The UK Government has held discussions with Rolls-Royce concerning the production of parts for its new small modular nuclear reactors (SMRs) at a steelworks in Sheffield. The talks aim to encourage Rolls-Royce to utilize British manufacturing capabilities for these critical components.
These negotiations follow Rolls-Royce's earlier announcement of its selection of Czech company Skoda and South Korea's Doosan Enerbility as its primary suppliers for SMR components. This decision had drawn criticism, with concerns raised that vital infrastructure for the UK's energy grid might be assembled overseas, potentially bypassing domestic steel sector contracts.
Sources indicate that representatives from the Department for Energy Security and Net Zero, alongside Great British Energy, the state-backed investment firm, met with Rolls-Royce. The focus of these meetings was to explore the feasibility of producing reactor parts at the Sheffield Forgemasters steelworks.
One individual familiar with the situation confirmed that these discussions took place recently. Another source stated that Rolls-Royce has faced "sustained pressure" from the current administration to prioritize UK-based firms for component sourcing, particularly given the strategic importance of the steel industry to national security.
Representatives from Great British Energy are also reported to have visited Forgemasters in recent weeks. The firm, which is government-owned, has acknowledged being in commercial discussions with both Skoda and Doosan regarding the potential supply of UK-forged components, either directly with Rolls-Royce or through Tier 1 partners. According to Forgemasters' boss Gary Nutter, Skoda and Doosan are currently engaged in pre-production activities, including work on the reactor pressure vessel body, early supplier involvement, design finalization, and manufacturing readiness.
This engagement offers a potential lifeline to the UK's steel industry, which has expressed concerns about being outcompeted by foreign manufacturers, potentially jeopardizing the nation's capacity to produce essential metal components for critical infrastructure and defense projects. A prominent figure in the steel industry, Sir Andrew Cook, emphasized the national interest in having SMRs manufactured with British-made components and supported by a domestic industrial base, drawing a parallel to historical arguments for national self-sufficiency in defense.
Rolls-Royce's SMR division, partially owned by Czech utility firm CEZ, is responsible for the initial three SMRs slated for installation in the UK, under the operation of Great British Energy. These reactors are also intended for deployment in the Czech Republic and have applications in Sweden, benefiting from standardized components for cost-effectiveness and flexibility.
Sources suggest these high-level talks were prompted after Forgemasters did not secure a contract for reactor pressure vessel bodies, with Doosan being selected instead. This situation reportedly arose amidst internal governmental discussions between the Treasury and departments for energy and business regarding cost considerations, with the Treasury favoring lower-cost overseas manufacturing.
Rolls-Royce stated that it is committed to maximizing UK content and is actively collaborating with Forgemasters and its Tier 1 partners to identify opportunities for contributions to its UK and export programs. The Department for Energy indicated that Great British Energy and Rolls-Royce are working together to deliver benefits to the UK supply chain and are regularly updating the government on their progress. The government also noted that Great British Energy Nuclear has awarded over £850 million in contracts to UK-registered firms.