Areva, the French nuclear giant, has joined forces with the British government to rebuild the industrial base needed to construct new nuclear power stations in Britain.
The plan comes as the nuclear industry takes stock of the crisis at the Fukushima nuclear plant in Japan. Friday’s huge earthquake led to an explosion, a release of radiation and the forced evacuation of hundreds of thousands of residents from the surrounding area as engineers frantically worked to prevent a meltdown.
Chris Huhne, the energy secretary, said: “It is much too early to say what the impact and implications are. We will be working closely with the (International Atomic Energy Agency and Japan to carefully establish what lessons can be learned.”
The accident will revive the debate over the technology just as Britain pushes ahead with one of the world’s most ambitious nuclear programmes.
It expects up to a dozen reactors to be built over the next 15 years. British expertise in the sector is a shadow of what it once was, yet this is just one of the many obstacles that threaten to derail the industry’s renaissance here.
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Rakesh Sharma, chief operating officer at Ultra Electronics, a nuclear contractor, said: “The last new instrumentation system to go through the [UK] nuclear inspectorate was in the early 1980s. Our industrial base has been diminishing since then. The whole industry is now gearing up again but there will still be a capability crunch.”
Each of Areva’s new European Pressurised Reactors will create up to 4,000 building and manufacturing jobs, according to its forecasts. The group is due to build four for EDF Energy and is vying for several other contracts.
Critics fear that cheaper Asian manufacturers or French engineers will benefit most from the jobs bonanza. Areva this week launched a joint venture with the National Advanced Manufacturing Research Centre (NAMRC), a group set up with taxpayer backing last year in Rotherham, South Yorkshire, to ensure that British manufacturers are brought into the fold.
Today, only 20 UK companies have been approved to work in the industry but 370 have applied to Areva to begin the qualification process. Under its new agreement with NAMRC, the French giant will help shepherd companies through the meticulous education, safety and procedural requirements for approval.
Rob Davies, head of new build at Areva, said: “The supply chain is there but there is a lot of work to be done to bring these companies into the nuclear world.”
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Last week, Areva signed Rolls-Royce, a contractor on Britain’s nuclear submarines, as its main British manufacturing partner. Davies said, however, that bringing smaller firms up to nuclear standards is critical. David Simpson, head of nuclear advisory at KPMG, the accountant, said: “This is the largest infrastructure building programme for at least the past 100 years and Britain has to relearn many of the skills that have been lost in recent years .
“The safety aspects of manufacturing for nuclear are fundamentally different to other industries and the standards are exacting. Companies must show they can provide components to the required quality.”
It is a cause close to the government’s heart. As Britain struggles to move beyond recession, the nuclear revival represents a rare opportunity to resurrect a domestic industry.
Davies said: “We are priming the pumps. There are 61 reactors being built around the world and there will be more. Britain can become a leader in the industry.”
Cost is another of the stumbling blocks in the way of Britain’s nuclear regeneration. Horizon Nuclear Power, the joint venture set up by RWE Npower and Eon, the German utility groups, is understood to be looking for a new partner to help share the financial pain. Each reactor is expected to cost at least £4 billion.
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EDF Energy, which has gone into partnership with Centrica, the owner of British Gas, is also heavily indebted. NuGeneration, the third consortium that consists of GDF Suez, Scottish and Southern Energy and Iberdrola, has the least advanced plans. The timetable, meanwhile, is slipping. The government and EDF set 2017 as the target date for the first new station to begin producing electricity. Sharma at Ultra Electronics said that given the numerous problems that still have to be overcome, the more likely target is 2020 or 2021.
The size of the financial carrot the government will offer to entice the industry to push ahead with its plans is key. Late last year, the department of energy published its proposal for electricity market reform, a new regulatory regime that will introduce a floor to the wholesale price of electricity, which developers said was indispensable before they agree to build.
Some fear that events in Japan could derail plans here. An analyst drew parallels to the meltdowns at Three Mile Island and the Chernobyl disaster. He said: “Chernobyl set the industry back for decades.”