Rolls-Royce's nuclear division has secured a landmark multi-billion pound deal with Swedish firm Videberg Kraft, set to enhance the nation's nuclear energy capacity for the first time in over four decades. The agreement will propel Rolls-Royce shares up nearly 4% to £1,353.60, contributing to Monday's market rally.
The contract underscores Sweden's commitment to increasing its low-carbon energy production and comes on the heels of significant backing from the UK government. Last year, the UK government selected Rolls-Royce SMR as its preferred technology partner for its own SMR programme, in conjunction with Great British Energy. The first UK SMR project is expected to be constructed at Wylfa in North Wales, projected to support up to 3,000 jobs during peak construction and thousands more across the supply chain.
The National Wealth Fund's £599 million financing package for Rolls-Royce SMR earlier this year demonstrates the UK's commitment to de-risking the project for private lenders. This capital injection is expected to attract billions in additional investment from both the City and international markets, further underlining the UK's support for nuclear energy development.
Small modular reactors (SMRs) are designed to produce approximately one-third of the electricity generated by conventional reactors, with proponents arguing that these smaller reactors can be constructed more rapidly and cost-effectively than larger power reactors. Each Rolls-Royce SMR unit is expected to generate 470 megawatts of low-carbon electricity, contributing to energy security and decarbonisation efforts.
Industry observers believe this deal will further accelerate the adoption of nuclear energy globally, positioning the UK as a leader in the sector. The Swedish agreement is seen as a key milestone for Rolls-Royce SMR, validating its strategic decisions and cementing its position in the market.
Source: City A.M.