Rolls-Royce plans civil nuclear expansion

By Rebecca Bream in London
Published: July 16 2008 23:16

Rolls-Royce, the UK aircraft engine maker, plans to expand its nuclear business to take advantage of the building of more reactors around the world.
The company has been involved in the military nuclear industry in the UK for 50 years, making reactors to power Royal Navy submarines. Now, it sees great growth potential in the civil industry and will on Thursday launch a nuclear power division focused on winning orders for reactor components such as pumps and control systems.

Jonathan Hale, director of business development, said concerns about global warming, energy security and the high cost of fossil fuels meant that nuclear power was growing in popularity and could be worth £50bn ($100bn) in 15 years.
The group’s new civil nuclear division aims to take advantage of this and “in time” could grow to be as big as the group’s marine division, which makes power and propulsion systems for ships and submarines. Rolls-Royce has one business, Data Solutions & Systems, that makes control and instrumentation systems for nuclear reactors, which is worth £50m in annual sales.
The company was also involved in the construction of the Sizewell B nuclear power station in the early 1990s, the last reactor to be built in the UK. Mr Hale said his group’s experience gave it a head start over competitors, particularly at a time when nuclear skills were thin on the ground. “We have more nuclear capability than any UK company by far,” he said, pointing to the group’s supply chain of companies employing a total of 20,000 people.
George Lowe, head of the civil nuclear division, said the group would be able to supply components for several reactor designs and had been in talks with energy companies and reactor manufacturers “for a number of months”.
Mr Lowe said Rolls-Royce was working both for Areva of France and Westinghouse of the US, the two manufacturers that are expected to supply most of the reactors for the next wave of nuclear power plants in the UK. He believed the UK had the chance to be at the forefront of the nuclear renaissance and develop skills and businesses that could be exported worldwide.
“But it all depends on the pace with which the government selects the sites for new reactors and that the planning approvals process goes forward in accordance with recent changes,” he said. If the nuclear industry in the UK grew at a slower pace than hoped, “there are other opportunities for us on a ­global stage,” Mr Lowe said.
Four nuclear plants are being built in the US, with several more in the planning stages. About 20 reactors are being built in Asia, mostly in China. In Europe, reactors are under construction in Finland and France, with another set to start soon in Bulgaria.
Copyright The Financial Times Limited 2008