SMR28 Feb 2023 00:21
So some thoughts on SMR, which a lot on here seem to be hanging their investment on.
1. UK Gov will not be buying any SMRs. They can’t even run basic services so how in God’s name do you think them capable of running a nuclear power plant. At best they will give some more grants/loans towards development and a possible guaranteed minimum price for the electricity produced.
2. EDF is both a builder of nuclear power plants and an operator. So it is easier for UK Gov to tie them in and guarantee a minimum price for electricity, which EDF in turn can securitise. Even they, with their massive experience/expertise and proven tech, can’t make a long term profit and are being renationalised by the French government.
3. RR have confirmed they want to sell SMRs, not operate them … so you want the Gov to guarantee a minimum price to someone, not yet determined, who, if approval is granted for the design in 1 or 2 years time, if the factories are built to manufacture the SMRs, if the sites are secured, to operate a brand new design which no one yet on the planet has any experience operating, and which will take billions of £s of investment to actually get the first one in operation? And you think this doesn’t hold multiple massive risks for investors?
4. It would appear the closest buyer/operator is Solway Community Power Company ltd, a startup company who have little capital and no experience running any type of nuclear plant. Would you trust them not to cut corners if they were under financial pressure? Much better if someone like Jim Ratcliffe buys the first one. Simpler, financially capable buying & operating and experienced running complex engineering operations (albeit not nuclear).
SMRs are a great idea and have the potential for the UK to be a world leader. In reality they will require massive investment, has enormous risks, realistically we won’t see one operational till 2035-2040 and RR can’t afford to fund the required investment by themselves. They are well capable designing the plant, get them off the ground, taking an ongoing revenue from maintenance etc but need to de-risk their initial investment by selling equity in their subsidiary.
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