Nuclear Research and Technology: Breaking the Cycle of Indecision

Home , Ben Britton, British Energy, Dounreay, Magnox, Nuclear Institute, Sue Ion

SCIENCE AND TECHNOLOGY SELECT COMMITTEE

Nuclear research and technology: Breaking the cycle of indecision

Oral and written evidence

Contents

AMEC Foster Wheeler (AMEC FW) – Written evidence (PNT0044) ...... 4 Atkins – Written evidence (PNT0015) ...... 14 Atomic Acquisitions (AA) – Written evidence (PNT0040) ...... 23 Professor Colin Boxall, Lancaster University – Written Evidence (PNT0051) ... 31 Bristol University/SW Nuclear Hub – Written evidence (PNT0043) ...... 37 Professor Grace Burke, University of Manchester, Centre for Nuclear Engineering, Imperial College London and Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) – Oral evidence (QQ 1-8) ...... 42 Cambridge Nuclear Energy Centre, University of Cambridge – Written evidence (PNT0056) ...... 43 Centre for Nuclear Engineering, Imperial College London – Written evidence (PNT0054) ...... 58 Centre for Nuclear Engineering, Imperial College London, Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) and Professor Grace Burke, University of Manchester – Oral evidence (QQ 1-8) ...... 66 Dalton Nuclear Institute, University of Manchester – Written evidence (PNT0018) ...... 67 Mr Simon Dawson – Written evidence (PNT0002) ...... 74 EDF Energy – Written evidence (PNT0039) ...... 75 EDF Energy, Nuclear Decommissioning Authority (NDA) and Office for Nuclear Regulation (ONR) – Oral evidence (QQ 20-30) ...... 86 Energy Technologies Institute (ETI) – Written evidence (PNT0012) ...... 87 Professor Martin Freer, University of Birmingham – Written evidence (PNT0058) ...... 92 GE Hitachi Nuclear Energy – Written evidence (PNT0030) ...... 101 Government – Department for Business, Energy and Industrial Strategy (BEIS) – Written evidence (PNT0029) ...... 106 Government – Professor John Loughhead OBE, Chief Scientific Adviser, Craig Lucas, Director of Science and Innovation for Climate and Energy and Jesse

Norman MP, Minister for Energy and Industry, BEIS – Oral evidence (QQ 31- 37) ...... 112 Government – Craig Lucas, Director of Science and Innovation for Climate and Energy, Jesse Norman MP, Minister for Energy and Industry and Professor John Loughhead OBE, Chief Scientific Adviser, BEIS – Oral evidence (QQ 31-37) .113 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) ...... 114 Government – Department for Business, Energy and Industrial Strategy (BEIS) – Supplementary written evidence (PNT0060) ...... 133 Gwynedd Council – Written evidence (PNT0011) ...... 134 Professor Neil Hyatt, University of Sheffield – Written evidence (PNT0028) ..147 Dame Sue Ion, NIRAB – Written evidence (PNT0031) ...... 153 Dame Sue Ion, NIRAB and the Nuclear Industry Association (NIA) – Oral evidence (QQ 50-59) ...... 165 Mr Robin H Jones, Reactor Physicist, Wylfa Nuclear Power Station – Written evidence (PNT0003) ...... 182 Professor William E Lee, Imperial College London – Written evidence (PNT0004) ...... 184 Mr Piers Manson and Mr R Nash – Written evidence (PNT0023) ...... 187 Dr Leslie A Mitchell FREng – Written evidence (PNT0007) ...... 191 Moltex Energy – Written evidence (PNT0037) ...... 195 National Nuclear Laboratory (NNL) – Written evidence (PNT0046) ...... 199 National Nuclear Laboratory (NNL) and UK Atomic Energy Authority (UKAEA) – Oral evidence (QQ 38-49) ...... 210 National Skills Academy for Nuclear (NSAN) – Written evidence (PNT0048) .227 North Wales Economic Ambition Board – Written evidence (PNT0059) ...... 232 NSG Environmental Ltd – Written evidence (PNT0050) ...... 236 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) – Written evidence (PNT0026) ...... 239 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) ...... 245 Nuclear Decommissioning Authority (NDA) – Written Evidence (PNT0036) ...261 Nuclear Decommissioning Authority (NDA), Office for Nuclear Regulation (ONR) and EDF Energy – Oral evidence (QQ 20-30)...... 268 Nuclear Industry Association (NIA) – Written evidence (PNT0041) ...... 284 Nuclear Industry Association (NIA) and Dame Sue Ion, NIRAB – Oral evidence (QQ 50-59) ...... 289 Nuclear Institute (NI) – Written evidence (PNT0033) ...... 290 Nuclear Skills Strategy Group – Written evidence (PNT0014) ...... 296

NuScale Power – written evidence (PNT0049) ...... 299 NuScale Power, Sellafield Ltd and Rolls-Royce Nuclear – Oral evidence (QQ 9- 19) ...... 308 Office for Nuclear Regulation (ONR) – Written evidence (PNT0024) ...... 309 Office for Nuclear Regulation (ONR), EDF Energy and Nuclear Decommissioning Authority (NDA) – Oral evidence (QQ 20-30) ...... 314 Penultimate Power UK – Written evidence (PNT0013)...... 315 Plaid Cymru – Written evidence (PNT0042) ...... 321 Prospect – Written evidence (PNT0019) ...... 326 Mr Chris Rogers – Written evidence (PNT0009) ...... 329 Rolls-Royce plc – Written evidence (PNT0006) ...... 330 Rolls-Royce Nuclear, NuScale Power and Sellafield Ltd – Oral evidence (QQ 9- 19) ...... 340 Sellafield Limited – Written evidence (PNT0052) ...... 341 Sellafield Ltd, Rolls-Royce Nuclear and NuScale Power – Oral evidence (QQ 9- 19) ...... 346 Snowdonia Enterprise Zone (SEZ) Advisory Board – Written evidence (PNT0055) ...... 360 Mr Gary Swift – Written evidence (PNT0001) ...... 365 Terrestrial Energy Inc. – Written evidence (PNT0057) ...... 366 Rory Trappe, Prospect Union Representative, Trawsfynydd site – Written evidence (PNT0008) ...... 375 TUV SUD Nuclear Technologies – Written evidence (PNT0021) ...... 378 U-Battery – Written evidence (PNT0047) ...... 379 UK Atomic Energy Authority (UKAEA) – Written evidence (PNT0035) ...... 384 UK Atomic Energy Authority (UKAEA) and National Nuclear Laboratory (NNL) – Oral evidence (QQ 38-49) ...... 390 UK Boiling Water Reactor (BWR) Research Hub and Network – Written evidence (PNT0020) ...... 391 UK Nuclear Data Network (UKNDN) – Written evidence (PNT0016) ...... 393 University College London (UCL) Nuclear Centre – Written evidence (PNT0025) ...... 395 University of Leicester – Written evidence (PNT0022) ...... 397 University of Oxford – Written evidence (PNT0034) ...... 402 Weinberg Next Nuclear – Written evidence (PNT0045) ...... 405 Westinghouse UK – Written evidence (PNT0027) ...... 407

3 AMEC Foster Wheeler (AMEC FW) – Written evidence (PNT0044)

AMEC Foster Wheeler (AMEC FW) – Written evidence (PNT0044)

Introduction

This evidence is being presented by Clean Energy business of AMEC Foster Wheeler (AMEC FW) to the Select Committee on Science and Technology in response to the Call for Evidence for ‘Priorities for Nuclear Research and Technologies’. The Science and Technology Committee, under the Chairmanship of Lord Selborne has launched an inquiry to revisit some of the conclusions and recommendations made in the previous report published in Nov 2011 on ‘Nuclear Research and Development Capabilities’. AMEC FW had submitted evidence to the previous enquiry and this submission covers all the main issues identified in the Call for Evidence.

AMEC FW is the largest UK-based private sector supplier of programme and asset management and engineering services to the civil nuclear sector. The business builds on AMEC FW’s 50 years’ experience in the nuclear market and UK clients include HSE, NDA, Sellafield Limited, EDF, Magnox, AWE Aldermaston, BAE Systems and Rolls Royce. Half of our nuclear business is now international with a wide client base covering nuclear utilities, vendors and regulators in the USA, Canada, Mainland Europe, South Africa, Japan and the Republic of Korea. AMEC FW is committed to maintaining its position as the leading UK engineering company servicing the growing UK and global nuclear market. We have supported a number of reactor design projects and maintain our technology neutral consultancy position in the market. AMEC FW is actively involved in a number of international nuclear R&D programmes, including new build projects, decommissioning and development of Generation IV and fusion technologies, and operates the largest private sector nuclear R&D laboratory facility in the UK.

A viable civil nuclear policy has to be long term and of strategic importance to the country, therefore, its responsibility has to ultimately lie with the UK Government and managed through departments such as BEIS or others with responsibility for energy supply. The policy should be maintained in consultation with industry and all other interested stakeholders. In forming its policy the UK Government should appoint a broad and representative advisory group of nuclear industry experts. This advisory group should include equal representation from both private and public civil nuclear entities. It should include representatives from new build investors, current operators, decommissioning stakeholders and the large UK nuclear industrial companies. The recently formed Nuclear Industry Council can serve this advisory role.

For international collaboration active support is needed from the UK Government as many countries require government to government agreement to start collaborative work in nuclear sector.

4 AMEC Foster Wheeler (AMEC FW) – Written evidence (PNT0044)

AMEC FW welcomes the UK Government’s ‘sector deal’ for the nuclear sector proposed in the green paper on ‘Building Our Industrial Strategy’. Britain was the first country to build a full scale commercial nuclear power plant in 1950s but now its position has slipped to 9th position in the world league table of nuclear energy producers. There is an urgent need to cultivate a world leading nuclear sector in the UK but the nuclear industry is facing a serious demographic challenge when it comes to professional skills. There is a sizeable age gap between the nuclear industry experts and the new generation of engineers entering the nuclear industry (Bridging the Gap, Andrew Gale and Nawal Prinja, Nuclear Future, Volume 11 Issue 2) and this is happening when the national laws and EU Directives have mandated use of Suitably Qualified and Experienced Persons (SQEP) for any nuclear safety-related tasks. In this context Lord Hutton’s initiative to help improve UK competitiveness and skills in the nuclear sector is most welcome.

The ‘sector deal’ can also include the collaboration between the firms, and between the sector and the Government. It is appreciated that the ‘sector deal’ is to be driven by business to meet business objectives and the following initiatives are proposed:-

(a) A formal consortium of nuclear firms can be created to design and build the next SMR or micro-SMR or both with backing from the Government. (b) Like the aerospace and automotive sectors, a new Reactor Research Institute can be created to share R&D and promote innovation in all aspects of nuclear reactor design. Specific focus can be on R&D for SMRs as outlined in response to question 6. (c) AMEC FW is keen to enter into collaborative R&D and has already launched its High Temperature Research Facility which is open to researchers from other organisations. (d) UK has world leading capability in High Temperature Reactor (HTR) technology and to further exploit it an HTR Research Institute can be considered.

SMRs

3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

The SMR development is at a turning point where new innovations are being introduced to overcome the challenges to achieve lower cost, better safeguards, new regulations and trade agreements. There are opportunities to develop partnerships and exploit the future global market. The main points regarding deployment of SMRs are as follows:-

 SMRs that use technology as close as possible to that of conventional reactors today are more likely to be deployed first.

5 AMEC Foster Wheeler (AMEC FW) – Written evidence (PNT0044)

 Development of new technologies like thorium and pebble bed fuel are likely to delay introduction of SMRs in the UK due to related licensing issues.  SMRs in the UK can help fill the energy gap between closure of existing plants and building of new GW plants only if the SMR initiative is accelerated.  Building an SMR in the UK will help establish credibility in the expanding international market for SMRs.  Introduction of plutonium burning SMRs may help deal with the Pu stockpile.

We agree with the studies conducted by Rolls Royce and World Nuclear Association (WNA) which show that SMRs are potentially much safer and the benefits outweigh any disadvantages. SMRs could play an important role in a long-term nuclear energy Cost Reduction Programme by reducing the unit cost of nuclear power. This could be achievable by moving away from onsite construction to much greater in-factory manufacture and minimal onsite assembly. In addition, shorter projected build times would ensure lower cost.

The cost of obtaining a Generic Design Approval (GDA) from ONR can be a disadvantage if current regulatory approach towards SMRs is not changed as further refinement of the staged approval process is required. There may be increase in security risk if SMRs are not installed on existing nuclear sites but overall the risk of nuclear incident is much lower because of enhanced safety and security provided by long term fuelling, stronger encasements, burial of the reactor below ground and remote sensing etc. There is less reliance on active safety systems and additional pumps, sumps, ac power for accident mitigation.

4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

A fully detailed global market analysis for SMRs has not been conducted as far as we are aware, but have seen some studies conducted by others (Rolls Royce, Urenco and WNA) and agree with their conclusion that there is a significantly large global market for SMRs. The SMR market can be broken down into three main subsets:

1. SMRs that can be sited on existing nuclear sites, either individually or in batches (farms) to produce collective power of several hundred MW. 2. SMRs offering power output in the range of 20-50MW that can be sited on industrial sites to power chemical plants or similar industrial plants with appropriate security. 3. SMRs of less than 20MW that are termed as “Batteries”or “Micro-SMRs” that can be buried underground to power industrial sites (if banked together in batches of 3-4) or power large office buildings in cities or smaller outlying towns.

With focussed R&D, “Micro-SMRs” can be developed which, in layman’s terms, can be as safe as X-ray machines in hospitals and, therefore, can be deployed closer to population centres. The opportunities could be huge if SMRs take off worldwide, especially if the markets subsets 2 and 3 above can be addressed.

6 AMEC Foster Wheeler (AMEC FW) – Written evidence (PNT0044)

On one hand, the UK needs SMRs less than some other countries as it is densely populated with a relatively large grid which is isolated from other networks. On the other hand, the non-prescriptive and technology neutral regulatory system and Contracts-for-Difference (not requiring EU approvals post Brexit) might make the UK an attractive market for SMR vendors. Many of the other countries that could benefit from SMRs – those with small grids (nearly 80% of the world’s grids would be too small to take a 1 GWe reactor), remote locations, and the need for desalination etc. have at present little or no infrastructure to support a nuclear programme. Deploying SMRs in the UK could therefore be a logical first step before wider deployment; this could present opportunities worth billions of pounds for UK companies. The SMR Feasibility Study produced in Dec 2014 for HMG by the consortium led by NNL indicated that there is a very significant market for SMRs where they fulfil a market need that cannot, in all circumstances, be met by large nuclear plants. The size of the potential SMR market, is calculated to be approximately 65-85GW by 2035 valued at £250- £400bn. The UK market alone could be 10% of this based on a demand for low- carbon generation and site availability for SMRs.

In short, the need to develop SMR in the UK emerges from the need to fill the energy gap between closure of existing plants and building of new GW plants that may take longer time. Also, it will help establish credibility in the expanding international market for SMRs.

UK industry is prepared to invest but confidence in any UK Government funding has declined due to the current lack of communications. As such we see UK industry investment on hold whilst we await understanding of the Government’s intent to share long term policy and market risks.

