£2.5bn contract to build small modular reactors will safeguard Derby jobs and cut UK energy costs

Rolls-Royce has secured a major government contract to build small modular nuclear reactors (SMRs), in a move set to safeguard hundreds of research jobs in Derby and cement the firm’s place at the forefront of nuclear innovation.

The £2.5bn deal, awarded after a competitive two-year bidding process led by Great British Energy – Nuclear, will see Rolls-Royce SMR technology chosen over several international contenders. Company executives hailed the announcement as a significant step towards becoming a global leader in what they believe is a rapidly expanding international market for modular nuclear power.

The Derby-based engineering giant shared artist impressions of how its SMR power stations might appear once constructed, offering a glimpse into the future of Britain’s nuclear landscape. Each SMR is designed to generate enough stable, affordable and emission-free electricity to power around one million homes for at least 60 years.

Chancellor Rachel Reeves has already pledged £16.7bn towards nuclear projects as part of the government’s wider strategy to transition the UK away from fossil fuels and towards cleaner, more secure energy sources. Officials believe SMRs offer a faster, cheaper alternative to conventional nuclear plants, with hopes that the first projects could connect to the grid by the mid-2030s.

Rolls-Royce confirmed that the deal will protect vital research and development roles at its Jubilee House base in Pride Park, Derby. The city has long been a centre of British engineering excellence, and this contract is expected to sustain that legacy for decades.

Baggy Shanker, Labour MP for Derby South and chair of the all-party parliamentary group on small modular reactors, praised the deal as a “major step forward for Britain.” He added: “Selecting Derby’s very own Rolls-Royce SMR as the UK’s preferred bidder shows the power of backing British engineering, skills and ambition.”

Catherine Atkinson, Labour MP for Derby North and vice-chair of the same parliamentary group, echoed his sentiment. “This is about delivering practical change: lower bills for families, new opportunities, and a more secure future built here at home,” she said. “Cities like Derby have the skills and ambition to lead the way.”

Rolls-Royce’s SMRs are expected to be built primarily on existing nuclear power plant sites across the UK, reducing planning challenges while cutting the nation’s reliance on imported gas. The modular design allows parts to be factory-built and then assembled on-site, dramatically reducing construction time and cost compared to traditional reactors.

The project forms part of the UK’s broader effort to shore up energy independence amidst volatile global markets and growing concerns over energy security. As geopolitical tensions continue to impact fuel prices, SMRs are seen as a promising solution for long-term stability.

This new contract not only secures the future of Derby’s high-skilled workforce but also positions Rolls-Royce as a key player in the global SMR market, with potential export opportunities on the horizon. The firm’s leadership believes Britain’s expertise in engineering and nuclear technology gives it a competitive edge as countries worldwide explore ways to decarbonise their energy sectors.

While Rolls-Royce now begins preparations to deliver its first SMRs, government officials hope this landmark deal will serve as a model for public-private cooperation in meeting the country’s ambitious net zero targets.