Rolls-Royce risks losing billions of dollars in overseas contracts if Labour delays vital strategic decisions on nuclear reactors, in what is shaping up to be the first crucial test of its trade policies.
Other projects could also be in jeopardy, putting thousands of jobs at risk, if the new ministers are slow to take action to address the crowded workloads they face.
The engineering giant is seen as one of the frontrunners among six groups vying to build Britain’s first mini nuclear power stations, known as small modular reactors (SMRs). State funding has been key to developing its designs.
One of the company’s aims is to create a major export market for its SMRs. It is considering contracts worth billions of pounds. The Mail on Sunday has learned 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 formal UK backing to the project by the end of the year.
SMRs replace coal plants or supply electricity to small industrial facilities and can be built more cheaply and quickly than full-size models.
Cutting edge: Rolls-Royce – seen as one of the leaders of six groups in the race to build Britain’s first mini nuclear power stations, known as small modular reactors (pictured)
The Conservatives had planned to decide which two companies would win the race to develop small modular reactors (SMRs) through a design competition, but there are fears Labour will launch a review of all the energy projects it has inherited, potentially causing months of delay.
The number and complexity of decisions to be made on energy pose some of the biggest challenges for the new government. “The biggest issue is that they are about to make a decision on[the new nuclear power station]Sizewell C, the over-budget carbon capture and storage projects and the hydrogen plans, so there is a lot at stake,” one source said.
“If there are delays, foreign governments will choose other (SMR) designs – it’s that simple.” Next week is the deadline for groups still in the running for SMR contracts to submit detailed plans to Great British Nuclear (GBN), a state body set up last year.
GBN will select four designs and present them to the Secretary of State for Energy, who will decide who the two winners will be.
Rolls is best known for making aircraft engines, but is also a major defence power supplier in addition to its work in the nuclear field. It has spent years adapting its own technology used in nuclear submarines for use in SMRs. A Rolls spokesman said it was “committed to a successful outcome in Great British Nuclear’s technology selection process.”
‘A decision taken before the end of the year will immediately unlock supply chain investments, job creation and huge opportunities to export this unique product to countries around the world looking to strengthen their energy security with a long-term, low-carbon solution.’
The spokesman said: “Labour supports new nuclear power for Britain and we will press ahead with the nuclear power our country needs, including SMRs.”
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