In the 2015 Autumn Statement it was announced that at least £250m will be invested over the next five years to revive UK nuclear expertise but a number of other R&D areas have also been identified requiring further research. We believe about half of the 2015 autumn spending review allocation of £250M R&D budget is intended for support of SMR R&D. While this is a significant investment, it will not be enough in itself (see outstanding R&D challenges listed in our response to question 6), particularly if an indigenous UK SMR design is to be developed. Funding decisions and allocations relating to the development of SMR’s need to demand not only the R&D relating to SMR’s but also evidence of a viable SMR supply chain and commercial siting considerations as well as overseas sales potential.

7 AMEC Foster Wheeler (AMEC FW) – Written evidence (PNT0044)

The Government launched an “SMR competition” in May 2016 but has not updated industry on any progress or definition of basis of competition since then. Given that development and delivery of an SMR is not possible wholly using private financing without government guarantees or underwriting then Industry requires clear communication from government on its intentions, and quickly.

Given the significant development cost of an SMR it would be sensible for the government to back one credible vendor and design (as the US DOE has done with NuScale) and channel the R & D money into this rather than smearing the money across the generic R & D supply chain. The selected vendor should have a strong UK base and commitment to deliver internationally.

Technical challenges depend on which type of SMR would be pursued. However, there remain some important technical obstacles to overcome before any type of SMR technology can be industrialised at commercial level (TRL 9).

The main issues such as implementation of the Defence-In-Depth philosophy for advanced reactors, siting, appropriate requirements for operator staffing for multi-module facilities, security and safeguards requirements for SMRs are still not successfully resolved and will remain as a challenge.

A selection criteria cannot be fully defined as GDA and validation and verification requirements are yet to be defined. The selection criteria should consider how successfully a design proposal considers the following technical challenges:-

(a) Prototype testing of an integrated system. (b) Validation of modelling codes to support design and safety cases. This is essential part of proof of principles of operation to raise the TRL. (c) Regulatory acceptance – including review of any non-UK standards that are claimed. (d) Integration into UK infrastructure. Load following and grid syncing. Increased load following (from 5% per minute to daily changes from 50% to 100% power). (e) Co-generation issues. District heating and desalination applications. Primary system at 100% power but secondary to adjust conversion between heat and electricity. (f) Site evaluations and requirements (g) Fuel handling, defueling, storage and transport (if SMRs are sited close to populations the challenges of waste management may differ from current practice) (h) Energy conversion systems (direct or indirect) particularly for HTR. Indirect steam (conventional but potential steam ingress safety concern) versus indirect gas. (i) Inherent safety requirement for heat removal. Confirmation of passive injection and passive heat removal systems. Need for modelling and experimental validation. (j) Materials: Long life of irreplaceable components, embrittlement problems in a compact small core and related chemistry issues. (k) Core physics issues. Core profile - Neutron leakage in small reactors. (l) Fuel issues (damage tolerant fuel and fuel cladding). Note that power density and fuel currently being used for submarine reactors may not be suitable. Fuel being used for large GW reactors may have to be degraded.

8 AMEC Foster Wheeler (AMEC FW) – Written evidence (PNT0044)

(m) Refuelling in integral reactors – practices for multiple units. (n) Inspection and maintenance practices in integral systems. (o) Modularity issues – multi-module operation (Human Factor issues), factory manufacturing and transportation practices. (p) Thermal hydraulics performance and natural cooling abilities. Designing against extreme conditions/events. (q) Digital Control and Instrumentation which can cost more for SMRs. (r) Remote control of multiple modules/sites.

The biggest challenge for any new design are to demonstrate to high confidence that it will deliver the required performance, can be built on time and at acceptable cost, have export potential and will be beneficial to the UK economy. Finally, given the scale of work still to be done, the selection of an appropriate SMR design for the UK has to be made this year.

Governance

7. Should the UK be involved in the development of Gen IV technology? If so, what funding and support should be put in place to help the UK establish a world leading position? Should our activity include development of one or more test reactors?

A number of consultations have previously taken place including the House of Commons “Innovation, Universities and Skills Committee consultation on Engineering: turning ideas into reality” (reported in March 2009). This identified key R&D development areas including a recommendation for re-engagement with Generation IV programme activities.

Whilst the extension of the Innovate UK remit to include nuclear development projects has been a welcome development, the nature of how these projects are selected and awarded does not lead to a significant or co-ordinated strategic advancement in UK capability or positioning to be a major participant in future nuclear programmes. It primarily provides seed funding development aimed at a variety of diverse technologies at early Technology Readiness Levels for academia and SMEs and as such doesn’t provide the strategic leadership required to advise and guide the Government on major nuclear programme R&D requirements.

The Government's preliminary view is to burn our civil plutonium stockpile in MOX fuel in thermal reactors (as reported in Nuclear Future, Vol 7 Issue 2). However future policy on Generation IV reactors remains unclear. The other options are to bury plutonium as waste or to maintain the stockpile for future use. Our view is that we should not dispose of such a valuable resource and deprive future generations from this resource.

The main issue is one of fuel supply. It is predicted that uranium demand would exceed identified reserves in about 2060 and exceed estimated (as yet undiscovered) reserves by 2100 - based on the projected growth of LWRs. Commercial deployment of fast reactors with a closed fuel cycle by 2050 would maintain the uranium demand within the estimated reserves indefinitely (although there are some fairly major assumptions about stabilisation of growth in world population and energy demand). Such is the fineness of the balance that

9 AMEC Foster Wheeler (AMEC FW) – Written evidence (PNT0044) a decade delay in implementing fast reactors could result in uranium shortages towards the end of the century. NIRAB has also recommended R&D in fuel recycle.

Hence AMEC FW’s view is that if nuclear is to continue to provide an important part of the future UK generation mix, then the UK should be an active participant in R&D for Gen IV assessing the suitability of nuclear technology developments, and ensuring that the UK has a sound understanding of the technical issues around these developing technologies through appropriate involvement of industrial partners in targeted collaborative R&D programmes for UK benefit. Current programmes are insufficient to do this. The UK currently has no priorities set for Gen IV R&D and there is a need to set these priorities.

The area which is difficult to address in the UK is material irradiation tests in reactors. There is no facility in the UK for these and it is necessary to hire time in overseas facilities or participate in multinational programmes. It will be cost effective to continue to participate in the existing test reactor programmes such as the Jules Horowitz Reactor rather than build a new test reactor in the UK.

It should be noted that NNL cannot deliver the required research by itself. Because of its history, NNL does not have strength across all areas. NNL has significant fuel related capability but does not cover many of the other key required disciplines to meet requirements, for example the ‘reactor systems engineering’ and ‘materials research and validation’ which already exist in the broader UK nuclear industry.

NNL has several facilities, if operated collaboratively with other facilities (such as Amec Foster Wheeler’s laboratories at Birchwood which are compatible with NNL’s but are not government owned), then it could represent an internationally competitive capability. Equally, NNL ought not to be in a position to use government funds to recreate a capability that competes with commercial industry. There is an ambiguity in NNL’s mission and therefore how it invests its Internal Research and Development (IRD) budget. Consideration should be given to refine NNL’s role such that it seeks engagement and improved impact through collaboration with commercial entities.

NNL on its own cannot compete with the scale of work carried out in most other national laboratories in Europe, at the top of the tree would be France (in particular CEA where 600 people are working on the fast reactor ASTRID programme alone and also IRSN), but other countries, even those running down their national nuclear programmes still have greater national R&D investment (e.g. GRS and KIT in Germany). National Laboratories, for example in France (CEA owned) and the USA (DOE owned), appear to have a very clear research remit. Commercial / competitive activities carried out solely in their name appear to be less obvious. By reference to the USA, NNL’s operating model is quite different. KAPL and Bettis laboratories are contractor operated (Bechtel) and solely support the nuclear propulsion programme. PNNL and ANL are clearly

10 AMEC Foster Wheeler (AMEC FW) – Written evidence (PNT0044) oriented to supporting the regulator (USNRC) and do not participate in industry- funded work.

To compete at international level, NNL and industry based laboratories need to collaborate more to support the UK’s future nuclear energy policy.

The R&D Advisory Board under Sir John Beddington felt a need for a national laboratory as it became obvious that many innovations were failing to progress through the mid-TRL stages what came to be known as the ‘valley of death’ for nuclear R&D. Most of the work done by NNL has been focussed on high-TRLs which is more suitable for industry partners than a government funded national laboratory. At the same time, there is not much work being done by NNL at the low end of TRL. NNL needs to focus on R&D not on commercial laboratory testing work like it has been doing for Sellafield Ltd. NNL should be encouraged to focus on mid-TRLs and increase their collaboration with academics/research institutes at low TRLs and with industry partners at higher TRLs. NNL as a government body needs to avoid competing against these partners and instead should encourage collaborative R&D. Both, academic and industry partners, will be more willing to work collaboratively with NNL and even help NNL represent UK’s nuclear capability if they adopt a non-commercial approach. It is also felt that NNL has shied away from leading international projects due to commercial constraints imposed on them. At international level, NNL can represent UK nuclear capability and at the same time it should be a breeding ground for nuclear experts and should supply expertise rather than drain expertise out of industry partners. NNL needs to trial and de-risk innovative technologies through mid-TRLs ready for the UK nuclear industry to pick it up for full industrialisation and exploitation.

NNL needs to avoid duplicating effort in developing technologies which may already exist. An example of this is that NNL is working with Sheffield University to develop a geopolymer for waste encapsulation. This technology already exists within Amec Foster Wheeler and has been deployed in Central Europe for over a decade. NNL needs to work on fundamental research and tie into British commercial organisations for delivery and commercial development of their findings.

We are mindful that NNL’s commercial activities are important to avoid any burden on the tax payer, but it is equally important that the UK Government ensures that there are no unfair advantages gained by NNL through commercial selling of its capabilities by over emphasising its role as the “UK National Laboratory”. Any over emphasis of NNL as “the” UK National Laboratory could mislead some customers (especially overseas customers) to believe that there is an obligation to work via NNL. Similarly, unfair advantages could be gained by NNL if they were to be awarded un-competed laboratory services contracts at any of the government NDA sites, especially if such wins were associated with government funded laboratory facilities.

11 AMEC Foster Wheeler (AMEC FW) – Written evidence (PNT0044)

In view of the potential state aid conflict (examples cited above), it would seem appropriate for Government to publically clarify the remit of NNL as a research entity and to ensure that NNL clearly ring-fences its commercial arm (perhaps under different management – periodically competed) from the NNL research arm.

NNL should be in a position, through Government ownership, to have best sight of Government energy policy and fit the supply chain capability to best serve this policy.

NIRAB has been successful in helping to bring UK stakeholders back working together again (after the industry had become very fragmented) and therefore giving more weight to recommendations made to Government but NIRAB has not been successful in influencing UK engagement in international R&D projects. A permanent successor to NIRAB or a Reactor Research Institute can fill this role.

UK engagement with EC on nuclear energy technology activities provided a strong link and opportunity to influence EC research programmes that benefitted many UK companies. The opportunity to continue this in some format post-Brexit will be important to ensure that UK companies retain the ability to participate in all future research programmes aimed at European nuclear market.

Currently no one has oversight of the whole nuclear R&D landscape including international activities. It is left to individual industry members to participate in activities organised by NIA, WNA, NI and IAEA to gather this intelligence.

NIRAB has been successful in reviewing Nuclear R & D needs from a technology basis rather than a business basis. That is to say that the Government has received from NIRAB a detailed view of what skills and technologies will be required in the future generically, but not linked to any particular delivery programme of a GW or SMR design. This means that when UK government converts the NIRAB recommendations to individual ITTs the specific technical need requested is generic and therefore the work value is diluted and also spread around the supply chain, but not aligned to any specific SMR or GW reactor programme.

NIRAB has been just an advisory body to the Government but this has been limited as it lacked funding to do any of its own research. There has been over reliance on one or two bodies (namely NNL) which has somewhat presented a distorted view of what UK nuclear industry needs to do. It should also be noted that 50% of NIRO staff was from NNL. Membership of NIRAB has had its impact on their recommendations. For example, research on thermohydraulics has been

12 AMEC Foster Wheeler (AMEC FW) – Written evidence (PNT0044) over emphasised and research on SMRs particularly micro-SMRs (which are more innovative) has been side lined. Members of NIRAB/NIRO need to avoid conflict of interest and not unduly influence government R&D funding for their own benefit.

The concept and philosophy of NIRAB was generally good and heading in the right direction. So a successor to NIRAB would seem to be appropriate. Some specific observations around NIRAB 2014-16 include;

 NIRAB 2014-2016 focused quite specifically on R&D and where government funds should be directed for R&D. A successor body to NIRAB could continue with this remit but also have a broader remit to include more strategic/commercial advice. This will help ensure that government funding is being directed towards activities which will yield long term sustainable commercial benefits for the UK.

 NIRAB 2014-2016 appeared to be very UK market focused. A successor body to NIRAB could consider having international industry experts to ensure that the UK makes funding and investment decisions in a global civil nuclear industry context. This could be especially important post Brexit to avoid the UK heading in a different direction to other civil nuclear countries or isolating itself from major R&D thinking.

 NIRAB 2014-2016 membership was weighted towards Government and Universities. Whilst members from Private organisations were included, they tended to be R&D / Technical leads. A successor NIRAB body should consider a more equal distribution of public / private entities as well as technical and commercial experts. International membership could also be considered.

 Finally, a successor body to NIRAB 2014-2016 should also conduct a review of government funded facilities to assess the success / utilisation of those facilities.

Authors: D H Boath, Vice President and Nawal Prinja, Technology Director

24 February 2017

13 Atkins – Written evidence (PNT0015)

Atkins – Written evidence (PNT0015)

General

1. Nuclear activities, by their nature and their long-term implications, require a coherent long term strategy and supporting policies. Without these it is extremely difficult to mobilise private capital investment in the nuclear sector through technology development, manufacturing investments and project deployment. This co-ordination generally best comes from Government direction to lead on a coherent strategy, which is likely to have technology and competitiveness as central pillars to be successful.

2. Ideally there should be a single responsible owner tasked with managing a coherent vision over a time scale of at least as long as the 10-15 years required for development to deployment. Currently this leadership should come from BEIS, with UKERC representation. It could be overseen by a steering committee represented by the full spectrum of government, academic and industrial partners involved in nuclear in the UK. This committee must include representation from the supply chain to the industry and this would drive an increased behaviour of competitiveness. It is essential that industry should keep the policies directed towards deliverable outcomes, products and projects, avoiding the temptations of research for research sake or maintenance of skills for skills sake.

3. To increase likelihood of success and reduce costs Government should look at examples from elsewhere where Government and industry have acted together and in unison for long term success. In setting up the Nuclear Industry Council, there was much comparison drawn with the UK automotive industry and the role of a similar industry council there to aid the success of the sector. Drawing on similar experiences from nuclear in other countries might be worthwhile. The challenge is finding such examples from overseas that are largely dominated by state run industries. Arguably Korea may be a good example, as private entities like Samsung, Hyundai and Doosan have a major role to play in developing and then competitively delivering a technology based coherent strategy.

The Government’s industrial strategy green paper discusses a possible ‘sector deal’ for the nuclear sector. How might the nuclear sector benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal?

