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With the confusing consortium behind it, the UK’s Rolls Royce ”small” nuclear reactor project is running a huge risk

this is a huge risk of public money on a speculative design. By the time we know how much SMRs will cost and whether they are reliable or not, there will be up to 10 reactors being manufactured unless production lines are allowed to sit idle for years waiting until the design is proven enough for new orders to be placed. Realistically the first reactor won’t be complete before the mid-2030s at about the time the last fossil fuel will disappear from the generation mix, so it’s too little, too late and too expensive    

What it turns out to amount to is an agreement to spend £400m over the next three years which may produce a design for a reactor which may get approved by the regulators and which may find investors willing to pay what will be at least £2billion to build each one

nuClear News November 21. Rolls Royce’s Small Modular Reactors On 9th November the Government announced that it would back the Rolls-Royce Small Modular Reactor with £210m in funding. Matched by private sector funding of over £250 million, this investment will take forward phase 2 of the Low-Cost Nuclear project to further develop SMR design and take it through the regulatory processes to assess suitability of potential deployment in the UK. 


The Government claimed that SMRs have the potential to be less expensive to build than traditional nuclear power plants because of their smaller size, and because the modular nature of the components offers the potential for parts to be produced in dedicated factories and shipped by road to site – reducing construction time and cost. Rolls Royce SMR estimate that each Small Modular Reactor could be capable of powering 1 million homes – equivalent to a city the size of Leeds.  

  The £210 million grant follows £18 million invested in November 2019, which, according to the Government, has already delivered significant development of the initial design as part of Phase One of the project. (1)

 The Rolls Royce SMR design is not exactly small. It was originally conceived as a 440 MW unit, but R-R has found a way of getting 470 MWe out of the core. Each of the proposed 16 reactors is expected to cost around £1.8 billion to £2.2bn and produce power at £40-60/MWh over 60 yrs. (2) Rolls Royce says it has a target cost of £1.8 billion once 5 reactors have been built. (3) 


  As well as the Government funding, Rolls-Royce has been backed by a consortium of private investors. The creation of the Rolls-Royce Small Modular Reactor (SMR) business was announced following a £195m cash injection from BNF Resources, and Exelon Generation to fund the plans over the next three years. (The Guardian suggests Rolls Royce will top this up with £50m of its own money, which gets us to £245m –not quite the ‘over £250m’ mentioned in the Government Press Release, but it’s not clear whether the £50m is extra money or part of the £195m). It is hoped the new company could create up to 40,000 jobs by 2050. The investment by Rolls-Royce Group, and the government will go towards developing Rolls-Royce’s SMR design and take it through regulatory processes to assess whether it is suitable to be deployed in the UK. It will also identify sites which will manufacture the reactors’ parts and most of the venture’s investment is expected to be focused in the north of the UK, where there is existing nuclear expertise. (4)

BNF Resources UK Limited appears to have been created in June and has two significant employees, Nicholas Fallows and Sean Benson. Benson says: “BNF has an established history of energy market investing and we are proud to be a part of Rolls-Royce SMR in this exciting opportunity. Following reviews of numerous proposals we found that this project, featuring a highly experienced team was the most realistic, affordable and scalable solution for provision of carbon-free baseload and alternative power requirements.” (5)


 It appears that BNF Resources UK Limited is a subsidiary of BNF Capital Limited which was created in 2012 (same address) and is registered in Guernsey. These two people seem to have a    history in Financial Investment. The Perrodo family, which made its fortune from the private oil company Perenco, is behind BNF Resources UK. 


Confusingly there has been no mention of the Rolls Royce SMR Consortium which included Assystem, Atkins, BAM Nuttall, Laing O’Rourke, National Nuclear Laboratory (NNL), Jacobs, The Welding Institute (TWI) and Nuclear AMRC, as well as Rolls Royce. The consortium existed in July of this year when Cavendish signed up to work on the SMR. (6) Assystem has since said it will continue to lead on the design of key areas of power plant infrastructure including the turbine island, cooling water island and balance of plant systems, and is expecting to double the size of its SMR team in the next six months. (7) Similarly Nuclear AMRC has said it will work with Rolls-Royce to help prepare critical components for commercial production in the UK. The centre will also support the design of a new UK factory for large SMR components. (8)

