Rolls-Royce Holdings PLC (LSE:RR.) said it will "proceed rapidly" to submit designs and work with the UK government to deliver the first small-scale nuclear reactors after securing funding from private investors.
An equity raise was agreed yesterday, with the result being that Rolls-Royce will be joined by French-owned BNF Resources and US energy company Exelon (NYSE:EXC) Generation in investing £195mln over three years.
The FTSE 100 group, which yesterday sold its nuclear controls arm, said it has now established the Rolls-Royce Small Modular Reactor (SMR) business "to bring forward and deliver at scale the next generation of low cost, low carbon nuclear power technology", with the private funding enabling the unit to secure £210mln of UK grant funding.
The SMR business will continue to seek further investment, Rolls added, and "will now proceed rapidly with a range of parallel delivery activities", including identifying sites for the factories which will manufacture the modules "expected to be focused in the North", continuing talks with the government on identifying how best to secure long-term investment in the technology and engaging with overseas customers "across many continents".
It said that 90% of each SMR power plant, which will eventually occupy a footprint the size of two football pitches, will be built or assembled in normal factory conditions and that the UK's current supply chain "could" deliver around 80% of the total.
A single SMR power station will be able to power approximately 1mln homes, Rolls said, as well as helping produce other fuels, such as sustainable aviation fuels and green hydrogen.
Chief executive Warren East said: “With the Rolls-Royce SMR technology, we have developed a clean energy solution which can deliver cost competitive and scalable net zero power for multiple applications from grid and industrial electricity production to hydrogen and synthetic fuel manufacturing."
Tom Samson, who has been appointed CEO of Rolls-Royce SMR, said the approach to delivering nuclear power based on predictable factory-built components "is unique and the nuclear technology is proven".
BNF Capital said it had reviewed numerous proposals but found this project "was the most realistic, affordable and scalable solution for provision of carbon-free baseload and alternative power requirements".