4. The key question here is defining what any sector deal is trying to achieve and then one may assess the above sub questions. We believe any sector deal, or government strategy, should be looking to achieve the following:

14 Atkins – Written evidence (PNT0015)

A. Investment channelled into UK ideas and products that differentiate the UK’s position in the global market; B. Creating the right financial frameworks to progress R&D concepts into commercial products and projects that are competitive globally; this should include consideration of the necessary infrastructure required to interface with the sector; C. Integration of the fragmented nuclear industry and creation of a focal point to facilitate co-ordination of currently dispersed capabilities (success would need a clear objective and delivery focus and it would need to challenge current nuclear sector working practices); D. Bring innovation and cross-industry experience into an industry that is traditionally slow to adopt improvements that can help on competitiveness, safety and performance; E. A sustainable skills base that industry develops as part of normal business and is globally competitive.

5. For example, the development of a world class competitive SMR with supporting manufacturing, fuel servicing, construction and operating capability to UK and export markets is a strong candidate for a ‘Sector Deal’ that would be focussed on an outcome or product. The deal would involve Government support for the early stages of technology selection and development, jointly undertaken with industrial partners. Government funded research would be focussed in areas supportive of the SMR programme. Over time the balance of investment would move towards majority private sector (as the technology development risk declines). The goal would be to produce a new ‘UK Champion’, most likely a consortium of existing UK companies, to move from R&D to product and to project and to be able to export and support the SMR in multiple markets.

6. Such a sector deal would be based on a ‘challenge’ which might be expressed by three simple criteria, the ‘60x30x2’ challenge, see answer to Q6 below.

7. With respect to a sustainable skills base that is globally competitive one might look at the Atkins example, which has grown organically and through acquisition to a business of over 2,000 nuclear professionals worldwide without subsidy. A foundation for this growth whilst being competitive has been the recruitment of graduate and apprentice engineers; in 2016 we took on just under 50. This is without financial support from MoD or other government bodies to establish student and PhD placements and without government research and development payments to maintain specialist laboratory equipment or facilities.

8. Indeed, any sector deal should be targeted toward development of commercially attractive offerings that can compete on a global basis; ensuring we avoid a sector deal that might inadvertently create an inappropriately low risk investment environment for the supply chain is key; we should be seeking to reward those willing to take their fair share of commercial risk.

SMRs

15 Atkins – Written evidence (PNT0015)

What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

Benefits:

9. In common with large nuclear plants SMRs offer a route to secure low carbon electricity generation.

10.There are many differing SMR technology concepts under development but as of now none are proven and deployed. The different technology concepts offer differing attributes and benefits – for example some technologies could offer high temperature heat for industrial purposes or potentially for hydrogen generation. Some could contribute to the disposition of Plutonium wastes.

11.Many of these benefits should be considered as ‘second order’ benefits. The key ‘first order’ benefits that SMR could offer include:

 Substantially lower capital cost per unit than can be offered by large nuclear plant. Leading to much better affordability and less dependence on government support, loan guarantees etc. leading to creation of a competitive market for nuclear power.  Potential to build capacity incrementally to better match rising demand curves in developing markets. Ability to serve isolated communities in areas lacking comprehensive grid systems.  System flexibility – SMRs have potential to be ‘load following’ and have greater siting flexibility so could be located closer to centres of demand, thus easing operating pressures on the grid and reducing potential investments in grid. This flexibility fits better with grid operations where there is a high penetration of intermittent renewables such as solar and wind.  Lower electricity cost (LCOE) than is available from large nuclear.  A benefit specific to the UK is the potential to arrest the decline of our once world leading nuclear capability and re-establish the UK in a leadership position in a potentially large emerging market.

Disadvantages:

12.We see few disadvantages specific to SMR deployment, if an economically competitive SMR can be developed it will have to compete on its merits for UK and international deployment with nuclear and non-nuclear technologies.

Risks:

13.It is not yet proven that SMRs will be economically competitive. Thus the diversion of finite funds to SMR development could risk depriving others areas of nuclear development for no eventual commercial gain.

14.Whilst SMRs have greater siting flexibility (small footprint, lower cooling requirements, smaller emergency planning zones etc). They are subject to

16 Atkins – Written evidence (PNT0015)

the same security, licensing and planning regimes as large nuclear plants. The ‘regulatory burden’ may make it uneconomic to site individual SMRs, deployment patterns are thus uncertain and some of the SMR advantages may be unavailable unless regulations are adapted.

What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

15.The scale of the global market for SMR is potentially large but highly uncertain. The major uncertainty is the cost competitiveness of SMR. To date there is no clarity as to the LCOE that could be offered by a SMR, one leading western developer has stated that they expect to deliver power for $90/MWhr.

16.Clearly if an SMR could offer power at £20/MWhr then the global market would be vast. If the LCOE were £100/MWhr then there will be a very much smaller international market, if any.

17.We are not aware of any publicly available global market analysis for SMRs that includes a market size assessment based on LCOE price sensitivity and perhaps this variable should be considered in more detail for any SMR investment decision, particularly any business cases reliant on an export market, as economic advantage will need to be significant in order to overcome regional politics and vested interests in many international markets.

18.The potential cost of not taking advantage of the SMR opportunity is that the UK’s nuclear sector will continue to decline and that, at some future date, the UK will be an importer of SMR technology as it is today for large nuclear plant. SMR offers a possibility to re-establish UK’s nuclear market strength and, whilst there is no certainty of success, there is clear opportunity today to increase the chances of success in this venture for the UK.

Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to coordinate UK actions including international engagement on SMR development and future deployment?

19.Government has not yet grasped the potential SMR opportunity. There is currently no coordinated UK effort directed at SMR development and deployment. There is no clarity as to what government’s priorities are with respect to SMR. R&D investments should be managed and coordinated on the basis of a clear strategy with clear outcomes, such as those laid out in Q6., and not on the basis of maintaining the current industry.

20.There are a large number of designs for SMRs actively being pursued worldwide, so it is late for the UK to be commissioning independent research in this field. The SMR designs are at various stages of maturity and some are a relatively mature technology and could be deployed quickly if the political will was there.

17 Atkins – Written evidence (PNT0015)

21.The UK needs to make a clear decision as to whether SMRs might offer an attractive and cost effective contribution to the future energy mix. If so a delivery partner (for the most commercial and technically viable option) needs to be established as a matter of urgency, including deployment sites and ONR approval. The obvious preference is that a preferred design would involve as much UK engineering as possible. Options also exist to be bolder and drive the UK SMR opportunity into more advanced and novel designs and this may be the preferable option to drive our industry forward.

Are the criteria set out by the Government for the SMR competition appropriate? If not, what should the criteria be? What timescale should the Government be working to in choosing an appropriate SMR design for the UK?

22.To date the government has announced its intention to run a competition to select an SMR for potential UK development and deployment. A ‘first phase’ industry engagement exercise was conducted in mid-2016 in which government held initial exploratory discussions with a number of qualified and interested parties. It was expected that government would publish a ‘roadmap’ of its way forward and further details of the competitive process in autumn 2016. This did not happen and industry is left with no indication as to government’s next steps or the timing of such steps.

23.Meanwhile one SMR developer has filed its design for regulatory approval in the US and others are progressing in the Middle East and elsewhere.

24.In terms of a ‘global race to market’ the UK is late and will be beaten to market by at least two developers of light water based SMR designs.

25.Government needs to urgently define its objectives which could follow one of two paths:

 Government wishes to support development of an SMR for UK and international deployment at the earliest possible date. In which case the choice would most likely be a Gen III light water design. The disadvantage of this is that others are already well ahead and there are significant doubts as to whether Gen III light water technology can be cost competitive in international markets.

 Or government decides to take a greater development risk by supporting development of a Gen IV technology that may offer a significant price breakthrough but at a later date.

26.We strongly believe that government should avoid ‘picking a winner’ at this stage. Rather government should set a challenge defining its key objectives. The challenge could simply be set by reference to the essential criteria of:

 Cost of Power. Unless truly competitive there will be no international market.

18 Atkins – Written evidence (PNT0015)

 Date of First of a Kind (FOAK) plant in operation. Private sector investors will not join a programme that promises delivery in two or three decade’s time.  Affordability. The plant must have a capital cost that is affordable and financeable to private sector utilities and smaller nations.

27.This challenge might be set as ‘60x30x2’ meaning:

 An LCOE of less than £60/MWhr (this number to be based on an assessment of international competitiveness). We believe £60 is an absolute upper limit at this time.  FOAK plant operating by end of 2030 – later than this and the private sector will not step up.  Overnight capital cost of less than £2bn. Based on the maximum project size that utilities are willing and able to finance on their balance sheets.

28.Having set the challenge government may well wish to initially select two or three designs for a period of development support and then down-select as it becomes clear which has the highest probability of success. The 60x30x2 challenge would be open to any and all technologies. We would propose 60x30x2 as a modern Longitude challenge.

Should the UK be involved in the development of Gen IV technology? If so, what funding and support should be put in place to place to help the UK establish a world leading position? Should our activity include development of one or more test reactors?

29.All current indications are that light water ‘Gen III’ SMRs are unlikely to be able to produce power at an LCOE that is appreciably below that of GW scale reactors using the same basic light water reactor technology. Therefore, we believe that government should encourage Gen IV reactors to come forward to the 60x30x2 challenge. In the UK, conventional wisdom is that Gen IV reactors cannot be delivered until the 2030s. We believe this should be challenged. We note that in the US there is now a rising interest in advanced reactor technology, several Gen IV developers are claiming the potential to deliver in the 2030s. These claims need to be challenged and verified.

30.If the UK continues the stance of sitting out the development of GEN IV technologies then, maintaining a position as a major nuclear nation will become progressively less tenable. Active participation in at least one Gen IV project is essential for the UK to remain a world leader, particularly in high temperature reactors. The country currently possesses a wealth of knowledge in operating, maintaining and design of high temperature AGR reactors. This expertise resides with the AGR operators, their supply chain and the ONR. The UK has also established associated world leading procedures and codes to predict the long-term performance of materials operating at high temperatures. This expertise must be exploited, developed and applied to new technology or it will be lost over the next decade. Similarly, the UK developed two metal cooled fast reactors at

19 Atkins – Written evidence (PNT0015)

Dounreay, the vast experience of which will soon be lost if no action is taken.

31.A Gen IV development programme could allow the UK to exploit its historical strength and its current skills in collaboration with international partners. The need for test reactors will have to be assessed based on the adequacy of data from historical development programmes and on the much enhanced ability to computer model reactor behaviours. Establishing a world-leading position for the UK alone in GEN IV technologies from the current UK situation will be difficult and may require at least one test reactor, otherwise the UK will be reliant on overseas partner’s facilities to develop understanding and innovation.

32.It may very well be worth waiting a few years to develop a Gen IV SMR design if it can deliver an intrinsically safe reactor with a true price breakthrough compared with the current Gen III offerings. Such a challenge could form the basis of a ‘sector deal’ for nuclear under the Industrial Strategy for UK.

Governance

Is the NNL fulfilling its remit appropriately? Can it deliver the required research to support the UK’s future nuclear energy policies? How does it compare to equivalent organisations in other countries?

33.The NNL is not able to compete with similar organisations (i.e. national laboratories with a nuclear remit) in other nuclear nations as they are not funded to undertake the full range of activities one would normally associate with an organisation called the National Nuclear Laboratory. Overall the remit of the NNL is not clear in vision nor in activity carried out.

Is the remit of the National Nuclear Laboratory (NNL) suitable to provide research and development support to the UK nuclear sector? Is the current funding and governance model for the NNL appropriate to its role and remit?

34.The answer to both questions is no - the remit does not appear to focus on new design while there is considerable emphasis on fuel and decommissioning.

35.As currently constituted the NNL can operate neither as an independent advisor to the government on nuclear strategy nor as the leader of research to support the UK’s future energy policies. This is because the current funding model means (a) that it has to generate most of its income from contract research, so it is beholden to those funders and cannot generate a truly independent view, and (b) that a world-leading research culture cannot be built when the priority is servicing short term, low level research contacts to earn a living.

36.It is unclear as to why NNL should be competing in the commercial sector where there are more cost effective routes to supply established services.

20 Atkins – Written evidence (PNT0015)

NNL should be funded for the purpose of retention and growth of critical knowledge to the UK nuclear sector

Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved? Who has oversight of the whole nuclear R&D landscape, including international activities?

37.There is no apparent oversight of the full range of UK nuclear research, or related activities at MOD and AWE. The ability to move skills and knowledge between fractions of the nuclear industry is also unnecessarily limited by barriers to move security cleared staff (which also reduces UK competiveness).

38.The academic community is quite well co-ordinated particularly with the establishment of regional Nuclear Hubs, and EPSRC appears to have a good grasp of the range and impact of this work and the international activities that they have started to support in the past 5 years.

39.What is lacking is an independent body accountable to BEIS which contains the correct mix of both private and public sector representation which truly reflects the broad spectrum of the nuclear sector and the potential route to market. The private sector (both manufacturing and consultancy service) is crucial as it represents the pull on the research activities and is the obvious route to market.

Was the Nuclear Innovation and Research Advisor Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be?

40.NIRAB has produced a high level of review of UK nuclear strengths and possible strategies however (a) it did not represent the full nuclear sector – membership was primarily from the established research community with experience on historic plant and decommissioning activities, and (b) the extent of its remit and its terms of reference were not clear.

41.Consequently, as it was composed by people with a vested interest in R&D at a personal level, we obtained a ‘going concern’ R&D programme with no overall unifying vision or clarity on outcomes.

42.With NIRAB no longer in existence, there is presently no effective oversight or sufficient coordination of the whole UK activity in nuclear engineering, science and technology, and a suitable replacement should be instituted that is comprehensive in make-up for industry, and small enough to make rapid decisions.

43.There is an opportunity to broaden the remit of a NIRAB, or its replacement, to represent the new nuclear horizon rather than simply the current fission community. To be effective it must be established with a clear terms of reference, mandate and accountability. Critically is must represent the broad nuclear sector and focus on future challenges/opportunities and implementation. Its composition should also

21 Atkins – Written evidence (PNT0015)

include (i) experts in Gen IV and fusion technologies, (ii) expertise in nuclear design and implementation which currently resides in nuclear consulting and manufacturing companies, and (iii) decommissioning design/implementation.

22 February 2017

22 Atomic Acquisitions (AA) – Written evidence (PNT0040)

Atomic Acquisitions (AA) – Written evidence (PNT0040)

Authors: Biplab Rakshi and Ian Laidlaw

Executive Summary

Atomic Acquisitions (AA) has carried out a number of market studies regarding SMR.

On 31st March 2016, it was commissioned by DECC1 to carry out a comprehensive technical and market review of sub 30MWe micro nuclear reactors with the remit to identify potential market and applicable technology. Prior to this AA developed the UBattery strategic deployment plan. AA has a comprehensive understanding of the SMR market in relationship to commercialisation of micro nuclear reactors and has been engaged in numerous discussions with energy executives in both developing and developed countries. The following submission is based on these and other interaction.

The market for SMR’s could be significant as SMR’s offers many advantages over large nuclear. In any other industry, the capex required to develop a First of Kind (FOK) SMR would be contained on a large corporates balance sheet, however, when it comes to SMR Nuclear New Build (NNB), even large corporates shy away from direct investment in favour of government participation/underpinning. The structure of the industry is very technology focused with little appreciation of commercial reality. Under the current leadership of NNL and NIRAB the focus is very much technology with little appreciation as to whether the end user will actually buy the end product. If SMR’s are really to take off, projects need to be commercially bankable and have the confidence of potential off takers and investors. They need to stand the rigors of project finance and be cost competitive against other forms of generation. There is little evidence of this in UK nuclear.

