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24 Nov 2017 | 16:30 UTC — Insight Blog
Featuring Oliver Adelman
The UK government's much heralded, pre-Brexit referendum "competition" to have a small modular reactor or SMR design manufactured in the country by the mid-2020s is struggling to regain momentum amid growing questions about the political will to proceed with the project.
The idea of a "competition" to select an SMR design was announced by then Chancellor of the Exchequer George Osborne in his March 2016 Comprehensive Spending Review. Osborne allocated GBP250 million ($332 million) of funding to the initial phases of the competition and other nuclear sector spending in the 2016 CSR.
The UK government subsequently announced later in 2016 that around 40 initial "expressions of interest" had been received in the competition from a variety of sources, including nuclear equipment manufacturers such as Rolls-Royce, NuScale Power, GE-Hitachi and China General Nuclear Power Corp., academic and research institutions and other joint venture entities.
However, much of the initial momentum behind the competition has since evaporated, with the June 23, 2016, UK referendum vote to leave the EU and the subsequent replacement of David Cameroon with Theresa May as new prime minister dealing a potentially devastating blow to the competition.
Repeated delays and a lack of communication from the Department for Business, Energy and Industrial Strategy have further weighed on the competition's prospects, and industry sources say that Osborne's replacement as chancellor, Phillip Hammond, is simply not as interested in the SMR competition concept as his predecessor.
Add to this continued scarcity of financial resources and an almost complete paralysis across government following the Brexit vote, and the hopes for the competition's initial deadline of having a completed SMR design manufactured in the UK by the mid-2020s look increasingly forlorn.
Several reactor manufacturers, including Rolls-Royce, have publicly indicated that they think that the late 2020s would be a more likely target date, something that BEIS, the government department in charge of nuclear policy, has not denied.
The situation is further complicated by the delayed White Paper, or formal government research report, setting out planned legislation and policy on the May government's industrial strategy, an attempt by the government to take a more comprehensive approach to policies in certain industrial sectors that are deemed to be key to the UK's economy.
Nuclear power, along with transport, digital strategy, clean energy, and the creative industries, has been named as an industry worthy of a "sector deal" between the industry and government under the industrial strategy. While the government has not specifically linked the SMR competition to the industrial strategy White Paper, nuclear industry sources are increasingly placing their hopes for the revival of SMR development in the UK on that White Paper, which is due to be published November 27.
An industry source employed at one of the entrants into the SMR competition said in an interview November 17 that he believed that the competition itself could even be scrapped completely, although the "idea of an SMR being built in the UK will definitely not be scrapped. The competition is so delayed that the industry really now has very grave concerns about is viability."
The source, who requested anonymity as he is not authorized by his company to speak to the media, added that the "government will be seeking to exit from the competition idea, but of course keep the goal it is aimed to achieve in place."
The industry source suggested that the government might pursue a "dual track approach" to SMR development in the UK, meaning that at least two and possibly more SMR designs could be allowed to proceed toward development in the country, as opposed to the original competition idea of selecting a single reactor design early in the development process.
The market for SMRs is significant: Rolls-Royce in a 2017 research paper estimated that the value of the global export market for an SMR design manufactured in the UK could be up to GBP400 billion and that the domestic development work of such a design could have a total value of up to GBP100 billion to the UK economy.
However, others are more skeptical, with the industry source in particular estimating that his company has spent well in excess of GBP10 million so far over two years in preparation for the later stages of the so-far abortive SMR competition.
What is clear is that the process of developing an SMR design in the UK is now in need of an urgent kick-start, either from the industrial strategy White Paper, a clear revival of the SMR competition concept or some other source. Without such a kick-start, the once proud UK nuclear industry will again be left on the sidelines while other countries develop the future technologies of the sector which, if past experience is any guide, the UK government then inevitably ends up importing expensively.