Rolls-Royce will move ahead with a multibillion pound plan to roll out a new breed of mini nuclear reactors after securing more than £450m from the government and investors. The engineering firm will set up a venture focused on developing small modular nuclear reactors, or SMRs, in partnership with investors BNF Resources and the US generator Exelon Generation with a joint investment of £195m to fund the plans over the next three years. The government will match the consortium’s investment, which is set to receive a second phase top-up of £50m from Rolls-Royce, with £210m to help roll out the mini nuclear reactors as part of the government’s green 10 point plan to kickstart the green economy over the next decade. Ministers hope that the new generation of SMRs will quicker and cheaper to roll out than traditional large-scale nuclear reactors – such as the 3,200 megawatt Hinkley Point C project – which face enormous construction risks, and are prone to spiralling costs and delays. Hinkley Point C reactor was initially expected to cost £18bn, but the figure has climbed to about £23bn at the Somerset site as EDF and ministers struggled to agree a new funding framework for a successor project at Sizewell C in Suffolk. Rolls-Royce has promised to “harness decades of British engineering, design and manufacturing knowhow” to roll out the first of its mini reactors which are based on a similar technology used to propel nuclear submarines. Each of the initial run of reactors is expected to have a generation capacity of 470MW, or enough to power the equivalent of 1.3m UK homes, and cost about £2bn on average, well below the price per MW sought by developers of large-scale nuclear reactors. About a fifth of UK electricity is generated by 13 nuclear reactors, but more than half of the country’s 7.8GW of nuclear capacity is due to retire by 2025, leaving a looming gap in the electricity supplies and the risk of a rising reliance on gas power stations. Tom Samson, the chief executive of the Rolls-Royce SMR consortium, said the venture was established to “deliver a low cost, deployable, scalable and investable programme of new nuclear power plants” to help the UK meet its net zero targets. Samson added that the approach would be based on “predictable factory-built components” and proven technology to create an “investable” nuclear option. Ultimately, the consortium hopes to build on an initial run of five SMRs, the first of which could go on line by 2031, to create a multibillion-pound stable of 16 SMRs around the country. Kwasi Kwarteng, the business secretary, described the shift to SMRs as “a once in a lifetime opportunity for the UK to deploy more low carbon energy than ever before and ensure greater energy independence”. He added that the SMR programme would “offer exciting opportunities to cut costs and build more quickly”, and would help to cut the UK’s reliance on fossil fuels while creating jobs and a new homegrown industry. “Not only can we maximise British content, create new intellectual property and reinvigorate supply chains, but also position our country as a global leader in innovative nuclear technologies we can potentially export elsewhere,” he said.