SMR vendors fall into two camps, those advocating evolutionary water cooled technology which in effect is a scaled down version of large reactors and those claiming innovative intrinsically safe/passive designs. There is no clear winner and although the innovation path offers step change in technology, the route to market is many decades into the future.

The role of government should be to define policy and engage the private sector in delivery, it is not to make choices as to which technology should be deployed. The commercial viability of technologies should be left to the market with companies who are willing to put up their balance sheet as equity? In a free market economy, the role of Government is to create a level playing field, the first of which could be to reduce the commercial uncertainties arising from regulatory risk. If the end game for government is job creation, training and development to bridge the skills gap is a worthy cause, however, this may be premature if only means to build new nuclear is direct government investment.

1 DECC Micro SMR study – (80755/REP/001 DECC 31st March 2016) awaiting publication.

23 Atomic Acquisitions (AA) – Written evidence (PNT0040)

Consolidating the sector under one umbrella organisation will ensure cross collaboration and ensure one focal point, one agenda for development. It hopefully will also ensure greater SME participation and open the sector to new entrants and new innovation.

1.0 Question 1: Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities including international collaboration and, within the UK, for cost-effective and efficient articulation of the different elements of nuclear work?

1.1 Atomic Acquisitions (AA) feedback is based on dialogue with a number of government institutions in both developed and developing countries, including those in East and West Africa and parts of Asia in addition to North America.

1.2. The current UK nuclear industry is very fragmented with a little or no centralised coordination. Where there is coordination it is very much technology focused with little sense of commercial reality. Each institution (NIRAB, NNL, NAMRC, NDA, ETI, ONR etc.) appear to be operating to their own agenda which again is very technology focused. The leadership appears to be dominated by old guard technologists who are accustomed to building nuclear plants in a fully funded, risk free government enterprise. The fragmented policy and direction also hinders new entrants and discourages innovation. Everything is iterative and doesn’t embrace private sector expertise or efficiency.

1.3. If the UK nuclear is to become world class, it may be time to adopt the structure adopted in other countries. The role of government should be to define policy and the role of private sector to deliver that policy. It is not for government to choose which technology should be deployed. The commercial viability of individual technologies should be left to the market. Technology development should lie in the private sector with companies who are willing to put up their balance sheet as equity. The role of Government should be to reduce the commercial uncertainties, especially those arising from regulatory risk whilst promoting cross collaboration.

1.4. A central integrated umbrella body encompassing all the different fragments (NNL, NDA, NIRAB, NAMRC, ETI, ONR etc.), under a single nuclear Government Department is a solution, however such an institution needs to be flexible with a governance model that allows it to operate effectively without undue bureaucracy. It will also give one point of focus and allow for greater cross collaboration internationally.

1.5. If the UK is to succeed internationally, nuclear needs to become commercially bankable. Having one central promoting body will allow for bottlenecks to be identified earlier and solutions found, which in turn will give comfort to potential investors.

2.0 Question 2: The Government’s industrial strategy green paper discusses a possible ‘sector deal’ for the nuclear sector. How might the nuclear sector

24 Atomic Acquisitions (AA) – Written evidence (PNT0040)

benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal?

2.1. If job creation is the goal for government, Training and Development to bridge the skills gap is a worthwhile cause and is advocated by much of industry. However, if the new build programme stalls this maybe a fallacy. The first priority should be to attract investors and encourage vendors to invest their balance sheet whilst underpinning Trainings and Developemnt needs with government support.

2.2. Atomic Acquisitions (AA) experience in the oil and gas sector would indicate that the size of the capex investment required to develop a First of Kind (FOK) SMR could be contained on a large corporates balance sheet. However, when it comes to SMR Nuclear New Build (NNB), even large corporates shy away from direct investment in favour of government participation/underpinning. This implies, they either do not believe in the technology they are promoting or have calculated that there is too much of a risk in making their investment commercially viable2. At the same time the SME supply chain is being squeezed in favour of larger participants which means SME’s are finding it difficult to decide how they participate. Either way the SME community bears greatest risk, being far removed from government support and dominated by the oligopolies.

2.3. Regulatory risk both in terms of cost and consequential programme delay is prominent as a major component preventing progress. It also explains the reluctance of financial investors to be more active. If regulatory effects can be quantified/capped, the risks of a nuclear power programme to the point of fuel loading, is no different to any other large infrastructure project. Government underpinning of this risk may yield greater benefit and attract finance into the sector, only then should we consider the skills needed to service those needs. Underpinning training and development through the sector deal should be secondary to getting projects off the ground.

2.4. Leadership in terms of picking a commercial champion whether it is RR or Nuscale is no different to picking technologies. By focussing the sector policy through effective risk allocation so as to attract greater external investment will create a level playing field and allow the market to choose the most commercially viable vendor propositions. This should lead to lower recourse to direct government finance. Underpinning training and development through government support will also free up balance sheets and potentially allow for increased investment.

3.0 Question 3: What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

2 Section 5 DECC Micro SMR study – (80755/REP/001 DECC 31st March 2016) awaiting publication.

25 Atomic Acquisitions (AA) – Written evidence (PNT0040)

3.1. The current designs fall into two categories. Those based on scaling down existing large water-based reactors and others claiming innovative technology, offering more intrinsically safe/passive operation3.

3.2. The most advanced are the water-cooled designs whilst the Molten Salt and High Temperature concepts remain primarily at conceptual stage. AA as part of the DECC4 study investigated 30 micro nuclear designs across the world from those close to commercial deployment to others still at conceptual stage.

3.3. The advantages of SMR designs are: 3.3.1. Comparatively Low capital outlay vs large nuclear 3.3.2. Rapid (modular) deployment in line with economic growth 3.3.3. Potential cost/quality predictability due to factory fabrication 3.3.4. Higher thermal efficiency if heat can be utilised. SMR has the potential to operate like a CHP (Combined Heat and Power)unit if located close to end user. 3.3.5. Zero Co2 emission. 3.3.6. Potential load profiled offtake 3.3.7. Claims of cost parity vs other forms of generation 3.3.8. For developing countries with growing energy needs SMR’s provide export opportunities. As one African energy minister put it “we need to develop our energy requirements in line with our industrial growth”. SMR offer a solution. In addition, low capex/ unit is also a factor for countries with limited GDP. 3.3.9. For developing countries, embedded SMR’s provides up to 20% cost advantage as it reduces investment in grid infrastructure. This is not the case in developed countries where large distribution networks already exist and potential off takers are less willing to pay a premium unless it is government subsidised.

3.4. Disadvantages of SMR designs: 3.4.1. Modular design concept still to be realised 3.4.2. High licencing costs with regulatory risk/uncertainties – unless ONR costs can be mitigated or capped lower than the £30million/GDA spent for large units, SMR’s development will be difficult to take off in the UK. From the work carried out by AA in conjunction with discussions with Windsor Energy Group5, unless licencing costs can be capped and quantified, project financing SMR is also unlikely. Without project finance in place SMR development may take the same route as large nuclear or be pursued through direct state support as is the case with Russian and Chinese reactors. 3.4.3. For developed countries, there is the added barrier in that marginal cost of alternative base load generation is much lower especially when considering existing grid infrastructure. 3.4.4. The Gen IV designs are at conceptual stage

3 Section 2.2 DECC Micro SMR study – (80755/REP/001 DECC 31st March 2016) awaiting publication. 4 Table 3a and 3b DECC Micro SMR study – (80755/REP/001 DECC 31st March 2016) awaiting publication. 5 https://mecint.files.wordpress.com/2016/08/innnewsjuly16-2.pdf

26 Atomic Acquisitions (AA) – Written evidence (PNT0040)

3.4.5. Proliferation issues prevail irrespective of vendor claims. For developers contemplating unmanned units in their value proposition; this maybe too onerous for public/regulators to accept in the near term. 3.4.6. The near-term water based reactors have same operational issues as their larger brothers and does not really provide a step change in technology. Of the designs examined by AA the capex per unit maybe low but to breakeven, multiples units will need to be built in parallel. This may defeat the objective of large NNB vs SMR NNB.

3.5. Of the designs examined by AA as part of the DECC study6, if a SMR can be licensed it will provide a platform for export especially if the unit is project financed. UK government should look at facilitating route to project financing NNB but let the market take project decisions. Capping regulatory risk/uncertainties will be a necessary first step and maybe this is where governments should be collaborating and underpinning. This is the AA conclusion from discussions with energy executives/ministers from several developing countries in Africa/Asia and others.

4.0 Question 4: What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

4.1. AA has conducted/reviewed several market studies on micro SMR deployment, identifying both potential for displacing exiting generation capacity as well as identifying new opportunities,7 including report commissioned by DECC entitled Market and Technical Assessment of Micro Nuclear Reactors (80755/REP/001 - 31st March 2016) which awaits publication.

4.2. The real potential for SMRs and Micro SMRs is in countries with little or no grid infrastructure and where only micro grids need to established. Lower capital outlay with generation at point of use (i.e. embedded generation) are the key factors highlighted by ministers in developing countries. However, with solar and wind prices falling and battery storage evolving, unless SMR’s become cost competitive, this potential maybe limited to specific use e.g. remote locations etc.

4.3. There are over 450 existing nuclear sites across the world which have the potential to accommodate SMR’s. In addition, there are significant numbers of new entrants from developing countries who are considering Nuclear in their energy mix. Linking SMR deployment to foreign aid goals, promoting SMR’s to meet demand e.g. desalination etc., offers additional market opportunities.

4.4. In addition, if the claims of certain developers of building intrinsically safe systems can be realised, then the potential new market opportunities increase exponentially. However, much of the claims originate from Gen. 4 developers

6 Section 3: DECC Micro SMR study – (80755/REP/001 DECC 31st March 2016) awaiting publication. 7 AA report Micro SMR deployment and other studies for Urenco whilst developing their UBattery deployment strategy.

27 Atomic Acquisitions (AA) – Written evidence (PNT0040) with conceptual designs only. It will be several decades before this technology is ready to be deployed commercially and potentially even longer before they are constructed on non-designated sites e.g. centres of population.

5.0 Question 5: Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to coordinate UK actions including international engagement on SMR development and future deployment?

5.1. From AA data, there are several countries pioneering SMR technology. In some cases, the collaboration includes both the off taker and the technology vendor e.g. Argentina and Saudi8. The UK model needs to include the end user/customers.

5.2. Of the core competence/centres of excellence being promoted by UK government, the discussions centre around technology and supply chain involvement and appears fragmented and piecemeal. The commercial issues are more of an afterthought. It’s not a case of what the customer needs/wants but what can we sell them and how good is the technical solution. Early stage strategic involvement is lacking as is the case of promoting R&D on the basis of what would be commercially viable in target markets; may explain why Centrica pulled out of Hinckley. The UK R&D expertise is all about technology prowess with little cost control and sense of commercialisation. AA experience is based on developing numerous conventional power plants whilst working for the major utilities both UK and abroad.

5.3. One question for government is “if there is such a shortfall in labour as claimed by the NIA (Nuclear Industry Association)9” why is there not more collaboration between developers and developer/off takers. Collaboration between developers and off takers may also keep in check costs and help fast track commercialisation by bringing forward proof of concept.

6.0 Question 6: Are the criteria set out by the Government for the SMR competition appropriate? If not, what should the criteria be? What timescale should the Government be working to in choosing an appropriate SMR design for the UK?

6.1. Initially the competition was to identify best fit technology but was suddenly expanded to include others. Should the competition be limited to Technology Vendors only? In terms of the criteria: 6.1.1. For near term deployment, buying in SMR technology is an option but all of the current vendors are foreign owned and the technology is a scaled down version of large reactors. Do they really provide the step change needed to promote the UK as a centre of nuclear excellence or the reactor for export?

8 http://www.world-nuclear-news.org/NP-Saudi-Arabia-and-Argentina-form-joint- venture-0903158.html 9 https://www.niauk.org/industry-issues/skills/

28 Atomic Acquisitions (AA) – Written evidence (PNT0040)

6.1.2. Government needs to decide whether the intention behind the competition is to make the UK as a centre of excellence or to fulfil short term energy needs. 6.1.3. Of the other designs, AA was closely involved with URENCO and the UBattery team. Such technologies have some way to go vs water cooled designs and although they offer step changes in nuclear power generation the earliest prediction for commercial deployment is several decades into the future. 6.1.4. If the UK is to become a centre of SMR expertise, maybe the competition should be refocused in terms of the step changes that the technology can offer and the interest the design can attract from potential off takers e.g. Saudi and Argentina model10. 6.1.5. The current competition assumes UK Plc will bankroll all or part of the development; that is the perception/expectations of the participants. The competition was not widely publicised and only open to selective organisations who were made aware of the competition and excluded many non-technology vendors. The role of government needs to be a facilitator for development rather than endorsing one design vs another? As highlighted in the AA report for DECC, if issues around regulatory risk can be quantified, development/construction of an SMR’s up to fuelling is no different from any other infrastructure project. 6.1.6. The market is best placed to take risk. If the competition is incentivised on the promise a substantial sweetener for the first project to go live, it will avoid risk to the taxpayer as it utilises company balance sheets vs reliance on government funds alone. The model could be similar to that adopted for Tidal Generation11. 6.1.7. For SME vendors without the balance sheet, matched funding from government maybe an alternative especially if the project attracts interest from commercial lending institutions. In the USA, certain developer consortiums are already looking to raise funds from the capital markets.12

7.0 Question 7: Should the UK be involved in the development of Gen. IV technology? If so, what funding and support should be put in place to place to help the UK establish a world leading position? Should our activity include development of one or more test reactors?

7.1. This is where the UK has a lead and original concept designs and thinking.

7.2. However, the designs are very much embryonic and setup for long lead commercial deployment, +30years.

7.3. Funding Gen IV is a long-term goal and it maybe optimum to spread the risk over a number of technologies. If the bottleneck is regulation, then a

10 http://www.world-nuclear-news.org/NP-Saudi-Arabia-and-Argentina-form-joint- venture-0903158.html 11 https://en.wikipedia.org/wiki/Saltire_Prize 12 http://www.world-nuclear-news.org/NN-US-consortium-calls-for-public-private-SMR- support-2002177.html

29 Atomic Acquisitions (AA) – Written evidence (PNT0040) competition facilitating the licencing process will create a level playing field. This way free market economics will still prevail.

8.0 Question 8: Is the NNL fulfilling its remit appropriately? Can it deliver the required research to support the UK’s future nuclear energy policies? How does it compare to equivalent organisations in other countries?

8.1. NNL appears to have its own agenda with little regard for developing UK capability. Is it a commercial enterprise or government body? Should it be restructured to focus on key issues whether SMR development or decommissioning?

8.2. Other models worth examining are from Korea with a centralised nuclear sector.

9.0 Question 10: Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved? Who has oversight of the whole nuclear R&D landscape, including international activities?

9.1. There is little oversight and coordination in nuclear. The mentality of incumbent non-departmental public bodies (NDPB) is to scope and then ask the market to bid. This approach drives up costs as the market is best placed to provide a solution not a government NDPB.

10.0 Question 11: Was the Nuclear Innovation and Research Advisor Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be?

10.1. The concept of NIRAB looks impressive but as the members are all nuclear insiders and have grown up in the old government backed fully funded nuclear bubble, appreciation of the real world maybe is limited. Unless the board is changed to include people with broader commercial experience of developing conventional power projects we will be in an endless cycle of R&D with no focus as to whether and who will buy the end product. There needs to be cross fertilisation with other industrial sectors who can bring the acumen needed to make nuclear a commercial success.

