Most authorities would agree that nuclear power is a vital part of the future energy mix.
It offers low carbon, base load electricity with low ongoing generation costs. But it is a complex technology that requires a sophisticated, experienced supply chain with qualified manufacturing facilities, trained people and ongoing support structures. Ever-improving safety standards are making certification increasingly onerous and expensive and designs are evolving, requiring constant new R&D effort. In short, suppliers to the industry need to invest heavily and for the long-term and there is only one reason why industry would do that: an assured ongoing business stream that will provide return on that investment. Either we build nuclear power plants or the supply chain will gradually fade away as companies seek alternative markets.
For some years the European supply chain has been sustained mainly by a combination of aftermarket business in Europe and elsewhere, plus new business from Asia and especially China. But it was clear from the start China planned to develop its own indigenous suppliers and that the flow of business to the west was of limited duration. This has proved to be the case.
The UK government's 2006 review of energy policy cleared the way for a new generation of nuclear power to be built wholly by the private sector. A 2012 study from the Institute of Public Policy Research estimated investment in new nuclear power stations could raise UK GDP by more than £5 billion, create 32,500 jobs, and increase nuclear industry exports by up to £900 million, a huge opportunity for the European supply chain.
Eight sites have so far been confirmed as suitable for new nuclear power plants: EDF Energy plans two at Hinkley Point, Somerset, and two at Sizewell, Suffolk. Horizon Nuclear Power is planning to build two or three at both Wylfa, Anglesey and Oldbury, Gloucestershire. NuGeneration is intending to build three at the Moorside site at Sellafield, Cumbria.
These new nuclear power investments will provide much needed work for the supply chain in Europe for some years to come, plus of course their valuable aftermarket contracts. But extensive though it is, this initiative will be of finite duration and European suppliers must look elsewhere for the long term.
Small modular reactors (SMRs), factory built in volume and shipped to site may prove to be the future market the European industry needs to provide the return on investment that will keep it healthy. SMRs show promise both technically and economically, but the first installations will still require massive up-front investment before the envisaged economies of scale can be realised. Private industry is unlikely to invest on this scale alone and therefore public money will be required for this vision of the future.
Governments and industry will need to cooperate – maintaining existing strong partnerships and forming new ones, sharing knowledge and working to common designs. In such a climate industry can invest in R&D and apply proven strategies for people retention; succession planning; proactive resourcing of new, experienced personnel and apprenticeship and graduate training schemes to bring new engineering talent into the industry.
☛ Colin Elcoate is vice president, business development for power at SPX Power and Energy