Howard Mustoe
Fri, 24 February 2023
SMRs - Rolls-Royce
Rolls-Royce’s nuclear power business has frozen hiring as it demands a contract from the Government for its pioneering miniature reactors.
The division – which employs about 600 people – has put all recruitment on pause until it secures a contract for its pioneering small modular reactors (SMRs), which will each be capable of producing enough power for 1 million homes at a cost of just £1.8bn apiece
The move comes after Rolls' new chief executive Tufan Erginbilgic warned that Britain was losing its edge as a leading developer of the technology amid foot-dragging by ministers.
He has urged the Government to “come to the table” and agree to buy some of the units, which are smaller than existing power stations and cheaper to build, with factory-produced parts.
Without a UK order, the project is unlikely to get business from abroad it needs, he said.
Rolls-Royce SMR has ramped up hiring from 100 to 600 people in the past year, but insiders say the business is now in limbo until a sale is made.
Mr Erginbilgic said on Thursday: “We need to come to the table and work very seriously and sign an agreement for the deployment of the first project. First mover advantage will be important.”
Rolls raised money for its SMR venture by bringing in external investors including the French billionaire Perrodo family, who made their fortune from private oil company Perenco; Qatar's sovereign wealth fund; and US nuclear business Exelon Generation. It also received £210m of taxpayer funding.
However, dozens of companies are developing mini-reactors – including big names such as GE Hitachi, which last month signed a deal to build the first SMR in North America in a deal with authorities in Ontario, Canada.
A Rolls-Royce SMR spokesman said: “Rolls-Royce SMR is making great progress towards its goal of deploying a fleet of factory-built power stations, in the UK and overseas, and we are ready to enter negotiations with government.
“A positive demand signal from Government will show commitment to the UK’s sovereign nuclear technology and to addressing future energy security, while delivering against its net-zero commitments.
“It is the right time for us to consolidate and take the time needed to consider our workload and ensure we are making the best and most efficient use of our people, with their unique skills and expertise.”
SMRs offer less than a tenth of the capacity of a traditional nuclear power station, but at a much smaller size. Their parts can be mass-produced, spreading the initial research costs involved over many units and lowering the price of the reactors.
Private companies requiring vast amounts of green electricity or heat will eventually be able to buy their own reactor, it is hoped, helping decarbonise industries such as chemicals, cement making and manufacturing.
As well as discussions with the UK, Rolls is also holding talks with the Czech Republic to sell SMRs. If the UK does not buy them, the Czech government is unlikely to, Mr Erginbilgic said. He said he is hoping Whitehall will start talks in earnest as soon as next month.
Responding to Mr Erginbilgic’s call for speed, a Government spokesman said: “Putin’s weaponization of energy has shown how vital UK energy security is, and nuclear sits at the heart of achieving our energy independence and will help us reach net zero.
“The Government is investing in these new technologies through the £385m Advanced Nuclear Fund, including £210m towards the Rolls-Royce Small Modular Reactors programme.”
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