The British company aims to build 200 small nuclear power plants by 2050, and believes that some of them will be in Norway. Until then, it remains to build the first one.
Most people probably think of luxury cars or aircraft engines when they hear the name Rolls-Royce. But if the British company gets what it wants, it is nuclear power that the Norwegians will associate it with in the future.
– We realize there is a long way to go, and a lot of work to do, but we see Norway as a market that can really thrive, says Tomo Houtonen.
Huttunen is President of Rolls-Royce SMR Nuclear, Scandinavian Market.
Rolls-Royce has identified what it believes are the most attractive markets for its nuclear energy investments: the central parts of Eastern Europe, with a focus on the Czech Republic and Poland, and Nordic countries such as Finland, Sweden and Norway.
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Except for the UK, of course. It is in Great Britain that we will build the first reactors and the first factories, says Tomo Houtonen.
E24 met up with Huttunen in Oslo on Monday. He was in Norway to sign a letter of intent with Norsk Kjernekraft, which is behind billionaire Trond Mohn, with Paul Christian Reber and Jacob Hatland.
The goal is to build Small Modular Reactors (SMR) in Norway.
Put together like Lego pieces
SMR is a new type of nuclear reactor that differs from the traditional large nuclear power plants that produce power in both Finland and Sweden today.
Huttunen explains that conventional nuclear power is always “first of its kind” when it is built. This makes the construction process complex, expensive and lengthy.
– Our SMR will be the first of its kind only once. After that, the production and construction process will be similar, he says.
The nuclear power plant units will be produced at Rolls-Royce’s own factories. The units will then be transported to where the nuclear power plant will be located and assembled like Lego pieces.
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– In this way, we remove the biggest problem that nuclear power has faced so far, which is the complexity and challenge of project management and the fact that it is very difficult to deliver on time and within budget, he says.
Finland saw this with Olkiluoto 3, which was delayed for many years and experienced significant cost overruns.
Rolls-Royce’s small modular nuclear power plants are planned to have the capacity to generate 470 megawatts of power. By comparison, the disputed wind power plants at Storheia and Fosen have a total capacity of 543.6 MW.
Nuclear power plants also power many more hours each year than wind power.
Double the lifetime cost of wind energy
Huttunen notes that financing large nuclear power plants has traditionally been very challenging, largely because of current interest rates.
– There is a big difference between investing 10 billion euros and having to wait at least 10 years to produce electricity, as is the case with conventional nuclear power, and investing 2 billion euros and waiting four years for commercial operation, as is the case with SMR, he says.
– You can imagine the cost of 10 billion euros when the interest rate lasts for at least 10 years. This makes the financing part considerably easier for SMR.
Rolls-Royce has so far assumed the cost of its small modular reactors to be NOK 27 billion. The plant’s life-time energy cost (LCOE) is estimated at 50 to 70 øre per megawatt-hour, which equates to 56 to 78 øre per kilowatt-hour at today’s euro exchange rate.
This is nearly twice the lifetime cost of onshore wind power in Norway, according to previous reports Estimates from NVE.
Still waiting for the world’s first SMR
Rolls-Royce SMR is one of several companies competing to build the SMR in the global market.
By 2050, they have a goal of building 200 reactors. And the goal is hairy, because so far no company has built a running SMR.
Rolls-Royce will start operating the first SMR in 2031 in the UK, according to Huttunen.
At the same time he writes Reuters The company is counting on raising more money to make it happen. The cash balance on Rolls-Royce’s nuclear power project in Great Britain will run out in 2024.
The most important thing is to ensure sufficient commitment from the British authorities. We need government support to build the first reactors, which will be more expensive than a third or fourth reactor, says Huttunen.
In 2021, Rolls-Royce received £210m from the British government, according to Reuters. This is equivalent to NOK 2.5 billion.
At the same time, the parent company Rolls-Royce, which owns 85% of Rolls-Royce SMR, and other shareholders invested £ 280 million in the company, which is equivalent to NOK 3.5 billion.
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The money was used to build the company, which today has 600 employees in the UK. In addition, the funds enabled the company to begin the regulatory process of approving the reactor design and identifying sites for facilities and plants.
Huttunen is not worried about the financing part.
– My understanding is that it should be resolved by this year, he says and adds:
– When there are politicians in the equation, it creates a new level of complexity. There has been a great change of prime ministers in Great Britain in the last year, which has caused some unfortunate problems.
But not everyone has as much faith in SMR technology as Norsk Kjernekraft and Rolls-Royce.
Among those who cannot be persuaded is Norway’s most famous energy analyst, Jarand Rystad, founder of Rystad Energy, which provides data and analytics.
in Interview with TU He says the biggest misconception is that SMR is cheap. He asserts that nuclear power plants are still only on the drawing board.
– For my part, we would like to have nuclear energy if it was close to economic competition, but it is not, Rystad tells TU.
DNV is also not convinced of the role of SMR in the energy mix. in a new way a report The advisory writes that so far there is a lack of evidence to support claims that SMR solves hurdles such as high costs, security policy, and non-proliferation. The latter relates to the danger of spent fuel being misled and used in weapons.
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