The UK government has announced a funding boost of £210m to Rolls-Royce to develop the design for small modular reactors (SMR), as part of its net zero strategy.

The funding, which will be provided through the UK Research and Innovation (UKRI), is matched by private sector funding of more than £250m.

According to the British government, the investment will advance phase 2 of the low-cost nuclear project for further developing the design of SMR and take it through the regulatory processes to evaluate its suitability for possible deployment in the country.

Phase 1 of the UKRI’s low-cost nuclear project saw funding of £18m awarded to a consortium led by Rolls-Royce in July 2019.

UK Business and Energy Secretary Kwasi Kwarteng said: “Small modular reactors offer exciting opportunities to cut costs and build more quickly, ensuring we can bring clean electricity to people’s homes and cut our already-dwindling use of volatile fossil fuels even further.

“In working with Rolls Royce, we are proud to back the largest engineering collaboration the UK has ever seen – uniting some of the most respected and innovating organisations on the planet.”

Rolls-Royce has established a special purpose vehicle (SPV) called Rolls-Royce SMR to develop the next generation of low cost, low carbon nuclear power technology. A Rolls-Royce SMR power station is expected to be designed to have a 470MW capacity of low carbon energy.

The company will be the majority stakeholder of the SPV and will invest £50m into the small modular reactor programme as part of the phase 2 funding process.

Over a period of approximately three years, Rolls-Royce Group alongside BNF Resources UK and Exelon Generation will invest £195m in the business.

Rolls-Royce SMR is expected to continue pursuing further investment, and will move ahead with a variety of parallel delivery activities. These include entry to the UK Generic Design Assessment (GDA) process and selecting sites for factories that will manufacture modules for enabling on-site assembling of the power plants.

Rolls-Royce CEO Warren East said: “With the Rolls-Royce SMR technology, we have developed a clean energy solution which can deliver cost competitive and scalable net zero power for multiple applications from grid and industrial electricity production to hydrogen and synthetic fuel manufacturing.

“The business could create up to 40,000 jobs, through UK deployment and export enabled growth.”