Penney worked on means to assess the effects of a nuclear explosion, and wrote a paper on what height the bombs should be detonated at for maximum effect in attacks on Germany and Japan. He served as a member of the target committee established by Groves to select Japanese cities for atomic bombing, and on Tinian with Project Alberta as a special consultant. Because the Quebec Agreement specified that nuclear weapons would not be used against another country without mutual consent, British authorisation was required for their use. On 4 July 1945, Field Marshal Henry Maitland Wilson agreed that the use of nuclear weapons against Japan would be recorded as a decision of the Combined Policy Committee. Along with Group Captain Leonard Cheshire, sent by Wilson as a British representative, Penney watched the bombing of Nagasaki from the observation plane "Big Stink". He also formed part of the Manhattan Project's post-war scientific mission to Hiroshima and Nagasaki that assessed the extent of the damage caused by the bombs.