TIDMRR.
RNS Number : 7229R
Rolls-Royce Holdings plc
09 November 2021
ROLLS-ROYCE ANNOUNCES FUNDING SECURED FOR SMALL MODULAR
REACTORS
Rolls-Royce (LSE:RR., ADR:RYCEY) announced today that following
a successful equity raise, the Rolls-Royce Small Modular Reactor
(SMR) business has today been established, to bring forward and
deliver at scale the next generation of low cost, low carbon
nuclear power technology.
Rolls-Royce Group, BNF Resources UK Limited and Exelon
Generation Limited will invest GBP195m across a period of around
three years. The funding will enable the business to secure grant
funding of GBP210 million from UK Research and Innovation funding,
first announced by the UK Prime Minister in 'The Ten Point Plan for
a Green Industrial Revolution'. Today's announcement is another
step towards the delivery of the Government's net zero strategy and
its 10-point plan.
The business, which will continue to seek further investment,
will now proceed rapidly with a range of parallel delivery
activities, including entry to the UK Generic Design Assessment
(GDA) process and identifying sites for the factories which will
manufacture the modules that enable on-site assembly of the power
plants. Discussions will also continue with the UK Government on
identifying the delivery models that will enable long-term
investment in this vital, net-zero enabling technology. Rolls-Royce
SMR is engaging with export customers across many continents who
need this technology to meet their own net zero commitments.
Warren East, Rolls-Royce CEO adds, "the SMR programme is one of
the ways that Rolls-Royce is meeting the need to ensure the UK
continues to develop innovative ways to tackle the global threat of
climate change. With the Rolls-Royce SMR technology, we have
developed a clean energy solution which can deliver cost
competitive and scalable net zero power for multiple applications
from grid and industrial electricity production to hydrogen and
synthetic fuel manufacturing. The business could create up to
40,000 jobs, through UK deployment and export enabled growth. As a
major shareholder in Rolls-Royce SMR, we will continue to support
its path to successful deployment."
Business and Energy Secretary Kwasi Kwarteng said: "This is a
once in a lifetime opportunity for the UK to deploy more low carbon
energy than ever before and ensure greater energy independence.
Small Modular Reactors offer exciting opportunities to cut costs
and build more quickly, ensuring we can bring clean electricity to
people's homes and cut our already-dwindling use of volatile fossil
fuels even further. In working with Rolls-Royce, we are proud to
back the largest engineering collaboration the UK has ever seen -
uniting some of the most respected and innovating organisations on
the planet. Not only can we maximise British content, create new
intellectual property and reinvigorate supply chains, but also
position our country as a global leader in innovative nuclear
technologies we can potentially export elsewhere. By harnessing
British engineering and ingenuity, we can double down on our plan
to deploy more home-grown, affordable clean energy in this
country."
Tom Samson, CEO, Rolls-Royce SMR, said: "Today's announcement is
fantastic news. Rolls-Royce SMR has been established to deliver a
low cost, deployable, scalable and investable programme of new
nuclear power plants. Our transformative approach to delivering
nuclear power, based on predictable factory-built components, is
unique and the nuclear technology is proven. Investors see a
tremendous opportunity to decarbonise the UK through stable
baseload nuclear power, in addition to fulfilling a vital export
need as countries identify nuclear as an opportunity to
decarbonise. The capitalisation of Rolls-Royce SMR takes us a step
closer to achieving a unique, and most importantly investable,
proposition in nuclear energy. It is a major vote of confidence in
British nuclear technology and the potential for building a
world-leading domestic supply chain."
Paul Stein, Chief Technology Officer, Rolls-Royce and Chairman
of Rolls-Royce SMR commented, "In establishing this business,
Rolls-Royce, BNF Capital and Exelon are taking leadership in
accelerating our path to a future without fossil fuels. Global
decarbonisation has never been more important, and we bring decades
of precision manufacturing, and nuclear experience to the problem,
adding to the skills of our partners. By deploying SMRs in the UK
and overseas we will be making a significant contribution to
decarbonisation. While the decarbonisation of the electricity grid
is vital, I am particularly excited by the use of SMRs to
synthesise net zero fuels which can be used to power Rolls-Royce
engines."
Sean Benson, Director of BNF Capital Limited commented, "BNF has
an established history of energy market investing and we are proud
to be a part of Rolls-Royce SMR in this exciting opportunity.
Following reviews of numerous proposals we found that this project,
featuring a highly experienced team was the most realistic,
affordable and scalable solution for provision of carbon-free
baseload and alternative power requirements."
