Submission from BAE Systems
1.1 This paper has been produced in response
to the Innovation, Universities and Skills Committee major inquiry
into engineering. The Select Committee has agreed that one of
the case studies will be Nuclear Engineering; the study's terms
of reference encompass issues which are relevant to BAE Systems
Submarine Solutions ongoing operations.
2.1 BAE Systems Submarines Solutions has
a proud history of nuclear engineering in support of the submarine
programme. Barrow is the UK's only site integrating the detailed
design and commissioning of nuclear reactors since 1995. A considerable
effort has been required to rebuild and retain the nuclear engineering
skill base at Barrow and its supply chain since the start of the
2.2 The international civil nuclear industry
is undergoing a renaissance and this will have an impact on the
defence programme through increased demand for nuclear engineering
skills and key components in the supply chain.
2.3 The Nuclear Industry is facing skill
shortages which are rooted in the long decline of the industry
over more than two decades, public perception and the post cold
war reduction in the nuclear navy.
2.4 Since 2003 the UK Government's commitment
to the submarine programme has enabled a vibrant investment in
nuclear capability at Barrow. There are similar opportunities
in the decommissioning market which could help UK engineering
industry build the capacity to meet the civil new build programme.
2.5 Help is required to ensure UK industry
investment is coordinated, with key elements of the supply chain
cooperating in a more strategic way. A programme to place high
calibre individuals in new build projects around the world will
help the UK gain the necessary experience and capture lessons
for the imminent UK build programme.
3. BAE SYSTEMS
3.1 50 years experience of new nuclear submarine
3.1.1 BAE Systems Submarines Solutions'
Barrow Shipyard has been managing the design, construction and
commissioning of Nuclear Submarines since 1958 (50 years). Astute,
the first of a new class of submarine will contain the 26th nuclear
power plant to be constructed and commissioned at Barrow.
3.2 Significant nuclear engineering programme
over next 20 years
3.2.1 Four Astute submarines have been ordered
of an anticipated seven. This construction programme will continue
3.2.2 The concept phase for the Vanguard
successor submarines commenced in 2007; detailed design work will
commence in 2009 in preparation for construction in parallel with
the last Astute class submarine.
3.3 Centre of nuclear engineering, construction
and commissioning excellence
3.3.1 Barrow, since the mid nineties, is
the only site engineering, constructing, fuelling and commissioning
nuclear reactors in the UK (Sizewell B achieved its rating certificate
in September 1995); at least three new naval reactors will commission
before the first UK civil nuclear power construction starts. These
activities require the Barrow site to maintain a nuclear safety
case and site licence in accordance with the Nuclear Installation
4. IMPACT ON
BAE SYSTEMS SUBMARINES
4.1 The end of the previous Civil Nuclear
Build Programme and Cold War produced a nuclear resource glut
4.1.1 The end of the Cold War in the early
1990's gave opportunities for a reduction in the submarine flotilla.
Old submarines were retired early and new orders deferred releasing
a significant number of nuclear qualified naval personnel. This
resource was eagerly recruited by industry. The need to train
and develop new people was further reduced by the imminent completion
of Sizewell B (1995) and the Vanguard Programme (1999). The deferral
of orders forced Barrow into redundancies and surface ship work
to survive. The Barrow workforce was reduced from 13,000 to 2,900
between 1992 and 2002.
4.2 The Astute construction programme suffered
key skill and knowledge shortfalls
4.2.1 The nuclear reactor construction for
Astute began to highlight problems with the skill and knowledge
levels in the Barrow Shipyard and key suppliers in 2002. It became
increasingly apparent that a lot of intrinsic knowledge resided
in experienced staff and could not be easily documented in procedures
and training packages.
4.2.2 The skill and knowledge shortfall
was also prevalent in the Ministry of Defence (BAE Systems' customer)
and the Regulators (Nuclear Installation Inspectorate and Defence
Nuclear Safety Regulator).
4.3 A negative public perception of the nuclear
industry further skewed the age profile
4.3.1 The UK public's perception of the
Nuclear Industry, post Three Mile Island and Chernobyl, reduced
the number of young engineers willing to train in nuclear engineering.
In addition, the workforce in Barrow had aged, with little new
recruitment during the 1990's. The nature of the submarine technology
restricts recruitment to UK nationals, further exacerbating the
problem of attracting new blood.
4.4 A reduced Nuclear Navy trains fewer engineers
4.4.1 Ex-navy nuclear personnel have always
been valued by the Barrow shipyard in engineering, safety engineering
and commissioning roles. Many have second careers in engineering
consultancies supporting the civil and defence programmes. This
valuable resource has been reduced in line with the nuclear fleet.
