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Rolls-Royce said on Tuesday it had agreed funding to get its small modular reactors (SMRs) through the design and regulatory clearance phase.
BNF Resources UK, a company backed by France’s billionaire Perrodo family, and Exelon Generation, a Chicago nuclear power giant, have agreed to invest £195 million over three years. The UK government is providing another £210 million, funding which was included in the Prime Minister’s recent Green Industrial Revolution plan.
Rolls-Royce CEO Warren East 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.”
Small modular reactors are mini-nuclear power stations that are easier to build and smaller than traditional nuclear power stations. Each site is roughly the size of two football pitches and can generate enough energy to power 1 million homes, compared to 6 million for a traditional nuclear station.
90% of the parts needed for the facility can be built in factories and then assembled on site, which is a radical departure from traditional nuclear power stations.
SMRs are cheaper to get off the ground, meaning they are less likely to be hit by the kind of funding issues that have plagued other nuclear projects.
Tom Samson, CEO of Rolls-Royce SMR, said: “Rolls-Royce SMR has been established to deliver a low cost, deployable, scalable and investable programme of new nuclear power plants.”
Sean Benson, director of BNF Capital, said the Rolls-Royce project was the “most realistic, affordable and scalable solution” his company looked at.
Rolls-Royce is holding talks with the government about possible sites for SMRs in the UK as well as discussions with overseas governments about possible projects.
The company said 80% of the supply chain for any UK projects could be based in Britain and could create 40,000 jobs.
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.
“By harnessing British engineering and ingenuity, we can double down on our plan to deploy more home-grown, affordable clean energy in this country.”
Tony Danker, director general of the Confederation of British Industry, said: “This is a hugely promising milestone for a technology that can not only boost the economy but help deliver a greener and more secure energy system overall.”
The funding announced today will help Rolls-Royce take SMRs through the design, regulatory clearance, and scoping phase. Rolls-Royce is seeking more investment for the project to help fund the building of actual SMRs and working reactors are still many years away.
The government is currently passing legislation that will allow investors to back projects like SMRs using a regulated asset base (RAB) model, which allows them to recoup up front costs. The government said this would “attract a wider range of private investment into these projects, reducing build costs, consumers’ energy bills and Britain’s reliance on overseas developers for finance.”
Shares in Rolls-Royce rose 3.4p or 2.6% to 145p.