Up to £100m expected to be announced in effort to make UK leader in technology and provide fresh source of clean power

Ministers are expected to back the first generation of small nuclear power stations in Britain with tens of millions of pounds this week, in an attempt to give the UK a competitive edge on the technology and provide a new source of clean power.

Rolls-Royce and a host of US and Chinese companies have been lobbying and waiting for the support since George Osborne first promised them a share of £250m two years ago.

Now, after industry frustration at huge delays to the government’s competition to find the best value “small modular reactor” (SMR), funding to develop and test the power stations will be confirmed.

The energy minister, Richard Harrington, is expected to announce support for the embryonic technology on Thursday, industry figures told the Guardian. The funding is likely to be up to £100m, one source said.

Small modular reactors provide about a tenth of the power of a conventional large nuclear power station, such as the one EDF is building at Hinkley Point C in Somerset. But their backers pitch them as a cheaper and quicker way to generate the new, low-carbon power the UK needs.

Rolls-Royce has been publicly and privately lobbying the Department for Business, Energy and Industrial Strategy (BEIS) over its SMR design, which it positions as an industrial opportunity for Britain that would generate thousands of UK jobs.

The firm argues that with electric cars likely to drive up future energy demand, the reactors will become a vital part of national infrastructure.

The BEIS announcement is long overdue, as Harrington admitted at an industry conference in June.



Several sources told the Guardian that the industry had been angered by government vacillation on whether to throw its weight behind the technology.

“They have blown a bit hot and cold on SMRs. There’s a sense that if we’re going to be part of this, we need to get on with it quite quickly,” said one.

Another source said: “The way this has dragged on has hacked off the better ones [SMR developers].” They added that while the funding was welcome, it was expected to be a relatively small sum and they were unsure it would be enough to make a difference.

“It’s a pretty half-hearted, incredibly British, not-quite-good-enough approach,” they said.

The funding is designed to help Rolls and other consortia, including the US companies NuScale and Terrapower and the controversial Chinese firm CNNC, undertake the research and development for a small nuclear power station to be built in the UK. It is not yet clear who will win a share of public funds, or how the pot will be carved up between the 33 participants in the SMR competition.

Government officials have repeatedly made it clear that developers will only get financial help if they can prove their SMR will be affordable and competitive with rival energy sources. The earliest an SMR is thought likely to be ready for deployment in the UK is around 2030.

One union said the technology warranted the government’s backing. Justin Bowden, the GMB national secretary for energy, said: “Nuclear new build is absolutely vital as part of a balanced energy mix that is safe, secure and reliable.

“SMRs should form part of that. Depending on who may or may not go on to build them, there is an obvious benefit in terms of UK infrastructure jobs and an economic boost.”

The former energy secretary Lord Howell gave his backing to the reactors at a recent House of Lords event, where advocates and critics debated the technology.

“The obvious way forward is through the sequential construction of a new series of smaller modular reactors of the kind now being developed by Rolls-Royce in the UK, and also in China and in America,” said Howell.

However, energy experts said the case for SMRs was far from proved, especially given the falling cost of alternatives such as offshore windfarms.

Paul Dorfman, a research fellow at University College London, said: “The real question the government must ask is this: given the ongoing steep reduction in all renewable energy costs, and since SMR research and development is still very much ongoing, by the time SMRs comes to market, can they ever be cost competitive with renewable energy? The simple answer to that is a resounding no.”

An energy industry source also questioned how credible most of the SMR developers were. “Almost none of them have got more than a back of a fag packet design drawn with a felt tip,” the source said.

A BEIS spokesperson said: “We are currently considering next steps for the SMR programme and will communicate these in due course.”

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