4.5 Nuclear Decommissioning and Atomic Weapons
Establishment projects are already driving new thinking in recruitment
and retention strategy
4.5.1 The new projects in progress at Sellafield
and AWE have increased the competition for nuclear engineering
resource. Attracting and retaining resource has required a combination
of structured development, flexible and home working, increased
remuneration and targeting retired engineers back into the workplace.
5. DEFENCE NUCLEAR
5.1 Civil Nuclear economics will drive Nuclear
5.1.1 The skills being maintained and developed
in the defence industry are highly valued in the civil nuclear
industry; demand will increase in the run up to the start of new
build in 2012.
5.1.2 The economics of civil nuclear power,
with its high capital costs, make schedule adherence and quality
(reliability and safety) the dominant measures of a project's
success. These projects can afford to ring-fence pools of the
best nuclear resource as a contingency against problems on the
programme critical path. The submarine programme does not have
the same economic drivers and needs other strategies to retain
5.2 Key skills were in short supply during
the last Civil Nuclear Construction Programme
5.2.1 The Sizewell B nuclear commissioning
team comprised 50% foreign nationals (American, Spanish, South
African and Slovakian). American engineers (the majority) came
from the completed nuclear build programme in the USA.
5.2.2 The USA had not ordered a new reactor
since 1979; in 2007 the USA nuclear utilities announced a new
build programme and are projected to need more than 30 new reactors
before 2020. The UK new build programme will need to compete internationally
for key skills; the remuneration for nuclear engineers will reflect
5.3 Demand for nuclear manufacturing will
stress the submarines supply chain
5.3.1 The international demand for components
to support civil nuclear build will overwhelm key areas of the
supply chain which support submarines. For example:
- There is a worldwide shortage of nuclear
capable forging capacity (75% shortfall against projected civil
nuclear demand alone). Submarines require the same capabilities
for their nuclear plants.
- Heavy machining capability in the UK is
based on old infrastructure and this capacity is running at a
high utilisation in support of, amongst other projects, the Chinese
market for conventional power plants. The projected UK civil nuclear
build will further stress machining capability in the UK.
6. EACH NUCLEAR
6.1 A stable Submarine Programme
6.1.1 The UK Government has shown a clear
commitment to maintaining the current nuclear submarine fleet
strength. This stable, long term workload, with one submarine
build every 22 months and design work already starting on the
successor submarines to Vanguard, is enabling BAE Systems to make
significant investments in people, facilities and processes.
6.1.2 Barrow has now entered a sustained
recruiting period in 2007 59 graduates and 97 apprentices were
recruited. During 2008 the Barrow shipyard plans to recruit 85
new graduates, 50-100 experienced engineers, 134 apprentices and
6.1.3 The nature of submarine work restricts
recruitment to UK nationals only. The security requirements take
over three months to achieve clearance of personnel. As BAE Systems
Submarines is currently focused on the defence programme, it cannot
make firm offers for employment until security clearance is received.
Many staff are lost in this period to competitors with business
which has less onerous security restrictions.
6.2 The Decommissioning Programme's Reliance
on Agency staff
6.2.1 The headline figure for the Nuclear
Decommissioning Authority's (NDA) budget of £2.5 billion/annum
appears attractive, but the underlying cost of ongoing operations
reduces the new money for decommissioning operations to less than
£500 million per annum.
6.2.2 Many companies attracted by the headline
figures, are finding the decommissioning market highly competitive.
To reduce risk regarding the delays to Project approvals that
continue to be experienced, companies engaged on these projects
use flexible (agency) resource. Agency staff do not receive the
same investment in professional development and, typically, do
not gain man management experience. The headline rates paid to
agency staff make it difficult for them to transition back to
the core workforce where they would need greater management experience
to justify their salary. Over-reliance on agency staff is undermining
an opportunity to develop valuable nuclear engineering resource.
6.2.3 The Barrow Shipyard has lost nuclear
qualified personnel to projects at Sellafield. Individuals are
attracted by the headline rates paid for agency personnel. A number
of these staff have recently returned to BAE Systems when the
uncertainties of agency engineering in decommissioning have materialised
but the turbulence is disruptive to production and personnel development.
6.3 New Civil Nuclear New Build is an Opportunity
for Regeneration of Nuclear Engineering Capacity and a Springboard
to the International Market
6.3.1 The Government's commitment to enable
the replacement and increase in civil nuclear generating capacity
offers a challenge to the UK nuclear engineering industry. After
such a long period of inactivity, the UK nuclear engineering base
has contracted. There is an opportunity for companies to enter
the UK market to fill the gap. If UK companies do not step up
to this challenge, foreign competition will. UK engineering companies
need to co-operate, playing to their strengths, to develop the
new engineers and integrated capabilities required.
6.3.2 If this UK integrated capability can
be achieved it will be well positioned to exploit international
7. THE UK HAS
7.1 Newer Modularised Reactors-offers project
and UK industry advantage
7.1.1 The more advanced reactors offered
for the UK market (Westinghouse's AP1000 and GE's ESBWR) both
feature a high degree of modularisation. This modularisation maximises
the work at factory locations; reducing the work content at the
power station construction sites, cutting programme time and risk.
