The success of an auction of NDA sites highlights rising support for nuclear construction. As John McKenna discovers, now is the time to start training and recruiting staff for a bright future.
More from: Nuclear special: Nuke beginning
At a time when it is easy to be pessimistic, the recent successful auction of three Nuclear Decommissioning Authority (NDA) sites emphatically displayed the level of optimism surrounding the UK’s new nuclear power construction programme.
The sale should have been a disaster. Here were three plots of farmland − 178ha at Wylfa, Anglesey, 48ha at Oldbury, Gloucestershire, and 200ha at Bradwell, Essex − each adjacent to ageing Magnox nuclear power plants, which the NDA was attempting to sell during the biggest recession since the Great Depression.
With property and land prices in freefall, the NDA placed a reserve price of £35M on each site and, although it was hopeful of raising more than this, it surely underestimated just how highly treasured these desolate strips of land were. The three sites sold in April for a combined total of £387M, with a joint venture of German generators Eon and RWE Npower buying Wylfa and Oldbury and French generator EDF snapping up Bradwell.
These sites fetched such high prices not for what they were, but for their potential: the chance to build new nuclear power plants on sites with better than average chances of gaining planning permission. The Wylfa and Oldbury sites are adjacent to operational Magnox plants scheduled to close in March 2010, while the land at Bradwell sits next to a Magnox plant already being decommissioned.
Away from the specifics, foreign generators had the confidence to invest in land in the UK because nuclear power is enjoying the highest levels of political support since its postwar construction heyday in the 1950s and 1960s. There is also a pressing need to replace the UK’s ageing nuclear fleet as all but one of the UK’s operational nuclear power stations will have shut by 2025 due to age.
Indeed, EDF was so confident that Britain is on the verge of a new nuclear power revolution that in January it paid £12.5bn for British Energy, which operates eight of the UK’s 10 operational nuclear plants.
The French generator has already committed itself to building four new reactors with a total generating capacity of 6.4GW, with the first operational by 2017. Specifically, it plans to build and operate two reactors each at Hinkley Point in Somerset and Sizewell in Suffolk, both sites of existing British Energy reactors.
Gearing up for new energy
Meanwhile the 50:50 joint venture between Eon UK and RWE Npower has promised to build 6GW of new nuclear generating capacity.
“The total declared plans for the first phase of new build to 12.4GW [is] greater than our existing, but ageing, nuclear capacity,” said energy and climate change secretary Ed Miliband after April’s NDA site auction.
“The successful outcome of this site auction is yet more evidence of major energy players gearing up for investment in low carbon energy in the UK.”
“The successful outcome of this site auction is yet more evidence of major energy players gearing up for investment in low carbon energy.”
The 12.4GW of new capacity to which the three generators are already committed may not be the end of it either: under the terms of its purchase of British Energy, EDF committed to offer land at either Heysham or Dungeness to other potential new build developers.
Subject to various conditions being met, including the level of progress at its preferred Hinkley Point and Sizewell sites, EDF has also agreed to sell its land at Bradwell acquired as a result of the British Energy purchase and the NDA auction.
All in all, the government is now considering 11 applications for new nuclear power stations that could potentially be generating electricity by 2025 (see diagram below).
A public consultation on these sites closed last month and the government is now considering which sites to prioritise for construction. These sites would most likely be the first beneficiaries of the new planning regime, ushered in under last year’s Planning Act. This will enable major infrastructure projects deemed by ministers to be of national significance to be fast tracked through the planning system.
It is highly unlikely that all 11 proposed sites will make the government’s fast tracking list: EDF has favourites among those sites it has put forward and RWE’s nominated sites of Kirksanton and Braystones in Cumbria are the only two on the list not to be based on or next to existing nuclear plants.
Politicians are well aware that new nuclear power construction programmes are generally popular in communities where a nuclear power plant is already established as a major local employer. Building two plants on greenfield sites outside the Lake District would be seen by many as political suicide.
There is also a sound technical argument for sticking with established sites. “One thing the [government’s siting] process did not invite is how to link these things to the grid,” says Mott MacDonald energy director Simon Harrison.
“Conventionally, you permit the plant to someone, and then to someone else you permit the transmission.”
This could cause problems at Kirksanton and Braystones where new pylons would need to be built. “Cumbria has less infrastructure and sites are close to the Lake District, which is an area of outstanding national beauty,” says Harrison. “To install pylons there is a significant challenge to public acceptability.”
However, even accepting that Kirksanton and Braystones fail to make the final cut and that Hartlepool is the only site EDFneither develops nor sells, there are still eight sites which could potentially house new nuclear reactors that will need to be built over the next 16 years.
A major boost for British construction
With new nuclear power plants likely to cost around £4bn each and construction of each plant likely to take at least five years, it is little wonder that the new nuclear power construction programme is seen as a major boost for British construction.
The generators and their suppliers are already beginning to engage with the British construction industry. Last December French nuclear reactor builder Areva signed a deal with Balfour Beatty and Rolls Royce under which they will work together to identify the skills and resources required to deliver a fleet of European Pressurised Reactors (EPR) designed by Areva with EDF and put an effective supply chain in place.
“The Lake District is an area of outstanding national beauty. To install pylons there is a significant challenge to public acceptability.”
Simon Harrison, Mott MacDonald
In a separate development, Balfour Beatty has formed a joint venture with Vinci Construction to help deliver project management, construction and civil engineering infrastructure for Areva’s EPR programme in the UK.
Areva’s EPR is one of two nuclear reactor designs currently being considered by the Health & Safety Executive and the Environment Agency under their Generic Design Assessment (GDA) process. This process for new reactors aims to ensure that only one or two reactor designs are used across all new nuclear plants in the UK.
It is hoped that this will avoid the costly decommissioning process that the UK is experiencing with its first generation of nuclear power plants, in which no two reactors are the same.
Westinghouse’s AP1000 reactor is the only other design being considered under the GDA.
High levels of engagement
As well as hiring Balfour Beatty to engage the supply chain, Areva also held a supplier’s day in March at which representatives of over 120 companies attended. The conference saw Areva president Luc Oursel invite British firms to supply up to 70% of the engineering components to be used in Areva’s new UK plants.
“Although we shall manufacture the main heavy components ourselves, that represents only 30% of the total nuclear island equipment by value,” says Oursel.
United States firm Westinghouse has meanwhile established a UK based company − Westinghouse Electric Company − to focus on delivery and Westinghouse regional vice president Tim Powell will speak at NCE’s “Engineering Nuclear New Build” conference on 1 July on the subject of “reaching out to suppliers”.
EDF, for its part, is also beginning to engage with the supply chain and is running its first industry day this month.
Tackling the skills shortage
There is good reason for such high levels of engagement before the locations of new nuclear sites have even been formally approved by government. The National Skills Academy for Nuclear estimates the sector will need to recruit an additional 10,000 people over the next 10 years. At the same time 80% of the existing 50,000 strong workforce is older than 50.
It could be that the nuclear sector’s skills shortage is the biggest barrier to a new nuclear build programme. The Academy is an employer-led organisation that works with the industry to address the skills needs of employers and ensure that world class training is available. At present it has 50 associate members who each contribute towards the running cost of the organisation and to the strategic direction of its growth. The target is to increase this to 100 by the end of 2010.
As well as training (or re-training) those already in the industry, a facility called Energus has been built on a 7.3ha site at Lillyhall, West Cumbria to provide vocational skills spanning further and higher education in the nuclear, carbon-free and environmental restoration industries.
It will be the delivery arm for the Academy. If there is anything that shows new nuclear is the future for the UK, then Energus is it.