UK-based global industrial technology group Rolls-Royce announced late on Monday the creation of a new subsidiary company, Rolls-Royce SMR Limited. This is a special purpose vehicle (SPV) which is focused on the development of Rolls-Royce’s small modular nuclear reactor (SMR) project and the creation of the new entity follows a successful equity raise to fund the further development of the project.

“[Monday’s] announcement is fantastic news,” enthused Rolls-Royce SMR CEO Tom Samson. “Rolls-Royce SMR has been established to deliver a low cost, deployable, scalable and investable programme of new nuclear power plants. Our transformative approach to delivering nuclear power, based on predictable factory-built components, is unique and the nuclear technology is proven.”

Together, Rolls-Royce, BNF Resources UK (part of a French family-owned investment group) and US low-carbon and zero-carbon (including nuclear) energy group Exelon Generation, will invest £195-million into Rolls-Royce SMR Ltd over the next three years. This investment means that the new company will also receive a grant of £210-million from the UK government, as part of London’s net-zero strategy and green industrial revolution, giving the SPV total capital of £405-million. Further investors will be sought. Once the equity raise is completed, Rolls-Royce will own 80% of the SPV.

However, the new company will not just wait for further investors to be secured but will rapidly move forward on several parallel ‘tracks’. These activities will include the start of the UK Generic Design Assessment process, the identification of factory sites (where the SMR modules will be manufactured, for subsequent on-site assembly), and discussions with the UK government on the delivery models for the project. Identifying these delivery models is essential to encourage long-term investment in the technology. And Rolls-Royce will continue talks with possible export customers, interested in the SMR technology to help meet their own zero-carbon targets.

“This is a once in a lifetime opportunity for the UK to deploy more low carbon energy than ever before and ensure greater energy independence,” highlighted UK Business and Energy Secretary (Cabinet Minister) Kwasi Kwarteng. “Small modular reactors offer exciting opportunities to cut costs and build more quickly, ensuring we can bring clean electricity to people’s homes and cut our already-dwindling use of fossil fuels even further. In working with Rolls-Royce, we are proud to back the largest engineering collaboration the UK has ever seen – uniting some of the most respected and innovating organisations on the planet.”

The Rolls-Royce SMR is so designed that 90% of each one will be manufactured or assembled in a factory or under factory conditions. Some 80% of each SMR could be sourced from within the UK, a uniquely high level of local content regarding the country’s energy infrastructure. The first SMRs should be operational within the UK early in the next decade. In addition to producing electricity, they will also be able to help produce green hydrogen and sustainable aviation fuels. Each SMR will be able to generate 470 MW of electricity, with a life of at least 60 years.

Rolls-Royce has been responsible for the design, development and manufacture of all the nuclear reactors used in the UK’s nuclear submarines, starting back in the 1950s.