Rolls-Royce Derby to build every Australian SSN-AUKUS reactor

Rolls-Royce Submarines will build the nuclear reactors for every Australian SSN-AUKUS submarine at its Raynesway plant in Derby, the UK Ministry of Defence confirmed on 15 September in its Defence Nuclear Enterprise 2026 Annual Update to Parliament. The decision concentrates reactor production for both allied fleets on one English site, backed by £2.4 billion of Australian money.

Key facts

• The next-generation reactors for all SSN-AUKUS submarines, including Australia's, will be built at Rolls-Royce Submarines' Raynesway site near Derby, per the 2026 Defence Nuclear Enterprise update
• Contracts worth about £4 billion have already been placed on the SSN-AUKUS programme, which is in its Detailed Design and Long Lead phase through 2028
• Australia has committed £2.4 billion over ten years to expand Rolls-Royce infrastructure and share the cost of designing the new submarine
• Steel will be cut on the first UK SSN-AUKUS boat in 2027, with the first Royal Navy submarine due in the late 2030s
• The government is investing £6 billion in Barrow-in-Furness and Raynesway infrastructure to reach a production drumbeat of one submarine every 18 months, double the current rate

What happened

The Defence Nuclear Enterprise 2026 Annual Update to Parliament, the thirteenth report in a series that began in 2011, states the arrangement plainly: "The next generation of nuclear reactors for all SSN-AUKUS submarines – including Australia's – will be built at Rolls-Royce Submarines Ltd's Raynesway site." The UK will also supply key components while Australia builds the industrial capacity to produce and sustain its own fleet.

The report puts hard numbers behind the announcement. Australia has invested £2.4 billion over ten years to boost Rolls-Royce infrastructure and share design costs. The programme has already placed contracts worth roughly £4 billion, and it is progressing through the Detailed Design and Long Lead phase, with decisions on the total number of submarines expected before that phase closes in 2028.

The industrial split is now settled across three sites. BAE Systems will build British SSN-AUKUS boats at its Barrow-in-Furness shipyard, Australia will build its submarines at the Osborne Naval Shipyard in South Australia, and every reactor for both fleets will come out of Derby. Steel cutting for the first UK boat is planned for 2027, with the first Royal Navy SSN-AUKUS submarine entering service in the late 2030s.

The scale of the money matters as much as the announcement itself. The Defence Nuclear Enterprise spent £12 billion in financial year 2025/26 and projects more than £100 billion through UK suppliers over the next decade. Its workforce is expected to grow from 47,000 today to around 65,000 by 2030.

Why it matters

This is the clearest signal yet that the AUKUS submarine programme will run through Derby for the next half-century. Concentrating every SSN-AUKUS reactor, British and Australian, on one site gives Rolls-Royce a guaranteed production line and gives the UK a durable claim on the industrial heart of Australia's largest defence programme. It also confirms that the naval-reactor supply chain is becoming a distinct growth track inside the wider nuclear industry, parallel to the civil small modular reactor build-out.

The demand signal extends well beyond submarines. The US Department of Defense is procuring land-based microreactors for military installations, from the Crane naval installation project in Indiana to the five-vendor Janus programme the Army awarded earlier this year. Defence nuclear work of every scale is now pulling on the same engineering workforce and supply chain as civil programmes. The wider picture is tracked in industry and business coverage.

Background

The arrangement builds on commitments made when the AUKUS partners announced in March 2023 that the first generation of Australian submarines would be based on a British design. In March 2024, the UK government confirmed that BAE Systems would partner with ASC Pty Ltd to build Australia's nuclear-powered submarines, and that Rolls-Royce would deliver the nuclear propulsion plants for the Australian programme. That announcement carried a specific jobs figure: the Derby site would roughly double in size, creating 1,170 highly skilled roles. At the programmes' peak, more than 21,000 people are expected to work on SSN-AUKUS in the UK.

The physical expansion is already under way. Rolls-Royce said in March 2026 that it had hit a key milestone in the major site expansion at Raynesway, and the Defence Nuclear Enterprise update confirms the groundbreaking of a new Primary Components and Operations Facility alongside improved site access and advanced prototyping facilities. The government frames this as part of a £6 billion infrastructure commitment across Barrow and Raynesway that will let the UK build SSN-AUKUS attack submarines in parallel with Dreadnought-class ballistic-missile boats, at a sustained rate of one submarine every 18 months.

The update also confirms the wider enterprise numbers the programme sits inside: a supply chain of more than 6,000 UK-based businesses and defence spending rising to 2.7% of GDP by the end of the decade, up from 2.3% in 2024.

What's next

The near-term milestones are fixed. Steel cutting on the first UK SSN-AUKUS submarine comes in 2027. The government decides how many boats to order before the Detailed Design and Long Lead phase ends in 2028. The first Royal Navy submarine arrives in the late 2030s, replacing the Astute class, and the first Australian boats follow in the early 2040s. Watch the Raynesway expansion through the rest of this decade: the Primary Components and Operations Facility, the jobs ramp toward a 65,000-strong defence nuclear workforce by 2030, and any Australian industrial-capability milestones as Osborne Naval Shipyard prepares to build its first boat.