Labour must act fast to fire up Rolls-Royce nuclear reactor deals

Rolls-Royce risks losing billions in overseas contracts if Labour delays vital strategic decisions on nuclear reactors, in what is emerging as the first crucial test of its business policies.

Other projects may also be in jeopardy, imperilling thousands of jobs, if new ministers are slow to take action to tackle the overflowing in-trays confronting them.

The engineering giant is considered to be a front-runner of the six groups in the race to build Britain’s first mini nuclear plants, known as small modular reactors (SMRs). State funding has been key to the development of its designs.

One of the company’s goals is to create a major export market for its SMRs. It is eyeing contracts worth billions of pounds. The Mail on Sunday understands that central European countries including the Czech Republic are among those in talks with Rolls. But these negotiations will stall – and possibly end – if Labour does not give the UK’s formal backing to the project by the end of the year.

SMRs replace coal-fired plants or provide electricity for small industrial site and can be built more cheaply and quickly than full-size models. 

Cutting edge: Rolls-Royce: is considered to be a front-runner of the six groups in the race to build Britain’s first mini nuclear plants, known as small modular reactors (pictured)

The Conservatives were planning to decide which two companies would win the race to develop small modular reactors (SMRs) through a design competition. But there are fears that Labour could launch a review of all energy projects it has inherited. This could causes months of delay.

The number and complexity of decisions that need to be made on energy present some of the greatest challenges to the new government. ‘The biggest problem is that they are walking into a decision on [the new nuclear power station] Sizewell C, carbon capture and storage projects being over budget and hydrogen plans, so there is a lot going on,’ a source said.

‘If there are any delays, then foreign governments are going to choose other [SMR] designs, it’s that simple.’ Next week will be the deadline for groups still in the running for the SMR contacts to submit detailed plans to Great British Nuclear (GBN), a state body launched last year.

GBN will select four designs and present them to the Secretary of State for energy, who will decide on two winners.

Rolls is best known for making aeroplane engines but it is also an important supplier in defence energy, in addition to its work in nuclear. It has spent years adapting its own technology used in nuclear submarines to be used in SMRs. A Rolls spokesman said it ‘is committed to a successful outcome in the Great British Nuclear technology selection process.

‘A decision before the end of the year will immediately unlock supply chain investment, job creation and enormous opportunities to export this unique product to countries around the world that are seeking to strengthen their energy security with a long-term, low-carbon solution.’ 

The spokesman said: ‘Labour supports new nuclear for Britain, and we will drive forward with the nuclear our country needs, including SMRs.’