Rolls-Royce plans for mini nuclear plants get £210m state backing
Some 40,000 jobs in the UK regions could be created by 2050 after Rolls-Royce announced that it had secured the funding to bring forward its plans for the next generation of low-cost, low-carbon nuclear power technology.
The Derby manufacturer’s Small Modular Reactor (SMR) Business will be launched after a £195m investment over three years through a consortium it has formed with BNF Resources UK Limited and Exelon Generation.
The funding will enable the business to secure grant funding of £210m from UK Research and Innovation funding, first announced by the Prime Minister in The Ten Point Plan for a Green Industrial Revolution.
The business, which will continue to seek further investment, says it will now proceed “rapidly” with “a range of parallel delivery activities”, including entry to the UK Generic Design Assessment (GDA) process and identifying sites for the factories which will manufacture the modules that enable on-site assembly of the power plants.
Rolls-Royce SMR says the potential for this to be a leading global export for the UK is “unprecedented”.
Nine-tenths of an individual Rolls-Royce SMR power plant will be built or assembled in factory conditions and around 80% could be delivered by a UK supply chain – a unique offering in energy infrastructure in the UK. Much of the venture’s investment is expected to be focused in the North of the UK.
A single Rolls-Royce SMR power station will occupy the footprint of two football pitches and power approximately one million homes. It can support both on-grid electricity and a range of off-grid clean energy solutions, enabling the decarbonisation of industrial processes and the production of clean fuels, such as sustainable aviation fuels (SAF) and green hydrogen, to support the energy transition in the wider heat and transportation sectors.
Warren East, Rolls-Royce CEO, said “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 business could create up to 40,000 jobs, through UK deployment and export enabled growth. As a major shareholder in Rolls-Royce SMR, we will continue to support its path to successful deployment.”
Business and Energy Secretary Kwasi Kwarteng said: “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. Small Modular Reactors offer exciting opportunities to cut costs and build more quickly, ensuring we can bring 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. By harnessing British engineering and ingenuity, we can double down on our plan to deploy more home-grown, affordable clean energy in this country.”
Tom Samson, CEO, Rolls-Royce SMR, said: “[This] announcement is fantastic news. Rolls-Royce SMR has been established to deliver a low cost, deployable, scalable and investable programme of new nuclear power plants. Our transformative approach to delivering nuclear power, based on predictable factory-built components, is unique and the nuclear technology is proven. Investors see a tremendous opportunity to decarbonise the UK through stable baseload nuclear power, in addition to fulfilling a vital export need as countries identify nuclear as an opportunity to decarbonise. The capitalisation of Rolls-Royce SMR takes us a step closer to achieving a unique, and most importantly investable, proposition in nuclear energy. It is a major vote of confidence in British nuclear technology and the potential for building a world-leading domestic supply chain.”
Rolls-Royce SMR says the move will generate £52bn in economic benefit to the UK.
A single power station will occupy around one tenth of the size of a conventional nuclear generation site and power approximately one million homes.
All phase one partners in the UK SMR consortium (phase 1 of the programme) will now become long term supply-chain partners.
Rolls-Royce was advised on the equity raise process by Eversheds Sutherland and HSBC.