7.1.2 Reducing the work content at site
will reduce the number of engineers who are required "on
the road". This will ease the problem of retention for companies
in this market and help ensure valuable experience is transferred
7.1.3 BAE Systems has gained significant
experience in design for modularisation in the submarine programme.
The level of module outfit routinely used at Barrow is higher
than the aspirations of the reactor vendors. Extensive experience
has shown that this allows significant pre-commissioning; the
risk reduction to the programme is significant. Increased focus
on higher levels of outfit and pre-commissioning by the reactor
vendors would further reduce the number of engineers required
"on the road".
7.1.4 Increased complexity in modules and
their pre-commissioning requires a more highly skilled workforce
for their design, construction and commission. A reinvigorated
UK industry supporting modular designed reactors will have competitive
advantage in future international projects.
7.2 An integrated Supply Chain approach is
7.2.1 Internationally the demand for new
nuclear reactors outstrips the available supply chain capacity;
a major opportunity for UK Engineering industries exists. Significant
areas of the UK engineering supply chain have been run down or
lost since Sizewell B was constructed. With the exception of the
defence industry, very few UK companies have recently managed
major projects with such a large high quality engineering content
7.2.2 The UK nuclear engineering manufacturing
base needs to work co-operatively to maximise the value it delivers.
Key capabilities such as forgings, machining, manufacturing engineering
and commissioning already exist in the UK, but they have limited
capacity. The timescales before the new power stations are required
do not allow free competition and market forces alone to generate
this capacity. There is a need for an integrated UK approach to
development of facilities and people to establish a world class
UK nuclear engineering supply chain.
7.3 Ensure the UK becomes an attractive location
for nuclear reactors
7.3.1 The UK Government's intention to streamline
planning and licensing for nuclear reactors will help establish
the certainty required for these large projects.
7.3.2 The UK will have to attract nuclear
skilled people into its workforce. Hopefully many of them will
be home grown, but it is likely that some will need to come from
abroad. Enabling this mobility will be essential to feed these
projects and prevent delays.
7.4 Develop Engineers and Technicians on existing
7.4.1 During the preparation for Sizewell
B, the CEGB seconded many engineers onto the international nuclear
construction and commissioning teams. Engineers were seconded
for the duration of construction and commissioning (2-3 years).
This was an expensive investment but it repaid many times during
Sizewell B's progress.
7.4.2 Government assistance in placing UK
engineers at current projects such as Flammaville (France), the
Watts Bar Completion (USA) or the AP1000 build in China would
greatly increase the UK knowledge and skill bank.
7.4.3 Another option would be to use the
existing UK nuclear projects (eg. the submarines and decommissioning
programmes) to develop resource; possibly by increasing the scale
of the current NDA graduate development programme.
7.4.4 Barrow, as the only UK licensed site
integrating, constructing and commissioning nuclear reactors,
is uniquely placed to train and develop the nuclear design, manufacturing,
construction and commissioning engineers and programme management
capability to meet the UK new build market need. This strategic
resource will become increasingly valuable over the next four
7.5 Stabilise and accelerate decommissioning
7.5.1 The decommissioning programme could
be used to produce a ramp-up in nuclear engineering activity.
Decommissioning could then be curtailed to release resource to
meet the demands of the new build programme.
7.5.2 By accelerating the early spend, and
providing certainty to the decommissioning projects, UK engineering
industry would be motivated to invest in core staff and facilities.
This would help UK industry to ramp up to the levels of activity
required to support a new build programme.
7.6 Learn lessons from the programmes which
7.6.1 The hiatus in the nuclear submarine
build programme resulted in a huge loss of intrinsic knowledge
in BAE Systems and its Supply Chain; this hurt the programme schedule
and increased costs. A significant programme of investment and
development has been required to recover competence and capability.
7.6.2 The supply chain supporting the first
EPR reactor construction in Finland has suffered similar problems
with major nuclear related components.
7.6.3 As the USA restarts the Watts Bar
project and moves into new construction, there will be many more
lessons to learn. Placing UK project managers, quality professionals
and engineers in these projects, would help de-risk the UK new
8.1 The nuclear engineering skill set to
support the nuclear renaissance still exists in the UK, mostly
preserved in the defence programme. There is a need to increase
the number people to meet the requirements of the new civil nuclear
8.2 Education alone will not produce individuals
of the requisite calibre, but the experience element can be achieved
by placing high calibre individuals into existing nuclear projects
in the UK defence industry or international civil nuclear build
8.3 The UK engineering industry has an opportunity
to build an internationally competitive nuclear engineering capability
on the back of the UK new build programme. But this requires a
coordinated approach to investment and the development of skills.