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Small nuclear reactors can help close the UK’s energy gap

And revitalise its industry

By Duncan Weldon  

General view of Hinkley Point B Nuclear power station © Andrew Matthews/PA Archive/PA Images

This article was produced in association with Rolls-Royce

On 22nd February Prospect, in conjunction with Rolls-Royce, convened a roundtable to discuss the future of the UK energy industry and in particular, the potential role that small modular nuclear reactors can play in meeting the UK’s energy gap and in revitalising parts of UK industry.

With half of the UK’s electricity capacity due to be decommissioned by 2030 and with tough new carbon reduction targets having been agreed at the Paris summit in 2015, the place of nuclear in the UK energy mix has moved up the political agenda. The roundtable brought together industry, academics, policymakers, civil society and trade unions to discuss how a new generation of small modular reactors (SMRs) could play a part in the UK’s energy, environmental and industrial strategies.

With coal plants being closed to meet climate change targets and much existing nuclear capacity in the process of being wound down, UK energy policy is at a crossroads. Whilst Hinkley—once it comes online—will provide an estimated 7 per cent of the UK’s electricity, the project has been hit by considerable delays. SMRs are a new technology which has the potential to not only help meet the UK’s energy needs but also to help establish a world beating UK industry.

Rolls-Royce is heading up a UK consortium—including Amec Foster Wheeler, Nuvia and Arup—looking to push the technology forward. In the 2015 Autumn Statement, the government announced that up to £250m of funding would be available to help develop nuclear technology in the UK—including SMRs.

The principle behind SMRs is to move away from the mega-projects that have characterised the nuclear industry in recent decades—the building of larger and larger reactors—and instead focus on building a more compact reactor. The UK consortium’s initial design at 16 metres high by 4 metres diameter is small enough to be moved by truck or train but could potentially generate around 220MW to 440MW of energy—the equivalent of up to 150 offshore wind turbines.

The technology has two crucial differences from the current approach of building much larger reactors. Firstly, using it is much quicker—there is perhaps just five years from ordering to actually generating, as opposed to the often multi-decade timings involved with larger nuclear stations. But secondly the underlying industrial process is categorically different. Whereas building large nuclear plants is essentially a civil engineering project, making SMRs is much closer to manufacturing. In the long run of economic history, manufacturing productivity has risen quickly especially as the volume of production has stepped up. Over time the process can be refined, standardised and improved upon. Something which is much more difficult with a series of large individual projects.

The Rolls-Royce led consortium has made a strong case for the economic benefits to the UK of pushing ahead with SMRs and how it fits into the government’s developing industrial—and regional—strategies.

At the core of the case is the fact that swift movement in the UK could help the country to steal a march on its global competitors and not only help close the UK energy gap, but also win valuable export market share with an easily exportable product. The potential global market for SMR capacity by 2035 is estimated at £250-400bn and the first country to develop a workable SMR will be strongly placed to win business in the Middle East and Asia.

Whereas previous nuclear projects in the UK have often boiled down to importing foreign skills and technologies and much of the value has seeped overseas, with SMRs there is the potential to leverage UK skills in defence nuclear engineering and related projects leading to the creation of a viable UK-focused supply chain. In effect the existing weakness of UK PLC in this area is a potential source of strength in a new area of technology.

With up to 75 per cent of the SMR consisting of modular components, the employment benefits would flow to the wider supply chain as well as the firms involved in assembly. The UK consortium estimates that up to 40,000 skilled jobs would be created both directly and in related areas. Crucially, the consortium believes that with the exception of the steam turbine, all of the components of an SMR could be manufactured in the UK with knock-on benefits for firms currently involved in a range of activities from steel to ship building. Much of the benefit would flow to firms in areas of traditional industrial strength—the Midlands, the North of England, Scotland and Wales, greatly aiding attempts to rebalance the UK economy.

SMR technology represents not just a way of filling the UK’s energy gap but a route to revitalising vast swathes of industry, winning new export markets and rebuilding parts of the UK’s skills base. But to achieve these goals, quick action will be required both from the government, which needs to get an appropriate policy framework in place, and from UK industry. The window of opportunity for developing an implementable and cost-effective technology won’t stay open for long.

For more information on Prospect’s work on energy, or to discuss Prospect’s thought leadership work more widely, please contact david.tl@prospect-magazine.co.uk.

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