Shares in Centrica PLC (LSE:CNA) jumped 4% after the government gave the green light to build Sizewell C nuclear power station, with the owner of British Gas committing £1.3 billion of investment.
The new total cost to build the plant has been put at £38 billion, which will be split between consumers, taxpayers and private investors.
The FTSE 100 energy group said it will have a 15% stake, with returns during construction and initial operations expected to include a real return on equity of 10.8% and an internal rate of return above 12% under moderate scenarios.
Centrica expects its equity share of the regulated base to reach £3 billion at commercial operations.
Chief executive Chris O’Shea said: "The UK needs more reliable, affordable, zero carbon electricity, and Sizewell C will be critical to supporting the country’s energy system for many decades to come."
He said the "milestone investment" by Centrica is "a compelling investment for our shareholders and the country as a whole".
The shares rose 4.2% to 163.25p.