Yahoo Finance City comment: Rolls-Royce’s mini-nuclear power stations offer a lot of promise - will it become reality?
Has Rolls-Royce cracked the UK’s clean energy conundrum?
Kwasi Kwarteng was falling over himself to praise British ingenuity this morning as Rolls announced a funding deal for its new mini-nuclear power stations, the so-called small modular reactors.
SMRs are cheaper and smaller than their older brothers, making them easier to stand up and hopefully more politically feasible than hulking giants that spoil voters’ views.
These new sites can power 1 million homes and should become a crucial part of the UK’s clean energy mix. Recent soaring gas prices, partly due to a low wind year, show we can’t rely on renewables alone.
So what’s the catch?
Firstly, Rolls-Royce’s SMRs won’t happen overnight. Funding announced today will only get the mini-nukes through the design and regulatory approval stages, which will take years. Shovels in the ground require hundreds of millions more and is unlikely until the end of the decade.
Then there’s the engineering challenges. SMRs offer the promise of factory-made parts that can be assembled on site: great in theory, but likely more complicated in practice. Cynics could point to the fact that Rolls-Royce is still grappling with fixes for its Trent 1000 engines, despite problems first emerging in 2016.
The bullish case for the success of SMRs is Rolls’ long history in nuclear: it has been working on UK nuclear submarines since the 1950s.
Tellingly, France’s billionaire Perrodo family are backing Rolls-Royce’s project despite France being one of the few other countries around the world exploring SMR technology.
Today’s announcement shows the company has clear government support for its SMRs, which will also help. The push to net zero means support is unlikely to wane as previous administrations’ nuclear enthusiasm has.
Rolls-Royce is the right side of history with its SMRs. Let’s just hope they can pull it off.
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