Government selects Rolls-Royce to build UK’s first three SMRs and commits £2.5bn

UK SMR consortium

THE UK government has chosen Rolls-Royce to build the country’s first three small modular reactors (SMRs), announcing plans to sign a £2.5bn (US$3.4bn) contract later this year.

Rolls-Royce SMR, majority owned by the British aerospace and defence company, had been considered the favourite candidate in the competition announced in 2023. Today’s announcement favoured Rolls-Royce SMR over US-owned Holtec and GE Hitachi who were shortlisted in September 2024.

SMRs are nuclear fission power generators that could be used to supply electricity to individual industrial facilities. The modules are manufactured on a production line which can then be shipped for installation on site. Proponents say this standardisation should help reduce the significant delays and cost increases seen with larger nuclear facilities.

The three SMRs Rolls-Royce SMR will build will generate around 1.5 GW of electricity in total, enough to power around 3m homes. While these will be the first commercial SMRs in the UK, the company is already building units in the Czech Republic which are set to generate 3 GW of electricity.

The project building the SMRs is expected to create around 3,000 jobs. 

Rolls-Royce SMR, whose minority investors include the Qatari sovereign wealth fund, US energy company Constellation, Czech utility ČEZ and investment fund BNF Capital, has been building and testing SMRs at a prototype plant at the Advanced Manufacturing Research Centre (AMRC) in Sheffield, UK since June last year.

Great British Energy-Nuclear (GBE-N), the Department for Energy Security and Net Zero’s (DESNZ) nuclear energy company, plans to form a development company with Rolls-Royce SMR later in the year, subject to final contract signatures and regulatory approval expected later this year.

The announcement comes as part of an investment package for nuclear technology in tomorrow’s spending review, which also includes the go-ahead for the Sizewell C nuclear reactors supported by £11.5bn of extra funding.

Tom Greatrex, CEO of the Nuclear Industry Association, said the government’s selection “is a hugely significant moment for Rolls-Royce SMR and for the British nuclear programme.

“These SMRs will provide essential energy security and clean power alongside large scale reactors, all the while creating thousands of well-paid, skilled jobs, opportunities for growth right across the country and significant export potential.

“We look forward to working with Rolls-Royce SMR and all other potential SMR vendors, including those not successful today, on making Britain the best place to build new nuclear anywhere in the world.”

The sites that will be powered by the three Rolls-Royce SMRs are expected to be announced later this year.  

Correction: the original version of this article incorrectly described the majority owner of Rolls-Royce SMR as a "British car maker". Rolls-Royce SMR is in fact majority owned by Rolls-Royce plc, a British aerospace and defence company which does not make motor cars.