Low-cost nuclear phase two grant award to Rolls-Royce SMR Ltd: information

Last updated:
9 November 2021

UK Research and Innovation (UKRI) through the UKRI Challenge Fund and the Low Cost Nuclear (LCN) challenge, is granting Rolls-Royce SMR Ltd up to £210 million to progress their design of a small modular reactor (SMR).

This grant awarded by the Department of Business Energy and Industrial Strategy (BEIS), is matched financially by Rolls-Royce SMR Ltd investors, who will be required to contribute £258 million. The objective is to advance a UK design of a small nuclear reactor that can potentially deliver low carbon power in the future to support the UK policy objective of net zero by 2050.

Phase two of the LCN programme is expected to develop multiple technical and manufacturing innovations. These will mainly focus on reducing construction time and programme uncertainties. They could directly create significant numbers of high value manufacturing, engineering and related jobs within the UK. If ultimately successful and cost competitive, the supply chain and the factories alone have the potential to create tens of thousands of high value jobs in the UK from the 2030s onwards.

The transition to a net zero economy will increase electrical demand fuelled by the growing need to:

  • recharge electric vehicles
  • sustainably heat homes
  • potentially produce zero carbon hydrogen gas.

This transition will require a diverse mixture of power sources, including firm low-carbon power at an affordable cost, to power the UK economy in the future.

Historically, nuclear power projects have been challenging to deliver to time and budget, owing to their scale and complexity. To address this issue, and reduce costs, Rolls-Royce SMR Ltd are proposing to develop radically different construction methods for new nuclear power plants. The programme will apply the known benefits of production line manufacture in factories to deliver nuclear systems. This has the potential to reduce the costs and construction times, while maintaining the ongoing quality and integrity of the systems produced.

The nuclear power station design proposed will be based on established pressurised water reactor technology.

A step change in cost reductions to electricity produced using nuclear power will require multiple innovations to be simultaneously and successfully implemented.

The Rolls-Royce SMR Ltd design is expected to enable a shift to manufacturing parts of nuclear power stations in factory conditions. Sub-assemblies could then be fabricated while protected against weather, tested and certified prior to shipping.

The final stage of construction on site would be similarly completed in a controlled environment undercover in a large re-usable on-site factory canopy. This would provide a protected working environment.

Importantly, each nuclear power station would be based on a replicated design.

This programme has the potential to yield benefits for the UK:

  • contribution to net zero
  • develop UK intellectual property
  • societal benefits such as skills, capability, and employment opportunities.

This is a potentially an important programme for decarbonising the UK’s energy system in line with net zero. Small nuclear power stations could contribute to future grid stability by providing diversified, firm, low carbon electricity generation at lower costs.

Legal basis:

i) Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part

ii) Higher Education and Research Act 2017

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