The Hinkley Point C power station in Somerset is massive. The 176-hectare (435-acre) power plant will provide 3.2 gigawatts of electricity, enough to power 6 million homes. Not only is the project huge, but the cost is also huge. With a price tag reportedly soaring to £48bn and delays of at least five years, it has become a symbol of the pitfalls of nuclear power.

But some companies believe they have a faster and cheaper option than the massive Hinkley Point plant in the form of small modular reactors (SMRs), which can be built in factories and then installed together on site.

Britain's Rolls-Royce, which also makes submarine reactors in Derby, is competing with three North American rivals for orders from the British government.

Stephen Lovegrove, chairman last year of Rolls-Royce SMR, the joint venture responsible for the effort, claimed in an interview at the FTSE 100 company's London headquarters that the company was 18 months ahead of its rivals.

However, Lovegrove, who previously served as the government's top civil servant in the energy sector and the Ministry of Defence, expressed frustration that the UK government competition has been delayed by another year, pushing back the earliest date for Rolls-Royce to build new reactors to 2032 year or 2033. This target has been postponed from 2029 to 2031.

Rolls-Royce is sticking with it even as group chief executive Tufan Erginbilgiç shuts down other speculative ventures as part of his turnaround plan.

However, Rolls-Royce SMR, led by chief executive Chris Cholerton, has blamed government delays for its decision to source key pressure vessels from outside the UK. Lovegrove said "every day without a decision increases the risk" that the UK will fall behind its rivals. "It's definitely going to hinder us, both domestically and internationally."

Lovegrove said the UK had "missed a trick" by failing to build turbines for its wind energy revolution over the past decade, including during his time in the energy sector under the Conservative government.

"Frankly, this is a period of austerity that requires certain types of investment decisions," Lovegrove said.

In November, the government shortlisted Rolls-Royce SMR, along with US rivals Holtec and GE Hitachi, and Canadian-owned Westinghouse. Two candidates are expected to be chosen at Chancellor Rachel Reeves' spring statement.

The decision to proceed with the development of small and medium-sized reactors will be an important milestone in the history of UK nuclear power. In 1994, UK nuclear power peaked at 12.7 gigawatts (GW), accounting for 17% of installed power generation capacity. Since then, the industry's fortunes have declined amid a lack of new projects to replace aging reactors.

Since Sizewell B opened in 1995, only Hinkley Point C has been approved. Hinkley Point's sister project, Sizewell C, is awaiting approval but is also expected to cost nearly £40bn.

Lovegrove said the first 470-megawatt Rolls-Royce SMR would be available in the UK and about a year later in the Czech Republic, with utility company Čez Group joining as a joint venture partner this year. He said another unnamed European country would follow by 2034. The US and Gulf states will also be targeted - Qatar's sovereign wealth fund is one of the investors that has put in £280m, along with £210m of UK grant funding.

Whatever the wait, various SMR contenders in the UK and elsewhere believe they will win in the nuclear sector, where renewable energy sources suffer from intermittent conditions when the wind dies or clouds obscure the sun. But another recent development is the huge clean energy demand from big tech companies to generate artificial intelligence.

Microsoft last year signed an agreement to rehabilitate the Three Mile Island nuclear power plant in Pennsylvania. Google has reached an SMR agreement with Kairos Power of the United States. Lovegrove said Rolls-Royce would respond to Facebook owner Meta's call for a nuclear project. In the UK, the government said on Monday that SMR would support the development of artificial intelligence.

Lovegrove, 58, worked at investment bank Morgan Grenfell and Deutsche Bank before joining the civil service in 2004. He rose through the ranks, including serving on the London 2012 Olympic Games board for seven years before becoming Permanent Secretary in 2013, the highest civil service level in the Department of Energy.

After leaving government, he also returned to banking as an adviser to Lazard and joined Columbia University as a distinguished visiting scholar.

There's a reason this interview was conducted in an office building (coincidentally, shared with the Guardian) rather than a factory: apart from test reactors in China and Russia, there's no place in the world where Small and medium-sized reactors do not exist anywhere.

Doug Parr, policy director at British environmental group Greenpeace, said SMR advocates were overly optimistic. He said the money would be better spent on renewable energy and energy storage.

"Despite the hype, a closer look at progress in small and medium-sized reactors shows that they do not appear to solve any of the problems faced by larger reactors," he said. He cited the experience of U.S.-based Nuscale, which abandoned a project in Idaho after costs soared. Parr said small and medium-sized reactors would be "much more expensive than renewables, and they are also slow to come online, making them too slow to play much of a role in decarbonizing the grid".

"The only significant difference from large reactors is that small and medium-sized reactors offer the opportunity to spread the nuclear power problem over a wider geographical area," he said.

Rolls-Royce, Holtec, Westinghouse and other competitors such as Nuscale and Russia's Rosatom all use variations of pressurized water reactors (PWR), which is the standard technology but on a smaller scale. Rolls-Royce's reactor building covers an area of ​​about two hectares, while other reactor buildings are smaller. But the key change for small and medium-sized reactors is the "modularity" aspect: the reactors would be built in a factory from truck-sized components and then deployed on a touted site from Cumbria to Anglesey or Inismond. location for assembly. North Wales.

This contrasts with the approach to complex, stick-built projects such as Hinkley Point or Sizewell, where sites are too large to provide shelter from the rain.

Lovegrove said a modular approach would "greatly, greatly, greatly reduce the risk of nuclear power plant construction" by spreading the costs of multiple reactors, building two per year. When asked if the SMR process carries the scars of Hinkley Point, he said: "SMR is an industrial process specifically designed to address the causes of this scarring."

Lovegrove said if Britain and the Czech Republic continue to fulfill orders, "this is a viable business." The UK purchase represents a budget of £10bn for three small and medium-sized reactors.

Lovegrove said Rolls-Royce stood by its 2022 submission that its electricity would cost "around £50/60 per megawatt hour" at 2012 prices. That would be half that of Hinkley Point and competitive with the wind power prices of between £54 and £59 guaranteed by the UK government at the latest auction in September.

"That is not the case, nuclear is a more expensive technology than renewables over the life of each project," Lovegrove said, citing the additional costs of storing and transporting renewable energy.

It's a favorable time for nuclear advocates, even if the technology is unproven. Lovegrove was Boris Johnson's national security adviser in February 2022, when Vladimir Putin's full-scale invasion of Ukraine triggered a global energy crisis and Europe scrambled to replace Russian gas.

"Most German policymakers would now admit that being so heavily dependent on Russian gas is a strategic weakness," Lovegrove said. Baltic states threatened by Russia, such as Estonia and Latvia, were the most interested in Rolls-Royce technology, he said. One of the countries of interest.

Lovegrove is looking at another aspect of Britain's response to the rise of authoritarian states: He is conducting a government review of Orcus, the U.S.-backed alliance that provides nuclear submarine propulsion from Britain to Australia. The alliance will benefit Rolls-Royce by increasing demand for subsea reactors. Lovegrove said there was no conflict of interest because SMR was an independently operated joint venture and Aukus would never be involved in civilian nuclear power.

"Aukus is the most important defense and defense industry collaboration anywhere in the world for more than 60 years," he said.

It's unclear whether the alliance signed by Joe Biden will survive Donald Trump's second term in the White House. However, Lovegrove believes that Trump should give his "full support" because "security in the Indo-Pacific region ... will be strengthened."

Rolls-Royce hopes the UK government's pursuit of energy security will lead it to favor British-made technology.

"We do have an opportunity to be a leader in small modular reactors and their supply chain," he said. "I really hope we can embrace it."