10.2. The governance model AA suggests is a NIRAB as an overseer of NNL and other government institutions. A think tank who can deploy resources and capital and embrace collaboration and market participation.

24 February 2017

30 Professor Colin Boxall, Lancaster University – Written Evidence (PNT0051)

Professor Colin Boxall, Lancaster University – Written Evidence (PNT0051)

Professor Colin Boxall, Director of the Lloyd’s Register Foundation International Joint Research Centre for the Safety of Nuclear Energy, Lancaster University

Policy

1. It is useful to look at our main international competitors, and thus our potential main international partners, and where responsibility lies in those countries.

2. France is the country with the largest share of its electricity generated by nuclear power using a closed fuel cycle. Civil nuclear policy is the responsibility of the Nuclear Policy Council (CPN), a body created by Presidential decree in 2008 and chaired by the President. Membership of CPN includes the cabinet secretaries with responsibilities for energy, foreign relations, industry, trade, finance and research. The Head of France’s Atomic Energy Commission (CEA) also sits on the Council. In 2011, the CPN set up the Nuclear Sector Strategy Committee (CFSN). Led by EdF, the 85% state owned utility, this is comprised of representatives from over 80 organisations with a nuclear modernisation seed fund of £133M jointly contributed from public and private sources.

3. China is the nation with the fastest growing nuclear power industry with 36 reactors in operation, 21 being built and more soon to start construction. China’s nuclear policy aims, which include a closed fuel cycle, are explicitly described in its 13th 5-Year Plan (published 2016) wherein nuclear power is identified as one of 16 "national science and technology projects," with substantial state funding to develop Chinese expertise. The China Atomic Energy Authority, a government agency, has responsibility for drawing up the annual plan for nuclear power development.

4. India comes a close second to China with respect to its reactor build programme. Like France, it operates a closed fuel cycle. The development of nuclear power tech, applications of nuclear technology in medicine, agriculture and industry, and oversight of basic R&D are the responsibility of the Department of Atomic Energy (DAE). The DAE is directly under the Indian Prime Minister and is comprised of India’s regulatory body, 6 research centres, 5 public sector corporations, 3 industrial organisations and 3 nuclear-facing universities. As such, it coordinates regulation, national labs, industry and academia.

31 Professor Colin Boxall, Lancaster University – Written Evidence (PNT0051)

5. The UK currently splits civil nuclear “activity” responsibilities between the OND (new build), the ONR (regulation), the NDA (decommissioning), RWMD Ltd (geologic repository delivery) and, until Dec 2016, NIRAB (R&D strategy) and the FCO (international engagement). Unlike France, China or India, no one body has overall oversight of the UK’s civil nuclear programme. If the UK is to compete internationally, this situation must be remedied quickly.

6. Preference would be for the creation of a two tier structure analogous to the French model where a single government Non-Departmental Public Body (NDPB), with a responsible minister and supported by its own permanent Expert Committee, consults on and formulates policy, and a single stakeholder body that has a clear mandate to implement it. Representatives of the stakeholder body (which may take a form similar to that of the recently formed NIC) could also be members of the Expert Committee, which should also include representation from the university sector (for reasons discussed in paragraph 10 below).

7. Sponsored by BEIS and Akin in function to the old Strategic Rail Authority, the new NDPB should incorporate the responsibilities currently discharged by the OND and the NDA (which should be dissolved). Especially, it should have responsibility for, inter alia: (i) coordinating and incentivising UK civil nuclear stakeholders; (ii) representing the interests of those stakeholders both within HMG and to international partners and bodies; and (iii) sending a clear political message as to the importance of nuclear to the UK. The creation of such a body has become especially pressing in recent weeks as a result of the Government’s stated aim to quit the Euratom treaty at the same time as the EU; there is now a clear need for a single authoritative voice to provide assurance to the international community as to the UK future intentions relating to international cooperation, particularly on safeguards and the nuclear non-proliferation treaty.

8. The green paper proposes that the first pillar of the Government’s industrial strategy should be “investing in science, research and innovation”. Whilst UK Nuclear can undoubtedly play a role here, the recent history of the industry itself is not exemplary in this regard.

9. The period immediately following the opening of Sizewell B in 1995 and the simultaneous dash for gas was characterised by a significant contraction in the nuclear industry. It also became much more conservative, both in its approach to innovation/risk and its increased focus on the short term. The former is in part an unintended consequence of the safety culture that (quite rightly) permeates the industry at every level; the latter is a result of site licence companies being required to focus on the immediate problems of decommissioning.

10. Thus, the industry’s recent track record in R&D, innovation and the adoption of new technology isn’t as strong as it might be. The National Nuclear

32 Professor Colin Boxall, Lancaster University – Written Evidence (PNT0051)

Lab, which would be expected to be driving such activities on the part of the industry is instead focussed on the delivery of short duration contract work for Sellafield, reactor operators etc (see below).

11. There has, however, been a revival in nuclear fission related R&D in the university sector over the last 7 years, something that was recently identified and commended by the EPSRC International Review of Fission and Fusion which stated that “The UK has rebuilt research capability in fission research, and has the capability to be a major player. (…) The connection to, and pull from, industry is excellent.”

12. Thus any investment in science research and innovation that flows as part of a possible sector deal must involve not only the industry but also university based R&D and innovation activities.

13. Specific elements of any nuclear sector deal should seek to address some of the sectors “grand challenges”. These include:  Streamlining of the nuclear site licensing process;  The provision of tangible and sustainable incentives for local communities to volunteer to host the first of the UK’s Geological Disposal Facilities;  Reform of the mission and business model of the National Nuclear Laboratory;  Ensuring more effective use of those publically funded UK R&D lab facilities with the capability to handle nuclear materials;  Revisiting and revocation of the recommendation of 2008’s “Meeting the Energy Challenge” White Paper that future new build should proceed on the basis that spent fuel will not be reprocessed – so allowing UK plc to maximise the commercial opportunities provided by its world-leading expertise in closing the nuclear fuel cycle;  Closely related to the above, developing a roadmap for UK involvement in Gen IV reactor technologies with the aim of commissioning the first of a fleet of fast reactors around the middle of the century;  Helping to address barriers to partnership and market access with other countries – most especially minimising the impact of leaving the Euratom treaty.

14. Leadership on all of the above would, in an ideal world, be provided by the NDPB proposed in paragraph 6 above.

SMRs

3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

15. It is widely recognised that Small Modular Reactors present a major opportunity for the UK to gain a stake in a potentially significant new global market. The opportunities in the developing of generic reactor designs and money-saving innovations in modularisation have been well articulated, as has the fact that these will be advantageous irrespective of reactor technology. Especially, the cost-savings accruing from reduced size and modular construction mean that the barriers to financing SMR construction will be

33 Professor Colin Boxall, Lancaster University – Written Evidence (PNT0051)

nowhere near as difficult to negotiate as those encountered with Hinkley Point C, resulting in shorter deployment times.

16. The development of a fuel cycle for SMRs is an area that presents particular opportunity for the UK. From a non-proliferation standpoint, the preferred means of international deployment of SMRs involves a small number of nations (rather than all) take responsibility for the nuclear materials and facilities. Under operational conditions this would involve those nations both supplying the fuel and taking back the waste. Within such a scenario, and so as to minimise the risk and cost associated with the transport of irradiated fuel, the reactor should be able to operate for as long as possible without refuelling. Current PWR employ fuel burn-ups in the region of 50 GWd/tU and so require refuelling every year and a half or so. To extend the intervals between refuelling, SMR designs that go to 300 GWd/tU are being discussed. At defueling, such fuel will be significantly more radioactive than conventional burn-up PWR fuels with a much higher content of long lived alpha-emitting trans-uranic elements.

17. For those countries taking back the spent fuel, the sending of that highly radiated fuel, with its long half life alpha emitters, to a GDF within an open fuel cycle may prove politically and logistically difficult and prohibitively expensive in terms of repository design and footprint. It would therefore be more sensible and sustainable to reprocess the spent fuel, recycling its alpha- emitting transuranic content as a mixed actinide fuel. Such fuel can then be safely burnt within a fast reactor, transmuting the trans-uranics to more short-lived fission products.

18. However, the trans-uranic element content and radiation fields associated with 300 GWd/tU burn-up fuel will be much higher than in the 50 GWd/tU fuels currently handled by traditional PUREX-type reprocessing.

19. Therefore, SMRs present the UK with two additional opportunities beyond those popularly espoused – and these are opportunities that play to the UK’s historical strengths in nuclear. The first is the development of a safe, sustainable and economic closed fuel cycle for SMR fuel – most especially SMR fuel reprocessing. The UK has a world leading reputation in nuclear fuel reprocessing, which would give it a good start, although much of that expertise is now within 15 years of retirement. The second opportunity is in Fast Reactor design and operation. This is again an area where the UK has been considered world leading although recapture of such a position would involve reengagement with GenIV, beginning with a knowledge capture exercise (the retirement situation for fast reactor design and operation is even more acute than for reprocessing).

4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

Nil return

5. Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to

34 Professor Colin Boxall, Lancaster University – Written Evidence (PNT0051) coordinate UK actions including international engagement on SMR development and future deployment?

Nil return

Nil return.

20. The answers here follow on from the response to question 3, paragraphs 17 and 19 above. Yes, we should be involved in GenIV technologies. With appropriate planning and strategy they are a natural follow-on from SMRs. The UK has particular skills in fuel design and spent fuel recycle that would put us at the GenIV top table. However, this is an area where industry would be very reluctant to invest given the R&D start up costs and long lead times to return on investment. Perhaps here, more than any other area in nuclear, there is a case for government support. There is a desire in the nuclear community for an amibitious a moonshot mission akin that given to NASA by Kennedy in the 1960s. Closing the fuel cycle via Gen IV is a leading candidate for that mission.

Governance

21. The oral evidence provided to the S&T Committee by Michaels Bluck and Tynan and Grace Burke on 22nd February sums up the issues with NNL quite succinctly. Its main business is to provide consultancy to Sellafield, fuel post- irradiation examination for the reactor operators and industrial supervision for Sellafield, NDA etc funded research projects within universities.

22. The former two are legacy activities from it time as BNFL R&D/R&T and it is undoubtedly successful at these – but they do not constitute research to support the UK’s future energy policies. The last activity is a means by which NNL captures IP via an intermediary role.

35 Professor Colin Boxall, Lancaster University – Written Evidence (PNT0051)

23. No and no. Again, pease see the oral evidence of Michael Bluck, Mike Tynan and Grace Burke.

24. Please see answer to question 1

25. Yes and yes. Such a body would, ideally, be in the form of the Expert Committee suggested in paragraph 6 above with particular (but not singular) responsibility for oversight and strategy of UK nuclear R&D and Innovation. This would include those R&D areas that are currently led by the NDA and so which were outside of the remit of NIRAB.

24 February 2017

36 Bristol University/SW Nuclear Hub – Written evidence (PNT0043)

Bristol University/SW Nuclear Hub – Written evidence (PNT0043)

There needs to be a single responsible owner tasked with implementing a coherent vision based on a UK strategy/policy for energy over a time scale of at least the 20 years required for development to deployment. Given the timescales it would appear logical that, at a high level, this responsibility would reside with a department of UK government, with UKERC representation. The strategy should be overseen by a steering committee represented by the full spectrum of government, academic (through their established reginal Hubs) together with industrial and supply chain partners in the UK. This committee should be responsible for supporting cradle to grave delivery of the necessary power plant, infrastructure and R and D. It should be recognised that the committee will need to be empowered with an operational arm to implement the necessary changes and drive the strategy on a day to day basis.

Critically it needs to be established what a sector deal is trying to achieve. From a research, development and implementation perspective it is proposed that such a ‘sector deal’ should aim for the following:

 Incentivise the right financial frameworks to progress R&D concepts into commercial products and projects that are competitive globally;  Integration the fragmented nuclear industry and creation of a focal point to facilitate co-ordination of currently dispersed capabilities;  Investment channelled into UK ideas and products that differentiate the UK’s position in the global market;  Bring innovation and cross-industry experience into an industry that is slow to adopt improvements that can help on safety and performance;  A sustainable skills base that industry develops as part of normal business and is globally competitive.  Provide trained workers to support the future skills requirements of the industry

3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

At a high level successful deployment of SMR technology would provide a route to securing a reliable low carbon baseline and load following capability in electricity generation based on nuclear technology. The potential benefit from an

37 Bristol University/SW Nuclear Hub – Written evidence (PNT0043) academic and UK industry perspective is that this could represent a project that can sustain and develop UK skills and manufacturing in the nuclear sector. There are potential gearing benefits from seeking appropriate international partners under the necessary terms.

There is a possible global market, including opportunities in process heat and desalination as well as electricity generation. If successful the SMR concept should offer more dispersed generation with a substantially lower capital cost per unit that can be offered by large nuclear plant leading to a more competitive market for nuclear power.

Unfortunately the business case for SMRs is not clear due to the inherent ‘up front’ costs associated with any nuclear project and the uptake forecast for overseas markets.

Many of the proposed reactors are far from small and there is a real chance of using public sector funds to support a particular nuclear technology which is not sustainable. Diverting of finite funds could also close us off from larger scale international collaborative projects.

The UK Regulator, ONR, is well placed to meet the associated regulation challenges for both the UK and the international community.

4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

This is difficult to answer these points as the LCOA that can be achieved by the various SMR technologies has not been clearly presented and we are not aware of a rigorous study which offers the required information.

If SMRs are not progressed then the UK nuclear generation sector will continue to shrink and it will not prove possible to re-establish the necessary expertise within the UK – hence there will be a shift to reliance on overseas knowledge and manufacturing as is evident with current new build reactors.

There are at least 30 designs for SMRs actively being pursued worldwide, so it is too late for the UK to be commissioning independent research in this field. The SMR designs are at various stages of development and some are a relatively mature technology and could be deployed quickly if the political will was there.

The UK needs to make a clear decision as to whether SMRs offer an attractive and cost effective contribution to the future energy mix. If so a delivery partner (for the most commercial and technically viable option) needs to be established as a matter of urgency, including deployment sites and ONR approval. The obvious route is that a preferred design would involve as much UK engineering/manufacture as possible.

38 Bristol University/SW Nuclear Hub – Written evidence (PNT0043)

Investment should also focus on the next generation of SMR and we should drive this new technology more strongly through UK and global interaction.

It is not clear either what the criteria are or the timescales. At the present time neither a clear road map of the way forward is apparent.

If the UK continues the stance of an observer for the development of Gen IV technologies, maintaining a position as a major nuclear nation will become progressively less tenable. Active participation is needed in at least one or more Gen IV project is essential for the UK to remain a world leader, particularly in high temperature reactors. The country currently retains a wealth of knowledge in the design and support for safe operation of the high temperature AGR reactors and their life extension. This expertise resides with the operators, their supply chain, academia and the ONR. The UK has also established associated world leading procedures and codes to predict the long-term performance of materials operating at high temperatures. This expertise must be exploited, developed and applied to new technology or it will be lost over the next decade. A key aspect is the desire for high temperature plant to be designed with a 60 year life – only the UK has any experience with operation and performance of material/ plant at the required temperatures for such timescales (approaching 40 years).

Establishing a world-leading position for the UK in Gen IV technologies from the current UK situation will be difficult without at least one test reactor as the UK will be reliant on overseas facilities to develop understanding and innovate. This reactor could be associated with SMR developments as a stimulus to build a first of a kind new generation technology and provide support for associated medical requirements.

