Rolls-Royce Renews Call for $2.8 Billion to Build U.K. Reactors

A Rolls-Royce Holdings Plc-led group renewed calls for around 2 billion pounds ($2.8 billion) of U.K. government funding to move forward with plans for a raft of new mini nuclear reactors.

Britain was said to be weighing the investment back in October, but the funding never materialized. Now Rolls-Royce and partners including Laing O’Rourke Plc are asking again for government support to build the first two or three plants out of a planned 16, just as the U.K. talks up nuclear -- and specifically mini reactors -- as one way to meet net-zero targets.

“We’re trying to explore with the government whether it’s going to be possible to get that level of commitment,” said Tom Samson, interim chief executive officer of the consortium. Compared with large nuclear projects, “it’s a smaller ask, it’s a shorter-term ask, and it leads to a self-sustaining financial future.”

Britain is likely to need nuclear to meet its 2050 emission targets, yet all of its remaining atomic plants will close by 2035, and only one is currently under construction. Backing Rolls-Royce’s plan to build 16 mini plants by mid-century would allow the government to boost clean-power generation, support U.K. manufacturing and prop up a company that has been hard hit by the pandemic.

The government’s U.K. Research & Innovation agency is “in discussion with the Rolls Royce-led U.K. small modular reactors consortium on how work may proceed,” the Department for Business, Energy & Industrial Strategy said Friday, declining to elaborate.

Prime Minister Boris Johnson has already pledged 215 million pounds for small modular reactors and Rolls-Royce hopes to raise 300 million pounds to supplement that commitment, it said earlier this week. But that’s all money for feasibility studies and project design; the consortium now needs 2 billion pounds to bring its plans to fruition.

EDF Project

While most in the industry accept that net zero will be difficult to reach without a solid underpinning of nuclear, the only project set to come online is Electricite de France SA’s Hinkley Point C in 2026. The government hasn’t given EDF any funding to build that plant, but it did agree to a subsidy for the power produced. That will equate to 30 billion pounds of taxpayers’ money over the 35-year contract, according to the Committee of Public Accounts.

The Rolls-Royce consortium aims to submit its 470-megawatt reactor design for assessment by regulators in the second half of this year. Final design approval is expected by 2026, but the factories to build the technology can be constructed in the meantime, meaning the first unit should be ready by the early 2030s, Samson said.

With the first five reactors expected to cost 2.2 billion pounds each, the consortium will look to overseas funders if the U.K. government won’t back the plan, according to Samson.

“Surely a U.K. technology should be prioritized in terms of government support, because it’s the one that generates U.K. manufacturing jobs and the exports,” he said.

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