Image courtesy of EDF Energy
The Hinkley Point C nuclear plant is one of Europe’s largest construction projects with build costs in excess of £19 billion. Hinkley C will deliver 7% of the UK’s electricity, and is expected to provide 25,000 construction jobs and employ 900 people to operate the plant when complete.
Hinkley Point C (HPC) is scheduled to start generating electricity from the first of its two reactors by the end of 2025 and will be the UK’s first new nuclear power station since Sizewell C came on line in 1995. HPC on the Somerset coast, will be built next to two existing nuclear facilities, Hinkley A which was decommissioned in 2000, and Hinkley B which is currently operational with a decommissioning date of 2023.
The consortium developing the HPC nuclear plant and the Licensee is NNB (Nuclear New Build) Generation Company. This is a joint venture between the majority French state-owned EDF, with a 66.5 percent share, (EDF operate the UK’s current nuclear energy fleet), and the state-owned Chinese utility company CGN (China General Nuclear Power Corporation) with the remaining 33.5 percent. CNNC (China National Nuclear Corporation) have indicated their intention to participate in the 33.5 percent Chinese stake.
NNB are also progressing a second proposed development at Sizewell C in Suffolk with EDF taking an 80 percent stake and CGN 20 percent. One further project Bradwell is being led by CGN who plan to use their own technology, the Hualong One (HPR-1000) at this site. In January 2017, the U.K. regulator began the Generic Design Assessment of the HPR 1000 reactor which is expected to be complete in 2021.
The forecast construction cost advised by EDF was £16 billion in 2012, updated to £18 billion in 2015, and to between £19.6 billion and £20.3 billion in July 2017, with a total cost including financing in excess of £24 billion. The £1.6bn increase in 2017 was attributed to “a better understanding of the design adapted to the requirements of the British regulators, the volume and sequencing of work on site and the gradual implementation of supplier contracts”. The potential revision to £20.3 billion was advised should the project be delayed by up to fifteen months due to these changes.
In September 2008, EDF announced plans to build Hinkley Point C. The EPR nuclear reactor received regulatory approval in 2012, a process that took 5 years. In November 2012 a nuclear site licence was granted and Planning Permission was approved in April 2013.
In October 2013, the government announced that it had agreed a "strike price" for the plant's electricity and in October 2015 EDF and CGN signed a Strategic Investment Agreement for the Hinkley project.
The receipt of planning permission allowed NNB to undertake enabling works and proceed to detailed design. The project was approved by EDF making their final investment decision in July 2016 and approved by the UK government in September 2016.
The construction period commenced on site in October 2016 with the UK's Office for Nuclear Regulation granting its first consent to begin construction of the first nuclear safety-related structural concrete in March 2017.
The official target date for producing electricity from the first of the 2 reactors is the end of 2025 and a construction duration of 10 years for the plant to be fully completed. A potential delay of fifteen months was advised in 2017 which would indicate a start date for the first reactor in 2027. The plant has a 60 year design life.
In 2013, the government proposed a Contract for Difference (CfD) mechanism agreeing a strike price of £92.5 per megawatt hour (MWh) of electricity in 2012 values, with annual increases linked to the retail price index, for the first 35 years of energy production. The strike price would reduce to £89.5 /MWh should the Sizewell C plant enter production.
In September 2015, the Government announced a £2 billion loan guarantee for the project, which was reported to require the EPR reactor in Flamanville 3 to be operational by 2020. The government approval in September 2016 included a special share that would give them a veto over future ownership.
This guaranteed supply price for 35 years was seen as being needed to secure the significant private investment needed to construct the plant and take on the financing, technology and construction risks. The current wholesale price of energy has dropped to levels less than half the strike price. The deal gives the NNB consortium a return on investment in the order of 8.5 per cent, provided there are no cost increases or delays.
NNB are acting as the programme manager splitting the scope into equipment supply and construction contracts, with direct responsibility for project and integration management through their teams located at the construction site, in their offices in Bridgwater and at the project HQ in Bristol.
NNB required early involvement of the supply chain during the planning phases of the project and some suppliers have been working on the project design and constructability for many years as preferred bidders. This included preliminary / enabling works contracts to allow for the establishment of concrete batching plants, road improvements, park and ride facilities and commencement of earthworks.
