Yahoo Finance Rolls-Royce rivals gear up for mini-nuke race as power system creaks
Rolls Royce has long been at the vanguard of Britain's nuclear industry, with more than half of the UK’s £385m fund to support advanced projects in the field allocated to Rolls’s mini-nukes programme.
But the company’s dominance is now being challenged by a new breed of scrappy start-ups who believe their technology could make Britain a world leader in nuclear power.
“You should have another viable alternative that you're supporting,” says Rick Springman, an executive at US mini-nuke company Holtec. “When you invest in stocks, do you put all your money in one company?”
Nuclear power is seen as central to the UK’s goal of meeting its Net Zero targets, improving energy security and reducing its reliance on Russian oil.
Last month, Rolls said its small modular reactors (SMRs), or so-called mini-nukes, could supply a fifth of the UK’s total electricity capacity to homes across England and Wales by the end of the decade.
The reactors use existing nuclear technology on a smaller scale than traditional power plants. Each can generate about 470MW of power and last at least 60 years.
The Government has picked eight sites for new nuclear projects including Sellafield in Cumbria and Bradwell, Essex, to place new projects. Other sites such as Trawsfynydd in the Snowdonia national park are also being considered. Rolls-Royce has chosen four it would like to build on, earmarked for their existing infrastructure and connections to the grid.
Rivals want access to these initial sites to prove their power stations work. Proof that they can power the grid in the UK could open up opportunities to launch projects abroad.
They believe their technology offers advantages. London-based Newcleo, for instance, wants to use some of the UK’s plutonium stockpile for fuel and Last Energy’s design aims to use more off-the-shelf components, offering a speedier build.
Meanwhile, Holtec is developing a reactor which can be cooled in an emergency without external power. While Rolls is planning 470MW reactors, equivalent to more than 150 onshore wind turbines, Holtec plans 160MW units.
Springman says: “Now you have a high electricity cost, you have inflated market prices. If you don't get this right, where are you going to be in 10 years? You have to start now.”
Before a reactor can be built, designers must go through a process called a Generic Design Assessment to assess the safety and security of a new reactor design.
Companies like Holtec would like some financial help with the design process and an agreement about a site they can use. After that, private money can be found, says Springman, since he can take an agreed reactor design and a place to build it to investors. Without those things, he claims the cost of borrowing would be extortionate.
Holtec’s reactor could share a site with Rolls-Royce or another contender. The forthcoming Hinkley Point C, with power of 3.2GW, is on a 160 hectare site. By comparison, a single Holtec reactor will occupy six hectares, or about 10 football pitches.
The push for approvals comes as deals elsewhere are signed elsewhere. GE Hitachi Nuclear Energy signed a deal last year with Canada’s Ontario Power Generation to deliver one of its BWRX-300 units which could be online as early as 2028. Deals for GE to build 10 more in Poland followed weeks later.
In February, French President Emmanuel Macron agreed €1bn of funding for EDF’s Nuward SMR which could be generating electricity by 2030.
All these competing projects are aiming to package a number of reactors together as a cheaper power station alternative. A longer-term strategy is to offer one or two mini-nukes to big industrial users at a price they can finance themselves.
Rolls’ own design aims for a price of £1.8bn, less than a tenth of the cost of the most modern large power station, while providing about a seventh of the power.
The plants also offer an attractive source of heat and electric power to steel, cement and chemical makers which need large amounts of power at a set price.
Last Energy wrote to the Parliamentary committee to say that “excessive Government funding for early stage development activities” can crowd out “entrants and innovation,” and that having a preferred supplier - a status Rolls-Royce enjoys in the UK - may limit the field.
As things stand, the UK faces declining output from the six nuclear power stations it has left as they reach the end of their lives. Stations at Torness, Hinkley Point B, Heysham and Hartlepool will end generation between 2022 and 2028.
Future supply was put further into doubt when Hitachi pulled out of the UK in 2020, scrapping plans to build a power station in Wales that would have provided 6pc of Britain's electricity. It blamed a failure to find both private investment and enough government support.
Springman says: “You need a site, and you need to get started soon, I think is the key point. You know that schedule is really what worries me. If we don't have a site by the end of next year, the schedule dates start to push.”
If things move quickly, Holtec can have a reactor supplying electricity to UK homes and businesses by 2032, similar to Rolls-Royce’s 2030 target.
Holtec will need to build factories to produce the reactors, and the UK could be a candidate for one of them, says Springman.
“We're looking to build one in Europe. We haven't had specific discussions, but if the market demand is here, I think we could definitely build a factory in the UK to support our needs.”
For Mr Springman, time is of the essence.
“Low cost reliable electricity is the underpinning, the key to any economy,” he says. “This is huge, a high stakes situation that not just the UK is in, but all of Europe is in right now.”
For Rolls-Royce’s part, it has signed a deal with one developer, Solway Community Power Company, cementing its technology as the preferred choice.
A Government spokesman said: “Small and Advanced reactors will play a vital role in our nuclear programme as we work to reduce our reliance on fossil fuels and exposure to volatile global gas prices.
“The Government is investing in these new technologies through the £385m Advanced Nuclear Fund including £210m towards the Rolls-Royce SMR programme.”
A Rolls-Royce SMR spokesman added: “Rolls-Royce SMR is seeking to move into negotiations with Government around a structure for the deployment of our UK SMR power stations.
This is the fastest way to get new nuclear on the grid. With each SMR providing one million homes with low-carbon electricity, our technology will provide greater energy security and support the country’s net zero aspirations.”
