A division of Rolls-Royce has been selected to be the UK’s provider of small modular reactor (SMR) technology.

Rolls-Royce SMR, which is co-owned by the FTSE 100 giant and Czech power company CEZ, has been successful in the Great British Nuclear (GBN) competition following a two-year process.

Following the news, shares in Rolls-Royce rose on the London Stock Exchange to pass the 900p mark for the first time in its history.

Rolls-Royce SMR will now build three units in the UK in a move which the firm said would “generate employment, boost the supply chain and generate economic growth, including through the capture of significant export opportunities”.

Small modular reactors are a type of nuclear reactor that can generate up to roughly one-third the power of a traditional reactor.

Developers say small reactors will be built faster and at a lower cost than large power reactors, scaling to fit the needs of a particular location.

Rolls-Royce CEO hails ‘very significant milestone’

CEO Tufan Erginbilgic said: “This is a very significant milestone for our business and Rolls-Royce SMR.

“It is a vote of confidence in our unique nuclear capabilities, which will be recognised by governments around the world.

“It is also evidence that the strategic choices we have made in the transformation of Rolls-Royce are delivering.

“I believe the value of Rolls-Royce SMR will grow materially from here as we successfully execute and deliver on the potential of this venture.

“I would like to thank the team in Rolls-Royce SMR for their hard work and dedication in getting to this important stage.”

In October 2024, the FTSE 100 group sold a stake in the division to Czech power company CEZ. The Czech state has an almost 70 per cent stake in CEZ.

The Derby-headquartered giant handed a 20 per cent share in its SMR division in a deal worth hundreds of millions of pounds.

At the time, CEZ said it planned to build the first small modular reactor at the existing Temelin nuclear plant in the first half of the 2030s.

The deal is also expected to result in up to three gigawatt-producing (GW) energy sources installed in the Czech Republic.