reduce our reliance on overseas oil and gas and protect working families from price shocks.”

Key measures announced included:

• £30B commitment to nuclear power
• £14.2B for Sizewell C nuclear power plant
• £2.5B for small modular reactor program with Rolls-Royce
• £2.5B for nuclear fusion, including support for the UK’s world-leading programme to design and build a prototype energy plant in Nottinghamshire.
• £9.4B in support for carbon capture and storage projects
• £80M over the SR period for port investment to support floating offshore wind deployment in Port Talbot, subject to final due diligence.
• Up to £27.8B to be invested through the National Wealth Fund (NWF), which will drive growth and create jobs across the UK. The NWF prioritises investment into the clean energy, digital and technologies, advanced manufacturing, and transport sectors
• £300M Great British Energy support over the SR period for Offshore Wind supply chains
• £2.6B to decarbonise transport from 2026-27 to 2029-30. This includes £1.4B to support the continued uptake of electric vehicles, and £400M to support the rollout of charging infrastructure

The SR also noted that the government is “fully committed to meeting its legally binding carbon budgets and to reaching net zero by 2050”. The government will set out further details in its Carbon Budget and Growth Delivery Plan in October, including its plans to decarbonise industry.

The government’s Infrastructure Strategy and Industrial Strategy are expected to be published mid-June. Clean Energy Industries and Advanced Manufacturing sector plans are also to be published as part of the Industrial Strategy.