News coverage of Britain’s biggest union, Unite, may have focused on its involvement in resolving the Lindsey Oil Refinery dispute of late, but perhaps less broadly reported was an important one-day conference hosted by the union last week in Westminster. 'New energy brings new opportunity' explored opportunities for the engineering supply chain in terms of job creation and export, with contributions from some of the major players, including Scottish Power, RWE NPower, Rolls-Royce, Doosan Babcock and Sheffield Forgemasters.
Unite believes that the nuclear and clean coal energy sectors could create 10,000 skilled manufacturing jobs over the next ten years and national officer, Dougie Rooney thinks that, with the right support from the UK government, Britain could become the centre for a global engineering supply chain. His statements were echoed by keynote speaker, Business, Innovation & Skills secretary, Lord Mandelson
According to Lord Mandelson, the nuclear industry is “clearly somewhere where the potential signs for Britain are good”, thanks to our nuclear heritage, strong skills base and the fact that we’ve been building, managing and now decommissioning reactors for more than forty years. The International Atomic Energy Agency estimates that at any one time between now and the year 2030 there will be up to 50 reactors under construction around the world. In Britain, all but Sizewell B of the current fleet of reactors will be retired by 2023. Thus if we are to embrace nuclear as part of our energy mix – and it seems very likely that we will - we can expect to see at least eight new reactors built in this country in the near future.
Dougie Rooney reminded his audience that Britain once took the lead in developing nuclear power generation technology. “The government must foster the right environment for British manufacturing to flourish once again,” he said. “The export potential is global and reaches out to countries including India and China. The opportunity to create thousands of highly skilled jobs in the UK over the next ten years cannot be missed, it has to be realised."
That is a commendable stand to take, but to be realistic about Britain’s nuclear power generation industry, it is probably not unfair to say that we have missed the boat as far as the core technologies are concerned. Future reactors for the UK will be designed and built by the big global nuclear specialists such as the French Areva Group and the American Westinghouse Electric Company. And, not wanting to appear too insular in these matters, I need hardly point out that they are going to be owned and operated by an energy group that has its roots in France.
But the object of Unite’s conference was not to wallow in nostalgia, rather to remind us of the very real supply chain opportunities that lie ahead – opportunities that really must be grasped now if we are to obtain the sort of benefits envisaged by Lord Mandelson and his fellow speakers at the conference. And, despite our current straitened economic circumstances, there was an encouraging amount of optimism emanating from the podium.
Graham Honeyman, chief executive at Sheffield Forgemasters International spoke of his company’s plans for the development of a 15,000 tonne press at its Brightside Lane site, which would be amongst the largest in the world. “This press would allow Forgemasters to make ultra-large forgings to service civil nuclear contracts, but also to meet increasingly high demand for ultra-large forgings in other power-generation sectors across the globe,” he said. “Such a project would immediately create several hundred jobs both in construction and operation in our area, but would also enable the formation of a manufacturing supply chain which undoubtedly creates a labour demand.”
This very point was picked up by Lord Mandelson who conceded that the UK and, indeed, the wider world lacked the forging capacity for ultra-large components and reactor pressure vessels. There are only a handful of such forges in the world and a UK-based facility such as the one proposed by Forgemasters would be an immense commercial asset to this country. The Secretary of State revealed that his department was looking carefully at both private and public sector options for encouraging the development of such capacity in the UK.
ScottishPower chief executive, Nick Horler, whose company has taken the forefront in carbon capture and storage (CCS) demonstration at its Longannet coal fired power plant, believes that the UK can lead the world with CCS technology, creating new skills, jobs and opportunities for growth. ScottishPower parent company, the Spanish energy giant Iberdrola recently announced its intention to make the UK its global centre of excellence for CCS. But Horler is fearful about letting timeframes slip. “The UK has the required engineering skills, the academic expertise, the natural resources and a supportive government - all the elements needed to take the lead in developing CCS technology,” he said, hinting that the CCS demonstration project at Longannet could kick-start a new industry that has the potential to be as big as North Sea Oil.
We might be forgiven for thinking that all this is going to be the preserve of the ‘big boys’ and there will be lean pickings for the rest. Lord Mandelson welcomed the exceptional line up of top-tier companies that have chosen the UK to build their civil nuclear strengths, but he also wants them to work with other UK-based firms, especially small-to-medium sized enterprises, in building up the wider nuclear supply chain in the UK.
But we’ll have to wait until next month, when the Department for Business, Innovation & Skills releases the results of consultations into its Low Carbon Industrial Strategy, to find out how smaller firms might be welcomed into the club.
Les Hunt
Editor
PS - since this newsletter was broadcast this morning, a new Energy Bill was proposed for the forthcoming session of Parliament as part of the Government’s plans to lead the world in breakthrough clean coal technology.
The Bill would enable the Secretary of State for Energy and Climate Change to introduce a financial mechanism to fund up to four commercial-scale Carbon Capture and Storage (CCS) demonstration plants.
This follows the publication on 17 June of the Government’s consultation document ‘A framework for the development of clean coal’ which sets out how the Government proposes to reconcile the need to curb emissions of carbon from future coal fired power stations with the need to maintain a secure diverse energy mix. The consultation also contains proposals for the detailed design of the financial support mechanism that will be introduced through the Energy Bill.