New nuclear reactors could power economy

04 November 2009

With oil and gas reserves set to run out in a few decades, a new wave of nuclear power plants is being hailed as key to meeting the UK's future energy needs.

And with new reactors planned on the Suffolk coast, the industry also offers massive potential for the region's businesses with contracts worth billions up for grabs. SAM WILLIAMS reports.

IN 2012 construction is due to start on two new nuclear reactors at Sizewell on the Suffolk coast.

And as well as delivering a major contribution to the country's energy needs, Sizewell C also offers potential contracts worth billions which could create thousands of jobs in the region.

Following the acquisition of British Energy, French power giant EDF Energy is planning to build to reactors generating 1,600MW, which together with another plant in Somerset could supply 13pc of the country's electricity.

And business leaders are keen to ensure that the region's companies benefit from opportunities the multibillion pound development offers.

Work on the existing Sizewell B power station, which was commissioned and built between 1987 and 1995, involved 2,000 suppliers, half of which were from East Anglia.

And at a conference organised by the Nuclear Industry Association (NIA) at Newmarket last week, EDF bosses and industry chiefs said a broad range of work will be available.

About 140 firms attended the event, called SC@nuclear, to learn more about the deals on offer and the requirements for working in the nuclear industry.

Keith Parker, chief executive of the NIA, said: “The development of new nuclear power stations could have a huge impact on the region.

“EDF has announced its intention to build at Sizewell. These reactors at their peak of construction are going to be employing 3,000 to 4,000 people.

“There are opportunities not only for high-tech engineers but also construction companies and civil engineering and there are knock-on impacts for smaller companies within the area, including transport companies and caterers.

“The potential is enormous, and that's just during construction. Once it is built the power station will operate for 60 years employing 300 to 400 people at each reactor, offering well rewarded well qualified jobs. It will have a big impact on the local economy.”

Each power station will cost in the region of 10bn euros (£9bn), using reactors from French nuclear supplier Areva, and while the design, construction and operation of the plants will require high levels of expertise, many of the skills required are already present in the region, partly in the supply chain built up in the development of the Sizewell A and B plants, but also in the offshore energy sector.

And while North Sea oil reserves are expected to run out in a matter of decades, the nuclear industry could be a lifeline to offshore firms to extend their life expectancies and secure new business opportunities.

Alan Cumming, head of procurement and contract management at EDF, said: “We are looking for a whole range of suppliers for a construction of this size, and what we are looking for in our supply base is going to be specialist skills.

“These range from supplying bread rolls right through to building the nuclear reactor.

“Through the development of Sizewell B there is already a supplier base here, and we are hoping to grow that capability.

“We will go in, identify exactly what capability there is in the region and try and match that to the work we have got.

“There is a huge amount of work, so much that needs to be done and there is also a lot of transition and synergy between industries, oil and gas particularly. The levels of quality they work to are very high.

“If they have got a competency in one industry they should be able to bring that to another. In 50 years' time there will be no oil left, and companies are going to have to do something else.”

But Mr Cummings warned the nuclear industry required working to tough safety and quality standards.

He added: “The requirements for safety and quality are top of our list. The requirements for working in the nuclear industry are very stringent and ensuring employers understand what they are getting themselves into is very important to us.

“If they get into a job they don't understand we will end up with a problem.”

Many of the companies present at the Newmarket conference currently work in the oil and gas sector, including Lowestoft-based AKD Engineering, which offers engineering and manufacturing services, mainly in offshore energy facilities.

The company was founded in 1955 and provided services in the development of Sizewell A in the 1960s, and managing director Martin Jolley said the firm had many of the requirements needed to win similar work in the construction of Sizewell C.

Mr Jolley said: “We are looking to get back into nuclear. In oil and gas the same quality and manufacturing standards apply.

“The challenge is that the paperwork is bigger than the job itself. But I think it's the sprat to catch the mackerel. Every company should be looking at what they have to offer, and if you have a business that can do other things as well should be bringing that into play.

“We can offer pipe work initially but there are lots more things we can do as well. If you can work in offshore energy you already have a lot of the skills needed.

“The developers were saying they can't get welders. We have 130. If they can weld a piece of pipe for us they can do so for just about anybody.”

And as well as major new opportunities, Mr Jolley said nuclear contracts could help secure a longer term future for the company.

“All the boffins are saying there is probably enough oil down there for 40 years, assuming current trends,” he said. “One of the reasons we need to move into nuclear is it offers better longer term prospects. It would get us a new business stream to diversify to.

“Oil and gas has given us continuity for 30 or 40 years, and probably has another 40 years to go. Nuclear will be sustainable for at least 50 years, and we are not talking about one power station but quite a few. It's a good starting point.”

But with the scale of contracts on offer, there is uncertainty among some potential bidders that smaller companies will have a look in when they are up against major national or global competitors.

Graham Muff, UK business manager at A&E Systems, which supplies anti-corrosion products, said it could be difficult for his company, which employs 50 in Malaysia and eight in Dereham, to secure a position as a main supplier.

He said: “There is considerable opportunity. The size of an oil rig and the pipe work within it is similar to that in a nuclear power station, and in the equipment and infrastructure of a nuclear power station there are the same problems as in oil and gas, of corrosion of pipelines, flanges and valves.

“The hardest thing for us as a small company is to get in as a leader in the supply chain. Being a small company can be a bit of a barrier.

“When you are trying to run a business day-to-day and return a profit it does not necessarily fit in to be doing a lot of paperwork.”

It is not only companies with technical expertise that could win contracts in the development and running of new power stations.

Bee Kemball, managing director of Debach Enterprises, based a few miles from Sizewell and which offers transport and storage services, said she was keen to secure work with the plant's developers.

The company, which has 150 staff and a £10m annual turnover, previously provided services in the construction of the previous power stations.

She said: “We are interested in getting involved in the industry again to help hold, store and move things close to the site. It could be huge or small for us, it all depends if we can get in with the right company and that company gets the right contracts.

“But we are very confident.”

One major challenge in the growth of the new generation of nuclear power will be to ensure the region has sufficient skills to meet demands, vital to making sure people in East Anglia benefit from the opportunities on offer rather than just staff brought in from other regions.

Celia Anderson, director of campaign organisation Skills for Energy East of England, said the new generation of nuclear power plants offered an “exciting opportunity” for future careers, and one the region must prepare for.

“The new reactors could provide choice as to whether to work in oil and gas or nuclear for those in the industry or for youngsters coming into the sector,” she said.

“We have a level of skills in the industry but we will need more people coming in. That will be quite a challenge, encouraging people into the industry now when jobs are not going to be available until later, to build experience in different sectors and move when the opportunities arise.

“The majority of jobs offered will be highly skilled, which raises the skills base in the region, and we also need to ensure we provide opportunities for people who live in the region.”

While nuclear energy has its opponents, a new generation of power plants would add to the region's wealth of expertise across the energy sectors, according to John Best, chief executive of the East of England Energy Group, representing businesses in oil and gas, renewable energy and nuclear sectors.

He said: “It is really heartening to hear that what EDF were talking about was the capability and capacity already in the supply chain.

“We have got a great strength in energy in this region, including oil and gas, offshore wind and nuclear. The new reactors really attest to this region's energy capability.”