Rolls-Royce Holdings PLC (LSE:RR.) has welcomed news that its prospective mini-nuclear reactor technology has been shortlisted for public backing in the UK.
“We welcome our shortlisting and are eager to build on this progress,” Rolls-Royce SMR boss Chris Cholerton said.
“Now let’s move at pace to secure the first order,” the company added in a statement.
Rolls-Royce was among six companies to see its small modular reactor (SMR) shortlisted for government contracts in the UK’s ongoing competition round.
Such SMRs promise to cut manufacturing time, complexity, and cost, with Rolls-Royce’s reactor designed to be built almost entirely from parts sourced in the UK.
Though EDF, GE-Hitachi Nuclear Energy International LLC, Holtec Britain Ltd, NuScale Power, and Westinghouse Electric Company UK Ltd were also selected to apply for government contracts, Rolls-Royce’s is the only reactor currently being assessed by regulators.
According to Cholerton, this places the FTSE 100-listed firm almost two years ahead of its competitors in bringing an SMR online.
“Securing a domestic contract is vitally important to unlock the enormous global export potential of our clean energy technology,” he continued.
A successful outcome would result in “immediate investment” in the mini-nuclear industry, the company added.
So what next?
Those selected to proceed into the next round of the competition will be invited to apply for government contracts to support the development of their reactors.
Essentially, this opens the six firms up to public funding for their projects, as promised by Chancellor Jeremy Hunt in this year’s spring budget.
“If demonstrated as viable, we will co-fund this exciting new technology,” he said in March as the competition was launched.
Given that proposed modular reactors, though cheaper than conventional sites like Hinckley Point C and Sizewell C, are still set to cost, this commitment from Hunt could equate to billions of pounds worth of funding.
Rolls-Royce’s SMR is expected to cost £1.6 billion, for instance, while competitor Westinghouse’s smaller AP300 - modelled on an existing reactor - will sit around £820,000.
These sites will aim to power some 1 million and 300,000 homes each respectively, offering a cheaper alternative to conventional reactors.
For comparison, both Hinckley Point C and Sizewell C are expected to cost over £30 billion each, with six Rolls-Royce SMRs projected to power their equivalent - 6 million homes each - at roughly a third of the price of development.
This is done by modularising reactors, with parts largely being built in factories along more efficient and reliable supply lines than seen in conventional projects.
Whether any of the companies are successful remains to be seen, with regulatory approval as yet in the balance and the actual end costs still mere estimates.
Critics have cited NuScale’s SMRs in the US which incidentally has seen costs almost double since the project was first announced.
Having originally expected to produce energy at US$55/MWh, NuScale’s reactors could now see a rate of around US$90/MWh a—fate not uncommon for larger-scale nuclear development.
Either way, optimism remains high, with Rolls-Royce hinting at “good progress” in the UK’s generic design assessment process and the government seemingly on track to award contracts for SMRs next summer.
“SMRs [...] could transform how power stations are built,” the government added, with the UK now seemingly well underway in chasing a targeted quarter of energy production from nuclear by 2050.