The NNL is not able to compete with similar organisations (i.e. national laboratories with a nuclear remit) in competitor nations for the simple reason that they are not funded to undertake the full range of activities one would normally associate with an organisation called the National Nuclear Laboratory.

Notwithstanding this point the overall remit of the NNL remains unclear. A considerable proportion of the work that it undertakes is based more on the business model which it is supported under, rather than a UK nuclear strategy.

39 Bristol University/SW Nuclear Hub – Written evidence (PNT0043)

The answer to both questions is no, unless the remit is largely focussed on fuel and decommissioning with precious little focus on new design.

As currently constituted the NNL can operate neither as an independent advisor to the government on nuclear strategy nor as the leader of research to support the UK’s future energy policies. This is because the current funding model means (a) that it has to generate most of its income from contract research, so it is beholden to those funders and cannot generate a truly independent view, and (b) that a world-leading research culture cannot be built when the priority is servicing short term, low level research contacts to earn a living. As an example if new SMR/Gen IV technology is a strategic goal for the UK then NNL should have a clear focus on associate fuel technology where it has clear facilities and skills which don’t reside elsewhere.

It is inappropriate that NNL should be competing with the commercial supply chain where there are more cost effective routes to supply services to the existing sector. NNL should be funded for the purpose of retention and growth of critical knowledge to the UK nuclear sector. Other funding models such as that applied to support metrology (NPL) should be reviewed.

There is no apparent oversight of the full range of UK nuclear research including that carried out under the banner of fusion ( UKAEA ), MOD or AWE, although the engineering and scientific challenges can strongly overlap.

The academic community is quite well co-ordinated (and competitive) particularly with the establishment of regional Nuclear Hubs, and EPSRC has a good grasp of the range and impact of this work and the international activities that they have started to support in the past 5 years. Recent activities at the traditionally impermeable fission/fusion interface are generating excellent science, and should be encouraged, as they are crucial in training the scientists and engineers that will be needed in coming decades.

What is lacking is an independent body reporting to government which contains the correct mix of both private and public sector representation which truly reflects the broad spectrum of the nuclear sector and the potential route to market. The private sector (both manufacturing and consultancy service) is crucial as it represents the pull on the research activities and is the obvious route to market.

11. Was the Nuclear Innovation and Research Advisor Board successful in carrying out its role? Is a permanent successor body to NIRAB

40 Bristol University/SW Nuclear Hub – Written evidence (PNT0043) required? If yes, what form should this body take and what should its role and remit be?

NIRAB has provided space within which it was possible to undertake a high level review of UK nuclear strengths and possible strategies however:

1. It did not represent the full sector – well established consultancy firms with overseas market opportunities had no voice and the membership was primarily from the established fission community with experience on historic plant and decommissioning activities. 2. It had an extremely broad remit and its terms of reference were not clear.

With the demise of NIRAB, there is presently no effective oversight or sufficient coordination of the whole UK activity in nuclear engineering, science and technology, and a suitable replacement should be instituted as a matter of urgency.

There is an opportunity to broaden the remit for a future grouping to provide compelling advice to Government which represents the whole new nuclear horizon rather than the current fission community (all of whose plant is >25 years old). To be effective it must not be too large otherwise it will not be agile and it has to be established with a clear terms of reference, mandate and accountability. Critically is must represent the broad nuclear sector and focus on future challenges/opportunities. Its composition should include:

1. Experts in fission, including Gen IV and fusion technologies 2. Expertise in nuclear design and implementation which currently resides in nuclear consulting and manufacturing companies 3. Decommissioning design/implementation 4. Appropriate representation from the academic community and the regulator ( ONR ) 5. The training and skills sector across the tier range

Finally any such board needs an operational arm to effectively implement the strategy and monitor output in a cost effective manner to deliver maximum impact. This could, but does not necessarily need to, reside within government. The importance of this resource to implement the strategy should not be overlooked as is often the case.

24 February 2017

41 Professor Grace Burke, University of Manchester, Centre for Nuclear Engineering, Imperial College London and Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) – Oral evidence (QQ 1-8)

Professor Grace Burke, University of Manchester, Centre for Nuclear Engineering, Imperial College London and Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) – Oral evidence (QQ 1-8)

Transcript to be found under Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC)

42 Cambridge Nuclear Energy Centre, University of Cambridge – Written evidence (PNT0056)

Cambridge Nuclear Energy Centre, University of Cambridge – Written evidence (PNT0056)

We are providing submissions in two areas:

A - Governance of NNL

B – R&D priorities for SMRs by Tony Roulstone is longer and comes with a summary.

A - Our experience with the National Nuclear Laboratory (NNL)

We have quite extensive dealings with National Laboratories overseas. This experience ranges from serving on scientific advisory committees at US DoE laboratories, reviewing grant proposals and promotion cases, collaborative visits to undertake joint experiments, applications to use (for free) high-end experimental facilities adapted for radiological experiments, participation in US- UK and pan-European research consortia with the National Laboratories of foreign governments and so forth. The following are some comments on an awareness of the similarities and differences between these National Laboratories and NNL that have arisen from these interactions and our interactions with NNL.

1. UK - We think it is essential that we work with experts at NNL to take advantage of their knowledge and experience, especially on issues of direct relevance to the UK. However, we find it difficult and expensive to work with them. This is not the fault of the personnel at NNL, but generally the short-term commercial imperatives under which these scientists and engineers are working. Some of our examples of the manifestation of this are below:

i. In a recent research consortium funded by EPSRC, the PI cost of two man-months of NNL contribution was equal to the PI cost of five academics contributing 5% time each over four years (the majority being well-paid professors). Clearly we would have liked a larger contribution from NNL, but it was unaffordable. ii. In a separate consortium, when funding was granted by EPSRC for a £0.5M facility use at NNL, university partners were initially asked to cover the 20% (£100k) shortfall arising from the EPSRC 80% fEC funding rules. A work around was eventually found, but the lack of even modest financial flexibility at NNL clearly impacts their ability to collaborate effectively with Universities. iii. Expensive uranium containing samples were prepared by NNL (but paid for by a consortium of universities) then could not be delivered for more than 3 years because it was discovered that NNL did not own the uranium it had used and in fact it was the property of the NDA. The PhD thesis plans of several students had to be re-thought because of the absence of these samples. This would seem to relate to complications arising from the original creation of the NNL, NDA, Sellafield Ltd and the assignment of their respective liabilities. This

43 Cambridge Nuclear Energy Centre, University of Cambridge – Written evidence (PNT0056)

hinders NNL’s ability to work effectively with university partners in the important area of sharing nuclear materials. iv. A manifestation of iii arises in access arrangements to get students and post-docs onsite at Sellafield Central Lab because of the complex site licence arrangements between NNL and Sellafield Ltd. This remains a stumbling block for universities’ use of National Nuclear User Facility (NNUF) equipment.

Our experience working with overseas laboratories is quite different. Most have set themselves up so that their scientists at all levels can interact with universities without having to meticulously charge out their time, or if they do it is clearly accounted for as part of their job description. The main driver of the interaction is to deliver good science with the added value of mutual complementary experience and approach, with the view to developing longer- term interactions, not the need to fulfil short term commercial goals. The science projects are viewed as ongoing and curiosity driven rather than being time and resource limited (even if in reality they are). For example, we have developed instrumental capability (radiological) with an overseas partner, which then received a Euratom transnational access grant operated from the UK. Ideally, this type of project would have been developed and situated in the UK since UK scientists were essential to its success. Access arrangements for students at overseas facilities, while being reasonably lengthy and bureaucratic, proceed in a transparent way when only one entity (site licence holder) is responsible for the safety and security of the visitor onsite. The other clear difference between NNL and overseas national laboratories is the publication record in journals with high impact. Publications tend to be technical reports and contributions to conferences. If they wish to be considered amongst the echelons of other national laboratories this is a clear area where there is room for improvement.

2. International collaborations are affected by the financial constraints of the funding system at NNL. In a recent Euratom H2020 application with 16 institutions from 9 countries, the largest budget request by some way came from NNL. As lead for UK institutions in this project, this put us in a difficult situation as the work proposed by NNL was not a particularly large part of the project and yet it made the UK institutions seem like a rather greedy partner. This was particularly difficult as the UK universities involved (and other partners) had tried to be good citizens by slimming their budgets down in response to the coordinator’s requests. Notwithstanding the results of our negotiations to remain within the European research community, giving the NNL sufficient funding flexibility to participate in the same way as European partner national laboratories in this, or similar initiatives elsewhere, can only be beneficial to nuclear science in the UK.

3. Overseas national laboratories maintain key competences in nuclear science & engineering. This appears also to be the primary role of NNL, particularly providing expertise and advice to government. However, while NNL have expertise in many areas of nuclear science and technology, it does not appear to provide or have funding enough to provide, a long-term strategic view in the range of subject areas required to address the national need over horizons of several decades. We believe it is this aspect that is the

44 Cambridge Nuclear Energy Centre, University of Cambridge – Written evidence (PNT0056)

largest difference between our National Laboratory and National Laboratories overseas.

4. It would seem that an overarching body, but not NIRAB II, that could provide the strategic direction, in 3 above, is required. However, it needs to be independent of NNL and include aspects of work related to RWM, NDA and Sellafield Ltd. For NDA and Sellafield Ltd issues, copy how clean-up and research can go hand-in-hand, by learning from the US Hanford site where nuclear energy research and weapons production over the last 70 years has created one of the most complex remediation sites in the world. The national laboratory (PNNL) on-site has been an integral part of the approach for the last 50 years producing world-class research together with applied engineering approaches to the clean-up problems. If we cannot have a world leading scientist at the helm of our national laboratory (as they often have in US national laboratories), perhaps this can be achieved by the choice of leader for the new strategic body. Someone who could provide the stature, vision and independence to be perceived as working in national interest rather than narrow nuclear industry interests. There would also be a significant advantage if the overarching body could also be a single point of contact with government to align policy with research and development.

Author: Ian Farnan Cambridge 17th February 2017

B - Priorities for Nuclear Research and Technologies

Small Modular Reactors (SMRs)

Summary 1. UK plans to build 10-12 large GW-size nuclear power plants over the next 15 years to replace the current aging reactors and to make a larger contribution to combatting Climate Change. These GWe-size large reactors are too big to fund, they take too long to construct and are not an affordable means of generating electricity to replace fossil fuels. SMRs provide a means of reducing the cost of nuclear power by designing smaller units than can be largely factory-produced and can be constructed on site in a few years. These new designs will depend on a sea-change in nuclear construction brought about by:  Simplification of design – fewer complex and costly systems;  More factory manufacture, raising productivity and facilitating learning;  Modularisation, allowing for faster on-site assembly and short build schedules;  Volume production of standard design, realising learning cost reduction.

2. A SMR programme could become competitive with fossil-fuelled electricity generation by:  Being large enough to provide the volume for a high and consistent production rate;

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 Being designed to ensure the share of capital cost produced in factories is more than 60%;  Demonstrating a build schedule of about 3 years.

3. SMRs have the potential for the UK to re-build a competitive nuclear supply industry and provide a large number of skilled manufacturing jobs, creating at least 10,000 new manufacturing jobs and providing £6bn in exports. A very successful SMR programme could create many times this number of jobs and generate tens of billion pounds worth of UK manufactured equipment exports.

4. SMR reactor technologies can be divided into two groups.  Light-water technology that has about 15,000 reactor years of civil power operating experience;  Generation IV reactors that are experimental and have either small amounts or no civil power operating experience.

Only the first group are capable of being deployed in volume from about 2030.

5. R&D for light water SMRs should focus on the issues of modularisation, cost and schedule that are key to the success of the idea.

6. It is proposed that the UK should consider investing some R&D funds in generation IV technologies, including molten salt reactors, by joining international development and demonstration programmes, to better understand the potential of these new and relatively un-developed reactor technologies.

Small Modular Reactors (SMRs)

Context

7. SMRs are of interest right now because they seek to address the economic issues of large reactors, making nuclear affordable as well as low carbon. The GWe-size large reactors that the UK is planning to build:  Are too big to fund;  Take too long to construct;  Are not an affordable means of generating electricity to replace fossil fuels.

8. Large reactors are so expensive that any project either requires state funding or requires state backing. The capital cost of nuclear power are three times (in real terms) the value assumed in the Nuclear Power White Paper (BERR (2008)) - £5,000/kWe in 2013 versus £1,250/kWe in 2008. No power utility and no reactor vendor can afford to fund such large construction projects. This funding problem has been evident for several years with the Hinkley Point C project and has been resolved only by state backing from France and China. Similarly, the Wylfa and Moorside projects will require state backing because of their high capital costs: £10-15bn. This UK experience of funding problems is repeated around the world. Elsewhere, backing is provided either by vendor governments (such as Russian VVER1200s in Bangladesh), or by

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the state to the utility (directly through ownership in China, or indirectly in US through regulated utility pricing).

9. Large reactors take many years to plan (4-5 years) and many more years to construct, perhaps up to ten years. Such long periods of time are hard for a power utility to plan for when electricity demand is known only for few years ahead. This makes nuclear unattractive for private sector utilities owned by shareholders with their shorter investing horizons.

10.Large reactors funded by private capital have high energy costs £100/MWh for EPR. There is some evidence that the other designs: ABWR and AP1000 could have lower energy costs, but this difference will not be large. These prices are more than double (in real terms) those assumed in the Nuclear Power White Paper (BERR (2008)) Nuclear energy costs are similar to the current costs of other mature ‘low carbon’ sources of energy, but well above the cost of electricity from a new CCGT plant, including the current carbon tax (£55-65/kWh).

11.Though it can be argued that carbon prices will rise and that gas generation is exposed to fluctuations in gas prices, the gap between the prices is large ~£40/MWh (66%). The UK reaction to high energy prices in recent years has shown that the public will not tolerate large jumps in the cost of energy, even when attached to ‘green’ objectives. Also, the price of renewables continues to fall. Nuclear costs will need to fall significantly to become competitive.

Nuclear Costs

12.In the past, the nuclear industry has always sought lower electricity costs by increasing reactors size. In the early 1970, reactors were 400-500 MWe. These grew to 800-900 MWe in the early 1980s and more than 1,000Mwe by 1990. EPR being built in France, Finland and China has an output of 1,700 MWe.

13.Reviews of the history of nuclear construction provides no evidence that larger reactors have lower electricity costs. Studies of the larger national nuclear programmes have shown that larger reactors are more complex, take longer to build and their very high site construction costs lead to higher capital and hence energy costs.

14.The market for these expensive large reactors is quite small. Apart from France no large country has more than 20% of its electricity generated from nuclear and in many countries the high costs are likely to lead to a reduction in the share of energy generated by nuclear.

Nuclear Cost Reduction through SMR

15.Nuclear energy costs are dominated by both the construction cost and their time-to-build. SMRs (outputs less than 300 MWe) seek to reduce capital costs by:  Simplification of design – fewer complex and costly systems;  More factory manufacture, raising productivity and facilitating learning;

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 Modularisation, allowing for faster on-site assembly and short build schedules;  Volume production of standard design, realising learning cost reduction.

The reduced volume of site construction activity will enable SMRs to be built much more quickly than large reactors which, because of their size, are not able to modularise construction in the same way.

