Tuesday, August 2, 2016

News: Nuclear supply chain still waiting on Hinkley go-ahead

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The Nuclear AMRC has welcomed the news that EDF has confirmed it is ready to invest in two new nuclear reactors at Hinkley Point in Somerset. But the Government is reviewing the billion pound project that it previously called "a milestone in our efforts to reduce emissions and to meet our climate change commitments in the most cost-effective way."

With state of the art facilities on the Advanced Manufacturing Park (AMP) in Rotherham, the £25m Nuclear AMRC is a joint initiative with industry, The University of Sheffield and The University of Manchester's Dalton Nuclear Institute, and is designed to help build and enhance the UK's civil nuclear new build industry.

The two Areva EPR reactors at Hinkley Point C (HPC) will strengthen EDF's presence in the UK, where its subsidiary EDF Energy already operates 15 nuclear reactors and is the UK's largest electricity supplier by volume. With a combined capacity of 3.2GW, the two HPC EPRs will provide around seven per cent of the UK's electricity demand.

The first concrete at HPC is scheduled for mid-2019, coinciding with the scheduled start-up of the EPR at Flamanville at the end of 2018. EDF says the first HPC reactor will generate electricity from the mid-2020s.

In 2015, China General Nuclear Power Corporation (CGN) said it would invest £6 billion for a 33.5% stake in the project. EDF retains the remaining 66.5% of the project. The French group said it intends to bring other investors into the project, but will retain a majority stake.

EDF estimates the construction cost of Hinkley Point C at £18 billion. It expects UK companies to be awarded contracts worth more than 60%of the project's construction value.

Around £1.5 billion worth of contracts were provisionally placed with UK companies ahead of the final investment decision.

The Nuclear AMRC works with UK manufacturers along the supply chain to help them become more competitive, including focused supplier development support through the Fit For Nuclear and Civil Nuclear Sharing in Growth programmes.

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Mike Tynan, chief executive officer of the Nuclear AMRC, said: "The Nuclear AMRC welcomes the decision by EDF to move forward with its project at Hinkley Point C. This is a landmark decision for the UK civil nuclear industry and one that shows confidence in the UK's ability to deliver a major infrastructure project for the civil nuclear industry.

"EDF has led the way in the drive for new nuclear power in the UK: it was the first through GDA, site licence, planning consents, and electricity price deals, and is now the first to FID. The Nuclear AMRC has supported EDF's supplier development programmes in its journey for UK EPR deployment, and we will continue to provide every assistance to the Hinkley Point C project as it moves through construction, installation, testing, commissioning and commercial operation.

"The project at Hinkley Point in Somerset will create thousands of long-term jobs in the nuclear industry, engage a wide range of UK suppliers, and deliver much-needed replacement nuclear generating capacity for decades to come."

Following the vote, the UK government announced that it is reviewing its support for the project and will make a decision in early autumn.

Richard Wright, executive director at Sheffield Chamber of Commerce, said: "We absolutely agree that a secure energy supply is critical to the future success of the UK and that must involve new nuclear capacity. But, there are a number of reasons why we are very nervous about the Hinkley Point solution.

"Nearly all of the critical parts of the nuclear reactor, and some of the others in planning, will be made abroad which is not good for long term jobs in the UK, nor for our balance of payments. The high strike price almost guarantees much higher energy costs in the future and this will not be good for all our businesses as they try to build competitiveness in a world economy."

The Nuclear AMRC is also working on research projects and manufacturing studies with the likes of Westinghouse, NuScale and Rolls-Royce on the future deployment of small modular reactors (SMRs) in the UK. SMRs promise to be much more affordable in the UK than the large scale reactors planned for projects like Hinkley Point C, which has struggled to secure investors and has had strike prices inflated by the expense of financing the multi billion pound project.

Wright added: "A lot of work has been done on smaller modular nuclear reactors, much of it locally at the AMRC between Sheffield and Rotherham, and we believe these, in combination with wind, solar and tidal power, should be seriously considered. They have many advantages. They can be made in the UK, they have much better cash flow implications for the country, they do not need as much investment in our energy distribution infrastructure, and the costs and ease of future decommissioning are less."

Nuclear AMRC website

Images: EDF Energy

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