Exelon is contributing under an agreement from a year ago to find international markets. (9)


This new funding will help Rolls-Royce start the SMRs on the Generic Design Assessment (GDA) process. (10) In May, the government declared the Generic Design Assessment (GDA) open to advanced nuclear technologies – including SMRs – for the first time. The process allows the nuclear regulators to assess the safety, security and environmental implications of new reactor designs. Rolls-Royce SMR has stated its intention to enter the GDA process shortly. (11) This could take about 5 years. (The GDA process took 5.75 years for the EPR, 7.5 years for the AP1000, 4.75 years for the ABWR, and process for the UK HPR1000 is continuing after 4 years. (12)) According to the Office for Nuclear Regulation (ONR) the GDA on SMRs was expected to have started by now but there have been delays.  

  Each of the initial run of reactors is expected to have a generation capacity of 470MW, or enough to power the equivalent of 1.3m UK homes, and cost about £2bn on average, well below the price per MW sought by developers of large-scale nuclear reactors. The consortium hopes to build on an initial run of five SMRs, the first of which could go on line by 2031, to create a multibillion-pound stable of 16 SMRs around the country. (13) 


This means that if delivered on budget and to engineering specifications, a single SMR would deliver roughly a seventh of the power of Hinkley for less than a twelfth of the price, while using less land. Each power station is said to be the size of two football pitches, (but this is open to question) and can also be used to create hydrogen by splitting water molecules. The company, primarily a jet engine maker, hopes the hydrogen SMRs could produce would accelerate a move to greener aviation.

Rolls-Royce will be seeking more investment for the project to help fund the building of actual SMRs. The government is currently passing legislation that will allow investors to back projects like SMRs using a regulated asset base (RAB) model, which allows them to recoup up-front costs. The government said this would “attract a wider range of private investment into these projects, reducing build costs, consumers’ energy bills and Britain’s reliance on overseas developers for finance.” 


Professor MV Ramana, a nuclear policy expert at the University of British Columbia in Canada, cautioned that this would be a new market for Rolls. He said: “It’s the same technology, but the set of constraints that you will be dealing with in the electricity sector are very different from submarines.” He also said Rolls has some catching up to do against rivals pursuing the same goals. NuScale Power, based in Oregon, received US regulatory approval for its own reactor design last year and could have a plant working by 2026. (14) 


Steve Thomas, Emeritus Professor of Energy Policy at Greenwich University said this is a huge risk of public money on a speculative design. By the time we know how much SMRs will cost and whether they are reliable or not, there will be up to 10 reactors being manufactured unless production lines are allowed to sit idle for years waiting until the design is proven enough for new orders to be placed. Realistically the first reactor won’t be complete before the mid-2030s at about the time the last fossil fuel will disappear from the generation mix, so it’s too little, too late and too expensive    

 Chair of the E3Gthink tank, Tom Burke, points out that this is the third or fourth time this programme has been announced in the past year. What it turns out to amount to is an agreement to spend £400m over the next three years which may produce a design for a reactor which may get approved by the regulators and which may find investors willing to pay what will be at least £2billion to build each one and which may be generating electricity which may be competitive with renewables just before the whole of our electricity system has to be decarbonised to meet the PM’s target. So, six things have to go right before we might see an SMR somewhere.


 As expected, Moorside, Wylfa and Trawsfynydd have all been mentioned as potential sites for an SMR. Tees Valley mayor Ben Houchen also wants Hartlepool to be on the list. (15) Dylan Morgan of PAWB (People Against Wylfa B) said: “We have an immediate crisis now. Nuclear power is slow, dangerous and extortionately expensive. It will do nothing to address the current energy crisis, neither will it be effective to counter climate change. The UK and Welsh governments should divert resources and support away from wasteful and outdated nuclear power projects towards developing renewable technologies that are much cheaper and can provide faster and more sustainable solutions to the energy crisis and the challenges of climate change.” (16)  https://www.no2nuclearpower.org.uk/wp/wp-content/uploads/2021/11/nuClearNewsNo135.pdf

November 13, 2021 - Posted by | Small Modular Nuclear Reactors, UK

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