Rolls-Royce has created a new Small Modular Reactor (SMR) division after clinching a cash injection of £405 million ($547 million, 473 million euros), it said in a statement.
SMR reactors are far cheaper to build than large-scale nuclear plants because the vast majority of manufacturing and assembly is done in a factory, before transporting to the site.
“Today’s announcement is another step towards the delivery of the government’s net zero strategy,” Rolls added.
The British government, which is currently hosting the UN climate change summit in Glasgow, aims to reach net zero carbon by 2050 with the help of nuclear.
The London-listed engineering giant hopes that the new business could create up to 40,000 jobs by 2050.
Rolls-Royce, BNF Resources and Exelon Generation will together invest £195 million over three years alongside a £210-million state grant, the group added in a statement.
“The SMR programme is one of the ways that Rolls-Royce is meeting the need to ensure the UK continues to develop innovative ways to tackle the global threat of climate change,” said chief executive Warren East.
“With the Rolls-Royce SMR technology, we have developed a clean energy solution.”
Britain’s Business and Energy Secretary Kwasi Kwarteng described the news as a “once in a lifetime opportunity” to “deploy more low carbon energy .. and ensure greater energy independence”.
The development would “bring clean electricity to people’s homes and cut our already-dwindling use of volatile fossil fuels even further”, he said.
Britain’s nuclear power plants built in the last century have either closed or are coming to the end of their lifespan.
But the country wants to maintain the 20 percent of electricity it generates from nuclear power to help meet its pledge to reduce carbon emissions to net zero by mid-century and tackle climate change.
Rolls-Royce meanwhile suffered huge financial losses as the coronavirus pandemic hammered the aviation sector and air travel demand.