Producing high-fidelity real-time simulations of neutron diffusion in a reactor is computationally extremely challenging, due, in part, to multiscale behaviour in energy and space. In many scientific fields, including nuclear modelling, the application of reduced-order modelling can lead to much faster computation times without much loss of accuracy, paving the way for real-time simulation as well as multi-query problems such as uncertainty quantification and data assimilation. This paper compares two reduced-order models that are applied to model the movement of control rods in a fuel assembly for a given temperature profile. The first is a standard approach using proper orthogonal decomposition (POD) to generate global basis functions, and the second, a new method, uses POD but produces global basis functions that are local in the parameter space (associated with the control-rod height). To approximate the eigenvalue problem in reduced space, a novel, nonlinear interpolation is proposed for modelling dependence on the control-rod height. This is seen to improve the accuracy in the predictions of both methods for unseen parameter values by two orders of magnitude for keff and by one order of magnitude for the scalar flux.