By Susanna Twidale
LONDON (Reuters) – Britain’s Rolls-Royce said its 500-million-pound small modular nuclear reactor programme will run out of cash by the end of 2024, risking development of technology the government has said could boost energy security and reach climate targets.
Britain is aiming to replace ageing nuclear plants as all but one of its sites, which generate around 13% of the country’s electricity, are due to close by 2030.
The country, along with others in Europe, also needs to boost energy independence after Russia’s invasion of Ukraine led to record electricity prices.
New large-scale nuclear projects with huge up-front costs have struggled to attract investment, putting the focus on smaller, cheaper reactors which the government said have export potential.
Rolls-Royce’s small modular reactor (SMR) development business received a commitment of 210 million pounds from the government in 2021 but talks on how the projects would be funded are yet to start.
“We aren’t asking the government to make an order (for the nuclear units) today but we need to start negotiations on a deployment plan by the middle of this year,” Alastair Evans, government and corporate affairs director at Rolls-Royce SMR, told Reuters.
“We are facing a cliff edge, by December 2024 the money will have run out,” he said.
Rolls-Royce’s new CEO Tufan Erginbilgic said last week there was a sense of urgency in its engagement with government.
“We built a capable team (and) without any project, sustaining that team will be a big challenge,” he told reporters after the group published full-year results.
With rivals working on similar technology, it was vital to move quickly, he said.
“It is important that we engage therefore with the UK government urgently, and for a project that we can deploy as soon as possible,” he said.
Rolls Royce and shareholders in the SMR business, advisory firm BNF Resources Ltd, U.S. Energy company Constellation and Qatar Investment Authority have invested around 280 million pounds in total.
This and the government money have been used to build the business, which employs some 600 staff across Derby, Warrington and Manchester.
The funds have enabled it to start the regulatory process to approve the reactor design and identify sites for plants and factories.
Rolls-Royce hopes to build the reactors in British factories and has identified possible sites in Sunderland and South Tyneside and Teeside in the north of England and Deeside in Wales.
($1 = 0.8267 pounds)
(Reporting By Susanna Twidale, additional reporting by Paul Sandle; Editing by Veronica Brown and Bernadette Baum)
