Budget power up for Rolls-Royce’s mini-nuclear plans
Power up for Rolls-Royce nuclear plans: Hunt vows to put more money into mini power plants
Rolls-Royce got a boost from Jeremy Hunt’s plans to put more money into mini-nuclear plants.
The chancellor promised to co-finance “exciting new technology” if it works.
Listed on the FTSE 100, Rolls has led a UK program to design small modular reactors (SMRs), which have become a major pillar of UK energy strategy.
Funding boost: Rolls-Royce has led a UK program to design small modular reactors, which have become a major pillar of UK energy strategy
The cabinet has now initiated a selection procedure that will determine this year which design and which company can build a reactor fleet.
While this means Rolls could lose out to a rival, the government has already invested £210 million in its scheme – dubbed Rolls-Royce SMR – which is expected to be the front runner.
Hunt’s move came when he rebranded nuclear power as ‘environmentally friendly’ and set up a public body, Great British Nuclear (GBN) to oversee the industry.
The British Chancellor wants a quarter of Britain’s energy to come from nuclear power by 2050.
Changing the way nuclear is categorized will allow pension funds and asset managers, under pressure to make green investments, to invest billions in power plants.
Winning the selection process would be a boon for Rolls, which has struggled for years and is being overhauled by boss Tufan Erginbilgic, who joined in January. The main source of income has long been making and maintaining aircraft engines, but this has been hit by the coronavirus pandemic.
The SMR design is based on the nuclear reactors it supplies to British submarines. The plants would cost around £1.8bn each and provide energy to 45,000 households.
As most parts are assembled in factories, the ‘flat pack’ plants can be built much more quickly and cheaply than major projects such as Sizewell C, estimated to cost £20bn.
Rolls-Royce SMR boss Tom Samson said it was the only technology of its kind to “go through the British regulatory process.”
Samson added: “Rolls-Royce SMR has called for rapid government progress and we welcome the endorsement of that principle.”
Hunt said the ministers’ “first” focus will be to establish the small reactor programme, meaning decisions on large sites will likely be delayed until later this year or in 2024.
Hinkley Point C, which has been over budgeted and heavily delayed, is under construction and the only other site under discussion is Sizewell C in Suffolk.
Hunt gave few details about GBN, such as its budget and powers, though it is expected to be included in a power strategy to be unveiled in a few weeks.