Breaking into new developments

18 July 2017



In April 2017, Exelon Generation and Japan Atomic Power Company (JAPC) formed a joint venture company, JExel Nuclear, to assist Horizon Nuclear Power develop two Advanced Boiling Water Reactors (ABWRs) at Wylfa Newydd in Wales. David Flin spoke with Ben Russell from Horizon Nuclear Generation about progress on the project.


Horizon Nuclear Power was formed as a UK joint venture between the European utilities E.On and RWE in 2009, with the objective of developing “around 6000MW” of new nuclear capacity in the UK by 2025. The joint venture acquired two sites at Wylfa and Oldbury. At the time, Horizon had not decided which reactor technology it would use.

In March 2012, E.On and RWE placed Horizon up for sale as a going concern, as a result of changes in attitude in Germany after the Fukushima accident. In October 2012 Hitachi announced that it would buy Horizon, and the sale was completed in November 2012. Hitachi will build two Advanced Boiling Water Reactors (ABWRs), each of 1350MW, at Wylfa Newydd – a site adjacent to the original Wylfa site, where the original Magnox plant is now being decommissioned.

Horizon, Japan Atomic Power Company (JAPC) and Hitachi signed a technical services contract in July 2016 for the Wylfa Newydd plant. According to the contract, JAPC will support Horizon in construction costing, licensing, and planning for commissioning.

In February 2017, Horizon joined forces with Exelon Generation to help develop its expertise and capability to operate a nuclear power plant. Exelon operates the biggest fleet of nuclear power plants in the USA.

It operates 19,460MW at 22 units, eight of which are BWRs. In April 2017 Exelon Generation and JAPC formed a joint venture company to “leverage Exelon’s expertise in operational excellence and safety among international operators using Japanese reactor technologies.” The new company is called JExel Nuclear.

Hitachi plans to bring other shareholders into ownership of the plant.

Progress at Wylfa Newydd

Ben Russell, spokesman at Horizon Nuclear Generation, said that the project is divided into three separate phases: development, construction and operation.

Development is well under way, and should continue until 2019. The licensing processes are well underway, and are on schedule.

Generic Design Assessment (GDA) for the ABWR design started in 2013. The Office for Nuclear Regulation (ONR – the nuclear safety regulator), and the Environment Agency and Natural Resources Wales (environmental regulators) announced in March that the GDA should be completed in December 2017.

Horizon applied for a nuclear site licence in April 2017 for the Wylfa Newydd site, which focuses on topics such as the suitability of the organisation, the suitability of the site and the suitability of its reactor design for use at the site. Mike Finnerty, deputy chief nuclear inspector and director of the ONR’s New Reactors Programme, said: “This is the first licence application for a new nuclear power station since 2011, and over the past three years we have been engaged with Horizon, providing it with advice on the licensing process and the robust requirements expected of a nuclear site licensee.” ONR will be conducting a 19-month assessment into the 36 conditions placed on a nuclear site licensee.

With design and site licensed, Horizon must gain a Development Consent Order to construct the plant. In May 2017, Horizon Nuclear Power launched a third and final consultation on the Wylfa Newydd plans. This will be the final consultation before the DCO application is submitted to National Infrastructure Planning (NIP), part of the Planning Inspectorate, which assesses and grants such applications. The consultation runs until 22 June 2017.

NIP operates to a strict timetable. Once an application is submitted NIP has 28 days to decide whether to consider the application. A three-month period of pre-examination allows interested parties to register to make representations. The Inspectorate then has six months to examine the application, and three months more to make a recommendation to the Secretary of State. The Secretary of State has three months to make a decision.

Russell said that Horizon planned to have all the major permits in place to allow it to effectively pursue the necessary investors. Hitachi is negotiating with the UK’s Department for Business, Energy and Industrial Strategy (BEIS) and on an electricity price guarantee. The price will be fixed via a Contract for Difference (CfD). That mechanism has been used to guarantee a price for the UK’s first new nuclear plant, EDF Energy’s Hinkley Point C. But recent reports suggest that Horizon will have to accept a price significantly lower than that achieved by Hinkley Point. The London Financial Times suggested that the price for power from Wylfa would have to be around 15% lower – at the £85/MWh level.

It has been reported that Hitachi wants to hold only a minority stake in the company, and will be seeking other investors for Wylfa Newydd. Preliminary investment is expected to be in place by the end of 2018. There will then be a period of approximately one year to bring in additional investors and resolve the issue of government support, with final investment settled by the end of 2019.

