Hitachi deal could put UK civil nuclear industry back on map

The goal of re-establishing a substantial and exportable UK civil nuclear industry came a step closer yesterday as British companies were placed at the heart of a deal to build up to six new power stations.

The Hitachi deal to buy the Horizon Nuclear Power venture from RWE and E.ON will see the Japanese company invest up to £20bn in the UK as part of what Hitachi’s president called a ‘100-year commitment’, which includes plans to build a module assembly facility in Britain.

Two British companies, Rolls-Royce and Babcock International, have also signed agreements with Hitachi to provide engineering capabilities, skills and services, and around 60 per cent of expenditure for the first plant is expected to go to UK-based companies — a figure that could rise for subsequent plants.

This could create thousands of jobs in the supply chain in addition to up to 6,000 jobs during construction and 1,000 permanent jobs expected at each of the two sites (Wylfa in Anglesey and Oldbury in Gloucestershire) where the plants will be built.

‘I believe the UK has the potential to be a springboard for new nuclear development around the world,’ said energy secretary Ed Davey at a press conference yesterday. ‘This presents massive supply-chain opportunities for firms in the UK, supplying new projects here and around the world.’

He added: ‘New nuclear isn’t just about keeping the lights on and getting carbon emissions down; it’s an industrial strategy with big potential winners. We want the UK to be globally recognised as the go-to place for the next generation of nuclear.’

The deal will also reassure investors as it brings to an end months of concern that a major part of the country’s new nuclear programme could collapse, which began when RWE and E.ON announced their intention to sell their UK joint venture in March 2012.

The Fukushima disaster in 2011 threw the future of the nuclear industry into doubt and the German government’s decision to end its nuclear programme has resulted in the strategic withdrawal of German companies RWE and E.ON from the sector.

But Hitachi’s decision — together with the continued commitment of EDF and Centrica plus GDF Suez and Iberdrola to develop new power stations — restores the goal of building up to 16GW of nuclear generation in the UK by 2025.

Keith Parker, chief executive of the Nuclear Industry Association (NIA), told The Engineer that the announcement signified that the hoped-for renaissance of the UK’s nuclear manufacturing and construction industry was back on track.

‘Since 2006, we’ve been working very hard to recreate nuclear capability in the UK supply chain,’ he said. ‘It never disappeared completely thanks to decommissioning and operation, but since Sizewell B [Britain’s youngest nuclear plant, built in the late 1980s] our capability to build has declined.’

Parker said the UK supply chain did have substantial capability for most of the work required in building new nuclear plants, with the exception of manufacturing large components such as reactor pressure vessels.

However, he said, other factors that needed to be addressed were the competitiveness of UK companies and their capacities to carry out work on multiple new power stations simultaneously.

To tackle these issues, the government yesterday also announced the creation of a Nuclear Industry Council, hoping to emulate the success of the Automotive Council in bringing government and industry together to develop the sector’s capabilities and competitiveness.

These issues will also be addressed by the NIA’s supply chain assessment and the government’s Nuclear Supply Chain Action Plan, both of which are due for publication in early December.

Another major challenge for the industry is recruiting enough new engineers and developing the right skill set within the UK.

This is already being partly addressed with the expansion of university courses in nuclear engineering and the involvement of utility companies such as EDF in creating training programmes at local colleges close to the sites of the proposed plants.

But one of Babcock’s roles in the new scheme will be to ensure there is sufficient training in place to allow Hitachi’s plans to go ahead.