UK Fusion Energy Ltd Annual Report and Accounts 2025/26 · first published 13 October 2026
UK Fusion Energy Ltd (UKFE) — formerly UK Industrial Fusion Solutions Ltd — is the government-backed company building STEP, the UK's prototype fusion power plant at West Burton, Nottinghamshire. It is a wholly owned subsidiary of the UK Atomic Energy Authority (UKAEA) and is funded by the Department for Energy Security and Net Zero (DESNZ). In 2025/26 UKFE spent £118.8m, of which 54% went to external industry — up from 47% the previous year — across 371 UK suppliers. The government has committed £2.5bn over five years (2024/25–2029/30), with approximately £1.3bn allocated to STEP, signalling a large and sustained procurement pipeline. UKFE has now appointed a Construction Partner (ILIOS consortium) and a first Magnets System Partner (Tokamak Energy), with further system-partner contracts expected in 2026/27 — creating real opportunities for SMEs in advanced manufacturing, digital engineering, materials science, and regional supply chains around West Burton. This is an annual report and accounts document, not a procurement policy note; it contains no new procurement rules binding buyers, but it is highly relevant context for any SME seeking to enter the fusion supply chain.
WHO THIS APPLIES TO
THE ENKII VIEW
The sustained ramp-up in external industry spend — 54% of a £118.8m programme budget, rising from 47% — combined with explicit plans for additional system-partner contracts in 2026/27 means the STEP procurement pipeline is opening up now, not in the 2040s. SMEs with capabilities in high-temperature superconductors, advanced manufacturing, digital engineering, plasma-facing materials, or construction and site services near the East Midlands are best placed to benefit. The 49 West Burton regional suppliers already engaged signals that geographic proximity to the site is itself a qualifying factor worth leveraging.
1. Register your interest with UKFE's supply-chain team now and monitor the Find a Tender / Contracts Finder portals for system-partner contract opportunities explicitly expected in 2026/27.
SMEs with capabilities in advanced manufacturing, superconductors, materials science, or fusion-relevant engineering — The report states 'Other system partner contracts are expected in FY26/27', and external industry spend rose to 54% of a £118.8m budget — the pipeline is live and growing.
2. Position your firm as a regional supplier by engaging with UKFE's West Burton community and stakeholder activities and the emerging 'fusion supercluster' initiative.
SMEs based in or able to mobilise to the East Midlands (Nottinghamshire) — 49 West Burton regional suppliers were already engaged in 2025/26, and regional and social benefits — including local employment — are explicit programme objectives. Geographic proximity is a genuine differentiator.
3. Track the statutory Development Consent Order (DCO) consultation planned for early 2027 and engage with ILIOS (the appointed Construction Partner) as they mobilise their delivery supply chain.
SMEs in construction, civil engineering, site services, or environmental surveying — The non-statutory DCO consultation completed early 2026; statutory consultation and enabling works are planned for 2026/27, meaning construction-related procurement is imminent.
4. Develop capability or partnerships around the Dassault Systèmes 3DExperience platform and model-based systems engineering, then approach UKFE or its strategic partners as sub-tier suppliers.
SMEs in digital engineering, AI, simulation, or product lifecycle management — UKFE has a strategic contract with Dassault Systèmes and spent £8.4m on digital capability in 2025/26 — this is one of the fastest-growing programme spend areas.
5. Prepare for Competitive Dialogue-style procurement processes: document your track record on technically complex programmes, your risk-management approach, and evidence of cultural alignment with collaborative delivery — these were the explicit evaluation criteria used to select the Construction Partner.
All SMEs considering bidding for STEP work — UKFE's published selection criteria for the ILIOS contract included 'track record on comparable programmes', 'technical competence, risk management, and delivery realism', and 'alignment on culture and ways of working'.
6. Ensure you have robust IP protection in place before engaging with UKFE or its partners — review any collaboration or non-disclosure agreements carefully given UKFE's active IP generation (29 patent applications in one year).
