UK Nuclear New Build Update Tony Roulstone December 2009

1. UK Nuclear New Build UpdateTony Roulstone December 2009

2. UK Nuclear Market Background 15 years after the last nuclear power station (Sizewell B) was completed and within sight of the end of life of existing AGRs, Government is now committed (in public) to enabling the replacement of nuclear with nuclear (~10GWe), using private capital without any subsidies; In private, Government accepts that at least 12 large new stations (15-18GWe) will be built as quickly as possible, with first in 2017/8 & one per year from 2020; Climate change pressures may well triple current capacity to ~30GWe by 2030/35, providing a massive UK nuclear market: +£60bn capital cost during the next 25 years, plus operating costs of several £bn pa; But UK nuclear capability has been severely eroded – skills lost; facilities closed & work-force has age profile skewed towards retirement; Government is preparing the ground (through the new Office of Nuclear Development): Generic design licensing of two new foreign design: EPR & AP1000; Infrastructure planning commission/process – to obviate multiple long planning enquiries; Provision of committed Waste & Decommissioning funds; Stimulating Education & Skills development.

3. Planning for Construction AREVA EPR • Three consortia are planning to build a series of nuclear stations 3-4 each: • EdF with Centrica, plus a third equity partner; Leading consortia with plans for four stations at Hinckley (2) & Sizewell (2) will act as own program system integrator & use EPR as at Flamanville 3. • Horizon JV between Eon & RWE; Following 2-3 years behind EdF, committed to build both for UK & preparation for new build in Germany, seeking a turn-key contract with plans for up to 4 stations, will choose reactor type in Spring 2010 – sites at Oldbury & Wylva; • Consortium: Iberdrola, SSE, Suez Energy. Third in line, have a site at Windscale and are yet to choose a reactor type - though appear to be close to Westinghouse, are adopting a more wait and see attitude – construction start post 2015 • Two reactor types: Westinghouse AP1000 & AREVA NP EPR - engaged in generic design assessment process which will lasting another 1.5 years to 2011, at least. Westinghouse AP1000

4. Generic Design Assessment - Update • In November HSE published their progress report on the staged licensing of both EPR & AP1000 - system design safety and security review; • Both design assessed as ‘could be suitable for construction’ if identified actions are addressed - & vice versa; • EPR significant issues: • Control system architecture – complete separation required between control and automatic shut-down systems, manual controls and safety justified displays, with more substantiation of controls safety claims; • External hazards not yet assessed because of problems with transfer of data; • More detail required in next phase (GDA4) including about: internal hazards isolation of safety systems, design claims and French construction design codes, aircraft crash protection measure, more complex fault sequences in safety analyses, thermal hydraulic data, internal/external hazards and code validation. • AP1000 significant issues: • Shortfalls in the identification and assessment of Human factors – how they relate to safety in a largely passive design of safety systems; • Substantiation of role of Squib valves in passive safety system; • Lack of agreed codes for Steel/Concrete/Steel containment and other parts of the civil structure & hence acceptability of the design; • External hazard case to be expanded to consider wider range of hazards and effect on segregation design – with knock-on delays of completing PSA during GDA4; • More detail required in next phase (GDA4) including about: human factor, more complex fault sequences in safety analyses, major accident analyses, transients including those without trip, fuel swelling & burn-out, reliability of control & safety systems, ALARP including neutron dose of RPV.

5. First Reactor – Preparing for Construction Topic Conceptual Plan HMG Carbon Trading/ Electricity price floor Economic • Economic Assess’t • Investment Case 2011 Planning • Act/IPC • National Policy • Site Planning Engineer/Safety • Reactor Choice • Type Cert’n • Site selection • Site safety submit • Contracts let • Construction start Client/Reactor Vendors secure Consortia & Supply chains Waste • NLFQAB process • Proposal/plans 2012 EdF timeline

6. Evidence of Supply Chain Preparations Dept BIS Preparations • Speaking in Sheffield, South Yorkshire, Lord Mandelson outlined new Nuclear Advanced Manufacturing Research Centre (NAMRC) that will bring together university research and industrial expertise to develop manufacturing techniques and components that will meet the demand for new nuclear power plants. • It will help a consortium of some 30-50 manufacturing companies gain accreditation to produce nuclear-quality components. • NAMRC will be based in South Yorkshire, led by University of Sheffield in partnership with University of Manchester, with Rolls-Royce as the lead industrial partner. Other founding industrial partners include Areva, Westinghouse, Sheffield Forgemasters & the National Metals Technology Centre (NAMTEC). NAMRC to be set up with £15 million ($25 million) of funding from the Strategic Investment Fund. • Lord Mandelson also announced that an additional £8 million ($13 million) will be provided to upgrade the nuclear laboratories at Manchester University's Dalton Nuclear Institute. This is in addition to the £15 million ($25 million) that the government has already committed to the NAMRC. • Government would provide support for Rolls-Royce's planned civil nuclear factory in South Yorkshire. which will be for components for nuclear power plants. The company said that the new plant will manufacture, assemble and test components - pressure vessels, heat exchangers & other large reactor parts - for new civil nuclear power plants. • Lord Mandelson also announced that a Nuclear Low Carbon Economic Area (LCEA) would be created in the North West and Yorkshire, led by the North West Development Agency (NWDA) in close collaboration with Yorkshire Forward. As part of the Nuclear LCEA the North West will support the Manufacturing Advisory Service's (MAS) nuclear services, offering manufacturing companies advice and support to access the nuclear market. 3 December 2009

7. Constructing a nuclear power stationRoles and potential participants

8. Where will the focus be in 2010? Government & Clients • Following through design licensing – sub-contracting technical studies/assessment; • National Policy Statement – getting them agreed by Parliament following consultation – allowing IPC to start work; • EDF & Horizon – preparing their site license and planning documentation/consultation; • Developing the supply chains EDF & Horizon – civil, specialist components, M&E etc. • Planning for Grid connections; • Developing and getting approved funding schemes for waste & de-commisssioning - NFLQAB; Reactor Vendors • Competing for business with Horizon (& then Suez/Iberdrola/SSE); • Developing the supply chains for EDF & Horizon • Contracting models for Horizon – program integration & turn-key pricing? • Skills & resource plans development; Suppliers • Choosing the right partners & making the JVs work for EdF & Horizon; • Bidding into programs in advance of contracts/potential contracts; • Skills development & business case development/support for investments.