AEA Technology rides the commercial wave30 November 1998
Privatised in September 1996, AEA Technology’s success shows there are many opportunities for commercialisation of nuclear technology, often in fields well beyond the nuclear industry itself. by NOLAN FELL
When the UK government privatised AEA Technology, separating it from the UK Atomic Energy Authority, no one was sure whether it would succeed. A value of £224 million was put on the company and shares were sold at 280p each. By March 1998 the company’s value had risen to £638 million, with individual shares worth over 600p. The rapid growth in the company’s value has led to concern that it was sold off too cheaply, with the UK taxpayer the loser (See NEI, September issue, p6).
No doubt about the winners, though. 89% of AEA Technology’s work force own shares, with the board looking for ways to increase the stake employees have in the business. 4500 people now work for AEAT, up from 3500 at privatisation; more than half are scientists or engineers with over 10% trained to PhD level. With a motivated and highly educated work force boasting considerable expertise in the nuclear field, diversification is fuelling growth which concentration only on the nuclear industry would fail to deliver.
The company’s site at Harwell in Oxfordshire is where the UK’s atomic programme began. Initially with a focus entirely on military applications, the emphasis shifted over a number of years towards power generation, with the site at Winfrith boasting over 20 research reactors. The largest, the Steam Generation Heavy Water Reactor (SGHWR) contributed to the national grid, whilst others were used for criticality and shielding research. All the reactors have now been closed down, with the SGHWR ceasing operations in the early 1990s. Although never official policy, there was a perception that the UK government was turning its back on nuclear technology, a trend taking place throughout the world. Given this reality the UKAEA had to encourage technology transfer if those whom it employed were to have any work to do.
As with many stories of technological development, the company is reaping the rewards of decades at the leading edge of science, with its knowledge being applied in ways which the pioneers of the 1950s could never have foreseen. Of the 11 businesses AEA Technology now runs, only four are directly connected with the nuclear industry. The others include batteries, engineering and process software, environmental remediation, rail technology and consulting.
“We are a new business – but one with over 40 years of experience at one of the twentieth century’s most exciting scientific frontiers,” said business chairman Chris Wright at the BNES/BNIF 2nd Nuclear Congress last year.
Early attempts at diversification resulted in a classically British outcome. Whilst the science and engineering were often brilliant, the commercialisation and business acumen were not there. In the 1970s, scientists at Harwell were involved in the development of vehicle exhaust catalysts using knowledge gained from work on steel alloys and a process for making oxide nuclear fuel pellets. Now a huge worldwide industry, AEA Technology failed to gain much, financially. Nor did it succeed in profiting from the emergence of carbon fibre materials now widely used in military aircraft, satellites and rockets as well as more down to earth applications in tennis rackets and golf clubs. AEAT had been working with graphite as a moderator for the UK’s advanced gas cooled reactors (AGRs) since the 1960s and its expertise was vital in developing a continuous production process for carbon fibre, first used in rotating cylinders for separating nuclear fuel.
Privatisation meant AEA Technology had to profit from its expertise and a change in culture was necessary for this to happen. Compared with the nationalised era there are now more people in the company with commercial experience, bringing in understanding of market research, marketing and the importance of legal protection such as patents.
“There was no precedent for a company like AEA Technology. We had to set up internal systems to focus research in areas we knew had commercial potential,” said John Hudson. Now commercial director for Canada, he has in the past managed research programmes in materials science and chemistry and waste management.
One of AEA Technologies greatest successes to date has been the development of its battery business, which has emerged over more than 15 years.
“We had the science skills – including electrochemistry, materials science, thermal management, and cell design – because of our work on reactor technology and reprocessing,” said Wright. “In the case of our sodium batteries which are currently powering electric vehicles, our understanding of sodium chemistry is an obvious spin-off from our nuclear work.” Research into the development of a component of the sodium battery led to a patent for a new concept in rechargeable batteries using lithium ion electrodes. The first US patent was granted in 1981, but for years nothing much happened. However the emergence of portable personal computers, led to a demand for rechargeable batteries. All major computer manufacturers now have licences for batteries designed by AEAT and the company is building a factory in Thurso, Scotland, to produce two million cells a year, its first venture into commercial scale production. Future battery markets could include electric or hybrid vehicles and lithium ion polymer batteries which could be made in a wide variety of shapes.
Another major business is process simulation software. Initially developed for safety analysis in nuclear reactors, the company’s CFX software was used to model the fire which led to a major catastrophe at Kings Cross underground station in 1987. The results of the modelling exercise were so successful the commercial potential of the software became immediately apparent.
“In just seven years, we have propelled CFX from a little-known code to what is considered by many as one of the world’s leading engineering software products,” said Wright. “It is now used by over 500 organisations worldwide to perform a variety of tasks, ranging from wind tunnel predictions to improving aerodynamics and to optimising the design of process plant.” The company’s success with CFX put it in a strong position in the simulation market and it has recently widened its interests by acquiring the Canadian process simulation company Hyprotech, which specialises in the oil and gas industries and the Sheffield based nCode International, which produces fatigue and lifetime improvement software for the automotive industry.
