Nuclear New Build Renaissance

Sean Lynch
Nuclear power is a key part of the UK government's energy policy for a sustainable, low carbon future. The planned renaissance in nuclear engineering will therefore have far-reaching impacts on skills development, and domestic and European industry, as well as energy security.

There are now 13 reactors at six UK sites, in various stages of planning and development. These are being delivered through private investment, backed by a strong financial framework and with cross-party support. Each developer has embarked on initiatives around research and development, skills creation and enhancement, manufacturing capability and industrywide liaison. However, there remains much to be achieved in the areas of policy and capacity to ensure the programme's success.

Policy

The new build strategy has seen the selection of four reactor technologies from a variety of global vendors. At first sight, this contradicts the objective of a framework for future UK capability. But a privately funded, economically viable programme built around new UK reactor technology was simply not an option and the chosen strategy provides significant opportunity. With government backing and by forging partnerships and alliances, UK industry can position itself as a prominent supplier to four of the seven leading vendors. The choice of vendors also gives access to the Chinese and Japanese markets, although this will need strong diplomatic support.

The UK has excellent engineering and professional service capabilities across the nuclear life-cycle...

The UK has excellent engineering and professional service capabilities across the nuclear life-cycle, but has not built a nuclear power station for a generation. Currently, we cover the full supply chain only in the fields of operation, waste management and decommissioning. Harnessing the new build programme to drive employment, skills and capability growth is important to enable the post-2030 nuclear build. This is demonstrated by the UK supply chain's significant share in the first project at Hinkley – largely limited to civil engineering, consultancy and lower tier elements. The strategy is working, but there is some way to go.

Rolls-Royce's partnership with Hitachi is a step forward for subsequent projects, but increased government lobbying on local supply in target areas is needed to secure supply chain growth. The Chinese Hualong One reactor's first deployment in a western market is of particular interest, with potential for UK involvement in third markets.

Illustrative view of the Conventional Islands

The UK's R&D and new technology nuclear industry is ripe for reinvigoration, with Nuclear Innovation and Research Advisory Board (NIRAB) identifying the potential of Small Modular Reactors (SMR). The recent budget announcement of £250m investment over five years is a positive step, but will not fully fund development of a robust UK technology for export. The government needs to work with industry experts to develop a technology strategy, weighing up cost, financing and potential market.

Capacity

UK supply chain capacity requires long-term investment in people, skills and equipment. In a maturing market, this would be a natural progression, but the timescales for nuclear energy projects mean that a catalyst is needed. The government's aim of becoming a nuclear energy nation cannot be delivered by the private sector alone. A joint approach is needed, with direct or indirect government backing, and greater co-operation between developers and vendors.

Immediate new build needs are met by the UK supply chain and experienced overseas companies forming joint ventures to bid for work. However, serious investment in manufacturing capacity is needed to enable the UK to compete in its own right. This would not only support the aim to join the nuclear energy nations, but also provide greater certainty of project cost and schedule. Knowing the baseline position and measuring project performance against it is, of course, critical. Greater cost certainty will provide confidence in the sector, as well as in individual projects.

The government needs to work with industry experts to develop a technology strategy, weighing up cost, financing and potential market.

Confidence is extremely important and the programme's challenges and lack of momentum are increasingly a concern to investors. However, final investment decision for the first plant at Hinkley Point C will clear the way for the whole programme to progress. The benefits of developing a series of plants must be realised, enabling more confidence in future business cases. This applies across the various technologies currently proposed for the UK. The sector urgently needs a way of sharing lessons learned, providing a robust platform for inward investors and skills exporters alike.

The Industrial Adventure Begins

The first project in this new build programme has been challenging and has called upon skills from around the world. Faithful+Gould has been involved at Hinkley Point C since the earliest stages, utilising our long history in the sector. Initially, we supported the development of the procurement strategy, working closely with EDF in the UK and France. Our industry costing and benchmarking enables development of cost models and scenarios as the design and contract strategy matures. We provide support to the investment case, regulatory and shareholder audits and we lead key supply contracts negotiations.

We remain an integral part of the project as it moves from development into delivery. Our investment and shareholder support continues, on a reporting rather than development basis, and our team is expanding to support programme areas such as the Conventional Island and Balance of Plant. We feel proud to be a key part of this first project, and we passionately support the positioning of the UK as a world leader in nuclear energy.