In the UK, a new wave of nuclear technology is emerging as Rolls-Royce and a handful of global competitors push forward with small modular reactors (SMRs). The race to deliver a new generation of reactors, cheaper and quicker than their gargantuan counterparts like the Hinkley Point C plant, is gaining momentum. But this race is not without its challenges, delays, and critics.
What Challenges Does Hinkley Point C Face?
The Hinkley Point C power plant in Somerset symbolizes the pitfalls of large nuclear projects. At 176 hectares (435 acres), it is a colossal facility, set to provide 3.2 gigawatts of power — enough to supply 6 million homes. However, the project’s cost has ballooned to a reported £48 billion, and its completion has been delayed by at least five years, highlighting the difficulty and expense associated with such massive undertakings. Despite these challenges, Hinkley Point remains a testament to the scale of traditional nuclear power.
How Do Small Modular Reactors (SMRs) Offer a Better Solution?
Against Hinkley’s struggles, Rolls-Royce and several other companies offer a different approach: small modular reactors (SMRs). These reactors, designed to be built in factories and then assembled on-site, promise to be quicker, cheaper, and more efficient than the large-scale nuclear projects of the past.
“SMRs offer a way forward for nuclear energy that’s not only faster and cheaper, but also far less risky,” said Stephen Lovegrove, chair of Rolls-Royce SMR, the joint venture spearheading the company’s efforts to develop this new technology.
Rolls-Royce, a company renowned for building reactors for submarines, is vying with three North American competitors—Holtec, GE Hitachi, and Westinghouse—to secure orders from the UK government.
Is Rolls-Royce Ahead of Its Competitors?
According to Lovegrove, Rolls-Royce is ahead of its rivals by a considerable margin. “We are 18 months ahead of our competition,” he stated confidently. However, despite the progress, Lovegrove expressed frustration over a further delay in a UK government competition that could push the first commercial SMR reactor from 2031 to 2032 or even 2033. This delay comes after a target date of 2029 had already slipped.
Despite the setbacks, Rolls-Royce SMR remains committed to the project, even as the company’s chief executive, Tufan Erginbilgiç, has closed other speculative ventures as part of his turnaround plan. “We are sticking with it because we believe in the potential of SMRs,” Lovegrove said.
How Are Government Delays Impacting SMR Development?
A key factor in the progress of SMR technology is the pace of government decision-making. According to Rolls-Royce, the delays have caused the company to seek crucial components like pressure vessels outside the UK. Lovegrove noted, “Every day that goes past without the decision increases the risk. It is definitely holding us back, both domestically and internationally.”
The delays are particularly frustrating for Lovegrove, who previously led the UK’s energy department and the Ministry of Defence. Reflecting on past government decisions, he lamented, “The UK missed a trick by failing to manufacture turbines for its wind energy revolution during the last decade.”
Despite these frustrations, the government has made significant strides. Rolls-Royce and its American and Canadian competitors were shortlisted for the UK’s nuclear energy competition in November. Chancellor Rachel Reeves’s spring statement is expected to select two companies.
Could SMRs Be the Key to Britain’s Energy Future?
A decision to proceed with SMRs would mark a major shift in the UK’s nuclear energy history. The nation’s nuclear power generation peaked at 12.7 gigawatts (GW) in 1994, but the industry has struggled. Hinkley Point B, the only atomic project approved since Sizewell B in 1995, is a rare exception. Despite the struggles of large-scale projects, SMRs are positioned as the future of nuclear power in the UK and beyond.
“SMRs will be part of the solution to the intermittency problems associated with renewable energy,” Lovegrove said, emphasizing that wind and solar energy can be unreliable when the wind doesn’t blow or clouds cover the sun.
In addition to the UK, other markets are interested in Rolls-Royce’s SMRs. The Czech Republic has already joined as a joint venture partner, and Lovegrove anticipates that other European countries will follow suit by 2034. Countries in the US and Gulf states are also seen as potential markets, with Qatar’s sovereign wealth fund among the investors who have already committed £280 million, alongside £210 million in UK grant funding.
How Are Big Tech's Energy Demands Fueling Nuclear Growth?