SMEs generating novel technologies or IP in fusion-adjacent fields — UKFE explicitly manages 'Information management and Intellectual Property' as a strategic risk and is generating IP rapidly; SMEs must protect their own innovations before entering collaborative arrangements.
Every rule below quotes the official document verbatim.
UKFE spent £118.8m in 2025/26, comprising £106.7m operating expenditure and £12.1m capital expenditure, within 1% of budget. (UKFE programme spend, financial year 1 April 2025 to 31 March 2026)
“Outturn for the year on both capital and operating costs was within 1% of the budget at £118.8m (comprising of £106.7m operating expenditure [financial statements note 5] and £12.1m capital expenditure [financial statements note 7]).”
External industry spend rose to 54% of total spend in 2025/26, up from 47% in 2024/25. (UKFE operational expenditure, FY2025/26)
“external spend with industry increased to 54% of total spend (2025/26: 47%).”
371 UK suppliers were engaged in 2025/26, with 80% of spend retained in the UK and 49 regional suppliers at West Burton. (UKFE supply chain, FY2025/26)
“371 UK Suppliers • 80% spend retained in the UK • 49 West Burton regional suppliers”
The UK Government committed £2.5bn over five years (2024/25–2029/30) to fusion, with approximately £1.3bn allocated to the STEP programme. (UKFE/STEP programme, five-year spending review period 2024/25–2029/30)
“£2.5bn government five-year commitment to fusion (24/25-29/30) • £1.3bn allocation over the 4 years to STEP Fusion Programme”
UKFE selected a Construction Partner (ILIOS consortium) through Competitive Dialogue, evaluating track record, technical competence, risk management, delivery realism, and cultural alignment. (UKFE Construction Partner selection process, concluded FY2025/26)
“Assessment of track record on comparable programmes • Evaluation of technical competence, risk management, and delivery realism • Direct engagement with senior leadership to test alignment on culture and ways of working”
Further system-partner contracts (beyond Tokamak Energy for magnets) are expected to be awarded in 2026/27. (UKFE supply chain development, FY2026/27 onwards)
“Other system partner contracts are expected in FY26/27 and further market testing for an EP will be conducted in later years.”
UKFE's operating model categorises economic and industrial benefits to include development of UK supply chains, stimulation of private investment, and creation of high-value capability applicable beyond fusion. (UKFE benefits framework, all programme phases)
“Economic and industrial benefits … Including development of UK supply chains, stimulation of private investment, and creation of high‑value capability applicable beyond fusion.”
Regional and social benefits linked to West Burton include skills development, local employment, and contribution to regional regeneration. (UKFE benefits framework, West Burton site and East Midlands region)
“Regional and social benefits … Particularly linked to the STEP site at West Burton, including skills development, local employment and contribution to regional regeneration.”
The first non-statutory Development Consent Order (DCO) consultation was completed in early 2026; the next formal statutory stage is planned for early 2027, creating a planning milestone relevant to site-services suppliers. (West Burton site, planning timeline)
“from January to March 2026 we ran the first, non-statutory, phase of consultation on our Development Consent Order to build the principal facilities … before launching the next formal stage of consultation in early 2027.”
UKFE generated 29 patent applications and 10 trademarks in 2025/26, and has a growing IP portfolio — indicating that collaboration agreements may involve IP-sharing considerations. (UKFE innovation activity, FY2025/26)
“29 patent applications • 10 trademarks”
UKFE increased its headcount by 53% (from 124 to 190 staff) during 2025/26 and the total STEP workforce across UKFE and partners grew to approximately 470 FTE. (UKFE organisation, FY2025/26)
“53% workforce increase (124 to 190 staff) … Growth of UKFE to ~200 FTE and ~470 FTE across STEP overall.”
UKFE identified supply-chain development risk as 'Moderate' appetite but considers it a 'massive industrial, economic, and social opportunity to build a new industry based in the UK'. (UKFE strategic risk register, FY2025/26)
“while lack of a supply chain generates delivery threat, there is a massive industrial, economic, and social opportunity to build a new industry based in the UK.”
This briefing is enkii's interpretation of the official document — the official text always governs.
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