Europe looks for nuclear power drive with new €200m SMR funding initiative

European Commission president Ursula von der Leyen announced the new funding package as part of a push by the EU to develop greater energy independence.

The strategy for small modular reactors would look to bring the first operational SMRs on stream from EU member states by the early 2030s, with €200m extra funding from the bloc’s innovation fund to be made available until 2028 to support projects.

The move comes as part of the launch of the EU’s new clean energy investment strategy, and was unveiled just weeks after the UK launched its own strategy for encouraging smaller nuclear projects.

Michael Freeman, a nuclear regulation expert and market lead with Pinsent Masons, said the strategy announcement indicated how Europe had aligned with other countries in looking to SMRs for energy security.

“The Commission’s strategy represents further political commitment to nuclear energy and SMRs, and to the crucial role that they can and must play in achieving carbon neutrality objectives and reliable domestic energy security,” he said.

“This is similar to recent policy announcements and commitments made in the UK and France – albeit this time at supranational level. The nine strategic actions established by the strategy will be welcomed by the nuclear sector across Europe.

“Clarity on funding and regulation in particular are necessary to help shape and crystallise projects – including fleet deployment and co-location – and provide confidence to investors and fuel cycle supply chains.”

Eran Chvika, an energy industry expert with Pinsent Masons in Paris, added: “The Commission’s strategy reflects France’s renewed commitment to nuclear development, initiated by the government in autumn 2022 and recently formalised through the adoption of the third Multiannual Energy Programme (PPE 3), which relaunches nuclear energy development “

The strategy will see the EU supporting green energy projects with up to €500m in funding from the European Investment Bank to anchor capital for specific energy infrastructure projects and support the efforts of providing a financial boost to the ongoing upgrades of Europe’s energy transmission and infrastructure projects.

Richard Murphy, head of energy in Ireland with Pinsent Masons in Belfast, said the extra funding was necessary to help drive transitional change across Europe.

“Europe needs much more flexible, low-carbon baseload,” he explained.

“Irish energy policy is very much based in the energy transition; largely focussed on offshore, renewable gas interconnection and batteries/system services as our baseload and main flexibility products “  

Speaking at the second Nuclear Energy Summit in Paris this week, von der Leyen said the investment would help support private investment in developing nuclear innovation across the continent.

“The logic is clear – when it is safe to deploy, it must be simple to deploy – all across Europe,” she said.

"Not only will we derisk investments in these low-carbon technologies, we also want to give a clear signal for other investors to join. This is one concrete step and part of a broader effort to improve the investment conditions for Europe's nuclear sector.

“This must be a joint European effort. The modular reactors' business model needs scale. So cooperation across European borders is vital.”

The Commission added the development of next generation nuclear technology was an important part of ensuring energy security for the continent and reducing reliance on fossil fuels – something which has become increasingly pressing under the shadow of the ongoing conflict in the Middle East.

Funding from other EU sources could also be made available as the Commission looks to develop a secure, competitive European supply chain for SMR projects.