An emerging factor that could accelerate the adoption of nuclear energy is the growing energy demands of big tech companies, especially those powering generative artificial intelligence. Microsoft has signed a deal to revive the Three Mile Island nuclear plant in Pennsylvania, while Google has partnered with Kairos Power in the US for SMR development. Rolls-Royce is also in talks with Meta, the parent company of Facebook, about future nuclear projects.
“SMRs will be integral to supporting the growth of AI,” Lovegrove said. “The energy demands of AI are voracious, and nuclear power is well-suited to provide the reliable energy required.”
Are SMRs a Faster and Cheaper Solution Than Renewables?
While the promise of SMRs excites many in the industry, environmental groups remain sceptical. Doug Parr, policy director of Greenpeace UK, has voiced concerns about the optimism surrounding SMRs. “The money would be better spent on renewables and energy storage,” Parr argued, warning that SMRs may not solve large reactors’ challenges.
He pointed to the example of America’s Nuscale, which abandoned a project in Idaho after costs soared. He cautioned that SMRs could prove “vastly more expensive than renewables” and “just as slow to bring online.” Parr also noted that while SMRs might help distribute nuclear power across more locations, they do not resolve the fundamental issues with nuclear energy, such as waste management and safety concerns.
How Does the Modular Design of SMRs Make a Difference?
One of the key innovations that sets SMRs apart from traditional reactors is their modular design. Unlike large, complex, and custom-built plants like Hinkley or Sizewell, SMRs are constructed in factories in lorry-sized parts and assembled on-site. This modular approach promises to reduce the risk and complexity of building nuclear power plants.
“The modular approach de-risks the building of a nuclear power station substantially,” Lovegrove explained. “It allows us to share costs over multiple reactors, building two a year, which is a far more efficient process.”
The first 470-megawatt Rolls-Royce SMR is expected to be built in the UK, with the Czech Republic set to follow a year later. If successful, Rolls-Royce projects that the procurement for three SMRs in the UK could reach a £10 billion budget, representing a viable business model for the company.
Can SMRs Compete with Renewables on Price?
Rolls-Royce maintains that its SMRs will be competitive in price with renewable energy. “The cost of our power will be around £50/60 per megawatt hour in 2012 prices,” Lovegrove stated. This price is roughly half that of Hinkley Point C’s electricity costs. It is competitive with offshore wind energy, which the UK government has recently auctioned at £54 to £59 per megawatt hour.
Lovegrove also contends that nuclear energy is not inherently more expensive than renewables when considering the additional costs of energy storage and grid management associated with renewables.
How Will Geopolitical Changes Affect the Future of SMRs?
The recent geopolitical developments, especially the Russian invasion of Ukraine, have added urgency to the conversation around energy security. Lovegrove, who served as Boris Johnson’s national security adviser during the crisis, believes the UK’s energy security quest could significantly boost the SMR market.
“Most German policymakers would now agree that their reliance on Russian gas was a strategic weakness,” Lovegrove said, emphasizing the importance of diversifying energy sources.
Can Rolls-Royce Capitalize on the Global Demand for Nuclear Technology?
Rolls-Royce is also involved in another significant global energy development: the Aukus alliance, which aims to provide nuclear-powered submarines to Australia with UK and US support. Lovegrove argued that the coalition would create more demand for nuclear reactors, benefiting Rolls-Royce and the UK’s broader atomic industry.
“Aukus is the most important defence collaboration in over 60 years,” Lovegrove said, hoping the UK’s leadership in SMRs could extend beyond the energy sector to include the global defence industry.
While it remains uncertain whether the Aukus alliance will withstand future political changes, Lovegrove is confident that the UK is well-positioned to take a leadership role in the future of nuclear power.
“We have the opportunity to lead in small modular reactors and the supply chain for them, and I really hope that we take it,” Lovegrove concluded.
Conclusion: Will SMRs Play a Major Role in the Future of Energy?
The future of nuclear energy, led by innovative SMRs, is exciting but uncertain. Rolls-Royce is at the forefront of this revolution, but the company must navigate significant hurdles, from government delays to environmental opposition. However, with technological advancements, strategic partnerships, and a growing global demand for clean energy, Rolls-Royce’s vision for SMRs could play a pivotal role in shaping the future of energy.
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