- Tufan Erginbilgic said Rolls’ designs more advanced than other companies
- Government on cusp of selecting maker of small modular reactors
- Power stations have become a critical part of UK’s net zero plans
Confident: Rolls-Royce boss Tufan Erginbilgic
Rolls-Royce is in the lead to win the race to build Britain’s first fleet of mini nuclear power stations, boss Tufan Erginbilgic told The Mail on Sunday.
Erginbilgic, who has led a stunning turnaround of the FTSE 100 engineering firm, says Rolls’ designs are much more advanced than the other companies vying for a Government deal to make small modular reactors (SMRs).
His latest comments come as the Government is on the cusp of making its selection.
These power stations have become a critical part of the UK’s net zero plans.
They are much quicker and cheaper to set up than traditional plants such as Hinkley Point C in Somerset.
Each SMR will be around the size of two football pitches –around a tenth of the size of a normal station – and can power one million homes.
Rolls is one of six firms shortlisted for the work by Great British Nuclear (GBN), a Government body established last year that oversees the sector.
The list, which also includes EDF of France, GE-Hitachi and Westinghouse, will be whittled down to two companies this spring. Contracts are due to be awarded later this year.
Rolls-Royce has spent years spearheading a project to adapt its own technology used in nuclear submarines to be used in SMRs – and has already received £210 million of government funding.
Erginbilgic told The Mail on Sunday that the company’s designs are about ‘two years’ ahead of the other shortlisted companies and are already going through rigorous tests required by regulators. ‘What I’ve said to the Government is that I will never lobby for you to pick us because I know on merit you will pick us anyway – we are ahead of everybody else.’ He added that the process – which has previously been delayed – must stay on schedule.
‘It is important for the UK to go at pace and stick to that timetable because this is a new technology and first-mover advantage is very important,’ he said. ‘It is an opportunity for the UK not only to decarbonise the economy but also to create significant exports.’ These latest comments echo sentiments he has previously expressed in the media.
Rolls is already in ‘serious talks’ with the Czech Republic, according to the chief executive, who visited the country in December to talk to the prime minister Petr Fiala.
Rolls-Royce’s SMR designs are being considered by Sweden, he added, as well as a number of other countries.
Tech giants such as Amazon are also keen on using its technology to power their energy-guzzling data centres.
Winning the UK contract would be an important seal of approval for other countries to place orders with Rolls.
But he has also said that being selected would ‘not mean anything’ unless detailed decisions are taken within months on where the reactors will be built. Oldbury in Gloucestershire and Moorside in Cumbria are expected to be the first sites to receive approval, according to a senior industry source. Officials are also eyeing power stations Heysham in Lancashire and Hartlepool, which are owned by EDF.
A Department for Energy Security and Net Zero spokesman said that ‘no decisions on sites have yet been taken’ but that it is working with GBN ‘to support access to potential sites for new nuclear projects’.
Erginbilgic’s comments follow the release of Rolls’ blockbuster annual results last Thursday. Profits more than doubled to £1.6 billion last year and the company is forecasting further growth in 2024. Within weeks of taking up the chief executive role on January 1, 2023, Erginbilgic launched a sweeping review of the group.
Rolls’ share price hit a five-year high after last week’s results announcement – adding to a rally that made the company the best-performing Footsie stock last year.
Erginbilgic has made a paper profit of almost £22 million on his holdings in the company after receiving £7.5 million as a ‘golden hello’ to join Rolls and compensate for money he would have earned at his previous job.
But shareholders are still missing out on the possibility of a dividend because of the engineering giant’s poor – though improving – credit rating. Erginbilgic said he was ‘optimistic’ that the major agencies, S&P, Moody’s and Fitch, may upgrade their ratings on Rolls following the results, paving the way for payouts to resume.