Reaction to change

International investor confidence in the UK’s nuclear renaissance will depend on how we tackle regulation, planning, sites, waste and skills, says John Hutton

The revival of nuclear power in the UK has the potential to be the most significant opportunity for our energy economy since North Sea oil and gas.

To become number one in the world for new nuclear investment, we must first learn the lessons of the past by addressing the concerns raised during our consultation on safety and security, waste management, costs and the perceived impact of nuclear power on investment in other low-carbon technologies. We must also recognise and address the realities of an ageing workforce in our nuclear industry.

So what steps are we are already committed to taking?

In Washington recently I signed the UK into membership of the Global Nuclear Energy Partnership (GNEP). This will enable us to play our full international role in promoting the benefits of civil nuclear power. It will help us gain invaluable expertise and experience on a range of critical issues such as infrastructure assessments, security and safety.

Another reason for the visit was to talk to senior executives of potential investors in the UK nuclear market. These meetings confirmed that there is tremendous international investor interest in the UK’s nuclear renaissance. Investor confidence will be dependent upon focusing relentlessly on what I would describe as five key building blocks — regulation, planning, sites, waste and skills.

We have one of the most effective nuclear regulatory regimes in the world. Safety, of course, is paramount for us all. But there is always more we can do. I have long believed that the effectiveness of our regulatory system can be a key differentiator for attracting inward investment.

Shortlisting the generic reactor designs to be submitted for more detailed assessment is another key milestone. We have begun this prioritisation process and are now inviting the industry to bring forward new designs for a Justification Decision that I need to make in the next few months — an important stage in getting the first new-build started.

Creating an efficient, predictable and fair planning regime is, perhaps, one of the most important factors that companies take into account when deciding where to locate their investment. And just to remind ourselves, it took six years to secure planning consent for the £30m Sizewell B plant. Despite this, only 30 of the 340 days of the inquiry were focused on local issues.

The urgent challenge of climate change and energy security can’t be compromised like this again. The Planning Reform Bill, currently being debated by Parliament, will help us tackle such long, inefficient, costly and unnecessary delays.

We need, therefore, to make sure there are sufficient sites available for our new generation of nuclear stations. So, in addition to the process that British Energy is going through, the Nuclear Decommissioning Authority has now made areas close to existing sites available for consideration.

We have also worked closely with potential investors to develop detailed guidance to progress the Funded Decommissioning Programmes for New Nuclear Power Stations. Finally, recognising the importance of continued progress on waste management, DEFRA will be setting out later this spring in a White Paper how it plans to take forward the safety programme to manage radioactive waste.

The potential scale and complexity of each investment is breathtaking. Just replacing our existing capacity will equate to three times the size of the Terminal 5 project and could represent around £20bn worth of business for UK companies.

I don’t want to see just a like-for-like replacement of nuclear capacity. Obviously it’s up to the market to decide what investment takes place. But energy security and climate change should provide the push for a significant expansion of nuclear in the UK in the coming decades. And it could create up to 100,000 new jobs. This includes thousands of highly-skilled, well-paid posts, many in some of our most deprived areas.

The industry is facing the pressure of replacing an ageing workforce. Around 1,500 employees need to be replaced every year and this will increase as more people retire.

The design, build, operation and decommissioning of new nuclear stations calls for a spectrum of professional skills — including engineers, scientists, mathematicians, radiation specialists, health physicists, project managers, office workers and administrators.

It’s time to update the strategic review of the industry’s skills base that was run at the beginning of the decade.

So the Sector Skills Councils, including Cogent, will run a skills audit of the energy sector to identify shortages, gaps and the impact of these and other demographic factors on our energy industry. The newly-established National Skills Academy for Nuclear (NSAN) is also working to co-ordinate and develop training at a regional and national level, alongside academies focused on boosting skills in manufacturing, the process industries and offshore oil.

With training partners, NSAN aims to deliver 1,200 apprenticeships, 150 foundation degrees and to retrain 4,000 existing workers in its first three years of operation. The academy is also building closer links with the higher education sector. And universities are responding strongly to our agenda to improve the supply of graduates into the sector.

Our energy challenge is clear: to secure a diverse mix of low-carbon energy supplies — including maximising indigenous production — and to work effectively with other countries to tackle the global problem of climate change.

Our commitment to enabling nuclear to play a full role in meeting this challenge is strong and unshakeable. Momentum is building. Companies from across the world see new-build in the UK as a gateway to the rest of the European market.

So it’s critical that we capitalise on this interest not only so we can realise our ambition for new nuclear capacity from 2017, but also to help hundreds of UK companies and thousands of workers benefit from the re-birth of our nuclear industries.

Edited extracts of a recent speech by John Hutton, Secretary of State for Business, Enterprise and Regulatory Reform