The United Kingdom’s nuclear industry is a hive of activity. As well as an operating fleet of nine nuclear stations powering around 20 percent of the country’s electricity needs, the UK has plans for up to 16GW of new nuclear over the next 15 years. In addition, by virtue of being one of the earliest countries to develop nuclear power it has a decommissioning program with an annual budget of over $5 billion.
Whilst much of this work will be undertaken by UK companies there will be opportunities in each sector for businesses all over the world, particularly through partnerships with domestic concerns. Looking first at the back-end opportunities, British companies, primarily in collaboration with American firms have pioneered a range of nuclear waste management projects.
These include, the British, American, and French conglomerate known as Nuclear Management Partners (NMP) which has become the Parent Body Organization (PBO) for the Sellafield site. From 2008, on behalf of the Nuclear Decommissioning Authority (NDA), NMP has been tasked with delivering the safe decommissioning of the site as well as fuel recycling and the management of low, high and intermediate level nuclear waste activities on the UK’s principal decommissioning site in northwest England.
The consortium has worked to complete a number of complex missions including decommissioning the Windscale Advanced Gas-cooled reactor in 2012, which was the first nuclear powered reactor to be decommissioned in the UK. In October 2013, the NDA announced its intention to extend the Sellafield contract with NMP into a second five year period.
On the fuel side, in 2010 the U.S. company, Westinghouse Electric Company, now a subsidiary of Toshiba took over responsibility of the UK’S commercial fuel manufacturing business and Springfields Fuels Limited from the NDA. This included a long term lease of the Springfields site in Lancashire, England where nuclear fuel, products and services have been provided to commercial power stations since the 1940s.
And on March 31, 2014, the Cavendish Fluor Partnership (CFP) (a joint venture between the British Cavendish Nuclear and the American Fluor Corporation) was announced as the preferred bidder for the PBO contract of Magnox Ltd and Research Sites Restoration Ltd by the NDA. The $10-11.5 billion contract will see the consortium manage decommissioning activities across 11 British nuclear sites as well as one remaining operating Magnox power station at Wylfa on Anglesey, which is due to close in 2015.
With an annual budget of $5.35 billion the NDA program will undoubtedly lead to more collaborative opportunities beyond those outlined above. Altogether the UK’s legacy clean up mission will total in the tens of billions of dollars, and there are few safer investments for supply chain companies.
Opportunities are also abundant in new nuclear with a Government backed program of 11 new reactors across five existing sites due to come online in 2024. This huge investment in infrastructure will create opportunities for businesses with each site generating tens of thousands of jobs during construction and approximately 900 operational jobs throughout their 60 year lifetime.
Much like the decommissioning sector, the international community, including U.S. firms, are heavily involved in the UK’s new build program. In January 2014, Westinghouse Electric Company announced that its parent company Toshiba Corporation had agreed in principle to take a 60 percent share in the Moorside project with plans to build three AP1000 Westinghouse reactors on the site next to Sellafield.
The deal worth $170 million will see Toshiba buy out Iberdrola’s entire 50 percent stake in the project and a further 10 percent of the project holding owned by GDF Suez. The French company will remain a 40 percent partner in the Moorside development.
The construction phase of the project will create 20,000 construction jobs and 1,000 permanent, operational jobs when complete boosting local, regional, national, and international supply chains. Worldwide more than 500 suppliers have already expressed an interest in working on AP1000 projects, to which Moorside will soon be added via, www.supply.westinghousenuclear.com. Westinghouse has outlined expectations for the first Moorside unit to be online in 2024 and once fully operational the site will deliver up to 7 percent of the UK’s electricity with a 3.4GW output.
EDF Energy’s Hinkley Point C (HPC) project is set to be the first of the new generation of nuclear power stations built in the UK. In Somerset, England EDF Energy will facilitate the build of two European Pressurized Reactors (EPR) capable of generating 3.2GW of electricity. Job creation associated with the development is comparable in scale to the London 2012 Olympic and Paralympic games, creating 25,000 new employment opportunities. To put the scale of the civil engineering work of HPC into perspective; at least 3.3 million tons of concrete will be required and over 250,000 tons of steel reinforcement.
Construction of the first EPR is due to begin before the end of 2015 as final steps are taken to facilitate the investment. To ensure that Britain’s ageing and carbon intensive energy infrastructure is replaced with clean generation, the Government has implemented reforms to set up an agreed price for all low carbon generated electricity. This ‘strike price’ mechanism means the generator has a guaranteed price at which it can sell its electricity. This works in the interest of both the developer and the consumer; if the wholesale cost of electricity falls below the established ‘strike price’ central Government will effectively top it up but if the wholesale cost of electricity is above the ‘strike price’ the generator will pay back the difference. This removes the instability out of the energy market and protects the consumer from spiking prices.
The technicalities of this reform are now being investigated by the European Commission following the Government’s agreement of £92.50 ($155) per megawatt hour for the electricity generated at HPC. The Commission’s public consultation closed on April 7, 2014 and the conclusion of the investigation is expected in fall, 2014. Following the outcome of the inquiry, EDF Energy and its partners will be able to make their Final Investment Decision (FID) and construction of the first EPR can begin.
Companies have been urged to register their interest in supplying the HPC project at www.hinkleysupplychain.co.uk. Beyond the HPC project, plans are in place to replicate the HPC project at the existing site at Sizewell in Suffolk, England.
Britain’s other developer, Horizon Nuclear Power has plans to develop reactors at Wylfa on Anglesey in Wales and at Oldbury in Gloucestershire, England. The company is 100 percent owned by Japanese multinational, Hitachi and it is currently in the process of developing its supply chain. Each station will create up to 1,000 operational jobs when complete with a peak onsite workforce of approximately 6,000. The combined investment in the two projects will total $33.5 billion.
Horizon Nuclear Power’s chosen reactor design, the UK Advanced Boiling Water Reactor (UK ABWR) is currently undergoing the UK’s independent regulatory assessment – the Generic Design Assessment (GDA). The GDA ensures that any new nuclear power stations built in the UK meet high standards of safety, security, environmental protection, and waste management.
Horizon has projected it will be in a position to make its FID before the end of 2018 with the first unit at Wylfa operating in the first half of the 2020s. Much like EDF Energy, Horizon also has an online registration portal for any businesses interested in working on the project – www.horizonnuclearpower.com/supplier-registration.
The British nuclear industry is a key component of the Governments industrial strategy with a focus on attracting inward investment to work with and support British companies. As a result, now is without doubt the time for global business to invest in Britain, spark collaborations and help build a new fleet of stations and decommission the country’s historic nuclear sites.
Nuclear Industry Association
The Nuclear Industry Association (NIA) is the UK’s trade association for civil nuclear power. The NIA represents more than 270 companies across the supply chain and the diversity of membership enables effective and constructive industry-wide interaction.
The NIA works to improve the commercial performance of the nuclear industry by helping its member companies develop their businesses in the UK and overseas. We also work to engage with the public, media, and political spheres to promote better understanding of nuclear energy and its role within a low carbon energy mix.
The NIA believes nuclear energy is essential to meet the UK’s future clean energy needs. Together with renewables, clean coal and energy effi ciency, nuclear can reduce the country’s carbon emissions. As part of a diversifi ed energy mix, modern nuclear-generated energy can provide safe and reliable sources of power for British homes, hospitals, schools, and industries.
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