Ralph Hunter, Chief Operating Officer of Exelon Nuclear Partners
and Vice President of Exelon Generation commented, "As the largest
producer of emissions-free energy in the U.S., Exelon helps
customers and communities meet their environmental and economic
goals. This partnership exemplifies our commitment to investing in
clean energy technologies that will create a more sustainable
future. We believe that small modular reactors could become a
crucial part of the world's clean energy mix and we are confident
that, as an operational partner, we can help develop, deploy and
operate a fleet of world-class SMRs."
Rolls-Royce SMR is using proven nuclear technology, coupled with
a unique factory-made module manufacturing and on-site assembly
system, to harness decades of British engineering, design and
manufacturing knowhow. It brings together the best of UK industry
to ensure a decarbonisation solution that will be available to the
UK grid in the early 2030s. The potential for this to be a leading
global export for the UK is unprecedented.
Nine-tenths of an individual Rolls-Royce SMR power plant will be
built or assembled in factory conditions and around 80% could be
delivered by a UK supply chain - a unique offering in energy
infrastructure in the UK. Much of the venture's investment is
expected to be focused in the North of the UK, where there is
significant existing nuclear expertise
A single Rolls-Royce SMR power station will occupy the footprint
of two football pitches and power approximately one million homes.
It can support both on-grid electricity and a range of off-grid
clean energy solutions, enabling the decarbonisation of industrial
processes and the production of clean fuels, such as sustainable
aviation fuels (SAF) and green hydrogen, to support the energy
transition in the wider heat and transportation sectors.
-end-
Contact
Rolls-Royce SMR
Alastair Evans
Director of Corporate and Government Affairs - SMR
0044 (0) 7553 207 591
0044 (0) 7595 003 158
alastair.evans@rolls-royce.com
Rolls-Royce Group
Isabel Green
Head of Investor Relations
0044 (0) 7880160976
Isabel.Green@Rolls-Royce.com
BNF Resources
contact@bnfcapital.co.uk
Exelon
Beth Archer
Director, Nuclear Communications
215-219-2300
elizabeth.archer@exeloncorp.com
Notes to Editors
Rolls-Royce has been a nuclear reactor plant designer since the
start of the UK nuclear submarine programme in the 1950s.
Rolls-Royce SMR will draw upon standard nuclear energy
technology that has been used in 400 reactors around the world.
A Rolls-Royce SMR power station will have the capacity to
generate 470mw of low carbon energy, equivalent to more than 150
onshore wind turbines. It will provide consistent baseload
generation for at least 60 years, helping to support the roll out
of renewable generation, helping to overcome intermittency.
Rolls-Royce was advised on the equity raise process by Eversheds
Sutherland and HSBC
When fully operational the Rolls-Royce SMR business is forecast
to create 40,000 regional UK jobs by 2050 and generate GBP52bn in
economic benefit.
A single power station will occupy around one tenth of the size
of a conventional nuclear generation site and power approximately
one million homes.
All phase one partners in the UK SMR consortium (phase 1 of the
programme) will now become long term supply-chain partners, able to
contribute their design and industry experience to strengthen the
Rolls-Royce SMR business.
Investors:
Rolls-Royce SMR Ltd is a Special Purpose Vehicle established by
Rolls-Royce Group. Rolls-Royce Group will own approximately 80% of
Rolls-Royce SMR on the completion of this equity raise.
For more information see www.rolls-royce-smr.com
Rolls-Royce Group has led the design, development and the
investment programme to secure equity for the Rolls-Royce SMR
project alongside the HMG grant. Rolls-Royce remains the majority
shareholder of the SPV and has committed GBP50 million of capital
investment into the programme as part of the phase 2 funding
process. Rolls Royce SMR is part of Rolls-Royce's pathway to net
zero by 2050 published in June 2021.
BNF Resources UK Limited , forms part of a family office with
extensive investments in the energy space. The company is
represented and advised by BNF Capital Limited, an FCA regulated
investment advisory business based in the UK."
Exelon Generation Limited is a subsidiary of Exelon Generation,
the U.S.'s largest producer of carbon-free energy, powering more
than 20 million homes and businesses through a diverse generation
fleet with more than 31,000 megawatts of capacity. Exelon
Generation operates the largest U.S. fleet of zero-carbon nuclear
plants with more than 18,700 megawatts from 21 reactors at 12
facilities. Exelon Generation sets the standard for world-class
power plant operations that produce clean, safe, reliable
electricity.
UK Research and Innovation (UKRI) is the largest public funder
of research and innovation in the UK, with a budget of over GBP8bn.
It is composed of seven disciplinary research councils, Innovate UK
and Research England. The Low Cost Nuclear challenge at UKRI
supported Phase 1 of the project through a match fund provision of
GBP18 million.
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