The Hinkley Point C power plant in Somerset is gargantuan. The 176-hectare (435-acre) plant will provide 3.2 gigawatts of power, enough for 6m homes. It is not just the project that is huge: the cost is as well. With a price tag that has ballooned to a reported £48bn, and delayed by at least five years, it has become a symbol of the pitfalls of nuclear power.But a clutch of companies argue they have a quicker, cheaper option than large Hinkley-sized plants in the form of small modular reactors (SMRs), which can be built in a factory and then slotted together on site.Britain’s Rolls-Royce, which also makes reactors for submarines in Derby, is vying with three North American competitors to gain orders from the UK government.Stephen Lovegrove, the chair 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, formerly the top civil servant in the government’s energy department and the Ministry of Defence, expressed his frustration at another year’s delay in a UK government competition that has pushed Rolls-Royce’s earliest date for a new reactor to 2032 or 2033, beyond a target which had already slipped from 2029 to 2031.Rolls-Royce has stuck with it, despite the closure of other speculative ventures by the group chief executive Tufan Erginbilgiç in his turnaround plan.Yet Rolls-Royce SMR, which is led day-to-day by chief executive Chris Cholerton, has already blamed government delays for its decision to source key pressure vessels from outside the UK. “Every day that goes past without the decision increases the risk” of the UK falling behind rivals, said Lovegrove. “It is definitely holding us back, both domestically and internationally.”Lovegrove said that the UK “missed a trick” in failing to manufacture turbines for its wind energy revolution over the last decade, including over the period when he led the energy department under the Conservative government.“It was a time, candidly, of austerity, and it required certain types of, sort of investment decisions to be taken,” said Lovegrove.The government in November put Rolls-Royce SMR plus American-owned rivals Holtec and GE Hitachi, and Canadian-owned Westinghouse on its shortlist. Two are expected to be chosen at chancellor Rachel Reeves’s spring statement.A decision to go ahead with SMRs would represent a significant milestone in Britain’s history of nuclear generation. UK nuclear power peaked at 12.7 gigawatts (GW) in 1994, or 17% of installed generating capacity. Since then the industry’s fortunes have waned, with a dearth of new projects to replace the ageing fleet of reactors.Only Hinkley Point B has been approved since Sizewell B opened in 1995. Hinkley’s sister project, Sizewell C, is awaiting approval but projected costs have also surged to near £40bn.Lovegrove said the first 470-megawatt Rolls-Royce SMR will be in Britain, followed by the Czech Republic a year or so later, after utility Čez Group this year joined as a joint venture partner. Another unnamed European country would follow by 2034, he said. The US and the Gulf states will also be targets – Qatar’s sovereign wealth fund is among the investors who have put in £280m, plus £210m in UK grant funding.Whatever the wait, the various SMR contenders in the UK and in other countries believe they are on to a winner with nuclear energy because of the intermittency of renewable energy when the wind stills or clouds cover the sun. But another, more recent development is big tech’s voracious clean energy needs for generative artificial intelligence.View image in fullscreenMicrosoft last year signed a deal to revive the Three Mile Island nuclear plant in Pennsylvania. Google has an SMR deal with America’s Kairos Power. Rolls-Royce will respond to a call for nuclear projects by Facebook owner Meta, Lovegrove said. In the UK, the government on Monday said that SMRs will support AI growth.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 board of the London 2012 Olympic Games, 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 adviser to Lazard, as well as joining Columbia University as a distinguished visiting fellow.There is a reason that the interview is happening in an office building (one shared, by coincidence, with the Guardian) rather than at a factory: no SMRs exist anywhere in the world, aside from test reactors in China and Russia.Doug Parr, policy director of environmental campaigners Greenpeace UK, said that SMR advocates are too 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 seem to be solving any of the problems suffered by larger reactors,” he said. He cited the experience of America’s Nuscale, which abandoned one project, in Idaho, after costs soared. SMRs will be “vastly more expensive than renewables, and they’re just as slow to bring online, which makes them too slow to be much use decarbonising the grid”, Parr said.“The only significant difference from larger reactors is that SMRs offer the opportunity to spread nuclear power’s problems over a wider geographical area,” he said.skip past newsletter promotionafter newsletter promotionRolls-Royce, Holtec, Westinghouse and other rivals such as Nuscale and Russia’s Rosatom all use variations of pressurised water reactors (PWR), the standard technology, but smaller. Rolls-Royce’s reactor building would cover about two hectares, while others are smaller. But the key change for SMRs is the “modular” aspect: the reactors will be built in lorry-sized parts in factories, before being assembled on one of the sites which have been touted, from Cumbria to the island of Anglesey or Ynys Môn in north Wales.That contrasts with the approach at complex, stick-built projects like Hinkley or Sizewell, with an enormous site too big to cover from rain.View image in fullscreenLovegrove said the modular approach will “de-risk the building of a nuclear power station very, very, very substantially”, sharing costs over multiple reactors and building two a year. Asked whether the SMR process bears the scars of Hinkley, he said: “The SMR is specifically designed as an industrial process to deal with the causes of that scarring.”If the UK and Czech Republic go ahead with orders, “that’s a viable business”, Lovegrove said. The UK procurement implies a budget of £10bn for three SMRs.Lovegrove said the Rolls-Royce was sticking to a 2022 submission that its power will cost “around £50/60 per megawatt hour” in 2012 prices. That would be half Hinkley and competitive with the prices of between £54 and £59 for wind guaranteed by the UK government in its latest auction in September.“It is not the case that nuclear energy is across the life of the various projects a more expensive technology than renewables,” Lovegrove said, citing the extra costs of storing and moving renewable energy.It is 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 accept now that such a heavy reliance on Russian gas was a strategic weakness,” Lovegrove said. Russia-threatened Baltic states such as Estonia and Latvia are among those most interested in Rolls-Royce’s technology, he said.Lovegrove is working on another aspect of the UK’s response to the rise of authoritarian states: he is carrying out a government review of Aukus, an alliance giving Australia nuclear submarine propulsion from the UK, with US blessing. 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 civil nuclear power.“Aukus is the most important defence and defence industry collaboration entered into anywhere in the world in over 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-throated support” because “security … will be enhanced in the Indo-Pacific”.Rolls-Royce hopes that the UK government’s quest for energy security will make it favour a British-made technology.“We do have the opportunity to be the leader in small modular reactors and the supply chain thereof,” he said. “And I really hope that we take it.”
