Rolls-Royce has been selected as the preferred bidder to build the UK’s first fleet of mini nuclear power stations, in a significant step aimed at securing Britain’s energy future and reviving domestic nuclear capabilities.
The announcement, made on Tuesday by the government’s publicly owned Great British Energy, follows a lengthy selection process and positions the FTSE 100-listed engineering firm ahead of American rivals GE-Hitachi and Holtec International.
Rolls Royce share price jumped by more than 2% in early trading on Tuesday.
The company will now lead the small modular reactor (SMR) programme, with £2.5 billion pledged through 2029 and further billions expected as construction advances.
This move comes as part of a broader £14.2 billion government initiative that includes the construction of Sizewell C, a large nuclear station in Suffolk, which will produce 3.2 gigawatts (GW) of electricity—enough to power six million homes.
SMRs offer a smaller, faster alternative to traditional nuclear plants
Unlike large-scale plants such as Sizewell C and Hinkley Point C, which require complex on-site construction, SMRs are designed to be manufactured on a production line and assembled on site.
Each unit is expected to produce around 470 megawatts, with at least three reactors planned in the initial phase to collectively deliver 1.5GW of electricity.
This factory-build approach aims to reduce both costs and the construction delays that have long plagued conventional nuclear projects in the UK.
While SMRs remain commercially unproven, Rolls-Royce believes its technology—based on well-established pressurised water reactors—can begin producing electricity as early as 2032.
Datacentres and technology companies are being targeted as early customers for the power produced by these smaller reactors.
Ministers promise jobs, growth and a “golden age of nuclear”
Announcing the programme, Energy Secretary Ed Miliband called it the beginning of a “golden age of nuclear,” pledging that the effort will support energy independence while creating thousands of skilled jobs.
Chancellor Rachel Reeves echoed that sentiment, saying the initiative would help “put more money in people’s pockets” by revitalising British industry and delivering long-term savings through stable energy supply.
Rolls-Royce SMR chief executive Chris Cholerton called the announcement “a milestone achievement,” noting that the company is already progressing on multiple international projects, including one in the Czech Republic and another in contention in Sweden.
“Deploying three of our units will drive domestic growth by creating thousands of highly skilled, well-paid jobs and supply chain opportunities,” he said.
Great British Nuclear to be absorbed into new state energy company
The announcement also confirmed a reshuffle of the government’s nuclear oversight bodies.
Great British Nuclear, the quango originally tasked with managing the SMR programme, will now be folded into Great British Energy, the newly formed public energy company under Ed Miliband’s department.
However, despite the optimistic tone, the government’s SMR ambitions have been scaled back.
Earlier proposals suggested that two or even three SMR designs might be taken forward to ensure competition and reduce the risk of relying on a single supplier.
With the Treasury under pressure to manage spending across healthcare and policing, the government has now opted for a more streamlined approach, selecting Rolls-Royce as the sole winner.
Industry analysts say this could limit innovation but acknowledge the decision brings clarity and momentum to the UK’s nuclear revival.
Tom Greatrex, chief executive of the Nuclear Industry Association, called it “a hugely significant moment” and highlighted the potential for exports.
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