A statement by the government said STEP will be an “innovative plan” for a commercially-viable fusion power station, including a prospect to build an actual station by 2040.
Secretary of state for business, energy and industrial strategy Andrea Leadsom announced the initiative on a visit to the Culham research centre.
Ms Leadsom said: “This is a bold and ambitious investment in the energy technology of the future. Nuclear fusion has the potential to be an unlimited clean, safe and carbon-free energy source and we want the first commercially viable machine to be in the UK”.
“This long-term investment will build on the UK’s scientific leadership, driving advancements in materials science, plasma physics and robotics to support new hi-tech jobs and exports”, she added.
According to the UK government, STEP builds on the UK Atomic Energy Authority's expertise in developing ‘spherical tokamaks’, with a new Mega Amp Spherical Tokamak (MAST Upgrade) experiment due to start operations at Culham in early 2020.
The government said the STEP initiative is expected to create 300 jobs directly, with even more in the UK fusion supply chain.
The Culham research centre hosts the Joint European Torus (JET), which is the largest fusion experiment in the world and is funded by the European Union as a joint scientific project among the bloc’s member states.
