Get free UK energy updates
We will send you a file myFT Daily Digest Rounding email to the latest UK energy News every morning.
Rolls-Royce is “well positioned” to develop technology for a new generation of small nuclear power plants in the UK, according to Britain’s energy secretary, who on Tuesday will launch an international competition for the work.
Grant Shapps told the Financial Times that small modular reactors would help meet the UK’s target of producing 25 percent of its electricity from nuclear power by 2050, up from about 15 percent currently.
British engineering group Rolls-Royce is “clearly well-placed” to build the reactors, Shapps said, having already received £210m from government grants for its project, but that up to four different technologies could be chosen. GE Hitachi and X-energy are among the other companies developing offerings.
He also conceded that small modular reactors won’t be operational until 2030, but said by the fall he wants a shortlist of “finalists to move on to the final design phase.”
Shapps is seeking to develop nuclear power to help reach the UK’s target of net-zero carbon emissions by 2050 and has said he wants Britain to have some of the “lowest wholesale energy prices in Europe by 2035”.
He said he hoped to see final investment decisions on small reactors in the next parliament. Asked when he thought they might start producing power, he said, “Maybe the 1930s.”
Britain’s energy secretary, Great Britain, is set to formally launch Nuclear on Tuesday, an independent government body, to oversee development of the new reactors and what he claims will be a nuclear “renaissance”.
Shapps will also announce a grant financing package of up to £157m to help fund the reactors.
A long-running attempt to get a new British fleet of nuclear power plants up and running has met many delays and setbacks over the past decade.
Since 2010, construction of only one large nuclear power plant has begun, at Hinkley Point C in Somerset, led by France’s EDF with investment from China’s CGN.
Parliament’s Intelligence and Security Committee last week expressed concerns about Chinese influence in the civilian nuclear industry.
But Shapps said he had examined CGN’s stake in Hinkley and was “convinced” that China’s participation was limited to a financing stake, with no access to the technology or infrastructure of the project.
He added, “The Chinese don’t have any access to the technology, the infrastructure, in terms of the way it’s built and delivered.”
A DOE source said CGN was not involved in any major supply chain contracts at Hinkley Point C, nor was it involved in metering and control systems, or any other important function of the plant.
By contrast, security concerns prompted the government last year to force CGN out of another large planned nuclear power plant that EDF hopes to build at Sizewell C in Suffolk.
EDF and the government now jointly own the company behind Sizewell C, which needs to raise nearly £20bn of private financing in a mix of debt and equity before construction can begin.
The project may not be completed until the mid-2030s, though EDF initiated public consultations on the plans in the early 2010s.
Shapps insisted the Sizewell C fundraiser was in good shape, saying, “We’ve been pre-testing and I’ve had a great response — really, really positive — speaking to no less than half a dozen serious, serious investors.”
Britain’s vulnerability to higher gas prices has been exposed by Russia’s all-out invasion of Ukraine, but Shapps said he did not expect the government to subsidize household energy bills again this winter.
Fatih Birol, head of the International Energy Agency, said this month that energy prices could jump this winter, especially if China’s economy strengthens rapidly.
Shapps said this was a “concern” but insisted that the market had adjusted and that gas futures prices made him “fairly confident” that no subsidies would be needed. “The market indicates that we will not need to return to this world,” he said.
Meanwhile, he admitted that the Tories’ goal of decarbonizing the electricity system by 2035 “wasn’t easy to achieve”. Energy experts questioned whether the timeline was realistic, as was Labor’s previous target for 2030.
Shapps was optimistic about the UK’s ability to compete with the US in developing green technologies, despite President Joe Biden’s $369 billion package of subsidies contained in his Inflation Act.
Shapps claimed that Britain had “10 to 15 years in the lead on this”, arguing that the UK’s cross-party support for laws and targets to tackle climate change had already attracted huge public and private investment.
He said Biden was “forced to use anarchy, tax and spending” due to a lack of bipartisan support in the US on climate change laws. “They’re dealing with a slightly different problem but we’ll get a response.”
Chancellor Jeremy Hunt promised a response in his fall statement and Shapps said planning reforms to facilitate more wind farms would be part of a “comprehensive approach”.
Shapps said he was also consulting on reforming the government’s system of “contracts for difference” for energy auctions – under which the state guarantees renewable energy companies a price for electricity – to shore up UK supply chains.
Shapps Biden and US climate envoy John Kerry met at Windsor Castle this month for talks on climate change called by King Charles, and he said he made clear how he, as energy secretary, could go to jail if he failed to deliver a plan to achieve net zero. emissions by 2050.
Revealing that Biden said he thought this would be a “great idea,” they joked: “Finally something we can get bipartisan support for: sending John Kerry to prison.”
