What If a Nuclear Reactor Is Just a Gas Turbine That Doesn't Burn Gas?

A thought experiment that changes how you think about the cost of small modular reactors.

Here's an uncomfortable question for anyone building a business case for a new gas-fired power station in the UK: have you actually priced in the gas? Of course you have!

Not just today's gas. The gas you'll burn every single hour, of every single day, for the next 25 years. And the carbon permits you'll need to buy for every tonne of CO₂ that comes out of the stack — at prices the UK Government has already told you will treble by 2045. Oh oh....

Most people compare nuclear and gas on capital cost. Nuclear is expensive. Gas is cheap to build. Argument over. But that comparison is like buying a car based solely on the sticker price and ignoring that one runs on petrol at £2 a litre and the other runs on electricity at 8p per kWh.

So let's do something different. Let's take a combined cycle gas turbine apart, piece by piece, and see what happens when we replace just one component — the gas turbine itself — with a nuclear heat generator (ie the core).

The Thought Experiment

A modern combined cycle gas turbine (CCGT) has a simple architecture. A gas turbine burns natural gas and spins a generator. The hot exhaust feeds a heat recovery steam generator (HRSG), which raises steam to drive a second generator — the steam turbine. An air-cooled condenser rejects waste heat. Electrical systems connect everything to the grid.

A small modular reactor has an almost identical back end. Steam turbine. Condenser. Generator. Grid connection. The only difference is the heat source. Instead of burning methane at 1,500°C, it splits uranium atoms at 400°C.

So here's the thought experiment: what if the nuclear reactor is just a very expensive gas turbine that never needs fuel deliveries and never produces CO₂?

Using the UK Government's own 2025 cost data, a new-build CCGT costs around £601/kW in EPC costs. The gas turbine package accounts for roughly a third of that — about £190/kW. Everything else — the HRSG, steam turbine, condenser, civils, electricals, buildings — comes to about £400/kW.

Now pull out the gas turbine and drop in a nuclear reactor with its containment vessel. At mature "nth-of-a-kind" costs, the nuclear island runs to perhaps £5,000/kW. The steam cycle equipment needs to be about 20% larger (because a pressurised water reactor produces steam at 340°C, not 540°C, so the thermodynamic efficiency is lower). That adds roughly £80/kW to the conventional island.

Total SMR cost: around £6,300/kW, versus £600/kW for the CCGT. A tenfold premium on capital. Case closed?

Not remotely.

The Gas Bill Nobody Talks About

A CCGT running at 85% capacity factor burns approximately 57 therms of natural gas for every megawatt-hour of electricity it produces. The UK Government's central projection for wholesale gas prices over the next 25 years averages around 68 pence per therm. That's roughly £38 per MWh in fuel cost — every hour, every year, for a quarter of a century.

An SMR's uranium fuel costs about £7 per MWh. The saving is £31 per MWh, year in, year out. Over 25 years, discounted at 8%, that fuel saving alone is worth approximately £2,500 for every kilowatt of installed capacity.

That's already half the capital cost premium of the nuclear island.

The Carbon Tidal Wave

But fuel is only half the story. Here's the number that should keep CCGT investors awake at night.

A CCGT emits roughly 360 kg of CO₂ per MWh. Under the UK Emissions Trading Scheme, the operator must hold carbon allowances for every tonne. The UK Government's published carbon price trajectory — the one they use for all energy policy modelling — shows the following:

• 2030: £50 per tonne → £18 per MWh added to CCGT costs

• 2040: £136 per tonne → £49 per MWh

• 2050: £235 per tonne → £85 per MWh

By 2050, the carbon cost alone will exceed the total wholesale electricity price we see today. And the UK ETS cap has already been extended to 2040, with legally binding net zero targets locking in the trajectory beyond that.

An SMR emits zero CO₂. Zero carbon cost. Zero exposure to the ETS. The net present value of those avoided carbon costs, over 25 years at an 8% discount rate, is approximately £3,300 per kilowatt.

Adding It Up

The SMR's capital cost premium over the CCGT is about £5,600/kW. The lifetime NPV of avoided gas and carbon costs is about £5,860/kW. The SMR pays for its own capital premium — and then some — simply by not burning gas and not emitting CO₂.

At the UK Government's central price assumptions, a CCGT commissioned in 2030 would have a levelised cost of electricity of approximately £105 per MWh over its lifetime. An SMR at mature costs comes in at roughly £121 per MWh. That's a gap of just £16/MWh — and it closes entirely under the Government's high gas and carbon price scenario. And the CCGT has benefited from decades of development and thus cost optimisation, unlike the SMR.

And that £16/MWh gap ignores one further factor: the SMR generates zero-carbon electricity that commands a premium in corporate power purchase agreements, qualifies for green certificates, and helps offtakers meet Scope 2 emissions targets that are rapidly becoming conditions of doing business.

The Punchline

The nuclear industry has spent decades trying to argue that reactors are cost-competitive with gas on capital cost. They aren't. A gas turbine costs £190 per kilowatt. A nuclear island costs £5,000. That's a factor of 26.

But capital cost is the wrong question. The right question is: what is the total cost of ownership over 25 years, including the fuel you burn and the carbon you emit?

When you ask that question — using the UK Government's own published price assumptions — the answer flips. The SMR's capital cost premium is almost exactly offset by its fuel and carbon savings. And every year that gas prices stay elevated or carbon prices rise faster than the central trajectory, the SMR pulls further ahead.

The real risk isn't building a nuclear reactor. It's building a gas turbine and betting that gas will stay cheap and carbon will stay free for the next quarter century. The UK Government's own numbers say that bet loses.

The analysis in this article is based on the DESNZ Electricity Generation Costs 2025, DESNZ Fossil Fuel Price Assumptions 2025, and DESNZ Traded Carbon Values 2025, all published by the UK Government in January–February 2026. Capital cost assumptions for SMRs draw on the INL Literature Review of Advanced Reactor Cost Estimates.