The Government’s decision to approve the construction of the £18bn Hinkley Point C nuclear power station in Somerset today marks the end of a long waiting game for the civil engineering sector.
Here’s some of the reaction from the industry to the Government’s new deal with EDF as it comes in:
Still some obstacles
Given there have been so many setbacks during the project’s timeline, Richard Black, director of the Energy and Climate Intelligence Unit (ECIU) gave some words of caution on the hurdles that remain for the project.
“Despite this being called a ‘final decision’ to build Hinkley C, other hurdles, including technical and legal challenges, may well lie ahead for the project,” he said.
“French trade unions don’t like it, nor do some of the likely candidates for the French Presidential Election next year, EDF’s finances are not the healthiest, and the French nuclear regulator is examining flaws in steel used for a similar reactor being built in France. So it may turn out not to be quite as ‘final’ as it looks now.
“Although China is reportedly happy with the new position, questions also remain over its main ambition – building its own nuclear reactors at Bradwell in Essex as a route into the Western market. The Chinese reactor hasn’t even begun the process of gaining UK safety approval, which usually takes four years, so negotiating a contract for Bradwell would fall to the next UK Government, not this one. By then, electricity from other sources might look a whole lot cheaper than it does now.”
It may turn out not to be quite as ‘final’ as it looks now.
ECIU energy analyst Dr Jonathan Marshall added that other parts of the UK’s energy mix needed similar certainty from the Government. He said: “If Hinkley does get built it will undoubtedly make a significant contribution to delivering the UK’s low-carbon power, but at a hefty premium to bill-payers in this generation and the next,” he said.
“Now the decision is done, one assumes that the Government will turn its attention to delivering similar certainty to other parts of the low-carbon energy system, notably offshore wind, tidal power, energy efficiency and demand-side response.
“Another thing for it to consider is whether the Hinkley model of bespoke, one-off deals with preferred bidders is really the way it wishes to do business; a more free-market approach, with genuine competition between low-carbon providers which also rewards innovation rather than incumbency, is surely the way to go.”
Decision ’paves the way’
Although Dame Sue Ion, a Fellow of the Royal Academy of Engineering, pointed out that the decision could pave the way for more energy investments. She said: “It’s very good news that after further reflection the Government has given the go ahead for Hinkley Point. Despite all the negative comments this is a good deal for the UK. Hinkley Point, we mustn’t forget, is the first of the new fleet of reactors to be built to secure our low carbon electricity supplies for the future. The news sends a tremendous boost of confidence to the sector generally and I hope it will pave the way for positive investment decisions for the Hitachi reactors at Wylfa on Anglesey and the Westinghouse reactors at Moorside in Cumbria, which are expected to achieve licensed status very shortly.
“This diversity in systems approved for deployment in the UK offers tremendous opportunities for UK companies to benefit as part of the global supply chain. The positive decision on Hinkley Point will bring immediate benefit to a number of our biggest engineering and construction companies.”
Start of a positive future
For the infrastructure companies themselves, who have hundreds of millions of pounds of work riding on this decision, the news was naturally met with open arms.
Civils firms in Somerset have already heavily invested on the back on an anticipated go-ahead. RK Bell group is part of Somerset Infrastructure Alliance and one of Hinkley’s preferred bidders. Managing director Nick Bell said: “We are delighted at today’s announcement. We have been working diligently on putting together an Alliance of like-minded local businesses to bid for and undertake these works for EDF. We are very much looking forward to putting our upskilled business and equipment to work very soon.
“We have invested in up-skilling the business to enable us to deliver in the new nuclear environment including the latest construction equipment, adding staff and adopting apprenticeship schemes. R K Bell group formed an alliance branded as the Somerset Infrastructure Alliance. EDF strategy and vision has enabled us as a local business to bid for and win the contract on a new nuclear build whilst leaving a positive lasting legacy for the Somerset community.”
We have invested in up-skilling the business to enable us to deliver in the new nuclear environment.
Kier, in joint venture with BAM Nuttall, has been undertaking site preparation works at Hinkley Point since 2012 and currently has approximately 350 employees working on the project at the moment. It has a £203M contract for the enabling works.
Kier Group chief executive Haydn Mursell said: “Today’s decision marks a major step in the UK’s nuclear renaissance and reflects the country’s commitment to a balanced energy strategy including low carbon energy sources.”
Atkins is part of EDF Energy’s Strategic Supply Chain Partnership. Its chief executive officer Uwe Krueger said: “Today’s green light is a very positive step for the nuclear industry in the UK as a whole and an encouraging signal of commitment from the government to building crucial energy infrastructure in this country. Nuclear power is an important part of our energy mix and has a major role to play in the transition to a low-carbon future. We are looking forward to continuing our 30 year-long relationship with EDF Energy during the construction and operational life of Hinkley Point C.”
WSP Parsons Brinckerhoff UK managing director for energy and industry Ian Maclean said: “This is the good news we’ve all been waiting for. After years of delays we can now look positively to the future, prepare our business and recruitment plans accordingly, and start filling the growing gap in our energy mix. However, this is just the beginning. We now need to start delivering not just on this one project but also other major nuclear projects – both big and small modular reactors – that are yet to get off the ground.”
This is the good news we’ve all been waiting for.
But he added: “Whilst this is a huge step forward in decarbonising our energy supply, we shouldn’t ignore the widespread public demand for renewables, as recent polls have suggested. Hopefully this is a sign that the Government intends to create a business climate that will encourage investors and developers alike to forge ahead with a new fleet of power plant that includes a mix of both renewable energy and nuclear power, as well as gas-fired power plants to provide cleaner and safer energy to UK plc.”
Other options ’cheaper and quicker’
Maclean’s point about renewable energy was shared by the renewables sector which pointed out that other energy sources, such as solar, cost less and were faster to get into action. The Renewable Energy Association chief executive Nina Skorupska said: “Renewables such as solar, onshore wind and biomass are already cheaper than nuclear, are quicker to deploy, and have none of the construction or economic risk. From the time Hinkley Point C was proposed to now we’ve seen extraordinary advancements in technology, falling costs, and high deployment rates. Since the project’s initial consultation in 2008 the UK has gone from producing less than 6 percent of its electricity from renewables to over 25 percent in the first quarter of 2016. Our analysis shows that for nearly every renewable technology the equivalent amount of capacity could be procured at much lower cost using renewables.
“While we welcome a diverse low-carbon energy mix, we urge the government to consider the costs and support other industries in which the UK could be a global leader, such as energy storage.”
The Civil Engineering Contractors Association (CECA) chief executive Alasdair Reisner added: “Hinkley Point presents a tremendous opportunity for the UK’s civils contractors to show they are among the best in the business. Four years ago, the London Olympics demonstrated the capacity of CECA members to deliver world-class mega-projects on time and on budget. Hinkley Point will showcase our industry, support long-term jobs for thousands of workers, and make a vital contribution to the mixed portfolio of energy generation we will rely upon in the future.”