The future of nuclear power in Wales Contents

4The contribution of the nuclear industry to the economy of North Wales

Contribution of Trawsfynydd and Wylfa A to the North Wales economy

65.The importance of the economic contribution of the nuclear industry to North Wales, particularly to Gwynedd and the Isle of Anglesey, resonated throughout the evidence we received. Representatives from the local councils told us that, not only had the nuclear industry been a major employer in the area, it had also been one of the few industries that provided high-paid and highly-skilled jobs.

66.Gwynedd County Council told us that Trawsfynydd had been particularly important as an employer in Meirionnydd because of a lack of well-paying jobs elsewhere in the area. The Council pointed out some factors that make Meirionnydd atypical:

67.Sioned Williams, Head of Economy and Community Services, Gwynedd County Council, told us that the nuclear sector was crucial because it provided high-quality, highly-paid jobs, which were necessary to improve the local economy:

“Average wages in Meirionnydd are £20,000 a year. In Trawsfynydd at the moment, average wages are £55,000 a year. …The average wage for an administrative job in Magnox is £25,000, which is again higher than the average for the area. We could therefore target lots of jobs in some sectors and make no impression on changing the state of the economy. Targeting high value jobs would create more opportunities in the area”88

68.From a cultural perspective, Gwynedd County Council said that keeping high quality jobs in the area would also be crucial for the future of Meirionnydd as a Welsh-speaking area. They contended that without high-quality employment opportunities, young Welsh-speaking people will move away. The 2011 census showed a decline in the use of the Welsh language, with 3.3% fewer Welsh speakers compared to 2001.89 The Council therefore concluded that improved employment prospects are crucial for maintaining a living Welsh-speaking culture.

69.On Anglesey there are similar concerns that, since Wylfa A has ceased operation, job losses could have a serious impact on the island’s economy. Isle of Anglesey County Council say that the closure will leave the island facing a difficult economic transition and that they promoted new nuclear build for this reason.90 They also pointed out that Wylfa A had provided some of the best-paying jobs on the island. Dylan Williams, Head of Economic Development, Isle of Anglesey County Council, told us:

“the average salary on Anglesey is about £21,000 to £22,000. The average salary at Wylfa…was about £35,000. It is not just the numbers, it is the actual quality of the employment opportunities as well.”91

Furthermore, echoing the experience in Gwynedd, Glyn Jones OBE, Chief Executive, Grŵp Llandrillo Menai and Member of Anglesey Enterprise Zone Advisory Board, emphasised how crucial the nuclear industry was for providing high-quality jobs that would keep young people in the area.

“the challenge is trying to keep young people in the area. These developments are key to getting big employers and high-quality jobs with good salaries for our young people to aim at so that they do not have to consider crossing the border to England to work”92

70.Magnox were able to provide some reassurance that it was preparing for the move to decommissioning and is trying to help workers get training and new jobs. For example, Stuart Law, site closure director for Wylfa, Magnox, told us:

“We gave [all the workforce] the opportunity to do any qualifications that they wanted. …to do that could help them for their future. …Fourteen hundred people enrolled and over 500 nationally recognised qualifications were gained as part of that process.”93

71.In addition, Greg Evans, Operations Director, Horizon Nuclear Power, appreciated that the nuclear power industry had provided long-term jobs and economic security, and therefore people were eager for work at Wylfa Newydd to start.94

72.The nuclear industry has made a major contribution to the economy of North Wales, and Wylfa Newydd would make a strong contribution in the future. Without the nuclear power industry, there is little prospect of many high-quality, well-paid jobs in the area, which will negatively affect the local economy. Furthermore, we are concerned that without these opportunities, young Welsh-speakers will emigrate from the area.

The economic impact of construction of Wylfa Newydd

73.Once operational, it is expected that 850 people will work at Wylfa Newydd during its lifespan of 60 years. The construction of the power plant is also expected to give the economy of North Wales a large boost. Horizon Nuclear Power say that, at its peak, construction will provide between 8–9,000 jobs. They expect at least 2,500 construction employees to be from the local area.95 In addition, Horizon Nuclear Power will invest large sums of money in North Wales during the construction and operation of Wylfa Newydd. £20m will be spent in North Wales96 during the site preparation and clearance phase. During construction, £200m will be invested in the local area and 2,000 jobs will be created in the local supply chain.97

74.Dylan Williams, Isle of Anglesey County Council, described the benefits to Anglesey of a project of this scale:

“Anglesey currently has about 19,000 jobs; Wylfa Newydd is predicting 8,000 to 10,000 during the build period for about six or seven years, so you can see the magnitude and the importance of the project. The 850 jobs during the operational stage for two to three generations are of a quality that would be very hard to attract from other industries because of Anglesey’s location.”98

