The launch of a new fleet of small modular nuclear reactors (SMRs) moved a step closer as Rolls-Royce was joined by co-investors and the UK government to fund development of the technology, which claims to offer rapidly deployable zero-carbon energy that can be competitive with renewables.

UK-based Rolls-Royce, US power giant Exelon and energy investor BNF Resources will over three years between them put £195m ($264m) and the British government £210m of grant funding into laying the ground for large-scale roll-out of the SMRs, including identifying factory sites for the modular components that can be mass-produced then shipped for assembly at the site of the so-called ‘mini nuclear’ facilities.

Rolls-Royce said earlier this year that its latest design for an SMR could match offshore wind on cost of electricity at around £50/MWh ($71/MWh) from a 470MW unit. The technology’s advocates claim that from the early 2030s it will be able to deliver reliable zero-carbon power without the need for the vast, hugely expensive multi-gigawatt facilities that have been the hallmark of the nuclear industry to date.

Each SMR will take up a site equivalent to two football pitches, with applications such as powering hydrogen production also seen as opportunities alongside grid-connected electricity supply. Rolls-Royce has previously estimated that the first SMR would cost about £2.2bn per unit dropping to £1.8bn after five have been made.

Energy secretary Kwasi Kwarteng said: “This is a once in a lifetime opportunity for the UK to deploy more low carbon energy than ever before and ensure greater energy independence.

“Small Modular Reactors offer exciting opportunities to cut costs and build more quickly, ensuring we can bring clean electricity to people’s homes and cut our already-dwindling use of volatile fossil fuels even further.”

The Rolls-Royce group will own about 80% of the newly-formed Rolls-Royce SMR after the fundraising.

Ralph Hunter, vice president of Exelon Generation – which claims to be the “largest US producer of emissions free energy” – added: “We believe that small modular reactors could become a crucial part of the world’s clean energy mix and we are confident that, as an operational partner, we can help develop, deploy and operate a fleet of world-class SMRs.”

The US government has made it clear that nuclear technology forms part of its decarbonisation agenda, while corporate energy buyers such as Google have not ruled out the use of “advanced nuclear” technologies to meet their goals.

However, opponents have labelled nuclear a dangerous distraction from a fully-renewable energy system, claiming that despite the smaller scale, basic concerns over safety and storage of waste remain unanswered.