Missing the Hinkley point

This week’s announcement that France’s EDF  Energy will lead a consortium including Chinese investors to build Britain’s first new nuclear power station in decades is, in some respects, welcome news.

The long-awaited go-ahead for Somerset’s Hinkley Point C plant is an important step towards a secure energy supply, a positive move away from a dependence on carbon intensive sources of energy, and  should create a number of jobs during the construction phase. The deal also, potentially, draws a line under the investment uncertainty that has dogged  the UK’s new nuclear ambitions.

But claims from some quarters that the deal is a boost for the UK’s own nuclear industry are spurious to say the least. Indeed, despite a rather unconvincing statement from DECC that “up to” 56% of the contracts “could” be awarded to UK firms, one of the most significant, and worrying,  aspects of the deal, is the fact the under the terms of the agreement all of the contracts for the advanced technology aspects of the project will go to French companies.

And yet if there are - as there should be - any aspirations at all to grow our expertise in a sector in which the UK once led the world - any future deals, such as the anticipated announcement on Sizewell C, must look for ways to involve UK engineering firms in the advanced, high value areas of the projects. Otherwise, all talk of a UK nuclear revival will be for nothing.

It’s worth stressing that this is not an unrealistic ambition. Contrary to some reports, our nuclear expertise has not entirely vanished. There are still some engineers around who have direct experience of building nuclear reactors and with firms like Sheffield Forgemasters the UK is one of the few places in the world theoretically able to produce many of the large components for civil nuclear.

At Rolls Royce we build nuclear powerplants for submarines, we manufacture the most complex parts of civil airlines, we build oil rigs, advanced combined cycle power stations, and even a fusion reactor.  All of these are large, complex, safety critical systems requiring a high level of component and material traceability. It shouldn’t be beyond our wit, with a bit of  government assistance,  to play a role in the civil nuclear technology industry. 

Quite apart from whether or not the EDF deal represents good value to the taxpayer - (we simply don’t know what  a strike price of £92.50 per MWh  will look like in 40 years time) it’s still not too late to use the renewed momentum behind the UK’s nuclear build programme as a catalyst for the UK’s nuclear sector. Maybe it might be possible to build into subsequent nuclear building contracts an increasing level of UK component manufacture? For example, Chinese companies are building steam generators for AREVA’s EPR reactors currently being build in Taishan; could a similar agreement be put in place for Sizewell C, if it goes ahead?

It will also be very interesting to see what contracts are placed for Horizon Nuclear Power’s proposed nuclear plants at Wylfa and Oldbury, since Hitachi, when it signed the contracts to take over Horizon, stated that it wanted to set up manufacturing capability in the UK to serve future European projects, and signed agreements with Babcock and Rolls-Royce.

Amidst all the uncertainty, one thing is absolutely clear. What we’re seeing today in the UK nuclear sector is an inevitable consequence of successive governments failing dismally to get to grips with our energy sector.  By placing their blind faith in the benefits of the free market - we’ve now arrived at a situation where our nuclear sector is nationalised, just not by us.  Perhaps the ultimate irony is that with the emergence of China as a UK nuclear player, we now appear to be destined to entrust large chunks of our future energy infrastructure to an autocratic communist regime.