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Rolls-Royce will go ahead with constructing a new fleet of mini nuclear reactors after receiving backing from the government and private investors.
The engine maker announced it will create the Rolls-Royce Small Modular Reactor (SMR) with the help of a £210m government grant and £195m from private firms.
Investors BNF Resources and the US generator Exelon Generation will fund the Rolls-Royce project for the next three years.
Supporters of the technology hope it will be cheaper and quicker to roll out than existing nuclear plants. Projects including the Hinkley Point C reactor have suffered from long delays and spiralling costs, with the bill now projected to hit £23bn.
Concerns have also been raised about the involvement of Chinese companies in critical infrastructure. The UK is looking at how to remove China’s state-owned nuclear company CGN from the Sizewell C nuclear plant in Suffolk. CGN currently has a 20 per cent stake in the project.
Rolls-Royce boss Warren East said on Tuesday that mini reactors were an innovative way to tackle the climate crisis.
“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.
Kwasi Kwarteng, the business secretary, said the UK had a “once in a lifetime” opportunity to deploy more low-carbon energy and boost the UK’s energy security.
“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.”
The UK has been shown to be vulnerable to volatile global energy markets this year. Gas prices spiked to record levels last month, causing rising bills for households and threatening to shut down energy-intensive industries including steel and ceramics.
A new generation of nuclear reactors will prove controversial, however.
Dr Simon Cran-McGreehin, head of analysis at the Energy and Climate Intelligence Unit, warned that hefty construction costs could mean that households could be forced to pay higher bills for several years before any new nuclear plants are operational.
“The high cost of nuclear technology combined with long build times means it isn’t a quick fix to our current energy challenges," Dr Cran-McGreehin said.
“The government’s continued and increasing focus on renewables alongside storage and flexibility – which can be quickly and cheaply deployed – are projected to form the backbone of a cost-effective, reliable energy system in the UK.”