Investing for growth and energy security
Sir Alex Chisholm, UK Chairman
| EDF
Last Friday, many across the country were celebrating Valentines Day. Perhaps buying a box of chocolates, or a bouquet of red roses from the local florist.
In a small corner of Suffolk, we were also celebrating another very significant anniversary – the 30th ‘birthday’ of the Sizewell B nuclear power station. Completed in 1995, the power station has employed thousands, already delivered £15bn in economic value for the country and supplied clean power for decades. Something truly worth celebrating.
This important milestone is particularly relevant at a moment when the Government is seeking to pull out all the stops to boost economic growth by building new infrastructure, including nuclear power stations like Sizewell B. The determination is clear – the Chancellor recently committed to “changing the rules to stop blockers getting in the way of development”. Economic growth is now code for “Build, Baby, Build’’.
Building large-scale infrastructure projects is far from easy. They require a skilled workforce, determined leadership and sustained political support. Projects can take decades to move from a drafted plan to construction. Taking time to get them right is understandable – a nuclear power station can last for a century – but the longer it takes, the higher the costs tend to be.
It’s easy to argue that in the UK today it’s impossible to build mega-projects like nuclear power stations quickly and at a competitive cost. We don’t have the domestic workforce nor all the right skills. Planning is challenging. Environmental rules get in the way.
But is that really such a modern phenomenon? In 1957, the Government of Harold Macmillan set out a target to build over 5GW of nuclear power stations within 8 years - a 25-fold increase – alongside a further 7GW beyond that. You might assume that the gung-ho optimism of the period made this feel readily attainable. Easy, even.
Far from it. The commitments led to an intense political debate on where these new power stations should be put. Whether there was the right workforce to build them. What it would mean for the Government’s challenging fiscal position.
Sound familiar? It should, as this is the exact debate we are having today.
A debate that the Prime Minister responded to directly earlier in the month, with a renewed commitment to transform the way we build nuclear power in this country.
As the Chairman of the company trying to build the first fleet of new nuclear power stations in a generation, I know the importance of this statement, and the size of the prize on offer.
Take Hinkley Point C – the first new nuclear project since Sizewell B started generating 30 years ago. The scale of the project is vast – over 15,000 will be working on the project this year, supported by 22,000 people in factories and businesses across Britain. We have had to train thousands, building state-of-the-art training facilities in the West of England solely for that purpose.
Alongside establishing the workforce, there have been countless regulatory hurdles to navigate that have carried a growing cost burden. As the PM noted, three European regulators reached different assessments of the reactor design for the project, leading to increased costs and delays.
But despite all of these challenges, has it been worth it?
Unequivocally, yes.
You could point to the energy security benefits – Hinkley alone will deliver power to 6 million British homes. And all of it clean power.
But there is a wider economic prize. Over 60% of the value of the project goes to British businesses and £5.3billion has so far been spent directly with local businesses. For a government laser focused on pursuing growth, this is growth that is happening now – not decades in the future – right across the country.
And it is just the start. Sizewell C in Suffolk is the next project in the pipeline. While it is still awaiting a Final Investment Decision due in the summer, £2.5bn has so far been invested in the project with 300 UK suppliers, with a target of 70% of project spend being made in the UK. The project will unlock economic growth over the next decade, attracting billions of pounds in foreign investment into the UK.
The lesson is to ‘build and repeat’ a proven design with as few changes as possible. This helps to bring costs and risk down as expertise, supply chains and skills are developed. We are seeing performance improve by 20-30% when we repeat work carried out on Hinkley’s Unit 1 on our identical Unit 2. Sizewell C will build on the huge progress being made at Hinkley and is starting construction with a completed design, a skilled workforce and a supply chain ready to deliver.
These learnings will not stop at Sizewell either, but will benefit the future crop of nuclear power stations, including the exciting developments around Small Modular and Advanced Reactors.
The capability we have already established stands to have lasting economic value for the nation, delivering economic growth today, but also building the capability to do things quicker and cheaper in the future.
So to bring it back to where it all started – what happened to the ambition shown by the early nuclear pioneers in the 1950s and 60s?
Well despite the scepticism and the challenges they had to grapple with, they did it, managing to build over 12GW of nuclear power in the decades that followed. The benefits have been enormous and often overlooked.
It’s all too easy to say that such an achievement couldn’t be possible today. But then again, they thought that then too.
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