As a newly qualified solicitor, I joined the nuclear industry in 1994 to advise on planning and environmental law. Since 1994, much has changed in the industry. We saw the creation of British Energy and the Nuclear Decommissioning Authority, with the broad division of operational and decommissioning stations split between the two.
The creation of the NDA paved the way for the UK nuclear industry's engagement, in decommissioning and waste management, of the international private sector with the transfer of costs and commercial risks. The engagement of newly formed site licence companies has achieved public benefit in overall site decommissioning programme and cost reductions – and has been a success on many fronts including attracting personnel with international experience and expertise.
The Government's efforts to secure private investment in nuclear energy production is not new and can be traced back to the privatisation of British Energy. Should we be concerned that all of the currently proposed new nuclear stations will be foreign owned? The UK government had no such concerns in September 2008, when it allowed EDF's acquisition of British Energy.
What is plain is that the government is very focused on securing investment in the UK's decaying energy network.
Earlier this year the UK government agreed a "strike price" with EDF Energy for each megawatt of electricity produced every hour from the proposed nuclear power plants at Hinkley Point, Somerset and Sizewell, Suffolk. It was also announced that Chinese companies China National Nuclear Corporation and China General Nuclear Power Corporation will be minority shareholders in the project at Hinkley Point. These twin announcements combine to provide a green light for the commencement of construction of new nuclear stations as Hinkley Point C. Whilst the local community may not be as supportive as that found elsewhere, it is clear that new nuclear generation is required to enable the UK to enjoy security of supply and, that nuclear energy provides a low carbon supply of electricity.
On 4th December 2013, the Chief Secretary to the Treasury, Danny Alexander, announced that the government had signed a co-operation agreement with Japanese energy company Hitachi "to promote external financing" for a new nuclear power plant at Wylfa on the island of Anglesey, Wales. The site was bought by Hitachi for around £700m in October 2012 and the plant will be built by Horizon Nuclear Power, a subsidiary of Hitachi.The 'opportunity' was bought from E.ON UK and RWE npower, a joint venture which withdrew from nuclear in the UK following the German government's announcement to replace nuclear with renewables as part of its domestic energy mix (in carbon terms it is interesting to note that since the change in domestic German policy its coal fuelled energy production – and CO2 emissions have increased).
The government has agreed to provide a loan guarantee to Hitachi to help it finance the project, subject to final due diligence and ministerial approval". David Jones, the Secretary of State for Wales, said the announcement was a "strong signal" of the UK government's commitment to new nuclear power.
Horizon has agreed "important strategic contracts" with Amex, Atkins and Cavendish Nuclear to provide engineering and related services for the Wylfa Newydd project. Horizon has said that the three tier 1 suppliers will "work collaboratively with their respective supply chains and Horizon for the next three years, focusing on preparatory technical activities for the new nuclear power station and supporting the development of expertise within Horizon itself." The suppliers will cover development and planning, site investigations, engineering support, environmental permitting and waste management, as well as planning and project management support. Hitachi-GE, a joint venture between Hitachi and General Electric, is the technology provider and delivery team leader for Horizon's new-build plans and has already been contracted to perform front-end engineering and design work for the proposed Wylfa site.
It is not only Japanese companies investing in the UK nuclear sector. Several Chinese firms have also signalled their intent to invest in UK nuclear power plants. China currently have 17 nuclear reactors in operation and another 28 plants are under construction. A memorandum of understanding between the UK and Chinese governments was signed during a UK trade envoy to China this Decemberwhich sets the strategic framework for collaboration on investment, technology, construction and expertise.
With over two decades of Nuclear experience of infrastructure development, Zyda Law welcomes the opportunities the new build bring and will harness our cross sector expertise to assist our new market entrants in navigating necessary regulatory and statutory processes to achieve development consent order and environmental permits.
The Chinese trade memorandum also provides for Chinese technicians to come to Britain for training in radioactive waste management – a clear opportunity for the Nuclear Decommissioning Authority (NDA) to show case UK sites as centres of decommissioning excellence. Dounreay for instance has won many international awards and made significant progress on decommissioning its three former nuclear reactors. We are proud to continue our long association with Dounreay, having first been instructed by UKAEA in 1997.
It is with regard to the UK's plans for the management and disposal of high and intermediate level nuclear waste that I think the UK government has missed an opportunity. Whilst we shall wait to see what effects foreign development and ownership of new nuclear stations will have (I personally think very little), we have seen in nuclear decommissioning and waste management that private funding and initiatives add value and save public funds. Why then, does the UK government not attempt to secure international investment in securing the UK's sustainable long term management of nuclear waste?
The GDF must be more than a long term policy aspiration. By attracting investment major infrastructure projects often find a new momentum. DECC's latest consultation exercise on the siting of a GDF strongly suggests that new initiatives and impetus is required. With the government successfully securing investment in new nuclear generation, the need case for the UK to have an operational deep geological facility for the long term sustainable management is growing.
Paul Zyda, a planning and environmental nuclear lawyer, and founder of Zyda Law* (LEGAL500 Tier 1) welcomes the Governments successes in attracting investment in the renewal of the UK's nuclear power stations but questions the missed opportunity to secure investment in the UK's proposed Geological Disposal Facility (GDF).
*Zyda Law is an award winning UK infrastructure practice with expertise in energy, waste, transport and water infrastructure development. Over the last decade it has a 100% success record for major infrastructure projects.
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