Proactive Investors - Rolls-Royce Holdings PLC (LON:RR.) received a boost from a strong hint from prime minister Rishi Sunak that small nuclear reactors will be at the forefront of the UK’s new energy strategy.
Sunak told reporters a new energy strategy would centre around “carbon capture and storage, small modular reactors and the like,” on Monday.
Employing the same technology used to power nuclear submarines, small module reactors (SMRs) are each set to cost £1.8bn and provide 470MW of power output from a 10-acre site, enough to power 450,000 homes, according to the government. This level of power would be similar to that generated by 150 wind turbines.
Rolls-Royce last year identified the first four potential SMR sites and is hoping for formal government approval on the first by mid-2024.
Components for 80% of each SMR would be sourced from UK suppliers, the FTSE 100-listed company claims, with the plants assembled in UK factories.
Sunak is set to unveil a new energy strategy after former the plan proposed by Boris Johnson was found to be unlawful, breaching the 2008 Climate Act by the high court last July.
Sunak said the new strategy would be announced “shortly” and he was “very confident that we will continue to have a very vibrant set of companies and jobs created in the UK as we transition to net zero”.
Rolls-Royce has led the way in the lobbying for SMRs in the UK, anticipating it could bring the first mini nuclear power station online by 2029.
If given the go-ahead, Rolls would seek to standardise its design for SMRs, offering a less complex and cheaper alternative to conventional nuclear plants, such as Sizewell and Hinkley Point.
These could be built in between four and seven years, according to public body UK Research and Innovation (UKRI).
“Size, complexity, uniqueness and unique builds separated over many years are common issues in mega-projects,” it commented in a February report.
“Traditional £20 billion nuclear projects are vulnerable to all of them, but small nuclear reactors can address size, complexity, uniqueness and frequency of build.”
Rolls-Royce shares rose 3.2% to 149.6p on Tuesday.