Other developments include: ultrafiltration processes which help remove the brown colour from peaty water; a land remediation kit designed to pinpoint contaminated areas with the help of global positioning satellites (initially used for radioactive contamination its application is widening to detect volatile organics and other substances); non-destructive testing techniques developed for safety analysis in the nuclear industry (recently used on oil storage tanks in Saudi Arabia); and medical applications emerging from expertise in the physiology of lungs and bones, gained through understanding of the impacts of radioactive elements on the body, such as improved treatments for osteoporosis and asthma.
Life extension and remediation
With the closure of AEA Technology’s research reactors over the last decade, the company now has considerable expertise in the experimental field, but no reactors to work on. Much of its work is now as a consultant to other reactors. A small group is working on rig construction at Petten in the Netherlands. A significant area of expertise is neutron embrittlement and the company has many contracts for taking samples from reactors to survey them for signs of fatigue.
AEAT also analyses fuel burn-up, examining the fission products within MOX fuel or from rods that have spent an unusually long time within a reactor.
“We cut up the rods and examine them,” says David Coates, former head of operations on AEAT’s Dido and Pluto research reactors. “We can determine the spatial distribution of all elements within a rod and can predict the lifetime of the fuel from this. We can also say whether we need to reduce the copper content within the steel cladding. The levels of copper are a debate at the moment, the US thinks copper is a good thing, the French don’t.” Another major area of consultation work is clean up and decommissioning. British Telecom is currently working to remove tritium from telephones produced mainly in the 1980s, whilst the Ministry of Defence is working to remediate areas in which radioactive material has been dumped. AEAT is also involved in work in the United States where the cold war military programme has left a legacy including hundreds of above ground radioactive waste tanks, some of which are leaking and require immediate attention.
Decommissioning and remediation are clearly areas where considerable amounts of work will be available for a number of years to come. In the last year AEAT has formed a joint venture company with the Canadian nuclear engineering company Canatom, to bid for contracts in the Canadian decommissioning and waste management markets. AEAT believe this Canadian market is likely to be worth £20 million a year within five years as privatisation leads to the closure of old reactors. AEAT is also bidding, with Atomic Energy of Canada Ltd, for a large piece of remediation work at Chernobyl.
It is clear that many of the people working at AEA Technology regret the loss of the research reactors at its own sites. Jim Page worked with research reactors Dido and Pluto from their birth in the late 1950s. He was involved in the first efforts at commercialisation, when Walter Marshall, head of the UKAEA during the 1970s, investigated the possibility of selling short-live isotopes for medical applications. Page feels that by closing most research reactors in the UK, the country has lost out to reactors elsewhere which have had their lives extended and now supply the isotopes and other services which AEAT used to be able to do.
Reactor life extension is a major area of activity now, with very few new reactors being built anywhere in the world. AEAT is working with Belgium to extend the life of its BR2 100 MW test reactor. Built in the late 1950s, the peak of research reactor construction, it is one of many reactors from that era that have enjoyed extensions to their lives beyond what was originally expected. One country considering a new reactor is Australia, where the Australian Nuclear Science and Technology Organisation is looking to replace a research reactor at the Lucas Height Science and Technology Centre near Sydney. AEAT is involved in the development of the proposal, helping the Australians produce tender documentation. The Australians do not have a nuclear power programme but see considerable growth in the demand for medical isotopes, currently running at 300 000 doses a year. This market could grow from the current figure of Aus$8 million a year to Aus$30 million a year by 2005. The research reactor could also benefit the Australian uranium mining industry by around Aus$100 million a year.
AEA Technology is a company which is benefiting from the expertise and experience it has in the nuclear field by applying these in a wide variety of areas. Privatisation was a step into the unknown, but one which has paid off spectacularly and AEAT may be reaping the rewards of being the first company of its kind to enter the commercial world. The emphasis on turning ideas into commercial products has produced a new project which the company hopes will encourage future successes. AEAT recently launched Innovations Plus. The aim is to encourage new ideas and inventions which may have commercial potential. The scheme is open to anyone.
“All those who approach us are first advised to seek suitable legal protection for their idea before disclosing it to us or anyone else,” says Chris Wright. “Ideas are scrutinised by a panel of scientists, engineers and business managers. Those ideas deemed to have a good chance of success and considered close enough to our areas of expertise for us to offer value to the inventor, are then taken forward.” AEAT is enthusiastic about the response to its new initiative and is confident that new products will emerge from Innovations Plus. The success and rapid diversification of AEAT reflects the undying quality of work on the cutting edge of science. The nuclear industry has suffered much criticism down the years, but the wide variety of activities and markets that AEAT is now involved in reflect the diverse uses to which knowledge can be put.