UK Backs Rolls-Royce to Build Britain's First Small Modular Nuclear Reactors

The UK Government has officially chosen British engineering giant Rolls-Royce to develop the country's first fleet of small modular nuclear reactors (SMRs), marking a major milestone in the nation's energy strategy.

The announcement was made on Tuesday, 10 June 2025, by Great British Energy (GBE), concluding a two-year competitive selection process.

Rolls-Royce emerged victorious over two US-owned firms also bidding for the contract.

This strategic move comes as part of the UK's broader commitment to expand its nuclear power capacity. It follows a £14.2 billion government investment in the development of the Sizewell C nuclear power station in Suffolk, which will serve as a cornerstone of Britain's low-carbon energy future.

A Transformative Step Towards Energy Security

Energy Secretary Ed Miliband hailed the announcement as a pivotal moment in the country's journey to energy independence and decarbonisation.

Speaking to CNBC, Miliband said: 'We are ending the no-nuclear status quo as part of our Plan for Change and are entering a golden age of nuclear with the biggest building programme in a generation.'

According to Miliband, the deployment of SMRs will not only supply low-carbon electricity to millions of households but also stimulate local economies, create high-skilled jobs, and bolster regional development.

The government sees these reactors as key to achieving net-zero targets and enhancing long-term energy resilience.

A Landmark Victory for Rolls-Royce

Rolls-Royce Chief Executive Tufan Erginbilgic welcomed the decision, calling it a major vote of confidence in the company's capabilities.

'This is a very significant milestone for our business and Rolls-Royce SMR. It is a vote of confidence in our unique nuclear capabilities, which will be recognised by governments around the world,' he said in an interview with The Guardian.

'It is also evidence that the strategic choices we have made in the transformation of Rolls-Royce are delivering,' he added.

Following the announcement, Rolls-Royce shares surged more than 2%, reaching a 52-week high.

While GBE is expected to finalise the contract with the company before the end of 2025, the deal remains subject to regulatory approvals.

Why SMRs Matter for the UK's Energy Future

Although the Sizewell C plant will generate 3.2 gigawatts of electricity—enough to power approximately six million homes—SMRs offer distinct advantages. Each SMR will produce 470 megawatts, and a planned fleet of three will collectively supply around 1.5 gigawatts to the grid.

While smaller in scale, SMRs are significantly quicker and cheaper to build than traditional nuclear plants. Their compact size and modular design also make them more flexible in deployment, with reduced environmental and spatial footprints.

Globally, interest in SMRs is growing. In the United States, major technology companies such as Amazon and Google have entered agreements to develop SMRs to meet the escalating power demands of data centres.

As low-carbon alternatives to fossil fuels, SMRs are viewed by experts as a critical component in the global clean energy transition. They promise reliable baseload power without the carbon emissions associated with coal or gas-fired plants.

The UK Government is expected to permit the construction of at least three SMRs. However, GBE has yet to reveal the proposed locations for the new nuclear facilities.