UK Business and Energy Secretary Greg Clark on 28 June announced a new deal with the nuclear sector intended to ensure “that nuclear energy continues to power the UK for years to come through major innovation, cutting-edge technology and ensuring a diverse and highly-skilled workforce”. The GBP200m deal was launched at Trawsfynydd in north wales – site of a closed down NPP now undergoing decommissioning.

This follows the government’s announcement earlier in June that it is to enter into negotiations with Hitachi over the Wylfa Newydd project. The deal includes “a strong commitment to increasing the diversity of the workforce so that more women can take advantage of new dedicated nuclear colleges and national schemes”, a government statement said. “Currently, the UK’s nuclear industry faces a lack of gender diversity, with only 22% of the nuclear workforce being female, and of this, only 15% being female nuclear engineers. This deal will deliver up to 100,000 jobs overall in nuclear by 2021 and significantly more diverse with a target of 40% women working in the nuclear sector by 2030.”

The Sector Deal will also see:

  • The unlocking of growth opportunities in the nuclear supply chain through joint government and industry support for smaller companies in the UK to access higher value contracts and new markets;
  • The strengthening of pioneering research with the potential for global impact with a national fusion technology platform at the UK Atomic Energy Authority’s Science Centre in Culham in Oxfordshire supported by government funding of GBP86m;
  • Up to GBP44m for research and development funding to support development of advanced modular reactors;
  • A dynamic new partnership with Welsh Government to develop a GBP40m thermal hydraulics facility in North Wales as part of the Nuclear Innovation Programme to support the design and development of advanced nuclear technologies;
  • A firm commitment from industry to reduce the cost of new nuclear build projects by 30% by 2030, and the cost of decommissioning old nuclear sites by 20% by 2030;
  • A new review to look at ways to accelerate the clean-up of nuclear ‘legacy’ sites (where there was previous nuclear activity) doing this safely whilst providing value for money to the taxpayer;
  • A significant reduction in the high costs associated with the sector through investment in new world-class technology, meaning nuclear energy can be produced in a more cost-effective way, and cheaper bills and peace of mind for energy customers;
  • The emerging findings of the Expert Finance Working Group’s analysis of small modular reactors (SMRs) – the independent group’s analysis suggest that the UK is well placed to develop first of a kind small reactor projects, and that the characteristics of small modular reactors could attract private investment.

The UK will be driving forward cutting-edge small and advanced modular reactors as part of this deal, the government statement said. “Smaller reactors using trusted light-water technology coupled with advanced modular manufacturing offer the potential for lower-cost nuclear power stations complementing the industry’s existing plans for larger scale new nuclear power stations.”

The breakdown of the GBP200m funding is as follows:

  • Up to GBP56m for R&D for advanced modular reactors;
  • Up to GBP4m in Phase 1 will support around eight reactor vendors to carry out detailed technical and commercial feasibility studies; up to GBP40m of further funding could then support 3-4 vendors to accelerate the development of their designs in Phase 2, subject to a value for money re-approval process with the Treasury;
  • Up to a further GBP5m may also be made available to regulators to support this;
  • Up to GBP7m of funding to regulators to build the capability and capacity needed to assess and license small and novel reactor designs, as announced in the Clean Growth Strategy
  • GBP86m for a National Fusion Technology Platform at Culham in Oxfordshire;
  • GBP32m for an advanced manufacturing and construction programme;
  • Up to GBP20m (subject to a rigorous business case) from government initial commitment of GBP12m from industry;
  • GBP30m for a new national supply chain programme;
  • Up to GBP10m from government (subject to business case);
  • GBP20m from industry (GBP10m from reactor vendors, UK supply chain companies and overseas markets; and GBP10m as contributions-in-kind).

Business and Energy Secretary Greg Clark said: “The UK is the home of civil nuclear technology and with this investment in innovation and our commitment to increasing diversity in an already highly-skilled workforce, I want to ensure we remain the world leader. Nuclear energy not only fuels our power supply, it fuels local jobs, wages, economic prosperity and drives UK innovation. This Sector Deal marks an important moment for the government and industry to work collectively to deliver the modern Industrial Strategy, drive clean growth and ensure civil nuclear remains an important part of the UK’s energy future.”

