Monday, October 21, 2013

News: Hinkley Point agreement can kick start the UK nuclear programme

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EDF Group and the UK Government have reached in principle an agreement on the key commercial terms for an investment contract of the planned Hinkley Point C nuclear power station - the £16bn project that will kick start the UK nuclear programme.

Two new reactors will be built at what will be one of the country's largest power stations in Somerset, supporting between 20,000 and 25,000 jobs during construction and 900 permanent jobs during operation.

The key agreement is the "strike price" - the minimum price which will be paid for the power produced. Finalising agreements with industrial partners for equity funding is one of the remaining key steps necessary before a final investment decision can be taken. Letters of Intent have now been signed by EDF Group, AREVA, CGN (China General Nuclear Corporation) and CNNC (China National Nuclear Corporation) to become strategic and industrial partners in the project.

Vincent de Rivaz CEO of EDF Energy, said: "What we are announcing today is a good, fair and balanced deal for consumers, the UK and EDF. The project will kick start the UK nuclear programme and will help rebuild the nation's industrial stamina."

It is the supply chain supplying EDF and their nuclear rector provider, AREVA, that is of most importance to this region.

The Nuclear AMRC on the Advanced Manufacturing Park (AMP) in Rotherham is currently working with 50 companies identified by AREVA to help them qualify and bid for work. 57% of the Hinkley Point's construction value could be spent in the UK, building skills and expertise which will help the country win a greater share of nuclear programmes nationally and globally.

The Nuclear AMRC is a joint initiative between the University of Sheffield, The University of Manchester, and a consortium of industry partners. It provides a focal point for the bulk of the UK civil nuclear manufacturing industry supply chain, ensuring that manufacturers in the UK have the capability and capacity required to compete for nuclear new build in the UK and globally, from skills training to research and development.

Mike Tynan, chief executive of the Nuclear AMRC, said: "This is a significant milestone in the development of new nuclear power stations in the UK. Utilities, developers and investors need confidence in both long term cost and revenue profiles for making a final investment decision, and I'm sure that this announcement will be welcomed by everyone involved in UK new nuclear build.

"The Nuclear AMRC looks forward to the Hinkley Point scheme moving forward with EDF Energy, and is already working closely with EDF and AREVA to develop the UK supply chain."

AREVA will have a 10% equity stake in the Hinkley Point project and will provide Instrumentation and Control, Nuclear Steam Supply System and Fuel. It is continuing to identify additional potential suppliers in the UK through the Nuclear AMRC's Fit For Nuclear programme and other initiatives.

Rolls-Royce, who is investing in a large nuclear manufacturing facility in Rotherham, has a £400m agreement with AREVA that sees the two companies collaborate on the UK civil nuclear market, covering nuclear new build and fuel cycle.

Rolls-Royce secured outline planning permission for a 21,000 sq m "Project PoWeR" facility on the AMP that is proposed for manufacturing and assembling power vessels for the next generation of nuclear power stations. Work on the facility, set to create another 180 jobs, will begin when the world-renowned engineers receive the first orders for its nuclear components.

The Chinese investment in the UK project also makes sure that UK companies like Rolls-Royce can be part of China's multi-billion pound new nuclear programme. CGN is currently the world's largest developer and constructor of new nuclear power plants. CNNC has nine units in operation and 12 under construction.

Martin Ride, supply chain consultant at the Nuclear AMRC, said: "This is a significant and welcome investment announcement for the UK's nuclear new-build programme and supporting supply chain, which could lead to real export potential for UK manufacturers into China's internal, fast-growing, multi-billion pound nuclear new build market.

"We welcome the involvement of participating Chinese companies, and will work to develop relationships and interest in areas of manufacturing and business support which will lead to new opportunities for the UK."

EDF Energy website
Nuclear AMRC website
Rolls-Royce website

Images: EDF Energy

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