75.However, Glyn Jones OBE, Chief Executive Officer, Grŵp Llandrillo Menai, said that more information about the type of jobs that would be in demand was required to help people prepare for the project, and benefit from the opportunities.99

76.Wylfa Newydd is an essential part of Isle of Anglesey County Council’s “Energy Island” programme to support the economy. The Energy Island programme aims to make Anglesey a centre of energy generation, research and development, and servicing, creating high-level jobs across a range of energy projects. The programme is jointly run by the council’s economic development unit and stakeholders from the private sector, and is supported by the Anglesey Enterprise Zone Advisory Board. The Council believes that through biomass, solar, wind, tidal, and nuclear energy projects, the programme could contribute £12bn over the next 15 years. Dylan Williams, Head of Economic Development, Isle of Anglesey County Council, said that Wylfa Newydd was the ‘backbone’ of this strategy because it was such a large project, would provide so many jobs, and was therefore vital to the Council’s economic plans:

“I do not think you can have a contingency plan for such a large-scale, complex and unique project, specifically in such a rural area such as Anglesey. I think it is very much required if we are going to turn round the current out migration.”100

77.Gwynedd County Council also emphasised that Wylfa Newydd would provide employment for people living in their area. Sioned Williams, Head of Economy and Community Services, Gwynedd County Council, said:

“There are no two ways about it—Wylfa will have a substantial effect on Gwynedd’s economy…Work has been planned deliberately to ascertain key elements such as the necessary supply chains, skills and infrastructure.”101

78.However, some witnesses argued that a comparable economic boost to the area could be provided from alternative energy projects and that any major investment in the area would have a similar impact. Gareth Clubb, Friends of the Earth Cymru, was critical of the local authority, and Welsh and UK Governments for making Wylfa Newydd so central to the economic plans for Anglesey. He argued it was negligent not to plan for a non-nuclear future on Anglesey, and that there was too much reliance on Wylfa Newydd going ahead:

“They base their planning for an energy network on significant nuclear supply to the grid. If that does not happen—and we have seen what has happened with Hinkley—suddenly there is a panic. When Wylfa does not proceed, there will be panic from the council and the Welsh Government and that is not a good basis for planning.”102

He suggested that the UK and Welsh Governments should instead encourage digital industries and life sciences to create jobs in the area, and that there needed to be a contingency plan for Anglesey should Wylfa Newydd not proceed.103

79.The Minister told us that the UK Government was looking at other economic opportunities for Anglesey. Most of these were associated with the Energy Island programme, rather than being contingencies for Wylfa Newydd not going ahead. However, she did indicate there were other options available for North Wales:

“there are a number of different ideas…but there is a growth deal proposed for north Wales with the Treasury. That, of course, will help to strengthen the region’s economy and make the most of its connections to the northern powerhouse.”104

80.The construction of Wylfa Newydd will have a large impact on the North West Wales economy, with thousands of people being hired and opportunities being provided to hundreds of businesses. The construction of Wylfa Newydd will also support the Energy Island programme and is a major part of the economic policy of the area.

81.We heard that Wylfa Newydd is the backbone of the Energy Island programme. However, it is important that the region is not dependent on one industry, and that it has a diverse economy. Therefore, we recommend that the UK and Welsh Governments should work with Anglesey and Gwynedd County Council to progress other aspects of the Energy Island programme and to find alternative economic strategies for the area.

Welsh workers and businesses in the supply chain and long-term jobs

82.While Wylfa Newydd would provide new jobs and opportunities, some witnesses were concerned that these would go to people from outside North Wales. This concern was in part based on that Horizon Nuclear Power’s definition of the local area, which covers anywhere within ninety minutes’ drive of the Wylfa Newydd site.

83.One way to improve the chances of local people finding employment at Wylfa Newydd is to improve skills. John Warden, Chief Executive Officer, Nuclear Institute, told us the nuclear industry needed 9,000 new entrants per year for the next five years, to replace retiring workers and to meet a rise in demand.105 There was also demand for engineering and construction workers due to concurrent infrastructure projects. He said “it takes [three to four years] to build the skills…to grow an apprentice, so we need to start that now.”106

84.Horizon Nuclear Power have already begun to train people for jobs at Wylfa Newydd. They told us that whilst they could not guarantee that a set proportion of workers would come from the local area, they would attempt to increase the proportion by offering training and development programmes. Alan Raymant, Chief Operating Officer, Horizon Nuclear Power, said that they was looking to the long-term by encouraging young people to consider careers in the nuclear industry:

