5 Supply chain and skills
86. The last nuclear reactor built in the UK
was Sizewell B, which was completed in 1995.
Since then much of the UK's nuclear supply chain has withered
away. Similarly, the population of skilled nuclear workers is
aging. This presents both a challenge and an opportunity for a
nuclear new build programme. The lack of an established and experienced
supply chain might lead to delays, as might a shortage of a skilled
workforce. However, there is also the possibility of new business
opportunities and job creation.
Potential for bottlenecks and
87. There are some parts of the nuclear supply
chain that are not available in the UK, for which we will be dependent
on overseas suppliers. For example, there is no UK-based capability
for fabrication of reactor pressure vessels, steam generators,
large turbines and components from other large forgings.
Neither is there a UK-based reactor designer/vendor.
88. Since the number of suppliers of these components
is limited, there is the risk that bottlenecks and delays could
occur if other countries placed orders for nuclear reactors at
the same time as the UK.
For example, in the case of the Areva EPR design, some very large
forging for the reactor pressure vessel can only be made currently
by Japan Steel Works.
89. One way to minimise the risk of delays is
to ensure that orders are placed early, before other countries
ramp up their own nuclear new build programmes. The NIA said "clearly
it would help avoid potential bottlenecks if the UK were to be
at the forefront of new build".
EDF was confident that orders for new UK EPR plants would be placed
in advance of orders from other countries and would therefore
avoid potential bottlenecks.
90. The Institution of Mechanical Engineers (IMechE)
was concerned that the potential for peaks and troughs in the
UK new build programme could lead to boom and bust for other parts
of the supply chain. One consequence of this could be increased
costs and/or delays if a several new build projects were to put
simultaneous demands on the supply chain.
A possible solution would be for the Government to broker communication
and dialogue between the companies involved in new build projects
to help them to better co-ordinate activity so that delivery of
different plants could be smoothed over time.
91. We recommend that DECC's
Office for Nuclear Development (OND) investigates ways in which
it might open a dialogue between the different consortia that
are involved in nuclear new build in the UK. The OND should aim
to facilitate a smoothing out of orders to supply chain companies
in order to avoid crunch points and resultant delays.
Opportunities for UK businesses
92. Even though some of the components of new
nuclear reactors will have to be imported, there is still scope
to develop a UK-based supply chain for the remaining components.
Sir William McAlpine explained that "initially, EDF will
build the thing [Hinkley Point C] but concrete is going to come
from this country, the steel will come from this country, the
welders will be here".
The industry has claimed that around 70% of a new build programme
could be supplied by UK companies.
Vincent de Rivaz told us that "our ambition is clearly that
more than half the value of our project [Hinkley Point C] will
be sourced from the UK".
93. Obviously, if there are opportunities for
local companies to win contracts with new build projects, this
will help to boost support among the local community. Alyn Jones,
New Nuclear Local Authoroties Group, told us:
If we are going to make new nuclear work, in our
view as part of that renaissance we need to make sure that the
local community, the regional community and the national community
can all enter into that business opportunity. [...] There will
be great concern, I am sure, in the local community if there is
no supply chain benefit as well. Constructing the plant and owning
the facility is one thing, but to have UK companies, local companies,
not accessing the supply chain will be a very big concern.
Similarly, if new job opportunities are created in
the local area, this will help to enhance support too.
94. Although there may be the potential for UK
companies to benefit from supply chain opportunities, it is by
no means guaranteed that contracts will go to domestic firms.
One of the biggest barriers to domestic firms winning contracts
is the rigorous safety culture associated with nuclear construction
projects that they may not be familiar with. Dr Fox (Institution
of Mechanical Engineers) told us "One of the key issues is
that many of the individual firms that might like to get involved
in the nuclear industry at the fitting level do not necessarily
understand the cultural requirements of getting involved, and
it is about transferring that understanding and that knowledge
John Earp (Institution of Civil Engineers) explained further:
You will appreciate that there have been issues with
concrete at both Olkiluoto and Flamanville, and indeed at some
of the plants that are currently being built in the USA. The guys
pouring the concrete, who were very good, had not worked on a
nuclear power station for a number of years and had a mindset
that, "Well, if we pour this and it's a road we can go back
and dig it up". That simple mindset doesn't exist on a nuclear
site, because once you have the nuclear material there, that concrete
is there for good.
