Project Nutcracker: A "hack" for Ed Miliband if he wants to win the global race for small modular reactors

This article is the fifth of my Project Nutcracker series which examines ways to speed up the consenting of UK infrastructure. Normally my focus is on the planning regime, but here I look at the "Regulatory Justification" process for SMRs.

The mis-application of this regime needs urgent correction in order to send a positive signal to investors about the Government's commitment to cutting red tape for nuclear power.

A more forensic, "legal engineering" approach to regulatory blockages is needed if we are to lead the world in the roll-out of SMRs.

The urgent need for SMRs

Great British Nuclear's announcement this month of the four short-listed contenders for Government support for a fleet of small modular reactors (SMR) in the UK had me worrying again about how the UK is going to speed up its regulatory regime to win this global race for nuclear.

The announcement comes in the same month as an influential report (Foundations: Why Britain is stagnating) highlights how slow and expensive it is to get anything built in the UK compared with the past, and with other nations. Nuclear, sadly, gets a special mention.

There is a dawning realisation across the world that nuclear is the only way we will reach Net Zero within the time horizon necessary to minimise the catastrophic effects of climate change. It is also the only way we will get the massive amounts of energy needed to drive the power-hungry data centres which will enable mass deployment of artificial intelligence. See this short FT video. Countries who harness this power will thrive. Those who do not will be left behind. The struggles National Grid is facing to rewire the country by anything like 2030 in order to connect new wind and solar to the grid only heightens the need for SMRs as a localised power source.

We need a fit-for-purpose regulatory regime

This is why it matters so much that we reform not just the regulations, but the customs and practices which have built up around the consenting of nuclear power. The latter, by the way, is often the more difficult – requiring cultural change within regulatory bodies used to doing things a certain way for decades. Regulations can be changed with the redrafting of a statute, cultures cannot.

My window into how the previous Government was addressing the challenge of speeding up nuclear consenting (the 'Nuclear Hackathon', described below) was not particularly encouraging. It is symptomatic of a general 'hackathon approach' to diagnosing and fixing regulatory issues that isn't as effective as it could be.

I hope that the new Government takes a more forensic approach.

To that end, if Mr Miliband or his team are reading this, I make a plea for one simple reform to benefit SMRs – one that will save millions of pounds of private and public sector money, years of time, and reduce nuclear safety not one jot. A real no-brainer. It doesn't even require legislation. The Secretary of State just needs to confirm that there is a "Regulatory Justification" covering all SMRs. See final section of this article. The Nuclear Hackathon asked participants for ideas to streamline regulation. This is an obvious candidate, and one which would send a great signal to investors.

The Nuclear Hackathon

In April this year, I was excited to attend the "Nuclear Hackathon" – an all-day event held by the Department of Energy Security and Net Zero (DESNZ) "to explore how we speed up the delivery of new nuclear projects… identifying opportunities for greater regulatory co-ordination and how this may lead to efficiencies in navigating regulatory pathways."  Right up my street I thought, as someone who led the consenting of Hinkley Point C and Sizewell C (the UK's first new nuclear power stations consented since 1989), and blogs about what's slowing down UK infrastructure consenting.

The event was part of the Government's consultation on how to turbo-charge the deployment of "alternative nuclear technologies". These technologies include small modular reactors (SMRs) – mini nuclear power stations that can be made in factories and assembled on-site (almost like lego). While still largely at the design stage, the excitement about them around the world is based on the hope that they could provide a fast and cheap way to generate high volumes of zero-carbon energy.  

The hundred-plus invitees assembled at Senate House were welcomed by Claire Coutinho, the then Secretary of State for DESNZ, but not before a warm-up exercise which involved us walking around the room, stopping, starting, and patting our heads as commanded by an enthusiastic facilitor. I couldn't help wondering what the Chinese would make of this as the UK's answer to speeding up the deployment of nuclear!

