Rolls-Royce has been selected as the preferred bidder by Great British Energy to pioneer the construction of small modular nuclear reactors (SMRs) in the UK. This decision comes as part of the government's initiative to advance the country's nuclear energy technology.

The competition, which saw Rolls-Royce competing against two US-owned companies, culminated in this announcement. The government's commitment to nuclear power is further evidenced by its £14.2bn investment in the construction of the Sizewell C power station in Suffolk.

Sizewell C is projected to generate 3.2 gigawatts (GW) of power, sufficient for approximately 6 million homes. In contrast, each of Rolls-Royce's SMRs is expected to provide around 470 megawatts. The government has indicated that SMRs collectively could produce up to 1.5GW of electricity, suggesting that Rolls-Royce may be authorized to construct at least three SMRs.

Unlike large plants like Sizewell C, SMRs will be predominantly constructed using a standardized design on a factory line, rather than being custom-built on-site. This approach aims to streamline the construction process, reduce complexity, and mitigate the costly delays that have plagued previous nuclear projects.

Although the SMR concept is untested, Rolls-Royce is confident in the pressurized water reactor technology it has selected. The company anticipates commencing power generation by 2032 at the earliest, with data centers being a key target market.

The government's decision not to disclose the initial locations of the UK's first SMRs, expected to be situated near retired nuclear power stations like Oldbury and Wylfa, has raised some industry concerns. Derby-based Rolls-Royce emerged victorious over US competitors Holtec and GE Hitachi, with Canadian-owned Westinghouse exiting the competition earlier.

Rolls-Royce's SMR subsidiary, partially owned by Qatar's sovereign wealth fund, has been a frontrunner throughout the selection process. The company's share price recently hit a record high, solidifying its position as Britain's largest manufacturer by market value.

Rolls-Royce's CEO, Tufan Erginbilgiç, described the contract win as a significant achievement that underscores the company's nuclear expertise. The endeavor is expected to create 3,000 jobs during peak construction, bolster regional economies, and enhance energy security.

Despite delays in the approval process, the government remains optimistic about the project's potential to drive technological innovation and facilitate exports of the SMR technology. Rolls-Royce's involvement in similar projects in the Czech Republic and Sweden further underscores the company's global reach and influence.