Russell said that there were a number of political question marks that needed clarification. The most significant of these were the implications of Britain’s withdrawal from the European Union, although this was an issue for governments to resolve, rather than individual companies.

One complication is Britain’s withdrawal from Euratom as part of the Brexit proceedings. Wylfa Newydd is expected to get its nuclear fuel from the USA, but USA nuclear co-operation agreements – which allow for transport and use of nuclear materials – are with Euratom, and the UK is expected to exit that organisation. New agreements will be required between the US and UK governments. Russell said, the UK government understands the importance of the deal, and is working to resolve this.

Construction

The second phase of the project, construction, will begin once the licensing and investment have been resolved. The natural course of construction will be to commence with the bulk earthworks, and preliminary construction, before starting nuclear construction.

Included in the construction will be an improvement in the transport infrastructure. The main construction activities include:

  • Construction of the new power station access road.
  • Establishment of large temporary construction compounds to allow for storage of materials and temporary construction materials.
  • Construction of haul roads and bridges.
  • Route improvements.
  • Construction of a concrete batching plant.
  • Marine construction, including breakwaters, cooling water intake and outfall, and a marine off-loading facility. Construction of temporary workers’ accommodation within the Wylfa Newydd Development Area.
  • Deep excavations and tunnelling for construction of the foundations of the main plant. 
  • General construction of all power station buildings, facilities and structures, and installation of all major equipment.

Russell said that the marine off-loading facility would be used as the most effective way of enabling big items and bulk material to be brought to the site.

Operation

The third phase of the project is operation. Unit 1 was scheduled to start first commercial operation in 2025, and unit 2 was scheduled to start commercial operation in 2027, but Horizon currently says commissioning will be in the ‘mid 2020s’.

One of the issues facing the construction phase is that of available skills. This is more significant for the construction phase than for operation. Because there has been no new nuclear build in the UK since Sizewell B was completed in 1995, there is a gap in new-build experience. By contrast, at around the time Wylfa Newydd starts commercial operation, many of Britain’s older reactors will be closing down, and experienced operators will become available.

With regard to construction, the challenge, according to Russell, is not whether the skills are available. There have been many big infrastructure projects, and these have been successfully carried out. The challenge is that there are a lot of large infrastructure projects being undertaken at the same time, and these will draw on the same skill sets that Wylfa Newydd will need.

Horizon is putting a lot of effort into making sure that the skills it will need when construction starts are available. It has an apprenticeship scheme, which started in 2016, with 12 apprentices being accepted. The second tranche, which opened for applications in February 2017, was heavily oversubscribed, with over 300 applicants for the 12 places. Horizon has also provided £1 million in funding and technical support to the Engineering Centre at Coleg Menai, one of the colleges under Grwp Llandrillo Menai.

The company has also got active schemes to encourage young people, at various stages of their education, to have an interest in science and technology (see NEI April p22-23).

Social licence

Russell said that an important factor in the development of the project was local acceptance. Anglesey already hosts the Magnox reactor at Wylfa, enabling the local population to realise that nuclear plants are generally good neighbours. Being co-located with the Magnox site means that there is also a pool of nuclear operators to draw upon. The company emphasises that operating the power plant will bring economic benefits to the local community, with approximately 850 long-term jobs at the plant, bringing an estimated extra £20 million annually into the local economy. During peak periods, there will be a construction workforce of between 8000 and 9000.

The company claimed that investment in the site and the surrounding area, including new transport links, will see up to 60 percent of the value of the first generating unit invested in locally and UK-sourced materials and services. This figure is likely to rise with each subsequent unit.

Russell said that the local population has generally been very supportive of the plan. The company undertakes community funding and sponsorship activities to boost relationships with the local community. Last year, Horizon donated over £80,000 to local causes.

The next key date in the roadmap of progress for Wylfa Newydd is the end of 2017, when the GDA should be completed. That would enable a Development Consent Order to be awarded by the end of 2018, and the plant investors to be finalised.  

New Build
New Build
New Build Wylfa Newydd will be build next to the Wylfa 1&2 magnox units, which retired in 2015
New Build Andy Bevan, Nuclear Site Licence Manager and Anthony Webb, Safety and Licensing Director submitted the Wylfa Newydd site licence application in April 2017
New Build


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