16.These changes of design and production could make SMRs much more competitive, with energy costs not significantly above those of CCGT generation (see Annex A). However, the changes depend on both major changes in the nuclear industry to promote standardisation and on the right type of programme architecture to drive and to enable lower costs.

17.Production learning can reduce the specific cost of nuclear construction but only through consistent use of the same or a similar design. Current large reactor construction has many local variations triggered either by local safety regulators, or by local construction practice, which prevent significant production learning. Standardisation and modularisation of the design are pre-requisites for production learning. Licensing of common design in different countries would be promoted by the simultaneous assessment of an SMR design by both the US and a European country.

SMR Programme

18.The key to lower capital costs will be the scale of the SMR programme (GWe) and the size of the SMR reactor. Small SMRs can benefit more quickly from the economies of volume than a larger unit but they will have higher operating costs. To become economic, a SMR programme should target a production rate of 10 units per year, over a period of about 10 years (see Annex A).

SMR Specific Cost & Modularisation £8,000 Modified Scaling £7,500 Modules & Prod Learn 5 GWe £7,000 Modules & Prod Learn 10 GWe £6,500 Modules & Prod Learn 20 GWe Target OCC for £65/MWh £6,000 £5,500 £5,000 £4,500 £4,000

£3,500 Specific £/kWe OCCSpecific £3,000 50 100 150 200 250 300 350 400 450 500

Unit Size MWe Figure 1 SMR Specific Capital Costs with Programme Size – Modularised

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19.Figure 1 shows how capital cost varies with unit size for a modularised design for a range of programme sizes. The effects of programme and unit size are compared with a target which is competitive with fossil fuel generation (electricity cost £65/MWh). The target line is affected by longer build schedule of the larger units. The smallest unit sizes have higher O&M costs meaning that lower capital costs are required to make such SMRs competitive.

20.Unless SMRs are designed and built in a completely different manner from large reactors they will be more rather than less costly.

21.Modularisation provides scope for additional cost reduction for all programme sizes. The largest programme (20GWe) achieves costs which are lower than the target over a range of SMR unit sizes between 200-400 MWe. Small programmes (5 GWe) do not achieve the rate or the volume to reduce costs enough to be competitive either with large reactors or with fossil fuels.

22.It is estimated that a build programme of about 20 GWe would be required to make a 250 MWe-sized SMR competitive with CCGT. This scale of programme would be very large for any single country such as the UK but it is a small share of the potential global power market. It is clear that the size of the global market for nuclear is dependent on its specific construction cost and the speed of construction. If the costs and build schedule of SMRs was demonstrated to be £3,000/kWe and 3-4 years, the global market for the SMRs would be more than 100GWe.

23.Securing a minimum commitment to a SMR build programme is key. In the same way that large reactors are too large to fund, a SMR programme would initially require government support. If the UK is to re-enter the nuclear industry it will not be through large reactors, where the key components are designed and produced abroad. Only the lower value -added construction work will be UK-based. SMRs provide an opportunity and a choice: either the UK waits for SMRs to be developed and import them much in the same manner as large reactors, or the UK can consider developing a SMR for use in the UK and for export.

24.The scale of the potential international market and the size of the envisaged investment mean that international collaboration will be required from the outset. If the expected costs and schedule characteristics of SMRs can be demonstrated by building a series, the cost of a 250MWe SMR would then be of scale (£1bn) that it could be funded either by a large utility or by private sources of capital, without any government guarantee.

SMR Programme Conditions

25.Based on this analysis a SMR programme could become competitive with fossil-fuelled electricity generation by:  Being large enough to provide the volume for a production rate of 10 reactor units pa for 10 years;  Being designed to ensure the share of capital cost produced in factories is more than 60%;  Demonstrating a build schedule of about 3 years.

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26.With:  A common design licensed in more than one major nuclear country;  Harmonised technical standards;  More than one globally competitive design and supply chain.

Reactor Technologies

27.There are many designs of SMR on offer. They cover all types of reactor technology. Each technology (light-water, liquid metal-cooled; molten salt, or high temperature gas-cooled) has its own distinct advantages. However, they can be divided into two groups.  Light-water technology that has about 15,000 reactor years of civil power operating experience;  Generation IV reactors that are experimental and have either small amounts or no civil power operating experience.

28.SMRs designed to use established technology (the first group) will require a demonstrator reactor as part of its commercialisation, but SMRs using novel technology will also need a technology demonstrator to address their particular technological uncertainties.

29.The newer reactor technologies have more potential and should be studied on their individual merits. This should include test reactors where these have not previously been built (e.g. for a MSR). Such projects would probably be best pursued by international collaboration. However, it will only be after several years of operation of a technology demonstrator of these new technologies that the final design and the complete cost of a commercial Generation IV system would become apparent.

SMR R&D

30.The two groups of reactors (see para. 19) have very different R&D needs. Light water reactors make use of existing nuclear technology. They should be at least as safe as the large reactors that are being assessed now by ONR.

31.The aim of SMRs is to make nuclear more economic by changing the way in which they are made and assembled. Therefore the R&D needs should be focused on design, production and schedule improvements, seeking to answer the following questions.  How to design a SMR that by modularisation can be 66% factory- made?  What is the most economical way to protect SMRs from extreme external hazards?  How does modular design affect SMR build schedule?  What is the effect of SMR unit size on the ability to source and deliver modules and components globally?  How to harmonise technical standards so that a standard design may be exported?  How to reconcile standard plants with different site conditions?  How to safely manage more than one reactor from a single control room?

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32.Generation IV reactor technologies have been studied extensively. They generally have the advantages of better efficiency and the ability to recycle nuclear fuel. They are not currently being pursued because these reactor technologies are less well developed, there is no near-term shortage of nuclear fuel and recycling of nuclear fuel is associated with proliferation hazards. With the large technical effort and the size of the investment required to commercialise these newer reactor technologies they have not been a priority.

33.Several test and prototype reactors have been built for liquid metal-cooled fast reactors (e.g. UK PFR) and sizeable high temperature gas reactor is being built in China (HTR-PM). Of the major Gen IV technologies only molten salt has not been pursued in the last forty years. There is new interest in molten salt fuelled or molten salt cooled reactors in China, US, Canada and the UK. The technology has specific potential in terms of its ability to burn actinides without the need for complicated and hazardous reprocessing .The UK has a conceptual design for a molten salt reactor.

34.It is proposed that the UK should consider investing some R&D funds in generation IV technologies, including molten salt reactors, by joining international development and demonstration programmes, to better understand the potential of these new and relatively un-developed reactor technologies.

UK SMR Status and Prospects

35.In 2014 an industry group led by G Waddington and coordinated by NNL, examined the available options for SMR based on light water technology. There followed a detailed Techno-Economic Assessment (TEA) of SMRs funded by DECC which completed it work in April 2016. The report of the work is yet to be published.

36.A further study by the ETI (UK ETI (2016)) investigated SMR deployment programme issues. This report re-affirmed the view that it will take about 10 years from initial commitment to complete the design, safety analysis, manufacturing development and to build the first demonstrator SMR. Once a demonstrator SMR has been built and operated successfully, series production of SMRs could then proceed.

37.UK energy system studies show that the UK will need additional nuclear capacity beyond the 16GWe currently planned, to be built between 2030 and 2045 in order to meet the 2050 Climate Change commitments. Failure to act quickly will make impossible the start series build of SMRs in 2030 – key to building a significant sized SMR programme – 10 GWe in 10 years. Also, delaying a UK decision about SMRs runs the risk of allowing other SMR projects in the US and in China to get ahead and potentially precluding the UK from entering this as yet unformed market at a later date when the barriers to entry will be much higher.

Deployment & Economic Effects

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38.ETI has also produced a report (UK ETI (2015)) on SMRs for combined heat and power with these reactors deployed widely on new sites across the UK. Though the idea has merits, the economics of nuclear power point in the near term to centralised nuclear sites (power parks) that accommodate multiple reactors (similar to France and S Korea) with shared technical and maintenance facilities and staff. Because SMRs require less space, less cooling water and are simpler to connect to the Grid, it is expected that additional new nuclear sites could be found using the current siting criteria.

39.It is clear that no SMRs will be developed in the UK without government involvement and support. No vendors could bear the development cost by themselves. There is no effective market in nuclear power plants – small or large. Government, as in the US, needs to be involved at least in the development of a SMR.

40.The DECC TEA was intended to provide the evidence for supporting the development a UK SMR, in terms of lower costs, increased manufacturing jobs and export potential. Because the report has not been published the case for remains hidden.

41.DECC began a competitive dialogue with potential SMR vendors in May 2016, It has involved a large number companies with widely different technologies that are at different stages of development. The process appears to have lost focus. There is some frustration with the process within industry because its objectives are unclear. Also, it seems to have inhibited rather than facilitated wider discussion with Government about the development and funding of SMRs.

42.The scope for SMRs to provide capital cost savings and hence energy costs is large. If SMR construction costs fall as expected, the export market for SMRs would be large, perhaps a similar size to the current global nuclear installed capacity (400 GWe), potentially requiring a thousand units. This market could accommodate several SMR vendors and designs. In the UK a successful SMR programme of 10 GWe could cut £1.5bn pa (25%) of the cost of wholesale electricity compared with large reactors (£60bn over a 40 year programme life-time).

43.SMRs for the UK and for export have the potential to re-build a competitive UK nuclear supply industry and provide a large number of skilled manufacturing jobs. If the UK were to win just 25% of UK manufacturing content for a 10 GW programme over 10 years and 20% of matching exports, SMRs would create at least 10,000 new manufacturing jobs and provide £6bn in exports. A more successful SMR programme could create many times this number of jobs and generate tens of billion pounds worth of UK manufactured equipment exports.

Author: Tony Roulstone

24 February 2017

Annex A

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Estimating the Construction Cost of SMRs

44.The costs of construction of a large reactor such as the EPR account for at least 70% of the lifetime levelised cost of electricity from the plant. Therefore construction costs are key.

45.Estimating the costs of a nuclear power is extremely difficult. Nuclear power plants are large and complex systems, and are often built with long gaps between projects, with different designs. A major element of cost is site labour which varies greatly between different countries and even different sites. Also, it is difficult to compare the cost of constructing nuclear power plants compared with conventional forms of generation, because of both the greater complexity and the higher quality standards of nuclear.

46.Where a reactor technology has yet to be demonstrated cost estimating is doubly difficult though it has been attempted in EMWG (2007). Here only the more established light water reactor technology is considered, where more than 350 power reactors have been built globally. In recent years, there have been two different methods used to estimate SMR costs. Carelli (2010) and Goldberg & Rosner (2011) employed scale concepts adjusting the costs of a large reactor. Abdullah (2013) used multiple experts in a Delphi-like exercise comparing the costs of large and small reactors. Both methods were affected by the long held belief of the nuclear industry (OECD (2000)) that larger reactors will have lower specific capital costs.

47.Cantor & Hewlett (1988) and Rothwell (1986) in their large-scale studies of US reactor build costs found that the outturn costs (at constant value) were higher, rather than lower for larger plant sizes. This was probably due to large reactors becoming more complex, together with the effect of changing safety regulation. More complex reactors took longer to build and hence cost more.

48.Similarly, the cost data for the large French reactor programme (Cour de Compte (2012)) does not show any reduction in specific capital costs with increasing unit size. This pattern is repeated around the world: Japan, S Korea, and Canada.

49.The scaling effect was driven by the equipment manufacturers’ experience (of reactor vessel and turbines) where cost scaling was present, but this effect is offset in building the rest of the power plant. For modelling SMR costs, a modified method is employed which recognises scaling with output for fully designed and factory made equipment but not for site-based construction activities. This approach uses UK large reactor cost data for next-of-a-kind £4,320/kWe (DECC (2013)) and it scales only the factory element with SMR output (i.e. increases the expected cost).

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SMR Specific Cost v Size £12,000 £11,000 Conventional Scaling £10,000 £9,000 Modified Scaling £8,000

£7,000

£6,000 £5,000

£4,000 Specific OCC £/kWe OCC Specific £3,000 50 100 150 200 250 300 350 400 450 500 Unit Size MWe

Figure A.1 SMR Specific Capital Cost Variation with Output

50.In Figure A.1, the effect of the scaling used in this analysis is compared with the more conventional but flawed approach of Carelli (2010). Specific capital cost increases from £4,320 to about £6,000/kWe as the unit size reduces to 200MWe, instead of almost doubling to over £8,000/kWe for the conventional scaling analysis.

51.Production learning is the main driver in reducing costs. This effect is widespread across all sectors and industries. It is observed too the wider energy sector, but significant learning is not seen in nuclear. The fractured nature of build programmes and the frequent changes in design inhibit learning. McDonald & Schrattenholzer (2001) have collected data on production learning rates from a range of energy systems. They examined the data of 26 studies and also quote the results of 22 other studies by Dutton & Thomas (1984).

McDonald & Schrattenholzer (2001) Dutton & Thomas (1984) 26 Studies 22 Studies

Figure A.2. Energy Systems - Production learning rates

52.For factory-made equipment for energy systems, production learning rates are in the range 10-20%. In contrast, learning rates in nuclear are generally low: 0-1% (U of Chicago (2004)) with 5% being the highest observed learning rate in the highly controlled Korean nuclear programme. The energy

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system learning rates are dependent on production being at least 10 systems per year. Also, they depend on competitive conditions that ensure cost savings are realised by the end customer. Therefore the key means of SMR cost reduction are an increase in the share of the power plant which is manufactured in factory conditions and ensuring that production rates of at least 10 systems pa so that improvements in production efficiency are achieved.

SMR Specific Cost & Production Learning £8,000 Modified Scaling £7,500 Prod'n Learn 5 GWe in 10 yr £7,000 £6,500 Prod'n Learn 10 GWe in 10 yr £6,000 Prod'n Learn 20 GWe in 10 yr £5,500 £5,000 £4,500 £4,000

£3,500 Specific OCC £/kWe OCC Specific £3,000 50 100 150 200 250 300 350 400 450 500 Unit Size MWe Figure A.3 SMR Specific Capital Cost Variation with Programme Size

53.The effect of programme size on specific capital costs is shown in Figure A.3. Costs fall as programme size increases. Reductions are curtailed at the large end of the SMR size range because the number of units produced is lower which reduces the rate of production, adversely affecting the learning rate. Smaller programmes (5 GWe) do not bring the specific capital costs down below the reference value of large reactors. For a 20 GWe programme, between a SMR unit size of 150 MWe and 400 MWe capital costs are almost constant at £4,500/kWe, a value similar to that for a current design of large reactor.

54.Building SMRs in volume is effective at reducing costs. However, unless the design includes a much greater share of factory-made modules, or the SMR is produced in significant volumes at a high rate, they will be more expensive than the large reactors than they seek to supplant. Unless SMRs are designed and built in a substantially different manner from large reactors they will be less rather than more economic.

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Unit Size MWe Figure A.4 SMR Specific Capital Costs with Programme Size – Modularised

55.Modularisation is a technique used widely in the oil and gas, in the shipbuilding industry as well as other engineering sectors. It divides a system into sections that can be built complete in a factory, transported to site and assembled to make the final power plant. Site activities then become those of assembly and commissioning rather than construction. By making use of the modularisation concept it is expected that the share of the final construction cost that can be factory produced (vessels, equipment plus modules) could be greater than the necessary 60%.