International Trade Secretary Dr Liam Fox MP said there is clearly a demand for UK goods and services from around the world. “This demand is exactly why we’re putting a strong emphasis on our ambition to secure GBP2bn of contracts related to the sector by 2030, both at home and overseas. As an international economic department, the Department for International Trade will continue to support our innovative businesses who want to access overseas markets with measures such as our award-winning export credit agency, UK Export Finance, our network of global Trade Commissioners and”

This is the fifth Sector Deal to be launched following the publication of the UK’s Industrial Strategy in November 2017. As a result of the deal, the nuclear industry will cut costs of new nuclear power stations by 30% by 2030, while cutting the cost of decommissioning old nuclear sites by up to a fifth – all essential to future-proofing this crucial part of the energy sector,” the government statement said. “The most recent UK energy figures show that nuclear provides more than 20% of our low-carbon, reliable, baseload electricity. According to recent research for the Nuclear Industry Association by Oxford Economics the nuclear industry contributes GBP12.4bn to the UK economy and provides long-term employment for 87,000 people across the civil and defence sectors.”

Good news for Wales and Cumbria

The deal represents a significant economic boost for Wales, with Trawsfynydd widely expected to be selected as a site for SMR development. Alun Cairns, Secretary of State for Wales, said: “It is particularly apt that we are launching the UK government’s nuclear strategy at Trawsfynydd. This site reflects both the past of our nuclear industry and an exciting future as the potential site for the new generation of small reactors, placing Wales at the centre of a UK arc of the nuclear industry.” He added: “Trawsfynydd is ready to be transformed with little upgrade needed to the grid infrastructure. It’s in the right place with the right people and good links to leading academic research institutions in the nuclear sector. The kind of small reactor which could be sited in Trawsfynydd is set to usher in an era of cost-effective power with equipment put together off site and transported to locations like this for relatively easy assembly.”

The Daily Telegraph quoted one industry source as saying that it is “highly unlikely the cash-strapped government will finance getting SMRs up and running, but by launching the sector deal at Trawsfynydd, ministers are signalling their support and willingness to create the right environment for the new technology to go ahead with private funding”. Leading contenders for such a programme include NuScale Power, which is building an SMR project in Idaho, and a consortium led by Rolls-Royce.

Duncan Hawthorne, CEO of Horizon Nuclear Power the Hitachi-owned company developing the Wylfa Newydd NPP on Anglesey in Wales, also welcomed the proposals. "It's a clear demonstration of how government and industry will work together to ensure nuclear continues to play a crucial role in providing clean, secure power for the UK, as well as delivering jobs, skills and investment across the country," he said. Under the sector deal plans the GBP40m thermal hydraulics facility to be built in North Wales will be a partnership between the UK and Welsh governments, with Menai Science Park on Anglesey understood to be the preferred location.

Cumbria Local Enterprise also welcomed the deal and said it was set to bring major economic benefits to northwest England. Jo Lappin, Cumbria Local Enterprise Partnership CEO, said: “We’re very pleased that a deal has been announced that sets out a clear and long term strategy for the nuclear sector. It’s great news for Cumbria given that the county holds many of the industry’s key assets, many of the skilled workforce, and a significant supply chain. It puts the county in a really good position to benefit from this deal.”

She added: “We welcome the particular focus on innovation and R&D, which reflects emerging priorities within the evolving Cumbria Local Industrial Strategy, plus the commitment to increase gender diversity. As far as supply chains are concerned, we are seeking an extensive business support programme which looks at emerging opportunities. The sector deal will also provide us with the resources we need to encourage more foreign direct investment into the area. Now that the deal is in place, we also expect that Cumbrian projects related to the nuclear sector and supported by the LEP will get some extra benefit when the government is allocating transport funding.”