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Energy: Nuclear gets ready for new build

After years of discussions, deliberations and plenty of engineering cogitation, it seems that 2013 will see the UK begin its transformation to a low carbon economy.

Many of the components required to kick-start this eagerly awaited transition are due to fall into place in the coming year.

The Department of Energy and Climate Change (Decc) is finalising plans for the energy market reform bill due to receive Royal Assent next April. The new bill - amongst other things - will guarantee energy firms a minimum price for electricity, allowing them to invest in low carbon energy projects such as nuclear that have high up-front, but relatively low running costs.

A second major milestone due for 2013 will see EdF start main construction of its planned new nuclear plant at Hinkley Point C in Somerset - the first nuclear new build in the UK for a generation. Hyder energy sector managing director Paul Pearson - a veteran of 30 years in the nuclear industry - is confident the project will go ahead.

“EdF’s investment is huge, spending £100M,” says Pearson. “It is a signal of EdF’s intentions.”

Hyder land development, building and environment managing director Andrew Henderson echoes Pearson’s thoughts.

“There’s a real urgency to get building nuclear power,” he says. But with current new build nuclear plants in Finland and France hugely delayed and over budget, Pearson acknowledges the need for Hinkley Point C to be constructed successfully.

Andrew_Henderson

“We’ve had a dash for gas, a whoosh for wind and now there’s a need for nuclear”

Andrew Henderson, Hyder

“It is very important that it goes well,” he says. “We cannot afford it not to.”

Nevertheless he is confident Hinkley Point C’s construction will usher in a nuclear renaissance, with British engineers and British firms at the forefront. “It may be being built with foreign money,” says Pearson, “but the projects need British expertise to go ahead.”

And Pearson has plenty of evidence to back up his views. Hyder is well placed in the UK’s nuclear programme - both in new build and decommissioning.

At Hinkley Point C the firm is supporting earthworks contractor Bam/Kier and is one of three remaining bidders for the £300M- £400M design and construction water cooling tunnels project.

The firm is also co-ordinating the environmental impact assessment for new nuclear build firm Horizon Nuclear Power for its proposed new nuclear power station at Wylfa in Wales, and is one of three remaining bidders for a similar role for Nu-generation - a new nuclear build joint venture between energy firms GDF Suez and berdrola for its site in Sellafield.

In the decommissioning sector Hyder has recently won places on frameworks supporting Magnox North and South and the Nuclear Decommissioning Agency.

£696M- Cost paid by Hitachi for Horizon nuclear new build

£3bn- Planned spend on decomissioning in 2013

Pearson believes Japanese engineering giant Hitachi’s recent £696M takeover of Horizon Nuclear Power sends a strong signal about the prospects for the UK’s new nuclear programme. “It is a positive step forward and demonstrates an intention that investors want to invest in the UK,” he says.

Construction of new nuclear power stations, along with any other scheme deemed “nationally significant”, now falls under the Planning Inspectorate’s National Infrastructure Directorate (formally the Infrastructure Planning Commission) where much of the planning work is done ahead of the project.

Henderson believes the new planning regime for nationally significant infrastructure projects, where specific timelines are given for the decision-making process, is an improvement on the previous methodology, where case-by-case decisions were made on schemes moving through the planning process. “There is more clarity and everyone knows the timeline,” he says.

Hyder has significant experience in helping these projects through the new regime. Most recent was its role in energy firm Halite’s Preesall Saltfield underground gas storage - a vast 600M.m3 storage facility. The firm was planning advisor for the project, guiding the client through the consultation process along with the environmental impact assessment.

“The client only wanted one external consultation,” says Henderson. “They needed a high level of confidence it would be successful. We spent two years in preparing for the consultation.”

The Planning Inspectorate is currently in the three month decision phase for the project, with a recommendation due to the secretary of state in January.

Henderson believes this experience of helping to guide projects through the numerous but vital regulatory and environmental stages in the now front-loaded planning regime will help streamline future projects.

Paul_Pearson_2

“It is very important that Hinkley Point C goes well. We cannot afford it not to”

Paul Pearson, Hyder

Henderson - in charge of Hyder’s environmental consulting, ecological, sustainability and geosciences divisions - recognises that these are the key risk areas in building major projects. “All major projects have environmental risk,” he says. “You need to set out how you intend to mitigate against these risks.”

He cites Sizewell C - EdF began consultation on building new nuclear reactors there last month - where close proximity to a site of special scientific interest is a typical environmental consideration for major infrastructure projects.

“There’s lot of very interesting ecological challenges that must be worked out,” he says.

The government came closer to agreeing much anticipated energy market reform last month, allowing energy companies to charge consumers up to £9.8bn per year (at 2020 prices) to fund renewable energy projects - up from £2.6bn per year today.

Pearson welcomes the extra commitment, and the framework that will allow new investment, but says the majority of the money must come from energy firms.

Energy regulators recently put the estimate of investment required in the UK energy network at £200bn.

“It’s a lot of money but that’s not insurmountable over the timescale,” says Pearson.

With this investment the government hopes to meet its challenging renewable energy targets, most pressing being the 2020 target which calls for 15% of energy and 30% of electricity to be produced by renewable sources.

This will mean huge rises in renewable energy capacity - the largest portion coming from off shore wind - due to rise from 12.3% this year up to 30% by 2020, despite only rising 2.3% in the past year.

Meanwhile the vast majority of coal and existing nuclear power stations are due to come offline. Despite the huge changes, both Henderson and Pearson believe the government is right with its bold projections - particularly in renewable and nuclear power.

“The government has to have a plan to transition into a low carbon economy,” says Henderson.

Pearson agrees that challenging targets are needed to encourage investment and transform the UK’s energy generation profile. And a failure to meet any specific targets does not on its own demonstrate an overall failure in the UK’s energy strategy.

“The only thing sure about a plan is it will change,” he says. “Difficult decisions will need to be made and it is a very significant challenge.”

Henderson is convinced nuclear will be a key part of the UK’s energy mix whatever the scenario. “We’ve had a dash for gas, a whoosh for wind and now there’s a need for nuclear,” he says.

How well that need will be acknowledged and met will be much clearer in 12 months time.

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