Rolls-Royce sidelines China with small reactor export blueprint

Engineering giant Rolls-Royce, whose CEO is former Arm chief executive Warren East, is primed to steer an innovative, safe and profitable nuclear export business from the UK.

Its strategy provides a beacon in the gloom as Britain accelerates a campaign to bar China from any involvement in major UK nuclear power projects.

Having excluded Chinese ICT big hitter Huawei from involvement in the UK’s 5G rollout, the Government is now set to block China’s involvement in future UK nuclear power projects – including the development of Sizewell C in Suffolk and Bradwell B in Essex.

State-backed China General Nuclear was set to play a key role in both projects and talks are continuing between the Government and the lead partner on the projects, EDF. China is proposed as lead developer for Bradwell B but tensions with Beijing are increasing.

Government ministers believe it is illogical to bar Huawei from involvement in 5G and then allow China General Nuclear to steer Sizewell and Bradwell developments.

Business Weekly reported in January 2019 that Warren East was overseeing a new strategy for Rolls-Royce to focus its civil nuclear activity on its home-made Small Modular Reactors. 

EDF is also a Rolls-Royce customer so the company has to tread carefully as its strategy plays out.

Rolls-Royce firmly believes that nuclear has a key role to play in decarbonizing and that there will be no true zero carbon hydrogen economy without vast quantities of zero carbon electricity.

The scale of renewables required and the associated storage for both short term and long term intermittency is just impractical with nuclear. 

The SMR approach is multiples rather than percentages better than the Large Nuclear Reactors ) in terms of land use/MW; capital cost/MW and levelised cost of electricity (LCOE)/MW. 

Rolls-Royce supports the LNRs that are planned and believes SMRs are complementary, but in the long run the company is aligning its investment into SMRs. 

There is one indisputable fact here: Through the Rolls-Royce SMR the UK has a secure independent source of nuclear power with no need of any input from China.

Whether people believe Chinese investment is good or bad it simply doesn’t matter in this particular arena: Energy is crucial to national security and so having a secure independent source of zero carbon electricity has to be good for the UK. 

It is true to say that China also has SMR designs – along with other countries. However, Rolls-Royce remains a highly respected global big hitter.

Rolls-Royce is determined to pursue significant export opportunities with its UK-based design and will be utilising a licensing business model for some of those exports, alongside the manufacturing opportunity that it envisages for the UK.