The Hinkley Point C power station in Somerset is gigantic. The 176-hectare (435-acre) plant will provide 3.2 gigawatts of power, enough to power 6 million homes. It’s not just the project that’s big: the cost is too. With a price tag that has ballooned to £48bn and delays of at least five years, it has become a symbol of nuclear power’s pitfalls.
But a group of companies argue they have a faster and cheaper option than large Hinkley-sized plants in the form of small modular reactors (SMRs), which can be built in a factory and then put together in place.
Britain’s Rolls-Royce, which also makes reactors for submarines in Derby, is competing with three North American competitors to win orders from the UK government.
Stephen Lovegrove, chairman for the last year of Rolls-Royce SMR, the joint venture undertaking the work, claimed the company is 18 months ahead of its rivals, in an interview at the FTSE 100 company’s London headquarters.
However, Lovegrove, once the most senior civil servant in the government’s energy department and Ministry of Defence, expressed his disappointment at another year’s delay in a UK government tender that has pushed back Rolls’ earliest date -Royce for a new reactor in 2032 or 2033, beyond a target that had already dropped from 2029 to 2031.
Rolls-Royce has stuck with it despite the closure of other speculative ventures by group chief executive Tufan Erginbilgiç in his turnaround plan.
However, Rolls-Royce SMR, which is led on a day-to-day basis by chief executive Chris Cholerton, has already blamed government delays for its decision to take flagship vessels under pressure from outside the UK. “Every day that goes by without a decision increases the risk” of the UK falling behind rivals, Lovegrove said. “It’s definitely holding us back, both domestically and internationally.”
Lovegrove said the UK “missed a trick” in failing to produce turbines for its wind power revolution over the past decade, including the period he led the energy department under the Conservative government.
“It was a time, frankly, of austerity and it required some kind of, kind of investment decisions to be made,” Lovegrove said.
The government in November put Rolls-Royce SMR plus US-owned rivals Holtec and GE Hitachi, and Canadian-owned Westinghouse on its shortlist. Two are expected to be chosen at Chancellor Rachel Reeves’ Spring Statement.
A decision to proceed with SMRs would represent a significant milestone in the history of Britain’s nuclear production. UK nuclear power peaked at 12.7 gigawatts (GW) in 1994, or 17% of installed generating capacity. Since then, the industry’s fortunes have faded, with a lack of new projects to replace the aging fleet of reactors.
Only Hinkley Point B has been approved since Sizewell B was opened in 1995. Hinkley’s sister project, Sizewell C, is awaiting approval, but projected costs have also risen to approximately £40 billion.
Lovegrove said the first 470 megawatt Rolls-Royce SMR will be in Britain, followed by the Czech Republic a year or so later, after ÄŒez Group joined as a joint venture partner this year. Another unnamed European country would follow by 2034, he said. The United States and Gulf states will also be targets – Qatar’s sovereign wealth fund is among the investors that have put £280 million, plus £210 million in UK grant funding.
Whatever the expectation, the various SMR contenders in the UK and elsewhere believe they are on the winning side with nuclear power due to the blackout of renewables when the wind stops or the clouds cover the sun. But another more recent development is big tech’s insatiable needs for clean energy for generative artificial intelligence.
Microsoft last year signed an agreement to revive the Three Mile Island nuclear plant in Pennsylvania. Google has an SMR agreement with Kairos Power of America. Rolls-Royce will respond to a call for nuclear projects from Facebook owner Meta, Lovegrove said. In the UK, the government said on Monday that SMRs will support the growth of AI.
Lovegrove, 58, joined the civil service in 2004 after working for investment banks Morgan Grenfell and Deutsche Bank. He rose through the ranks, including seven years on the London 2012 Olympics board, before becoming permanent secretary, the highest civil service rank, of the energy department in 2013.
Since leaving government, he has also returned to banking as an advisor to Lazard, and joined Columbia University as a distinguished visiting fellow.
There’s a reason the interview is taking place in an office building (one shared, incidentally, with the Guardian) rather than a factory: no SMR exists anywhere in the world, apart from test reactors in China and Russia.
Doug Parr, policy director of environmental campaigners Greenpeace UK, said SMR advocates are very optimistic. The money would be better spent on renewables plus energy storage, he said.
“Despite the relentless hype, a closer look at the progress of SMRs shows that they don’t appear to be solving any of the problems suffered by larger reactors,” he said. He cited the experience of America’s Nuscale, which abandoned a project in Idaho after costs rose. SMRs will be “much more expensive than renewables and they are just as slow to bring online, which makes them too slow to be used much for grid decarbonisation,” Parr said.
“The only significant difference from larger reactors is that SMRs offer the ability to spread nuclear power problems over a wider geographic area,” he said.
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Rolls-Royce, Holtec, Westinghouse and other rivals such as Nuscale and Russia’s Rosatom all use variations of pressurized water reactors (PWRs), standard but smaller technology. The Rolls-Royce reactor building would cover about two hectares, while the others are smaller. But the main difference for SMRs is the “modular” aspect: the reactors will be built in lorry-sized parts in factories, before being assembled at one of the locations that have been announced, from Cumbria to the Isle of Anglesey or Ynys MÃ in north Wales.
This is in contrast to the approach to complex, stick-built projects such as Hinkley or Sizewell, with a large site too large to cover from the rain.
Lovegrove said the modular approach “will very, very, very substantially compromise the construction of a nuclear power plant,” by spreading costs over many reactors and building two per year. Asked if the SMR process bore Hinkle’s scars, he said: “SMR was specifically designed as an industrial process to deal with the causes of that scarring.â€
If the UK and the Czech Republic go ahead with the orders, “this is a viable business”, Lovegrove said. UK procurement means a budget of £10bn for three SMRs.
Lovegrove said Rolls-Royce was sticking to a 2022 statement that its power will cost “around £50/60 per megawatt hour” at 2012 prices. That would be half of Hinkley and competitive with prices between 54 and £59 for wind guaranteed by the UK government in its last auction in September.
“It’s not the case that nuclear energy over the lifetime of various projects is a more expensive technology than renewables,” Lovegrove said, citing the additional costs of storing and moving renewable energy.
It’s an opportune time for nuclear advocates, even with unproven technology. Lovegrove was Boris Johnson’s national security adviser in February 2022, when Vladimir Putin’s full-scale invasion of Ukraine triggered a global energy crisis, with Europe scrambling to replace Russian gas.
“Most German policymakers would now admit that such a heavy reliance on Russian gas was a strategic weakness,” Lovegrove said. Baltic states threatened by Russia such as Estonia and Latvia are among those most interested in Rolls-Royce technology, he said.
Lovegrove is working on another aspect of the UK’s response to the rise of authoritarian states: he is conducting a government review of Aukus, an alliance that gives Australia nuclear submarine propulsion from the UK, with the blessing of the US. The alliance will benefit Rolls-Royce by providing more demand for submarine reactors. Lovegrove said there was no conflict of interest because the SMR company is an independently operated joint venture and Aukus will never involve civilian nuclear power.
“Aukus is the most important defense and defense industry collaboration linked anywhere in the world in more than 60 years,” he said.
It is unclear whether the alliance, signed by Joe Biden, will survive Donald Trump’s second term in the White House. However, Lovegrove argued that Trump should give “full support” because “security” will increase in the Indo-Pacific.
Rolls-Royce hopes the UK government’s quest for energy security will see it favor a British-made technology.
“We have the opportunity to be a leader in small modular reactors and their supply chain,” he said. “And I really hope we can achieve it.â€
