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Rolls-Royce consortium ‘secures funding’ for modular nuclear reactor

08 NOV 2021

 BY TIYA THOMAS-ALEXANDER


A consortium led by Rolls-Royce is poised to confirm it has secured huge backing from private investors for its small nuclear power plant plans.

Confirmation of funding from a consortium of backers is set to be announced in the next few days, according to the BBC. The government previously pledged to invest up to £210m in match funding if private investors could be found.

Rolls-Royce has been working on plans for small modular reactors (SMRs), which would cost around £2bn to build, it claims. This would be around one-tenth the cost of full-size plants such as Hinkley Point C. The announcement is expected to set out plans for four initial SMRs.

Laing O’Rourke and Bam Nuttall were part of a consortium with Rolls-Royce that invested £18m in development of the plan in 2019, with the government matching that. It is unconfirmed if they are part of the new consortium.

SMRs are designed to be built through 75 per cent modular construction, with parts assembled on site.

Rolls-Royce responded to say they had no comment as did a spokesperson for the National Nuclear Lab. The Department for Business, Energy and Industrial Strategy (BEIS) has been approached for comment.

New nuclear power plants have become key to the government’s decarbonisation plans for the UK. At least one new full-size plant is set to be approved before the end of parliament in 2024, with Sizewell C the most likely candidate. Last month, the government announced a £120m funding boost for small and large nuclear projects.

Rolls-Royce sells nuclear controls arm, closes in on small-scale nuclear investment

A block of four small modular reactors would be capable of generating nearly 500 MWs of power

Rolls designs the power plants for the Royal Navy's nuclear submarines

Rolls-Royce Holdings PLC (LSE:RR.) said it has completed the sale of its nuclear controls business but is expected to put this deal in the shade in the coming days with confirmation that plans for a new type of smaller nuclear reactor have received investor backing.

On Monday the FTSE 100 group said its civil nuclear instrumentation & control (I&C) business is now owned by Framatome, concluding a deal first announced last December and following regulatory clearance.

The proceeds will contribute to management's pandemic target to generate at least £2bn from disposals and will be used to help strengthen its balance sheet as it looks to return to an investment grade credit profile.

There were also reports on Monday that Rolls-Royce could make the announcement as soon as Tuesday on its small-scale nuclear plans.

Downing Street previously said it would provide £210mln in funding if that could be matched by investment from other sources. A consortium of investors has agreed to provide capital, the BBC reported.

Rolls, which makes power systems for aeroplanes, ships and submarines, is thought to have developed a design using four small modular reactors (SMRs), similar to those used in nuclear-powered submarines.

A block of four SMRs would be capable of generating nearly 500 megawatts (MWs) of power.

They will cost around £2bn each, which compares to the £20bn cost of reactors at the Hinkley Point nuclear plant in development in Somerset and another plant planned at Sizewell in Suffolk.

Grossi 'absolutely confident' of nuclear's inclusion in EU taxonomy

The International Atomic Energy Agency's (IAEA's) Director General Rafael Mariano Grossi said he is "absolutely confident" that "some arrangement" will be made to accept nuclear energy in the EU's taxonomy of sustainable investment. In an on-stage interview at COP26, he said the escalation of gas prices has increased political interest in nuclear power.

Grossi during his interview at COP26 (Image: Jonathan Cobb)

The interview at COP26 marked a new era of engagement for the IAEA in the United Nations Framework Convention of Climate Change process to address climate change. Although the agency has participated regularly in COP events, it has not previously taken a prominent position to represent nuclear energy and explain its role.

Grossi told his interviewer, the British journalist Gillian Tett, that achieving net-zero without nuclear power would be "extremely difficult, far more expensive and longer." That is one reason why, "There is an increased recognition that it is part of the solution and it will be part of the solution."

Considering recent price rises in gas and electricity markets, Grossi said, "We have seen this movie before with oil and with other volatility of prices.

"It is obvious that what we've seen with gas prices multiplying has only increased the interest - the urgency of interest - in countries which are dependent or fragile on gas provision from other suppliers," said Grossi.

COP "is the place to have such a message [of energy security]", said Grossi, "because you are looking in the frame of political decisions that are 10-15 years down the line. But that fits perfectly well. You need to have stable markets, price-wise and also environmentally-wise and in every respect."

Tett described the European Union's debate over its taxonomy of sustainable investments as "a bout of civil war." She asked whether Grossi thought nuclear would be included. "It will be," was his answer, "I'm absolutely confident. We saw the other day the President of the European Commission (Ursula von der Leyen) saying we need it as a stable source.

"I will not meddle," said Grossi. "I was in Brussels last week. It's not that people tell me what will happen. They are going to find some arrangement to include it."

He continued, "Let's look at the science. There's a political thing, but there is also science: the Joint Research Centre - the highest scientific body of the European Commission - came to the conclusion that nuclear does not do significant harm more than the other sources.

"It will be included in one way or another, for sure," he said. "In the EU, half of the countries using nuclear want more. I'm sure they will find some consensus."

Researched and written by World Nuclear News