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The money, matched by over £250m from the private sector, will fund design of the Rolls-Royce SMR and take it through the regulatory process to assess its suitability for deployment in the UK.
SMRs could be less expensive to build than traditional nuclear power plants because of their smaller size. The modular nature of components means large parts of the plants can be produced in dedicated factories and shipped by road to site, reducing construction time and cost.
The consortium, also known as Rolls-Royce SMR, estimates that each 470MW plant – occupying the footprint of two football pitches – could be capable of powering 1m homes, equivalent to a city the size of Leeds. Rolls-Royce said they could be available to the UK grid ‘in the early 2030s’.
“With the Rolls-Royce SMR technology, we have developed a clean energy solution which can deliver cost competitive and scalable ‘net zero’ power for multiple applications, from grid and industrial electricity production, to hydrogen and synthetic fuel manufacturing,” said Rolls-Royce chief executive Warren East.
“The business could create up to 40,000 jobs through UK deployment and export-enabled growth. As a major shareholder in Rolls-Royce SMR, we will continue to support its path to successful deployment.”
The next phase of the design process will include entry to the UK Generic Design Assessment (GDA) process and the identification of potential factory sites. 90% of an individual Rolls-Royce SMR power plant will be built or assembled in factory conditions, and around 80% could be delivered by a UK supply chain.
Dame Sue Ion, fellow of the Royal Society and Royal Academy of Engineering, said: “This is extremely welcome news and demonstrates the potential of advanced nuclear power, which could be expanded safely to improve the overall efficiency of our energy system, with cheaper, stable low-carbon power to help meet the UK’s net zero goal.
“This welcome recognition of the innovative approach taken by the Rolls Royce-led team gives the UK a real chance to regain its place at the top table in nuclear energy internationally, and create a new manufacturing base for cutting-edge power generation, helping boost our economy and our export potential.”
The project will unite “some of the most respected and innovating organisations on the planet”, said business and energy secretary Kwasi Kwarteng. “This is a once-in-a-lifetime opportunity for the UK to deploy more low-carbon energy than ever before and ensure greater energy independence.
“SMRs offer exciting opportunities to cut costs and build more quickly, ensuring we can bring clean electricity to people’s homes and cut our already dwindling use of... fossil fuels even further.”
Parliament is considering the Nuclear Energy Financing Bill, which could establish a new financing model for nuclear projects, known as the Regulated Asset Base (Rab). The government hopes it could attract a wider range of private investment, reducing build costs, energy bills and Britain’s reliance on overseas finance.
The UK is also investing up to £1.7bn to bring at least one large-scale nuclear project to a final investment decision.
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