Budget boosts Rolls-Royce’s nuclear plans
ROLLS-ROYCE received a boost from Jeremy Hunt’s plans to plough more cash into mini-nuclear power plants.
The Chancellor promised to co-fund ‘exciting new technology’ if it works.
FTSe 100-listed rolls has spearheaded a British programme to design small modular reactors (Smrs), which have become a key pillar of the UK’s energy strategy.
The Government has now kicked off a selection process that will determine this year which design and which company can be used to build a fleet of reactors.
Although this means rolls could lose out to a rival, the Government has already invested £210m in its scheme – called rolls- royce Smr – which is expected to be the front-runner.
Hunt’s move came as he relabelled nuclear power as ‘environmentally friendly’ and launched a public body, Great British Nuclear (GBN) to oversee the industry.
The Chancellor aims to have a quarter of the UK’s power come from nuclear sources by 2050. Changing the way nuclear is categorised means pension funds and asset managers, who are under pressure to make green investments, can invest billions in 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. Its main source of income has long been the making and the servicing of aeroplane engines but this was hit by the coronavirus pandemic.
Its Smr design is based on the nuclear reactors it provides for British submarines. The plants would cost around £ 1.8bn each and provide energy for 45,000 homes.
As most parts are assembled in factories, the ‘ flatpack’ power stations can be built much faster and more cheaply than major projects such as Sizewell C, which are estimated to cost £20bn.
Tom Samson, the boss of rolls-royce Smr, said it was the only technology of its kind ‘moving through the UK’s regulatory process’.
Samson added: ‘rolls-royce Smr has called for rapid progress from the Government and we welcome the adoption of that principle.’
Hunt said ministers’ ‘initial’ focus will be to pin down the small reactor programme, meaning any decisions on large sites are likely to be delayed until later this year or in 2024.
Hinkley Point C, which is over- budget and much delayed, is under construction and the only other site being discussed is Sizewell C in Suffolk. Hunt gave few details on GBN, such as its budget and powers, though this is expected to be included in an energy strategy to be unveiled within the next few weeks.
‘Exciting new technology’