Around the tables of ten were fantastically knowledgeable and experienced people, from organisations like Great British Nuclear, the Nuclear Industry Association, SMR developers, nuclear supply chain providers, and all the key regulatory bodies (from the Office for Nuclear Regulation to Natural England). We grabbed the moments we could to share thoughts, and some really interesting topics were begun, but the format of the event seemed designed to make serious discussion impossible. We were directed to write down ten ideas in ten minutes for reforming nuclear regulations. The facilitator chivvied us to move on after each minute, to ensure we didn't get bogged down in the detail. We were reassured that this was all part of the plan – to give even our wildest suggestions an airing. Having scribbled down ideas, the tables were mixed up and we voted with post-it notes for our favourites. In teams we then worked up Dragons Den "pitches" for these ideas to other groups.

We were reassured at the end of the day that the post-it notes and tables of issues would be collected up and used to help Claire Coutinho with her consultation. I left with a sense of a wasted opportunity.

Why the "Hackathon" approach to regulatory reform worries me

There may be many policy areas where this type of brain-storming works - areas like education perhaps, where the big ideas aren't necessarily bounded by laws that need to be fully understood in order to be cleverly engineered around.

The Government is desperate to reform the planning system to achieve growth. The additional layers of regulation for SMRs (and their relationship to custom and practice at regulators like the Office of Nuclear Regulation) similarly needs analysing urgently.

Brain-storming sessions with those operating within the current system is exactly what we need, but twinned with some really rigorous legal analysis of the levers we can and can't pull. I have no doubt that civil servants are busy working away in the background on some of this detail. The "blob" (the derogatory name for the civil service apparently used by some MPs and Ministers) is often blamed for failing to implement the creative and radical ideas of politicians – including, no doubt, those identified at Nuclear Hackathons. I suspect the real problem is that time and effort is being wasted by not getting lawyers practising in the field to help upfront to analyse the legal parameters Government has to play with: Are we up against human rights law, principles of procedural fairness, international environmental treaties or just difficult political messaging when we look to speed up a particular regime? Or is it the way the rules are being implemented by a regulator which is causing the problem? How possible is it to deal with each, and how worthwhile in terms of bang for your political buck?

I've been involved in numerous roundtables on planning reforms. They're a decent start, but without instructing us to do the hard-yards of legal analysis as follow-up they're of limited value…rather like asking a civil engineer to opine off the cuff on whether a project is viable without getting them do the full design work.

Bear in mind also that many lawyers won't like to be the ones to say publicly at a roundtable that the big ideas being floated won't work, or that they'd need to do some serious research to decide if they do. I've seen this many times.

A classic example of this is a suggestion that comes up time and again: why can't we in some way dis-apply the Habitats Regulations where they get in the way of consenting really important infrastructure? Particularly where that infrastructure is part of reaching Net Zero, which in itself will have a benefit to habitats? This happens to be something I've looked at in detail recently. An article to come out on this soon but (spoiler alert) despite Brexit it's not possible unless we want to break a number of International Treaties, which I highly doubt the Government will wish to do. The projects I work on involve me advising on Habitats Regulations almost daily. But without an express mandate to explore the limits of its dis-application (which is highly complex) I would not have known that this is a non-starter.  Neither would any of the other planning lawyers and barristers sat at Government roundtables and think-tanks who haven't squashed this idea to date.

Law has more similarities to engineering than people think. While not quite as immutable as the laws of physics, some laws are hard-wired in to such an extent they are in effect untouchable. Others, like granting a Regulatory Justification for all SMRs (see below), are low-hanging fruit that Government would be mad not to pick. Government needs the best practitioners in the field to work with industry to distinguish the former from the latter. The things that will be most effective within the realms of what's legally possible will not always be the most exciting sounding or obvious. Regulatory Justification is one such.

Low-hanging fruit: "Regulatory justification" - confirm it all for SMRs

I offer the Government an easy win in its bid to show it is serious about streamlining the consenting of SMRs. If they take my advice on this alone, the Nuclear Hackathon will have been worthwhile.

Amidst the organised fun and post-it notes, I snatched a conversation with my neighbour, the CEO of an SMR developer.  When we met for coffee afterwards, he briefed me on the madness of the "Regulatory Justification" procedure which the Government requires each and every SMR developer to go through for their particular design.

