LONDON (Reuters) - Small-scale nuclear projects could deliver electricity to Britain for a similar cost as offshore wind, Rolls-Royce said on Tuesday, providing another potential option for a country struggling to get big nuclear projects off the ground.

FILE PHOTO - The setting sun reflects on the windows of a building at Rolls-Royce in Derby, central England, November 4, 2014. REUTERS/Darren Staples/File Photo

Britain needs to invest in new capacity to replace ageing coal and nuclear plants that are due to close in the 2020s, but the costs involved have seen large nuclear projects delayed or run into trouble.

Offshore wind has plummeted in cost over the past few years, with the latest renewable auction clearing this week at a low of 57.50 pounds per megawatt hour (MWh). That is lower than the subsidy awarded to EDF to build Britain’s first large nuclear plant in twenty years.

In response to the auction, Rolls-Royce, known best for making plane engines, said on Tuesday the small modular nuclear reactor (SMR) being developed by its consortium could deliver power at 60 pounds/MWh.

SMRs use existing or new nuclear technology scaled down to a fraction of the size of larger plants and would be able to produce around a tenth of the electricity created by large-scale projects.

The mini plants, still under development, would be made in factories, with parts small enough to be transported on trucks and barges where they could be assembled much more quickly than their large-scale counterparts.

Rolls-Royce said the bulk of the components for its plants could be built in Britain and open up a potential 400 billion pound global export market.

The British government, which is looking to boost exports as it leaves the European Union, launched a 250 million pound nuclear research and development competition in 2016, with a chunk of the money going towards the winning SMR design - but has yet to announce the winner.

Rolls-Royce has launched a bid as part of a UK consortium with Amec Foster Wheeler, Nuvia, Arup and Laing O’Rourke, with the Nuclear Advanced Manufacturing Research Centre.

Another group to express an interest in the competition is NuScale, majority owned by U.S. Fluor Corp, which has also said its projects could generate power at the 60 pound/MWh mark.