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Hundreds of jobs could be created on Teesside after a partnership was launched to build a new type of nuclear power station across the UK.

Newcastle’s Penultimate Power UK is planning to use Japanese nuclear technology to develop a string of power stations up and down the UK, starting on Teesside.

The company has signed a partnership with the Japan Atomic Energy Agency (JAEA) - an agency of the Japanese Government - to replicate its nuclear technology in the UK, in a bid to help ease the UK’s energy crisis.

Taking up around five acres, high-temperature gas-cooled (HTGC) reactors are small in size compared to conventional nuclear power stations. Many of their parts do not need to be built on site and instead can be produced in a central factory, which Penultimate Power hopes to build in Teesside.

Penultimate - which has been launched by two energy experts - wants its first nuclear site to be in the area.

Prof Ian Fells, emeritus professor of energy conversion at Newcastle University and a long-time and well-known advocate of nuclear energy, is technical director at Penultimate Power. He is joined at the company by Candida Whitmill, a former Government advisor on energy policy who has written widely on various energy sectors.

Prof Fells said: “This technology is forward looking. The power station can be constructed in a factory - they don’t need to be constructed on site - and they are inherintly safe.”

He added: “The prospect would be to have a factory that would be building most of the components for these sites and it is hoped that that would be built in the North East.”

It is estimated that each reactor will cost around £500m to build and will employ around 500 people on site. If a central factory is also built in Teesside, the project could create thousands of jobs in the region, both directly and in the supply chain.

“It is proven and very safe and will bring jobs to the North East,” said Prof Fells. “We will use the supply chain for a lot of the construction.

“We are not just interested in building one, but a stream of them around the country in industrial areas. It is a gigantic leap ahead.”

While the two companies have agreed to build the reactors in the UK, no specific sites have yet been confirmed. Before building can go ahead the joint venture would need approval from a number of organisations, including the Office for Nuclear Regulation.

Funding for the project is expected to come from the JAEA as well as private investors. It is also hoped investment will be received from the UK Government.

Penultimate Power is aiming to fix the UK’s energy shortfall through the development of these small nuclear reactors. But as well as generating electricity for the National Grid, the reactors also produce “high grade heat” of up to 950ºC. This heat can then be used in the production of steel and hydrogen.

The use of hydrogen fuel is becoming increasingly important as a way of powering heavy transport, such freight trains. The North East already produces more than half of the UK’s hydrogen, and last week it was revealed that two hydrogen refuelling stations are set to be built in Middlesbrough and Redcar.

The deal has come just a few weeks after Japanese industrial giant Hitachi suspended work on a multi-billion-pound nuclear project at Anglesey because of rising costs.

The announcement, which follows setbacks at other nuclear sites, has raised questions over the future of nuclear energy in the UK, as well as the country’s wider energy policy.

Currently the only nuclear power station in the area is at Hartlepool.

Commenting on the role its reactors could play in the UK’s energy infrastructure, Penultimate Power said: “We are excited to be working with Japan on this innovative technology. We are creating energy hubs that are inherently safe.

“The UK urgently needs affordable, carbon-free electricity that complements the renewables on the system, but this technology could prove a breakthrough in how we decarbonise heat and transport too, saving millions of tonnes of CO2, more efficiently, financially and environmentally, than any other method available.”