“We are talking to school children directly and recognising that the children in secondary education now are likely to be in our first crop of workers. We have been sponsoring an apprentice programme at Menai since 2011, [and] we are starting our own apprenticeship programme…taking our first intake of direct apprentices …Horizon in September of this year, which will be the start of an ongoing programme of apprentice recruitment.”107

85.For Grŵp Llandrillo Menai, which is a group of three further education colleges in North Wales, Wylfa Newydd is an opportunity to increase skills in the local workforce. They have signed an agreement with Lockheed Martin to develop training materials and are bidding to run the Operator and Technician training programme for Wylfa Newydd. They are also holding engineering apprenticeship fairs, with links to Horizon Nuclear Power’s apprenticeship programmes, and developing an employment and skills brokerage for Wylfa Newydd. Grŵp Llandrillo Menai is also developing a nuclear fundamentals course and a steel fixing and scaffolding course that would help students get construction jobs with Horizon Nuclear Power. They currently have 942 students enrolled on engineering courses and are holding STEM (Science, Technology, Engineering and Mathematics) outreach events in North Wales. Additionally, the Welsh Government has provided £5m in funding for an engineering facility at Llangefni. Glyn Jones, Grŵp Llandrillo Menai, explained:

“We are also redeveloping our campus in Llangefni. There is an opportunity to double or treble the numbers of students there. We are moving our engineering site from Bangor to Llangefni, and we are working with Horizon to develop a centre of excellence. There will be a specific building with a simulator and so on to practise the work of fitting reactors.”108

86.Despite these benefits, Glyn Jones also warned that there could be costs associated with displacement, as small companies might lose workers to the Wylfa Newydd project. Therefore, it was important that Horizon Nuclear Power worked with small companies so that they too could benefit from the project.109 This was a concern also raised by Dylan Williams, Isle of Anglesey County Council.110

87.Nonetheless, Horizon Nuclear Power told us that some jobs would have to be filled by people with specific expertise and that some constituent parts would have to be sourced from outside of Wales and the UK. For example, the manufacture of the reactor vessel will have to take place outside the UK, as no steel forge in the UK meets the technical requirements. For less specialised components, Horizon Nuclear Power told us they were working with local businesses, with some success, to bring them up to speed so that they could join the supply chain.111

88.Professor Andrew Sherry, Chief Scientist, National Nuclear Laboratory, said that it should be possible for the Government to drive the involvement of the nuclear supply chain. The Government has set up the Nuclear Advanced Manufacturing Research Centre, with the Universities of Sheffield and Manchester, to give the supply chain the capability to be part of projects like Wylfa Newydd. Professor Sherry also argued that the Government should drive innovation, creating even more opportunities for companies in the supply chain.112

89.The Minister told us the Government had a strategy to provide people in Wales with the skills required to work in the nuclear sector. Transferability of skills, new apprenticeships, training for new graduates, and re-training for existing engineers would be crucial and the National Nuclear College would be a large part of this work.113 The National Nuclear College is currently due to establish campuses in Somerset and Cumbria, with the possibility of a Welsh campus being explored:

“As it stands, the Welsh Government are already investing significantly in the education and skills need for the nuclear sector in Wales. …The decision on whether there will be a Welsh hub to the National College for Nuclear will lie with the NCfN board…What I can tell you is there are ongoing discussions between Welsh Government and officials from BIS and DECC surrounding the National College for Nuclear, so they are looking into that.”114

90.Local businesses and people in North Wales will need assistance to be ready for the Wylfa Newydd project. We heard that programmes are in place to provide training, but that many people needed more detail on what skills would be required in order to take advantage of the opportunities provided by the project.

91.The local authorities, and Welsh and UK Governments should all be working together to ensure that there is a large Welsh contribution to the construction and operation of Wylfa Newydd. We recommend that they work with Horizon Nuclear Power to ensure that the local population is well trained and is able to take up opportunities at Wylfa Newydd.

92.We welcome the work that Horizon Nuclear Power are already undertaking with local businesses and training providers. However, we recommend that they provide greater clarity as to what they require from the workforce. This will enable education and training to be provided, to give local people the skills they will need. Furthermore, we recommend that Horizon seek to retain the skills of workers leaving Wylfa A. This is a ready source of skilled individuals, who will be able to transfer to the Wylfa Newydd project, either directly or with some re-training.

93.As well as helping local individuals to gain from Wylfa Newydd, the Government should make sure that businesses in Wales and the UK are able to join the supply chain for Wylfa Newydd. We recommend that the UK Government enable businesses to take advantage of the resources of the National Nuclear Laboratory, the National Nuclear College and the Nuclear Advanced Manufacturing Research Centre, so that they are able to prepare to be part of the supply chain for Wylfa Newydd.

