FTSE 100-listed engineering company Rolls-Royce has been shortlisted to build a fleet of mini nuclear reactors, City A.M. understands.

It's part of the government's £250m nuclear research programme unveiled in last year's Autumn Statement, which includes a competition to identify the best value small modular reactor (SMR) design for the UK.

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An industry source said that the SMR scheme won't be a "short process". This comes despite the UK energy policy crisis, with an increasingly strained power supply. Almost 6,000 MW could be lost this year.

Of the 38 companies which submitted expressions of interest in the competition, 33 were eligible to compete in the next round, according to the Sunday Times which first reported the news.

These also include US engineering giant Bechtel, NuScale Power which is backed by US engineer Fluor, and Canada’s Terrestrial Energy.

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The factory built, baby nuclear reactors could be transported on the back of a lorry. Ministers believe SMRs have the potential to be an export leader for the UK, but they face concerns such as safety and security, financing and design approval.

Rolls-Royce already makes nuclear reactors that power Royal Navy submarines, and would be applying these expertise to the civil nuclear sector.

The company declined to comment, while the Department for Energy and Climate Change hasn't yet responded to a request for comment.