The nuclear power renaissance

Posted June 2008

Falling North Sea oil stocks and rising oil and gas prices have prompted the UK government to back a new generation of privately-built, privately operated nuclear power stations.

Nuclear power already provides around 19% of the UK's electricity, but most of the country's nuclear power stations are due to come out of service within 15 years. Only one, Sizewell B on the East Anglian coast, will still be operating by 2023.

A nuclear power plant by night

The Arguments

To the electricity generating industry, nuclear power offers an effective way of reducing emissions. Opponents argue that no country has yet shown that nuclear waste can be stored effectively, and that adoption of nuclear baseload generation reduces the incentive to develop renewable energy.

Campaigning organisation Greenpeace has threatened further legal action, after successfully winning their case claiming that the government’s original consultation process was flawed.

Public perceptions of the nuclear industry are mixed and confidence will need boosting if the plans for new plants are to be popular.


How it Will Happen

Energy companies will have to fund, develop, build and operate eight to ten new plants, including meeting the full costs of decommissioning and much of the waste management cost.

Running costs and day to day responsibility are also being transferred to the private operator, reducing government participation and minimising the cost to the taxpayer.


Locations

Locations are not finalised, with a review expected to report by 2009, but the new reactors are likely to be built at or near the site of existing reactors which are controlled by either British Energy or the Nuclear Decommissioning Agency.

The nuclear regulators (the Health and Safety Executive and the Environment Agency) are carrying out a Generic Design Assessment (GDA) of three potential designs put forward by private contractors:

  • EDF/Areva,
  • General Electric/Hitachi and
  • Westinghouse/Toshiba.

The government intends to establish an Independent Planning Commission which will speed up the planning permission process, removing control from local government.

Drax Power Station, Yorkshire


The Challenges

The building of new nuclear facilities presents some key challenges to the supply chain.

The government intends that operators will have to build and run the facilities without subsidies and availability of long-term finance may therefore be an issue. Greater certainty about lifecycle costs will be needed. Capacity to handle the upturn in workload is questionable, both in the UK and globally.

Finding capable resources to design, manage and construct is expected to be the major challenge as a new generation of British nuclear engineers and skilled workers will need to be trained.

Rapid expansion of the market may create some shortages potentially driving up current prices.


What We're Doing

Faithful+Gould and Atkins(this is an external link and will open in a new window) are working to build on our existing nuclear power capability.

Following the new nuclear power proposals, we have been involved in undertaking preliminary studies for clients and we expect the workload to expand significantly over the coming years.

We have an established track record in the wider nuclear sector and our client portfolio includes British Energy, British Nuclear Fuels Limited/British Nuclear Group, AWE, UKAEA, NIREX and Ontario Power Generation.

For further information contact Peter Breen on +44 (0)1925 238300 / peter.breen@fgould.com.