Rolling Energy Innovation: Rolls-Royce Leads in the Nuclear Market

Rolls-Royce is on track to receive its first order from a European government to establish a fleet of small nuclear reactors after being selected as the preferred supplier in a competition led by the Czech government. The British aerospace and defense group emerged victorious over six other competitors and concluded the agreement with the state energy provider ČEZ Group. Chris Cholerton, Managing Director of Small Modular Reactor (SMR) at Rolls-Royce, described the partnership as “groundbreaking” and emphasized the strengthening of Rolls-Royce's market position in Europe. Globally, governments are interested in the potential of small, modular nuclear reactors to provide a reliable power source while meeting rising demand without causing CO2 emissions. Cholerton stated that the agreement would place ČEZ, Rolls-Royce SMR, and its existing stakeholders at the forefront of SMR introduction. Discussions are currently ongoing to finalize the contract terms, and the agreement is subject to regulatory approval. However, insiders report that the deal could generate orders worth billions of pounds for British industry. The first reactor is planned near the Temelín nuclear power plant in South Bohemia and is expected to be realized by the mid-2030s. The Czech government stated that the project would contribute to the modernization of the Czech energy industry and open new opportunities for the domestic industry. It is expected that local companies will play a significant role as Rolls-Royce builds its supply chain. Rolls-Royce's SMR design has a capacity of 470 megawatts, making it relatively large for this reactor type, which typically has a capacity of 300 megawatts or less. Governments hope that their compact and modular design will prevent the budget overruns and delays that plague large-scale projects. However, a recent report by the International Atomic Energy Agency notes that there are currently only three SMR designs in operation: in China and Russia, as well as a test reactor in Japan. The contract between Rolls-Royce and the Czech government could be an important benchmark for whether the technology can deliver the anticipated benefits. Rolls-Royce is one of five companies currently competing in a UK government-led competition for support to build SMRs in the United Kingdom. Competitors include GE-Hitachi, Holtec, Nu-Scale, and Westinghouse Electric. Additionally, EDF, the state-owned French energy giant, was initially in contention but withdrew earlier this year to continue developing its Nuward design. The competition, launched last year under the former Conservative government, is behind schedule, which initially aimed to award contracts by the summer of 2024. Participants are now expected to learn by the end of this month how many of them will advance to the next negotiation round. In its manifesto prior to winning the general elections in July, the Labour Party stated that the technology would “play an important role” in the UK's energy security. Although "small modular reactors" can encompass a variety of different designs, the designs in the UK's competition are based on proven nuclear technology with water-cooled systems.