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The Nuclear industry in 2018: what next?

We look at key trends and developments now and in the future

The nuclear industry is facing one of its biggest ever challenges – and 2018 is expected to be an important year in determining how it’s resolved. As old infrastructure is decommissioned, we examine how the UK’s new generation of nuclear plants is shaping up, and the obstacles that need to be overcome to make these plants a commercial reality.

Out with the old

Our country is a pioneer in the use of nuclear energy to generate electricity, building the world’s first commercial nuclear power stations from the 1950s onwards. As has been widely reported, though, this means our nuclear plants are now coming to the end of their useful lives, if they haven’t already been shut down.

There are currently 15 reactors across seven sites in the UK generating about 21 per cent of our electricity, all owned and operated by EDF Energy. Almost half of this capacity will be retired by 2025, and all are due to close by 2035.

Governments in the past 10 years have been generally supportive of nuclear as an important part of the UK’s energy future, based on its credentials as a reliable, clean alternative to polluting fossil fuels. However, past underinvestment means there’s a lot to do to get up to speed.

In with the new

There are proposals for new plants at six sites across England and Wales as part of the ‘new build’ programme. Only one project is underway: Hinkley Point C in Somerset, the first new nuclear plant to be built in the UK since the 1990s.  The project is expected to employ as many as 25,000 workers during construction, and create 900 permanent jobs down the line. The first reactor should start operating by 2026. However, mounting bills have attracted media headlines: EDF estimated the cost at £18 billion in May 2016 but this was raised to £19.6 billion last July.

EDF is also planning another project, Sizewell C in Suffolk, which may be under construction by 2021, depending, of course, on funding. The company has indicated that the lessons learned from Hinkley Point C could result in substantial savings of as much as 25 per cent at Sizewell, making it more attractive to investors.

Other proposed sites include:

  • Moorside, Cumbria
  • Wylfa, Anglesey
  • Bradwell, Essex
  • Oldbury, Gloucestershire

The challenge ahead: funding

The experience at Hinkley Point C highlights one of the biggest issues with any nuclear project: the high cost of infrastructure investment.

To add to the pressure, it’s now high time for funding proposals to stack up if new projects are going to get off the ground in time to replace ageing reactors.

There are some favourable signs. Since the UK is one of only a handful of developed economies planning new reactors right now, there’s plenty of international interest, especially from Asia: Chinese, Japanese and South Korean companies all have a stake in the new build programme. However, industry experts warn that these projects won’t go ahead unless there’s some government support, for example, assistance to reduce debt financing costs.

One prospect is the development of next generation ‘small modular reactors’. The government announced in December a new three year funding package to support research and development into this promising new field.

The challenge ahead: the skills crisis

The industry is feeling the pain from a shortage of skilled workers, as experienced personnel retire and not enough young people fill their shoes. It’s a problem that’s only going to become more acute if and when new projects break ground.

Everyone agrees that there needs to be a bigger focus on attraction, retention and training, but how to do this right is the multi-million-dollar question – especially as nuclear faces heavy competition from other construction sectors such as rail to secure and retain top talent.

The Nuclear Skills Strategy Group’s 2017 assessment predicts that the number of people employed in the nuclear workforce will need to increase from almost 88,000 to more than 100,000 by 2021 to meet demand. Where all of those extra workers are going to come from is the second multi-million-dollar question.

The uncertainty surrounding Brexit is also causing angst – will it make it more difficult to recruit much-needed specialists from continental Europe? Will such workers be less attracted to positions in the UK?  Only time will tell.

Where to from here?

It’s said that challenges always present opportunities. Expect plenty of announcements about industry deals and agreements during 2018, and, if you’re working in the sector, the possibility of exciting new prospects.

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