‘Dithering’ Britain risks losing jobs as Rolls wins mini-nuke deal in Czech Republic

The Czech Republic has become the first country to place an order for Rolls-Royce’s mini nuclear reactors, raising fears in Britain that skilled jobs and exports will disappear abroad.

Rolls said the deal, announced on Wednesday evening, would put the Czech state and the company “at the forefront” of small modular reactor (SMR) development globally.

It was hailed by UK ministers as “an outstanding vote of confidence in British engineering”.

However, industry sources on Thursday expressed exasperation over Whitehall’s “dithering” on mini-nukes, as a domestic SMR competition drags on at home.

They fear that Rolls’s success in selling its reactors to the Czech government could mean that UK industry misses out on in-demand supply-chain contracts that go to rivals overseas.

As part of the deal, the Czech government has guaranteed a pipeline of initial work for Rolls by committing to at least three sites, with each expected to host multiple SMRs. Negotiations over the final details are currently under way.

One industry source told The Telegraph: “While the UK dithers, other countries are getting on with it.”

Another person familiar with the UK process warned: “Frankly, you cannot blame Rolls or the Czechs for having the guts to make a decision.

“This is about which governments are willing to set policies that make supply chain investments worthwhile – and companies will always prioritise where their order book is.”

SMRs have been touted as a potential breakthrough that could dramatically cut the cost of nuclear power plants and the time required to build them.

But the technology remains unproven on a commercial basis, with countries and businesses jostling to see who will reach that milestone first.

The deal between Rolls and Prague comes as a surprise because executives at the company had previously complained that foreign governments were unwilling to commit to orders before London was itself signed up.

But Wednesday’s announcement instead trumpeted the “great opportunity for the Czech economy” in going first.

“The advantage for the Czech Republic is that Rolls-Royce SMR is just forming its supply chain, and Czech companies thus have a unique opportunity to stand at its birth and participate to the maximum extent possible,” the Czech government said.

“Thanks to this strategic cooperation, local companies will be able to participate not only in the development and implementation of the new small modular reactor, but also in the supply of SMR abroad.”

It echoes comments previously made by Tufan Erginbilgiç, the chief executive of Rolls-Royce, to the Telegraph.

In June, Mr Erginbilgiç said: “First-mover advantage on a new technology is very important.

“Why? Because if you are the first one going into execution, you will build the supply chain, you will enable the supply chain.”

Tom Greatrex, chief executive of the Nuclear Industry Association, said: “This is very good news for Czech energy security, Czech power prices and the Czech supply chain, which will be well placed for projects there.

“If the UK wants to secure similar benefit for our energy security, power prices and supply chain coming from an SMR rollout then we need to get on with choosing the technologies, the sites and the number of units.

“Greater urgency than ministers have thus far signalled is needed – the longer they take, the longer the country will be exposed to volatile international gas markets driving energy costs up and undermining the health of the economy.”

Domestic competition drags on

The UK’s SMR competition was first announced in 2015 by former Conservative chancellor George Osborne, who at the time said it would pave the way for the first mini-nuclear reactors to be built in the 2020s.

However, it was not until summer 2023 that Great British Nuclear, the government agency tasked with shepherding a new generation of reactors into development, launched the official SMR design competition.

A shortlist of six companies was announced in October 2023 but initial timelines slipped, with bids submitted in early July – and one company, EDF, dropping out.

The remaining contenders – Rolls-Royce, GE Hitachi, Westinghouse, Holtec Britain and NuScale – were initially told that the shortlist would be reduced from five to four by late August, but has been delayed by a month following the July election.

Under the current timelines, it is hoped that a winner will finally be selected by late this year or early 2025. However, the Government has yet to confirm which sites will be made available for the first SMRs.

By comparison, Rolls has got on to a final shortlist of two contenders in Sweden already, and in Canada GE Hitachi has begun work on an SMR for the Ontario government.

Chris Cholerton, the chief executive of Rolls-Royce SMR, said: “This important strategic partnership further strengthens Rolls-Royce SMR’s position as Europe’s leading SMR technology, and will put [Czech state utility provider] CEZ, Rolls-Royce SMR and its existing shareholders at the forefront of SMR deployment.

“Rolls-Royce SMRs will be a source of clean, affordable, reliable electricity for Czechia – creating jobs, enabling decarbonisation, reducing the reliance on imported energy and supporting the global effort to reach net zero.”

Jonathan Reynolds, the Business Secretary, said on Thursday: “This is an outstanding vote of confidence in British engineering and proof the UK is at the cutting edge of nuclear technology.

“With our international investment summit one month away, we’re seeing the benefits of political and economic stability in this country.

“It’s fantastic to see expertise developed at home being sold to the world and supporting the global effort to reach net zero.”