Rolls-Royce Holdings has raised £455m ($615 million) to develop small modular nuclear reactors (SMRs) in Britain.
The company said the move would be vital in helping the UK to reduce its reliance on fossil fuels. The UK government has contributed £210m towards the project.
The aerospace and defence company can now focus on gaining approval for its reactor design and identifying sites for the manufacture of parts needed to build the plant.
The UK government has said it believes nuclear power is the best way to supplement power generated by renewables such as wind, which can be intermittent, and to eliminate fossil fuels from power plants by 2035.
“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 volatile fossil fuels even further,” UK Business Secretary Kwasi Kwarteng said.
Developing them can “also position our country as a global leader in innovative nuclear technologies we can potentially export elsewhere”.
As announced in the UK government’s Spending Review, the Treasury will allocate £1.7 billion towards bringing forward a final investment decision on at least one large nuclear project, most probably Electricite de France’s Sizewell C.
Small modular reactors and advanced modular reactors are potentially cheaper and quicker to build than big conventional stations, which have been in use for decades.
Companies led by Rolls-Royce Holdings are working on 16 small reactors by 2050.
Its chief executive, Tom Samson, said the programme would “deliver a low-cost, deployable, scalable and investable programme of new nuclear power plants”, helping the UK to meet the targets at the forefront of the Cop26 climate conference.
Rolls-Royce estimates the project could create up to 40,000 jobs through a UK set-up and export-enabled growth.
The announcement comes after three former Conservative energy ministers came together to say the UN Cop26 climate summit, currently taking place in Glasgow, needs to accept that nuclear power, along with hydrogen, should play a greater role in the global energy mix if net-zero targets are to be hit.
A report by Conservative MP Chris Skidmore – backed by former energy secretary Amber Rudd and Claire Perry, who had been nominated as Cop26 president before the role was given to Alok Sharma – said the conference in Scotland should “open its eyes to the combined value of nuclear and hydrogen as a complementary strategy alongside renewable energy”.
The Department for Business, Energy and Industrial Strategy said the £210 million invested into SMRs would go towards progressing phase two of its low-cost nuclear project to develop the reactors’ design and explore whether they would be suitable for use in the UK.
It is part of the £385m Advanced Nuclear Fund, which was announced last year in Prime Minister Boris Johnson’s 10-point plan for a so-called “green industrial revolution”.
Rolls-Royce estimates that each SMR it hopes to build could be capable of powering one million homes.
Renewables campaigners criticise nuclear punt
The inclusion of nuclear in the government’s 10-point plan to cut emissions to net zero by 2050 is not universally acclaimed and state backing of the Roll-Royce reactors was condemned by Greenpeace.
Dr Doug Parr, its chief scientist, said the reactors were more expensive than renewable energy and that no concerted plan was in place to dispose of radioactive waste.
“What’s worse, there is not even a prototype in prospect any time soon,” he said. "The immediate deadline for action is sharp cuts in emissions by 2030, and small reactors will have no role in that.”
Mike Childs, head of policy at Friends of the Earth, agreed that government focus should be on “renewable resources such as offshore wind, tidal and solar, and boosting measures to help householders cut energy waste”.
But Tony Danker, director general of the Confederation of British Industry, was in favour of the move, calling nuclear a technology that would not only “boost the economy but help deliver a greener and more secure energy system overall”.