95. During our visit to Hinkley, we heard that
the significant up-front costs that can be involved in gaining
quality accreditations could prevent some potential supply chain
organisations from bidding for contracts with nuclear new build
projects. Potential suppliers need to strike a fine balance -
proceed with accreditation too early, and there is a risk that
a new build project might not go ahead, and the money will be
wasted; wait too long, and the accreditation might not be in place
in time to bid for work.
96. We were pleased to see that
DECC's Nuclear Supply Chain Action Plan (published after we had
finished taking evidence) acknowledged that the costs involved
in quality accreditation could be a barrier to entry into the
nuclear supply chain.
However, we were disappointed by the timetable for action - the
first meeting with industry to "understand issues" will
be held in the first quarter of 2013 and further meetings were
not mentioned. If, as is widely expected, EDF makes a final investment
decision to go ahead with Hinkley Point C in the near future,
potential suppliers for that project might miss out. We urge
DECC to bring forward solutions to this challenge by summer 2013
in order to maximise opportunities for domestic supply chain industries.
97. We asked the Minister whether
the Government would provide assistance to businesses who wanted
to access supply chain opportunities. He told us "I think
we will look again at how the process we have already begun can
be tailored to bring about exactly what you suggest, which is
the opportunity for as many smaller businesses as possible to
engage. When I have done that I would be more than happy to write
to the Committee setting out what we have done already and what
more we think we might be able to do to ensure that outcome".
We look forward to receiving the Minister's report on this matter.
98. Many witnesses expressed a concern about
a potential shortage of the skills that are needed to build, operate
and regulate nuclear reactors in the UK.
The last UK nuclear new build project was completed in 1995. Many
experienced nuclear engineers in the UK are now over the age of
50 and are likely to be retiring within the next decade. We heard
that there was a need to train up a "new generation"
of nuclear engineers if there is to be a renaissance in nuclear
power in the UK.
99. Witnesses also suggested that there may be
competition for skills at the international level, particularly
for senior level specialists.
The Institute for Mechanical Engineers and Institute of Physics
were concerned that if there was a hiatus in developing new nuclear
projects in the UK, then engineers and skilled workers might be
tempted abroad to work on international nuclear projects.
100. CITB-ConstructionSkills suggested that one
area where training would be needed was the "nuclearisation"
of the construction industry, which would mean "a change
in culture, attitude, behaviour and compliance amongst the construction
workforce, to support rigorous safety and security for workers
on site and quality workmanship in the construction [of new nuclear]".
101. We were pleased to hear about the range
of initiatives that are currently under way to help develop the
requisite skills, including the National Skills Academy for Nuclear
and the facilities around specific nuclear sites, such as the
energy centre at Bridgwater College (which was funded by EDF).
102. Alasdair Reisner (Civil Engineering Contractors
Association) raised another potential barrier to delivering a
skilled workforce: "If you don't have confidence that there
is going to be a programme of new nuclear, you are a graduate
coming out of university and you are making a career choice, are
you going to make that choice if you can't be certain that there
is something down the line?".
103. Significant training will
be required for the UK to benefit from new job opportunities.
Initiatives like the energy centre in Bridgwater College are encouraging,
but stronger leadership from Government about the future role
of nuclear could help to encourage more people into this area
121 Ev w86, Ev 89, Q 154 [Mr Earp] Back
Ev 81, Ev w23 Back
Ev 81 Back
Ev 81, Ev 93, Ev 91, Ev w23, Ev w35, Ev w21 Back
Ev 93 Back
Ev w24 Back
Ev 93 Back
Ev 111 Back
Ev 111, Q 152-153 [Dr Fox] Back
Q 318 Back
Q 201 [Mr Anastasi] Back
Q 197 Back
Q 127 Back
Q 162 Back
Q 162 Back
DECC, The Nuclear Supply Chain Action Plan, December 2012, p 44,
para 6.34 Back
Q 461 Back
Ev 93, Ev w11, Ev w23, Ev 118 Back
Ev 91, Ev w23, Ev 89 Back
Ev 91, Ev w23 Back
Ev 111, Ev w23 Back
Ev 89 Back
Q 174 Back