The engineering firm linked to Rolls Royce will proceed with its rollout after the UK government agreed to match the consortium’s investment.
After securing more than £450 million from the government and investors, Rolls-Royce will move ahead with a multibillion-pound plan to roll out a new breed of mini nuclear reactors.
The engineering firm, in partnership with investors BNF Resources and the US generator Exelon Generation with a joint investment of £195m to fund the plans over the next three years, will set up a venture focused on developing small modular nuclear reactors, or SMRs.
As part of its green 10 point plan to kick start the green economy over the next decade, the government will match the consortium’s investment, which is set to receive a second phase top-up of £50m from Rolls-Royce, with £210m to help roll out the mini nuclear reactors project.
The ministers expect that the new generation of SMRs will be quicker and cheaper to roll out than traditional large-scale nuclear reactors – such as the 3,200 megawatt Hinkley Point C project – which face enormous construction risks, and are prone to spiraling costs and delays.
Initially, the Hinkley Point C reactor was expected to cost £18bn, although the figure has climbed to about £23bn at the Somerset site. With all that happening, EDF and ministers struggled to agree on a new funding framework for a successor project at Sizewell C in Suffolk.
For the launch of its first mini reactors, which are based on a similar technology used to propel nuclear submarines, Rolls-Royce has promised to:
“harness decades of British engineering, design and manufacturing know-how”.
The generation capacity of each initial run of reactors is expected to be 470MW, or enough to power the equivalent of 1.3 million UK homes, and averagely cost about £2bn, well below the price per MW sought by developers of large-scale nuclear reactors.
About a fifth of the UK’s electricity is generated by 13 nuclear reactors. Nevertheless, by 2025, more than half of the country’s 7.8GW of nuclear capacity is due to retire, leaving a looming gap in the electricity supplies and the risk of a rising reliance on gas power stations.
Tom Samson, the chief executive of the Rolls-Royce SMR consortium, said that to help the UK meet its net-zero targets, the venture was established to:
“Deliver a low cost, deployable, scalable and investable program of new nuclear power plants. The approach would be based on “predictable factory-built components and proven technology to create an “investable” nuclear option.”
To create a multibillion-pound stable of 16 SMRs around the country, the consortium ultimately hopes to build on an initial run of five SMRs, the first of which could go online by 2031.
Kwasi Kwarteng, the business secretary, described the shift to SMRs as “a once in a lifetime opportunity for the UK to deploy more low carbon energy than ever before and ensure greater energy independence.”
“In addition, the SMR program would offer exciting opportunities to cut costs and build more quickly, and would help to cut the UK’s reliance on fossil fuels while creating jobs and a new homegrown industry.”
He concluded that not only can the country maximize British content, develop new intellectual property and reinvigorate supply chains, but it can also position the nation as a global leader in innovative nuclear technologies that can potentially be exported to other places.