Rolls-Royce factory, Derby

Rolls-Royce wins £210m to progress small modular reactors

Image credit: PA

The UK government is investing hundreds of millions of pounds into small modular reactor (SMR) R&D led by Rolls-Royce, in the hope that the technology could play a significant role in the energy transition.

SMRs, which could be in use by the early 2030s according to government statements, have the potential to be much less expensive to build, operate and decommission than conventional nuclear power stations, which are multibillion pound, decades-long infrastructure projects.

Unlike parts for full-scale nuclear reactors, which are vast engineering challenges to manufacture and transport, SMR parts can be made in dedicated factories and transported on trucks and barges. SMRs can be assembled far more quickly and cheaply than full-scale reactors.

The £210m funding is part of the £385m Advanced Nuclear Fund previously announced as part of the prime minister’s “10-point plan” for decarbonisation.

Efforts to downscale the risk and cost involved with establishing nuclear operations are aimed at attracting domestic investors to the sector, as the government hopes to shift away from reliance on Chinese funding for new nuclear power stations. In September, reports emerged that the government was looking into whether it could remove EDF Energy’s Chinese partner from the planned Sizewell C project.

Business secretary Kwasi Kwarteng described the investment – which also has over £250m of private funding – as a “once in a lifetime opportunity” for the UK as the country shifts away from fossil fuels amid concerns over volatility in gas prices.

“This is a once in a lifetime opportunity for the UK to deploy more low-carbon energy than ever before and ensure greater energy independence,” said Kwarteng. “[SMRs] offer exciting opportunities to cut costs and build more quickly, ensuring we can being clean electricity to people’s homes and cut our already-dwindling use of volatile fossil fuels even further.”

“In working with Rolls-Royce, we are proud to back the largest engineering collaboration the UK has ever seen, uniting some of the most respected and innovating organisations on the planet. Not only can we maximise British content, create new intellectual property and reinvigorate supply chains, but also position our country as a global leader in innovative nuclear technologies we can potentially export elsewhere.”

His department said the public funding would go towards progressing phase two of its Low-Cost Nuclear project to further develop design of the reactors and see whether they would be suitable for deployment in the UK (take the technology through the UK’s nuclear regulatory process and identify potential sites for deployment). The government invested £18m in November 2019 during phase one, helping develop the initial SMR design.

Rolls-Royce SMR Ltd, a Special Purpose Vehicle, already has investment of £195m from Rolls -Royce, BNF Resources and Exelon, covering three years of work on the technology. Rolls-Royce will own approximately 80 per cent of Rolls-Royce SMR on completion of equity raising.

Rolls-Royce SMR said that a domestic SMR sector could create around 40,000 jobs. It estimated that each small modular reactor could be capable of powering one million homes (the population of Leeds).

Rolls-Royce CEO Warren East commented: “The SMR programme is one of the ways that Rolls-Royce is meeting the need to ensure the UK continues to develop innovative ways to tackle the global threat of climate change.

“With the Rolls-Royce SMR technology, we have developed a clean energy solution which can deliver cost competitive and scalable net zero power for multiple applications from grid and industrial electricity production to hydrogen and synthetic fuel manufacturing.”

The announcement comes as three former Conservative energy ministers argued at the COP26 climate summit in Glasgow that nuclear power, along with renewables and hydrogen, should play a greater role in the global energy mix if net-zero targets are to be reached in time to prevent warming beyond 1.5°C. Their report said the conference should “open its eyes to the combined value of nuclear and hydrogen as a complementary strategy alongside renewable energy”.

Chancellor Rishi Sunak announced in the Spending Review that £1.7bn would be made available to bring at least one full-scale nuclear project to a final investment decision.

Craig Lucas, chair of the IET’s Energy Policy Panel, said: “In the race to build a zero-carbon energy system we need to take advantage of all the available low-carbon technologies. Nuclear provides a stable source of low-carbon power, and this stability and predictability will have increasing value as we grow an electricity system with much higher penetration of renewable generation. ths big question for nuclear over the last few years has been whether it could go on a cost reduction journey similar to the amazing progress made by other technologies, notably offshore wind. The concept of modularising nuclear build is potentially a key route to realising mass production savings, and to unlocking the related challenge of making nuclear technology bankable.”

“To truly capture these cost reduction benefits requires volume production, so small modular reactors need to be deployable internationally. Therefore, it is great news to see a UK manufacturer leading the development of this technology, no doubt with an eye to the global export market. It is also interesting to see Exelon investing in this phase of development, so we have the largest US operator of existing nuclear plants working as part of the consortium. Furthermore, this is an excellent opportunity for the UK to further develop our skills in nuclear energy technology, as well as being a broader opportunity for the engineering supply chain.”

Dame Sue Ion, a fellow at the Royal Society and Royal Academy of Engineering, commented: “This is extremely welcome news and demonstrates the potential of advanced nuclear power, which could be expanded safely to improve the overall efficiency of our energy system, with cheaper stable low-carbon power to help meet the UK’s net-zero goal.

“This welcome recognition of the innovative approach taken by the Rolls-Royce-led team gives the UK a real chance to regain its place at the top table in nuclear energy internationally and create a new manufacturing base for cutting-edge power generation, helping boost our economy and our export potential.”

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