Nuclear is the word on everbody’s lips this week
Whether you deem the decision brave, stupid or absolutely necessary, the political will from the coalition to press ahead with a new nuclear energy programme is now sharply in focus. The UK government is moving the debate on and privately informing industry of the need to concentrate on overcoming the many obstacles to delivery, from capacity to capability. And it’s happening faster than anybody could have imagined, given the safety considerations and cross-party Whitehall sensitivities following the Fukushima disaster in Japan. While Germany, Italy, China and even Switzerland have taken the bold step to halt their new build nuclear energy programmes, the lessons for the UK appear to be just another layer of bureaucracy to be navigated, costed and overcome.
Politically, aside from the European green targets, the future security of energy supply continues to be the most compelling reason to push on - almost half of the UK’s energy comes from gas and some 80% of this is imported from unstable regions such as the Middle East and Africa, not to mention the rising demand in the hands of prime minister Putin. The other obvious reason for immediate action is the fact that nearly half of the current power plants in use must close within 15 years. As well as nuclear, the coal and oil plants, which have historically generated the bulk of our supply, will be out of service within a decade because of safety concerns.
But aside from the emotive considerations surrounding this tricky area of government policy, what’s at stake for industry in the UK is a 20-year programme of eight nuclear new build plants worth about £40bn. And it’s this long-term perspective and the comparative cost efficiency and sustainability of nuclear energy that makes it irresistible to a government wanting and needing to talk about growth over the next 18-24 months.
While it may be pleasing to see the political obstacles being removed with every flick of energy secretary Chris Huhne’s pen, in reality delivering this programme is still looking more than a little challenging for the people having to do it. “The reports are right; there is a shortfall in capacity and capability,” says Alan Cumming, EDF’s nuclear new build boss. “We’re embarking on a journey but we’ve not packed our rucksacks yet.” Somewhat of an understatement, you could say.
Already there is time lag and delay, partly caused by the inevitable regulatory costs emerging from the Fukushima review (estimated to increase the build costs in some countries by up to 15%). EDF anticipates slippage on the 2017 deadline for the Hinkley Point plant in Somerset, where it is already working with the likes of Kier and Bam and a list of the usual suspects for the £1bn civils package. But it is not the only player in town. The likes of Horizon and NuGen are gearing up to be on site by 2016, following the inevitable government sign off. And while EDF’s message is that there is absolutely a role for UK firms to assist in the delivery of this programme, such are the capacity issues that European players will be eyeing this market. So it’s up to UK firms, supply chains and individuals to be fully skilled up, equipped and ready for a new generation of work - starting from now.
Tom Broughton is Building’s brand director