An industry consortium led by Rolls-Royce, the UK aero-engine maker, and the British taxpayer will jointly pump £405m into the development of a fleet of mini-reactors as part of a new push into nuclear power designed to help the government meet its net zero carbon targets.
Rolls-Royce said it had secured funding from US energy company Exelon Generation and privately held BNF Resources, an investment vehicle backed by members of France’s wealthy Perrodo family and owner of oil group Perenco. The three partners will invest a total of £195m in a new business, Rolls-Royce Small Modular Reactor, over three years.
The funding will trigger a commitment of £210m from the government, which is due to be announced by business secretary Kwasi Kwarteng on Tuesday.
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.”
UK Prime Minister Boris Johnson backed the new technology under development, known as small modular reactors (SMRs), as part of his 10-point plan for a “green industrial revolution” last year.
The technology is viewed within the government as a way to strengthen Britain’s energy security, create manufacturing jobs and help deliver on Johnson’s “levelling up” agenda designed to ensure wealth and jobs are more evenly spread across the UK.
The government’s backing for Rolls-Royce comes three years after the UK engineering group threatened to shut the SMR programme unless it received a long-term commitment to the technology.
Other western nations, including the US and France, are also pursuing their own SMR technologies for use in their domestic markets as well as a new source of exports.
SMR developer NuScale of the US announced at the COP26 conference in Glasgow last week that it had struck a deal to build small-scale reactors in Romania. Emmanuel Macron, president of France, allocated €1bn of government funds last month to help the state-backed utility EDF develop its own SMRs by early next decade.
Rolls-Royce and its partners will use the initial funding to put its SMR design through the UK’s rigorous nuclear regulatory regime. The process is expected to take up to four years but would keep the consortium on track to complete its first 470MW plant by the early 2030s. Each mini-power station would be capable of generating enough low-carbon electricity for about 1m homes.
In contrast to full-scale nuclear power stations, the SMR would have a footprint of just two football pitches. But the key difference is that the small, modular design would allow the parts to be built in factories ready for quick assembly at the chosen location, making them much cheaper than the traditional large reactors.
Rolls-Royce estimates at least 16 SMRs could be installed at operational and mothballed nuclear sites in Britain. As part of the development phase it will also identify possible manufacturing sites for SMR modules.
The company has previously said it expects the first five SMR reactors to cost £2.2bn each, falling to £1.8bn for subsequent units. It estimates that the programme could create as many as 40,000 jobs in the UK regions by 2050.
The group said the new venture will continue to seek further backers. It said it was in talks with a potential fourth investor, which would raise the consortium’s commitment from £195m to £250m. Other companies, including Jacobs of the US and the UK’s Laing O’Rourke, which were previously named as part of the consortium, would become supply chain partners, Rolls-Royce said.