Rolls-Royce shares surge as government backs nuclear reactor innovations

Rolls-Royce shares surge as government backs nuclear reactor innovations

Saxo Stories 3 minutes to read
Saxo Be Invested

Saxo Group

Summary:  The Rolls-Royce share price surged to a six-month high when markets opened on 9 November 2021 thanks, in part, to the news that it will be a driving force in the UK's push for net zero emissions. The British aerospace company leads an industry consortium that will work in tandem with the government to develop small nuclear reactors (SMRs). Rolls-Royce shares rallied after announcement, trading up from 142p to 149p within an hour of the market opening on 9 November.


Will Rolls-Royce shares find new momentum?

Rolls-Royce shares have produced mixed results in 2021, but the current upswing suggests a possible breakout. The company’s trading value remains significantly below its five-year peak of 375p due, in part, to COVID-19 disrupting the aviation sector. However, the latest news, in addition to air travel returning to some semblance of normality, the Rolls-Royce share price has stabilised. A peak in March of 127p was followed by a bearish run that reversed in July. Rolls-Royce shares have remained largely bullish since the summer swing and, this week, they’ve found new momentum.

The £405 million joint projects will become a cornerstone of the government’s 10-point green plan to cut carbon emissions and produce more energy from alternative sources. Rolls-Royce, along with BNF Resources UK and Exelon Generation, will invest £195 million over a three-year period. This, along with a £210 million grant from UK Research and Innovation (UKRI), will fund the development of small nuclear reactors (SMRs).

What will low carbon energy do for the Rolls-Royce share price?

Producing the next generation of low-cost, low carbon energy sources will create up to 40,000 new jobs and, in turn, signal a new era for Rolls-Royce, according to CEO Warren East. Commenting on this week’s announcement, East said that, as a major shareholder in the project, Rolls-Royce is committed to facilitating the deployment of this innovative technology both at home and abroad.

“We have developed a clean energy solution which can deliver cost competitive and scalable net zero power for multiple applications from grid and industrial electricity production to hydrogen and synthetic fuel manufacturing,” East said.

The Rolls-Royce share price has reacted positively to the news. Although the shares are still suffering from the impact of COVID-19, the current picture looks more positive than it was in 2020. Diversifying into new areas such as clean energy will help the company utilise its engineering expertise and contribute to the UK’s ongoing efforts to reduce carbon emissions. This, in turn, could be good news for anyone wanting to buy Rolls-Royce shares.

Prime Minister Boris Johnson urged the UK to make “bold compromises” in the face of climate change at COP26. Investing in SMRs is one such compromise that will help create a more environmentally friendly energy source. Rolls-Royce will spearhead these efforts in the UK and, if successful, export its products to the world at large. That could be good news for the Rolls-Royce share price, particularly in the face of ongoing issues for the aviation sector.

Create an account with us today and start trading Rolls-Royce shares, as well as stocks in hundreds more innovative energy companies.

All trading carries risk. Any past performance stated is not an indication of future performance.


Quarterly Outlook

01 /

  • Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally

    Quarterly Outlook

    Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Q3 Macro Outlook: Less chaos, and hopefully a bit more clarity

    Quarterly Outlook

    Q3 Macro Outlook: Less chaos, and hopefully a bit more clarity

    John J. Hardy

    Global Head of Macro Strategy

    After the chaos of Q2, the quarter ahead should get a bit more clarity on how Trump 2.0 is impacting...
  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

Content disclaimer

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Bank A/S and its entities within the Saxo Bank Group provide execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation.

Saxo’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

Please refer to our full disclaimer and notification on non-independent investment research for more details.

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900 Hellerup
Denmark

Contact Saxo

Select region

International
International

All trading and investing comes with risk, including but not limited to the potential to lose your entire invested amount.

Information on our international website (as selected from the globe drop-down) can be accessed worldwide and relates to Saxo Bank A/S as the parent company of the Saxo Bank Group. Any mention of the Saxo Bank Group refers to the overall organisation, including subsidiaries and branches under Saxo Bank A/S. Client agreements are made with the relevant Saxo entity based on your country of residence and are governed by the applicable laws of that entity's jurisdiction.

Apple and the Apple logo are trademarks of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.