Rolls-Royce group wins funding as UK SMR race gathers pace

Competition from Canada to build first SMR increases pressure on design competition.

The UK SMR Consortium has received financial backing from the UK government to advance its small modular reactor programme, as part of the Industrial Strategy Challenge Fund.

The consortium, led by Rolls-Royce, comprises Assystem, SNC Lavalin/Atkins, Wood, Arup, Laing O’Rourke, BAM Nuttall, Siemens, National Nuclear Laboratory, and Nuclear AMRC.

“The £18 million [US$22.3 million] government funding for phase 1 of the programme (from the ISCF Wave 3 bid we were recommended from by government) is being matched by industry funding in the consortium,” Ben Todd, Rolls-Royce Communications Business Manager – Nuclear, told Nuclear Energy Insider.

“It’s a really big boost to the project, however we have a conservative outlook and realise there remains a significant amount of work still to do and many hurdles to overcome. Phase 2 will be a further circa £500 million [US$618 million] total (matched from government, industry and possibly equity providers) to take through to the completion of the GDA process.”

The initiative was launched in November 2015, as a range of measures to support the next generation of nuclear power plants. It included investing £250 million [US$310 million] in nuclear R&D over five years and launching the competition to identify the most cost effective SMR design.

“We are waiting for the government award of the grant offer letter forecast in mid-October to enable industry commitment to the next phase,” said Todd.

“We have a power station design that is ready to be prepared for the UK licensing process and just as importantly, we have a business case that has been rigorously reviewed by the UK Government, UKRI, and the independent Expert Finance Working Group. Together this is already creating a lot of interest in the market place which gives us belief and confidence that we have a great power station.”

Feasibility studies and funds for non-LWR

In June 2018, the UK government's £200 million Nuclear Sector Deal was announced to cut the cost of nuclear power and bolster the UK skills base, at a time when fears were rising over scientists leaving the UK due to Brexit. That deal included £56 million towards the development and licensing of advanced modular reactor designs – and £32 million pounds towards advanced manufacturing research – against stiff competition from Canada in the SMR race.

Eight non-light water reactor (non-LWR) vendors each received £4 million to perform detailed technical and commercial feasibility studies. Those vendors are Advanced Reactor Concepts, DBD, LeadCold, Moltex Energy, Tokamak Energy, U-Battery Developments, Ultra Safe Nuclear Corporation (USNC), and Westinghouse Electric Company UK.

USNC said that its MMR-REM plant, being developed for Canada, may not be the best solution for the UK market and is identifying a specific UK application that is best suited to launching a UK-MMR reactor. USNC expects that this will be in the delivery of high temperature process heat that can be used to replace fossil fuels and to generate high-value products such as hydrogen.

The MMR-REM design is advanced and has undergone the Vendor Design Review (VDR) Phase 1 with the Canadian Nuclear Safety Commission (CNSC).

Moltex Energy, which is also focussing in Canada, is working on its Stable Salt Reactor (SSR) design. Moltex chose not to pursue the licensing process in the U.S. due to low gas prices and the number of U.S.-based developers competing for early-stage funding. Design review processes in the UK and Canada are also seen as more supportive for new technology licensing as the national regulators use a principles-based analysis rather than prescriptive approach.

Moltex has used conventional components and materials already qualified in the nuclear sector where possible to benefit from quick deployment timelines. It says licensing of the SSR plant could be completed in five years and that construction time for a FOAK 300 MW plant would be three years.

The Westinghouse Lead-cooled Fast Reactor is a 400 MW plant which uses liquid lead as primary coolant and uranium oxide (or U-Pu oxide) as fuel, while LeadCold is proposing a lead-cooled reactor using uranium nitride fuel. A single SEALER-UK unit produces up to 40 MW of electricity in a vessel that can be transported by rail rail.

Drawing on experience

Rolls-Royce has decades of nuclear experience to draw on and its hand in the UK was arguably strengthened when Japan’s Hitachi and Toshiba walked away from large-scale build projects. That led in January this year to the UK SMR Consortium asking for more than £200 million of UK government funding to develop and license its light water reactor (LWR)-based design.

The Rolls-Royce SMR design is based on GenIII+ technology, using a three loop, close-coupled, single pressurized water reactor (PWR) and a single steam turbine.

The developer initially considered 220 MW models but has settled for a 440 MW design to maximize cost efficiencies while retaining modular build advantages and the ability to transport major components by rail and road.

“The design has been taken as an integrated power station from inception and subject to extensive requirements-based design and business case assessment throughout the process,” says Todd. “Our innovations are for benefit in the key requirements while closely monitoring the effects on the operator’s Levelized Cost of Electricity.

“The modularity of our generating plant is key: 85% of the capital cost activity is completed off-site in a factory-controlled environment, removing one of the primary causes of cost overruns on other power station builds (ie their bespoke nature). This concept also allows for economies of scale to be created through the manufacturing of standard components.”

According to Todd, the projected cost of the power station is £1.8 billion and the fifth unit learn out LCOE is £60/MWhr. That could be reduced by a further third with delivery confidence and a more appropriate financing mechanism that recognizes the differences between this SMR as a product and a conventional one-off infrastructure project.

“The potential of the regulated asset base model makes financing easier as it reduces the cost of borrowing,” said Todd. “The independent Expert Finance Working Group analysed the business case and deemed it to be commercially investible, largely because of the relatively low level of upfront investment; the way we have innovated to gradually reduce cost and schedule risk; the way economies of scale push down costs over time; and the way we’ve created a concept that can be easily replicated anywhere in the world.

“Globally we see at least three or four solutions for SMRs to have a strong market potential. Our USP is that we’ve considered the entire power station, not just the nuclear aspect.”

Scott Birch