94.We find it surprising that, in light of Wales’s proud role in the history of the UK nuclear industry, that the Government’s plans for nuclear skills development did not have a Welsh dimension. We recommend that the UK Government correct this oversight by setting out plans to create a North Wales campus for the National Nuclear College.

The economic impact of job losses at Trawsfynydd

95.The Trawsfynydd nuclear site is a major employer in Gwynedd, and the local council told us they are extremely concerned by the prospect of the end of decommissioning and the accompanying job losses on the site. They estimate that the decommissioning of Trawsfynydd will contribute £310m to the Welsh economy through to 2033, but that the loss of jobs has further weakened the economic situation in the Meirionnydd area.115

96.Furthermore, Gwynedd County Council believe that the end of decommissioning will lead to a loss of skilled workers in the area. Their aim is to retain skilled workers, but it is difficult to provide alternative employment options within Meirionnydd, as only 41 companies within 20km of Trawsfynydd employ more than 30 people.116 John Idris Jones, Snowdonia Enterprise Advisory Board, said that maintaining skills in the area would be important for ensuring that people in the area could take advantage of future opportunities, including Wylfa Newydd.117

97.Magnox told us they had made preparations to help workers when the decommissioning work at the Trawsfynydd site ends. For example, they have established a detailed schedule of the remaining work, so there is more predictability.118 Furthermore, Kenny Douglas, Managing Director, Magnox Ltd., told us:

“We have replaced agency or contractor staff, many of whom travel into the area, so we are keeping jobs in the area. …our prime focus has been to keep Magnox jobs for Magnox people, and where appropriate, for them to undertake training.”119

98.Magnox are providing their workforce with an allowance of £1,500 for retraining and are providing assistance for people to transfer to other energy companies. They also provided £91,412 in funding to projects in the local area in 2015/16 and £360,000 to fund training facilities for Coleg Meirion Dwyfor. Kenny Douglas explained how Magnox were trying to maintain local employment levels:

“We will be running down to a workforce of around 100 in the early 2020s. We need to be working with the local communities to see what jobs we can generate. We need to be looking at the Horizon programme. We also look back into the parent organisations…to look at opportunities that we can provide for those people”120

99.The Nuclear Decommissioning Authority (NDA) are also acting to help workers at the Trawsfynydd site with the end of the current phase of decommissioning, in compliance with their obligations under the Energy Act 2004.121 It is contributing to training and employment programmes, in partnership with Gwynedd County Council and Grŵp Llandrillo Menai. This includes training workers in skills for low carbon energy projects and for “alternative high-value employment”. The NDA has also provided £7m of funding, with £39m in matched funding, to a number of local projects, including the Energy Island programme and the Meirionnydd Employment programme, a Gwynedd County Council project to boost the outdoor leisure and tourism sector.

100.The number of employees at Trawsfynydd is scheduled to fall by 75% by 2028. This will have a severe impact on the economy of Meirionnydd and Gwynedd, as Trawsfynydd is a major employer for the area and one of the only sources of well-paid, highly skilled jobs. It is essential that the economic impact of job losses is mitigated. Therefore, we recommend that the UK and Welsh Governments work with Gwynedd County Council to find ways to maintain nuclear industry skills and to attract other high-value jobs to the area.

87 Cyngor Gwynedd Council (FNP 48)

88 Q143

89 Cyngor Gwynedd Council (FNP 48)

90 Isle of Anglesey County Council (FNP50)

91 Q156

92 Q164

93 Q203

94 Q24

95 Horizon Nuclear Power (FNP34)

96 Defined by Horizon as being within 90 minutes’ drive from the site and incorporating Anglesey, Conwy, most of Gwynedd and parts of Denbighshire.

97 Horizon Nuclear Power (FNP34)

98 Q157

99 Q164

100 Q156–157

101 Q147

102 Q183

103 Q173

104 Q294

105 Q93

106 Q95

107 Q36

108 Q164

109 Q164

110 Q164

111 Q35

112 Q273

113 Q290

114 Q293

115 Cyngor Gwynedd Council (FNP 48)

116 Cyngor Gwynedd Council (FNP 48)

117 Q146

118 Q201

119 Q201

120 Q202

121 The Energy Act 2004 obliges the NDA to consider the socio-economic impacts of its activities on local communities. A supplementary function is to give ‘encouragement and other support to activities that benefit the social or economic life of communities’ living near sites. See Nuclear Decommissioning Authority (FNP 52).

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21 July 2016