For anyone interested, I have a full paper I can share, explaining the basis on which the new crop of SMRs can and should be confirmed by the Secretary of State as already benefiting from Regulatory Justification. The bones of that argument are as follows:

• The Justification of Practices of Involving Ionising Radiation Regulations 2004 ("JR2004") are the latest derivation of the Euratom Treaty put in place in 1957. The Treaty was driven by the desire to promote nuclear energy as a means of ensuring energy security and economic growth in post-war Europe, and to foster collaboration in nuclear research and development.
• The principal intention of JR2004 is to ensure that the benefits of "a new class or type of practice" involving "ionising radiation" outweigh the cost (risk). This is what is referred to as having "Regulatory Justification". The use of X-rays in prisons and bone density scanners for Sports Performance Assessments, for example, require (and have obtained) Regulatory Justifications to ensure that the small risks to human health they pose are outweighed by their benefits. The Regulatory Justification applies not to each and every type of x-ray machine and bone-density scanner but to them as a "class" of ionising radiation practice.
• Under Regulation 5 of JR2004, something is an "existing class or type of practice" if it is either: (a) a practice carried out lawfully without regulatory justification before 6 February 2018; or (b) it has already been found to be justified, or both.
• There is a clear argument that the SMR designs coming forward are both (a) and (b), given the Regulatory Justifications granted/deemed in the case of existing operational reactors in the UK. The Secretary of State has the power to confirm this under Regulation 12 of JR2004: to confirm that "the use of ionising radiation for the generation of electricity from nuclear energy using oxide fuel of low enrichment in fissile content in light water cooled, water moderated thermal reactors" is an "existing practice". This could be done after a short, targeted consultation with specified bodies.
• This confirmation would avoid each SMR developer making separate applications for Regulatory Justification, something which was never the intention of JR2004.
• It would save SMR developers millions of pounds in costs and years of delay. DEFRA's expected timeline from application to decision is currently 2 years. It would remove regulatory replication, save regulators and government both time and capacity, without any reduction in safety, security, and safeguarding of the environment. This is because, to be clear, the output of any "Regulatory Justification" decision is just that – confirmation that the use of ionising radiation in the particular product or process is justified on a cost/benefit analysis. It does not set out any conditions or duties on operators. For nuclear power stations all such controls are provided for in a myriad of other regimes (generic design assessment, development consent orders, environmental permits, and nuclear site licences). It is in fact on the basis of the robustness of those regimes that the Secretary of State can feel confident that the cost/benefit analysis justifies the generation of electricity from nuclear power for the purpose of JR2004. In effect, Regulatory Justification for nuclear power is a very elaborate tick-box exercise.
• Even better, if the Secretary of State were to issue confirmation under Regulation 12, those SMR designs which have already applied for regulatory justification (Rolls Royce) would be saved from pursuing their applications through the system. The Regulation 12 confirmation would apply equally to them.

Every participant in the Great British Nuclear SMR procurement competition is proposing a reactor that fits the stated "existing practice" set out above. Despite this, each one will have to submit a separate justification application. Rolls Royce has progressed to the final round of the Great British Nuclear SMR procurement competition, it has completed step two of the Generic Design Assessment from the Office for Nuclear Regulation, and it has received hundreds of millions of pounds from the Government. However, Rolls Royce[1] only applied for Regulatory Justification in July 2024. The Government (DEFRA) is still processing the application, meaning (in theory) that Government is not yet certain if the benefits outweigh the costs.

By giving a blanket Regulation 12 confirmation, the Government could resolve this contradiction and allow the Great British Nuclear procurement process to proceed without facing the awkward question: how can the Government procure a product where it is unsure that the benefits outweigh the detriments?

The Government has already publicly taken a view on the overall benefits of nuclear power for the country, and should remove this procedural redundancy.

Further discussion

We welcome hearing views on these proposals from all with an interest in solar development. Please contact us if you are interested in discussing this further using the contact details below.