Crucial Decision Looms for British Steel in Nuclear Reactor Project
A significant debate is brewing within the British government and industry circles, with mounting pressure on ministers to ensure that domestically produced steel is prioritised for the construction of Small Modular Reactors (SMRs). The controversy centres on a multi-billion-pound investment in SMR technology, spearheaded by the Department for Energy and Net Zero, and the potential for overseas manufacturers to secure lucrative contracts.
Last year, the UK industry celebrated a major victory when Rolls-Royce was selected to build three SMRs on Anglesey. This decision was hailed as a boost for British manufacturing and technological prowess. However, the project’s collaborative nature has introduced a complex challenge, pitting national industrial interests against international partnership agreements.
Rolls-Royce’s partner in this ambitious venture is CEZ, a company owned by the Czech state. Reports indicate that CEZ is actively advocating for the crucial reactor components to be manufactured in the Czech Republic, rather than at the highly capable Sheffield Forgemasters steelworks, which is currently under Ministry of Defence ownership. This potential diversion of work has ignited concerns that Britain’s vital steel sector could miss out on substantial, much-needed orders.
The 70% British Content Conundrum
The existing government deal with Rolls-Royce stipulates that a substantial 70 per cent of the materials used for the SMRs must be sourced from Britain. However, a critical ambiguity has emerged: officials have not yet specified precisely which materials this requirement encompasses. This lack of clarity has fuelled fears that the “British-made” mandate could be met with less significant components, such as concrete, while high-value steelwork is outsourced.
The investment made by Sheffield Forgemasters, a £1.3 billion outlay on a new forging press specifically designed to produce reactor parts, underscores the industrial readiness and commitment within the UK. This state-of-the-art facility is poised to deliver the precision engineering required for nuclear applications.
A Call for Domestic Prioritisation
Prominent figures within the Labour Party are urging ministers to reconsider the procurement requirements. Sheffield Labour MP Clive Betts and former MP Richard Caborn have been vocal in their advocacy for Sheffield Forgemasters to secure the contracts. They argue that awarding this business to the taxpayer-funded steelworks would not only revitalise the facility but also generate a significant economic ripple effect, benefiting a wider network of suppliers and ultimately proving advantageous for the UK taxpayer.
With the final deal yet to be formally signed, there remains an opportunity for ministers to adjust the specifications. Betts and Caborn are actively lobbying for these changes, aiming to ensure that the Sheffield Forgemasters steelworks secures the business.
Richard Caborn expressed his concern about the current ambiguity, stating that the absence of specific material stipulations could lead to the requirement being fulfilled by something as basic as concrete. This highlights the potential for a narrow interpretation of the “British-made” clause, undermining the broader goal of supporting domestic heavy industry.
A Clash with Government Strategy
This controversy arises at a time when the government is actively promoting its new steel strategy, launched by Business and Trade Secretary Peter Kyle. This strategy explicitly champions domestic manufacturing, with a newly published ‘Steel Public Procurement Notice’ mandating the consideration of UK-made steel in all public contracts. The current situation with the SMR project appears to be in direct tension with these stated ambitions.
Clive Betts has voiced his apprehension that vast quantities of cheaper, imported structural steel could be used for the reactor housing structures. This concern is echoed by other industry leaders, including Sir Andrew Cook, whose company, William Cook Holdings, specialises in producing ultra-high-integrity components for the nuclear sector, and who is also actively lobbying for SMR components to be manufactured in Sheffield.
Betts articulated his strong conviction: “Those high-quality, precision-made pieces of engineering must be made at Sheffield Forgemasters. We have a publicly-owned business that has the capacity. The idea of producing those parts in the Czech Republic is barmy. We need to change that.”
Caborn reinforced this sentiment, adding, “We are pushing for British manufacturing to get into pole position for what is a brand-new global market.”
Industry Response and Ongoing Negotiations
A spokesperson for Rolls-Royce SMR acknowledged that the company is “yet to procure heavy vessels and the associated reactor components for its small modular reactors (SMRs).” They further stated that “Conversations with potential suppliers are ongoing and commercially confidential.” The spokesperson highlighted the significant scale of the project, noting that Rolls-Royce SMR will procure “over 40 million components for each SMR,” and reaffirmed the company’s commitment to “maximising UK content for our first project, alongside Great British Energy – Nuclear, where competitive capability exists.”
A spokesperson for the Department for Energy and Net Zero (DESNZ) confirmed the ambition: “Great British Energy – Nuclear has set out its ambition for 70pc of all supply chain products across the Small Modular Reactor fleet to be British built.” However, the department declined to provide further comment on whether specific stipulations would be introduced to ensure that critical reactor parts and structural steel are sourced from UK suppliers. The outcome of these ongoing negotiations will have a significant bearing on the future of British heavy industry and its role in the global energy transition.
