Rolls-Royce has announced it is divesting most of its energy business to focus on nuclear. Here Paul Vallance, Rolls-Royce executive vice-president, Nuclear, explains the thinking behind the move.

By Jason Deign

As executive vice-president of Nuclear, Paul Vallance is well placed to provide insight into why Rolls-Royce has set its sights firmly on the nuclear sector after selling the bulk of its energy unit to Siemens.



Q: What was the rationale for selling off the energy business?

Rolls-Royce Energy has outstanding technology and highly skilled people. However, this is a business where scale is important, and despite our best efforts we are simply not big enough to compete effectively in global markets.

Siemens is a much bigger energy company and has a highly complementary portfolio of products and services.

The transaction will provide a better home for the business and greater career and development opportunities for our existing energy employees. It will also allow Rolls-Royce to concentrate on the markets where it can add most value.



Q: Why did you decide to focus on nuclear?

A key part of Rolls-Royce’s strategy is to focus on the areas where it can grow most value and nuclear is clearly one of those areas. The global nuclear industry presents a significant opportunity.

Rolls-Royce has over a 50-year heritage in serving the nuclear industry in both naval and civil nuclear markets across the full nuclear life-cycle.

We have a long history of working with naval and civil licensees and regulatory authorities to generate, substantiate and maintain designs and associated safety justification. We already have a sizeable nuclear services footprint.

For instance, we provide nuclear services and solutions to every civil nuclear power station in the US and Canada.

Additionally, we provide safety instrumentation and control monitoring solutions and services to all 58 reactors in France, and to more than 200 reactors across 20 countries.



Q: What are the main components of your nuclear power portfolio?

Rolls-Royce has been responsible for the delivery of reactors for every class of nuclear submarine ever built for the UK’s Ministry of Defence. This covers the entire primary system and all related elements.

Rolls-Royce has managed and operated the Royal Navy’s land-based prototype nuclear reactor in Scotland for more than 40 years.

We operate two nuclear-licensed sites and understand the regulatory and commercial pressures required to ensure specialist services and plants operate safely and reliably while reducing downtime.

In the civil nuclear industry, we serve major utilities, vendors and site operators around the world. Our key areas of expertise include new build and nuclear projects, instrumentation and control, and nuclear services.



Q: You’ve said that you will seek to expand your civil nuclear power activities. Can you say when, where and how?

Our priority is to continue satisfying our customers, winning new orders and delivering high quality solutions. Our strategy is to grow a global nuclear business that is a technology-independent partner to industry.

We will focus on the areas that we can add the greatest value to our customers. In the UK, we are concentrating our efforts on the high-value engineering design and manufacture of complex components for the new build industry.

We will assess potential investments in high-value manufacturing in order to contribute positively to a successful new build programme.

We will utilise our significant supply chain expertise to help deliver a step change in competitiveness and capability of the UK new build supply chain.

In international markets, we will continue to extend the suite of products and services that we offer to nuclear utilities to achieve safe, efficient and reliable lifetime nuclear reactor operations.

We aim to expand our existing nuclear services footprint by maximising opportunities to transfer our capabilities between geographies.



Q: Where do you see the most growth potential for nuclear power?

Across the world, the outlook for nuclear is positive.

We believe that countries with well-established nuclear programmes and a large in-service nuclear fleet offer significant opportunities for growing support activities as utilities seek to extend the life of their aging reactors.