Following their final investment decision NNB are now awarding contracts to their Tier 1 suppliers, who are subcontracting to Tier 2 suppliers, who in turn may contract with Tier 3 and 4 companies. Preferred contractors have been selected for many of the Tier 1 work packages with several UK companies forming Joint Ventures with French suppliers.
NNB have stated their commitment to using businesses local to the Hinkley Point site. In line with these commitments six local consortia have been created to provide a range of services from catering and accommodation, to transportation and facilities management, and the provision of utilities. A Hinkley Professional Services Group has also been established to provide support to the supply chain in the areas of Human Resources (recruitment, training and employee retention), Legal, Accounting and Finance, and Project Management.
The Tier 1 contractors involved early on the project include
· Kier Bam – a joint venture between Kier and Bam Nuttall who are responsible for the earthworks package.
· BYLOR – a Bouygues / Laing O’Rourke JV who were awarded the £2bn-plus main civils package.
· Balfour Beatty – responsible for the cooling water tunnels.
You can learn more about the supplier requirements for working on the project in our e-book What’s Different About Nuclear, A Supply Chain Guide.
HPC is one of Europe’s largest construction projects with an estimated 5,600 workers on site at peak, and 25,000 individual job opportunities over the construction period. Once built an operational workforce of 900 will be required during its 60-year operation.
£15 million is being invested into education, employment and skills to help inspire the next generation and provide people with the necessary training and support to help them into long term careers, including a Construction Skills Centre and an Energy Skills Centre.
You can learn more about finding a job on the project in our e-book Hinkley Point C - A Guide for Job Seekers.
The European pressurised reactor (EPR) is proposed by EDF for the Hinkley and Sizewell sites. The EPR is a third generation Pressurised Water Reactor (PWR) design offered by the French company Areva, which is now part of EDF. Two 1,600 MWe reactors will be installed on the HPC project.
PWRs reactors use a pressure vessel to contain the nuclear fuel, control rods, moderator, and coolant. In contrast to a Boiling Water Reactor (BWR) with one coolant loop, heat is transferred to a lower pressure secondary coolant without mixing the two fluids and pressure in the primary coolant loop prevents the water from boiling within the reactor. The PWR’s are promoted as providing higher inherent safety mechanisms, however, pressurising the coolant water requires high strength piping, a heavy pressure vessel, and additional high pressure components increasing construction costs and the complexity of a PWR.
There are four commercial EPR units currently being built, one at Olkiluoto Nuclear Power Plant in Finland, one at Flamanville Nuclear Power Plant in France, and a further two, Taishan 1 & 2 in China.
The initial 12 months of the construction phase has been focused on undertaking the bulk earthworks, construction of the accommodation blocks and marine works used for materials and equipment delivery and the provision of utilities to the site.
The main civil works are anticipated to start ramping up in 2018. M&E works on the main power plant are expected to start approximately 4 years into the project and ramp up to a peak in year 6. While there is an intent to optimise off-site works a construction workforce will reach an estimated peak of over 5,600 workers approximately 5 to 6 years into the build, with an intent to reskill and upskill staff employed at the early stages in order to retain them on the project.
You can keep up to date with the latest progress in our Hinkley Point C blog posts.
A2O People produce a regular series of blogs designed to keep people informed about the Construction Industry, the UK Energy Sector, the UK Nuclear Sector, the Hinkley Point C project, and HR / Employment Law issues impacting the Construction sector.
Shane Keaney is a director of A2O People a Recruitment and People Consultancy specialising in the Nuclear and Energy Construction sectors. You can learn more about our Recruitment, Business Advisory and Training services on our website www.a2opeople.co.uk, by emailing us at firstname.lastname@example.org or calling 01278 732073.
If you are interested in job opportunities in the construction sector or on the Hinkley Point C nuclear project you can register your CV.
A2O People are a member of the Hinkley Point C Professional Services Group. We have developed a Guide for Job Seekers for people interested in working in the UK nuclear sector and a Supply Chain Guide e-book for companies interested in working on the UK Nuclear New Build projects.
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