The chief executive of Rolls-Royce has warned that the UK risks losing out on the race to develop small nuclear modular reactors (SMRs) if the government delays its selection of companies to build them beyond June. Tufan Erginbilgiç, who took over the helm at Rolls-Royce in January 2023, said that the UK could face similar setbacks as it did during the offshore wind energy revolution, where it lagged behind other European nations in manufacturing key turbine components. Rolls-Royce, one of the four companies shortlisted last year by the government to develop SMRs, emphasized that any further delays would hinder not only its own plans but also the broader supply chain for the sector.
In an interview with the Financial Times, Erginbilgiç stressed the importance of selecting companies by June to ensure that the necessary supply chains for SMR development are built in the UK. He explained that once supply chains are established elsewhere, it becomes difficult to shift them, leading to external economies of scale and establishing a long-term competitive advantage for other nations. “Why do you think the wind supply chain didn’t happen in the UK? These supply chains, once they are developed somewhere, it is hard to change them,” he said.
The UK government is keen on the potential of SMRs to provide a reliable electricity supply while reducing carbon emissions, especially with rising energy demands. SMRs, being smaller and modular, are seen as a way to avoid the delays and cost overruns that have plagued larger nuclear power projects in recent years. In fact, major tech companies like Amazon and Google have recently signed power supply deals with nuclear providers, aiming to meet the energy demands of their data centres.
Rolls-Royce’s SMR design, with a generating capacity of 470 megawatts, is among the larger designs in the sector, with most SMRs generally having a capacity of 300MW or less. The company is already making headway internationally, having been selected as the preferred supplier for a project in the Czech Republic. A strategic partnership with Czech utility ČEZ was formed, and the first reactor is slated for construction near the South Bohemian Temelín nuclear power plant in the mid-2030s.
Should Rolls-Royce be selected in the UK, Erginbilgiç said the company intends to pursue both domestic and international projects in parallel. He highlighted that, with the right government support, 70 percent of the supply chain for SMRs could be sourced domestically in the UK. This would be a significant boost to the UK economy and help position the country as a leader in the emerging global SMR market. Despite earlier speculation that he might shut down the SMR business, Erginbilgiç has remained committed to driving the project forward.