56.The effect of programme size with 60% factory content (equipment plus modules) is shown in Figure A.4. The effects of programme and unit size on cost are compared with the target which shows when nuclear would be competitive with fossil fuel generation costing £65/MWh. The target line is affected by the longer build schedule of larger reactors. At the smallest unit sizes, higher O&M costs mean that even lower capital costs would be required to become competitive.

57.Modularisation provides the scope for additional cost reduction for all programme sizes. The largest programme (20 GWe) achieves costs which are lower than the target over a range of SMR unit size between 200-400 MWe. Small programmes (5 GWe) do not achieve the rate or the production volume to reduce costs sufficiently to become competitive either with large reactors or with fossil fuels.

References 1. Abdullah (2013). Expert assessment of cost of LWR SMR. Carnegie Mellon, PNAS 2013. 2. BERR (2008) Meeting the energy challenge. White Paper on Nuclear Power January 2008. pg. 61. 3. Cantor & Hewlett (1988). Economics of Nuclear. Power Resources & Energy. 10 315-335 NH.

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4. Carelli (2010) Economic features of integral, modular, small to medium-sized reactors. Progress in Nuclear Energy 52 2010 403-414. 5. Chen & Goldberg (2013) Small Modular Nuclear Reactors: Parametric Modelling of Integrated RV Manufacture. Detailed Analysis Vol. 2 ANL 2013. 6. Cour de Compte (2012). The cost of the nuclear power sector. Cour de Compte January 2012. pg. 22-23 7. DECC (2013) Energy generation costs. December 2013 8. Dutton & Thomas (1984) Treating progress functions as a managerial opportunity. Academy of Management Review 9, 235. 9. GIF Economic Modelling Working Group 2007 10.Goldberg & Rosner (2011) SMR Key to Future of Nuclear Generation in US. U of Chicago. EPIC. 11.McDonald & Schrattenholzer (2001) Learning rates for energy technologies. En Policy 29 255-261 2001 12.OECD 2088 Reduction of capital costs of nuclear power plants. OECD/NEA 2000. 13.Rangel & Levesque (2012) Revisiting the cost escalation curse of Nuclear Power – French Exp. 2012 14.Rothwell (1986) Steam-electric scale economies & construction lead-times Social Science Working Paper 627 Stanford U. Dec 1986 15.Rothwell & Ganda (2014) Electricity generating portfolios with SMRs. ANL 2014 pg 20. 16.Thomas (1988). The realities of Nuclear Power. Pg. 185 Cambridge 1988 17.Waddington (2014) SMR Feasibility Study NNL Dec 2014 18.Wright, TP (1936) Factors Affecting the Cost of Airplanes, Aeronautical Science 3: 122-128.UK 19.UK ETI (2015).The role for nuclear in UK within low-carbon energy system. 20.UK ETI (2015). System requirements for alternative nuclear technology. August 2015. 21.UK ETI (2016). Preparing for deployment of a UK SMR by 2030. September 2016. 22.University of Chicago (2004) Economic Future of Nuclear Power. Chap 4. pg. 4-24 August 2004

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Centre for Nuclear Engineering, Imperial College London – Written evidence (PNT0054)

Authors: Dr Michael Bluck (Director), Dr Ben Britton, (Deputy Director)

1.1 Beginning with the break-up of the original UKAEA in 1971, aided by the contemporaneous commercial success of North Sea oil and gas, the decay of much of the indigenous UK civil nuclear programme was set in train. As with other sectors, 1980's privatization soon followed and nuclear activities became fragmented. Without anything to replace the strategic direction and capabilities of the UKAEA (setting aside criticism of its performance), we were left with an industry geared toward maintenance of the current fleet and their ultimate decommissioning. Implicit in much of that history was the assumption (by successive Governments) that nuclear (apart from waste & decommissioning) had no long-term future in the UK. Contrary to this assumption, in 2017, we find ourselves initiating a range of new nuclear build programmes, with cross-party consensus and Government support. The world has changed and in particular the recognition of the importance of low-carbon technologies is now widespread. Nuclear is recognized as a viable and reliable low-carbon energy source and this has reinvigorated nuclear globally, if not uniformly so. The UK has recognized the importance of nuclear in meeting emissions targets and long term energy security, although the ambitions we have set ourselves are poorly supported by the existing governance and funding structures (largely inherited from an industry in decline). Ultimately, the responsibility for a coherent and consistent long term policy on civil nuclear is likely at odds with current administrative structures.

1.2 Looking to the future, the nature and scope of the responsibility depends entirely on the UKs long term vision, ambition and policy for nuclear. We envisage that this ‘long term’ vision encompasses plans that range from new build, towards small modular reactors, and in the longer term, so- called Gen IV closed-cycle reactors and potentially fusion. A key question arises: Do we view ourselves as, perhaps, an informed customer, or do we intend to develop our own nuclear technologies, including reactor technology?

1.3 Plainly, nuclear technology is not a short-term consideration, whether we view ourselves as users (albeit informed) or as active participants in the development of the technology. The timescales and capital investment for both are formidable and usually well beyond typical political and industrial timescales. Sustained skills development takes time and investment, at all levels. Whilst the UK is blessed with considerable

58 Centre for Nuclear Engineering, Imperial College London – Written evidence (PNT0054)

educational and industrial capabilities, there will have to be a focus on support for the development of a talented and capable nuclear workforce, which ranges all the way from apprentices and up to subject matter experts, with capability to meet current and future needs. Furthermore, the scale of these objectives is such that developments are frequently the result of international collaboration and we must re-engage with appropriate research programmes (eg. Gen IV programmes such as GIF) as part of these ambitions.

1.4 Ensuring a coherent and consistent long term policy must involve direction and oversight, distanced to a significant degree, from the buffeting of short term demands. It follows that responsibility requires an independent body with long-term budgetary powers – possibly a nuclear executive authority, similar in kind to the French CEA or the early incarnation of the UKAEA. Such an authority would ensure a coherent and consistent programme for civil nuclear activities - directing skills development, determining the UK nuclear research agenda, ensuring the provision and maintenance of expertise, and supporting facilities.

1.5 This executive authority would naturally sit within BEIS as the interests necessarily cover industrial strategy and energy. The authority should also have input into other departments, most notably the Department for Education. The authority's role in oversight of appropriate skills development is important. It must support an environment that develops skills, works with schools, colleges and universities to feed the industry and it should have a role in developing a strong, independent, academic support network. Ambitious long term programmes need the insight of an independent expert cadre, involved in nuclear research and education, with national and international collaborations, who can contribute to decision making without the constraints and short term vision of industries beholden to shareholders. Universities already play a vital role in this regard, but these institutions have a necessarily broad remit and, left to themselves, they may not regard nuclear as a priority. With growing nuclear ambitions, there must be active intervention to encourage Universities to support the sector well beyond current levels.

2 The Government’s industrial strategy green paper discusses a possible ‘sector deal’ for the nuclear. How might the nuclear sector benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal?

2.1 A sector deal for nuclear would provide a clear means for addressing the shortfall in nuclear skills and R&D capacity. This skilled nuclear workforce will likely encompass a range of talented and motivated individuals with significant STEM apprentices, graduates, and PhDs working collaboratively to support a low carbon future. This should include the development of nuclear specific expertise in Colleges and Universities and the provision of a pipeline of subject matter experts to industry and Government. There are many organizations involved, either in the provision of skills development or in the application of these skills. Given the ambitions and timescales involved, it does not seem likely that a

59 Centre for Nuclear Engineering, Imperial College London – Written evidence (PNT0054)

simplistic reliance on skills demand to drive supply will be enough. We anticipate a need to provide strategic pump priming in these areas to enable the UK to lead on the international stage, and to provide a long lasting technical capability with both technical breadth and depth that engages across the sector. There is credible evidence in this regard, for instance within the three nuclear Centres for Doctoral Training (CDTs) hosted in the areas of nuclear fission and fusion in galvanising the next generation of subject matter experts and drawing together academia and industry together in close collaboration. We anticipate that a critical mass of expertise in nuclear, developed in collaboration with the higher education sector will facilitate the long-term ambition and scope of vision in nuclear power, and will interact strongly with an Executive Authority in the discharging of its duties. The Authorities’ duties will likely draw together industrial strategy, energy policy, research, education and training addressing the whole nuclear supply chain, including ambitions in the next phase of low carbon power (such as Fusion or GenIV technologies). We believe that an authority, combining the interests and expertise of Government, industry and academia, of the kind indicated in our response to question 1 above, would be able to provide the leadership required.

2.2 A sector deal would also help in establishing investor confidence that we can achieve our objectives and signify that the UK Government is prepared to provide support in an area where upfront investments can be difficult for traditional market forces to deliver. Again, an authority of the kind indicated in our response to question 1 above could provide the leadership and coordination required.

3 What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

3.1 The potential benefits, disadvantages and risks are strongly dependent on the particular SMR technology deployed and where manufacturing takes place. These are all strong functions of the country of origin, stage of development and the novelty of design.

3.2 Beyond the general benefits in terms of energy security (given the planned shutdown schedule of the current fleet), SMR deployment could make a contribution to UK industrial growth and reinvigoration of the manufacturing economy.

3.3 Irrespective of origin, SMRs offer economies of production scale, effective deployment of skills in a production line model, improved quality and consistency, siting flexibility and could be a significant export proposition. Again, the degree to which these benefits may be seen is dependent on the nature and origin of the SMR.

3.4 It must be borne in mind that much of the supporting case for SMRs is that construction is largely factory based. A UK built SMR would certainly contribute to industrial growth. That said, non-UK designs, which are manufactured outside of the UK, would offer little scope for UK involvement, indeed, arguably less so than for large reactors.

60 Centre for Nuclear Engineering, Imperial College London – Written evidence (PNT0054)

3.5 Other disadvantages may arise: Depending on the type of SMR, there may be a longer time to deployment as qualification of new technologies (eg Fast reactors, molten salt, liquid metal, etc) is likely to demand capabilities beyond those currently available (certainly in the UK) and will delay deployment.

3.6 The cost per KWh is likely to be higher for an SMR than a large unit, although this is a complex calculation and there are many uncertainties. In particular, one could expect production costs to become lower beyond first-of-a-kind and the scope for this is greater with SMRs. Furthermore, the capital “one off” figures for each SMR may be more amenable towards the market than larger reactor designs.

3.7 Some costs may be fixed irrespective of unit size; GDA and regulation being obvious examples. Indeed, the licencing of SMRs may present significant challenges: The potential advantage of locating SMRs in unconventional sites in order to support grid diversity is also a challenge for public acceptance and licencing. Locating collections of SMRs on existing licenced sites is more straightforward, but there is considerable debate on whether such reactors are operated individually or collectively and the impact this has on safety.

3.8 Security and safeguards may also be more of an issue with a more geographically dispersed fleet, although again this is dependent on the nature of the SMR. Conversely, a diversity of supply could provide more grid resilience in the event or outage or planned maintenance. In the event that deployment of a home-grown SMR is a success in the UK and an export market is developed, we cannot expect others not to enter this market and this will pose a threat unless we also continue to develop our offering. For example, if our first SMRs are relatively conventional open- cycle LWR designs, we would need to plan for potential closed cycle products for deployment in the future, taking into account the significant timescales this would involve.

4 What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

4.1 A study by the NNL (December 2014) indicates a potential international market for SMRs of £250-400bn by 2035, supplying 65-85GW. There is, of course, significant uncertainty over these claims, but the cost of not taking a significant participatory role in this potential market are clearly substantial. Export of SMR technology would certainly improve the return on investment.

5 Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to coordinate UK actions including international engagement on SMR development and future deployment?

61 Centre for Nuclear Engineering, Imperial College London – Written evidence (PNT0054)

5.1 There is insufficient sustained and robust investment in SMR technologies at present. Public funding of fission R&D was approximately £120m in 2015/16 (less than in 2010/11), however, the majority of this is devoted to waste and decommissioning. In terms of reactor technology R&D, the figure is a modest fraction of that £120m. Public funding for SMR specific R&D is essentially negligible.

5.2 To stimulate R&D, there must be sufficient funding. Current funding is often sporadic, with significant portions of this money arising from what sometimes appears to be political expediency rather than coordination according to a strategic plan. Any route to the deployment of SMRs will necessarily require significant funding and coordination. The outcome of the current SMR competition will be a timely point at which to establish a future R&D strategy.

5.3 In comparison to our international colleagues, the UK has taken a relatively passive involvement in nuclear technologies in recent years. As global energy demand increases and pressure on other technologies increases, it is important that we attempt to recover our position, and international engagement is an effective means by which to achieve this. In terms of coordination, this is a role that an Executive Authority could fulfil.

6 Are the criteria set out by the Government for the SMR competition appropriate? If not, what should the criteria be? What timescale should the Government be working to in choosing an appropriate SMR design for the UK?

6.1 The first five criteria (Constitution, Offences, Sanctions, Solvency and Non-proliferation) are sensible – and obviously so. The only criteria worthy of discussion are Capacity and Modularisation. Capacity is stated as 'having a generation capacity up to circa 300MW'. This definition is essentially arbitrary and, depending on the nature of the deployment, irrelevant. Firstly, the main feature of SMRs is the ability to construct the principal components in a production-line factory setting, with subsequent transport to site – and this has naturally led to ('small') designs with capacities of approximately 300MW and below, but it is not, in and of itself, a criterion. Secondly, if the intention is also to deploy SMRs in unconventional sites, in particular as part of a more distributed grid, then there is likely to be a demand for units substantially smaller than conventional reactors. However, if the deployment is in the form of collections of modular units on larger sites, then the generation capacity of an individual unit is irrelevant. The criteria on capacity should be readdressed to enable construction of an economical SMR design that transforms the manufacturing model to enable the remaining criteria. In doing so, this provides the UK with a technology that can tackle needs and address challenges for energy supply within the UK market, as well offering the potential to contribute to the global energy market.

6.2 Timescales: If first grid deployment is to be by 2025-30, then the selection must be soon, say 2018. This will necessarily restrict the choice of SMR. If we are considering more ambitious reactors (eg alternative

62 Centre for Nuclear Engineering, Imperial College London – Written evidence (PNT0054)

fuel cycles such as fast reactors for a closed cycle or thorium as an alternative to uranium) then deployment will be some way off, likely beyond 2030.

7 Should the UK be involved in the development of Gen IV technology? If so, what funding and support should be put in place to place to help the UK establish a world leading position? Should our activity include development of one or more test reactors?

7.1 Dealing with waste, together with a potential shortage of uranium in the event of widespread global uptake of nuclear technology, is a driver for the development and deployment of Gen IV closed cycle technologies.

7.2 In the event that the UK embarks on an early deployment SMR programme (with necessarily conventional designs), and a significant global market develops, then Gen IV (all of which are non-UK) offerings will be attracted to the market and these could ultimately pose a competitive threat. Another possible scenario is that the UK skips Gen III(+) technology and focuses its activities on Gen IV technology. In either scenario, there would be a clear need to access international facilities (eg JHR) and benefits in involvement in related programmes (eg GIF). A closed fission cycle is also a competitive threat to nuclear fusion power.

8 Is the NNL fulfilling its remit appropriately? Can it deliver the required research to support the UK’s future nuclear energy policies? How does it compare to equivalent organisations in other countries?

8.1 The activity of the NNL is directed, principally, at the support of the Sellafield site. In this role, it provides services to Sellafield in regard to waste and it does this reasonably well. It certainly possesses world leading expertise in this area. In that sense, the NNL does partially fulfil its current remit. In a sector focussed on waste and decommissioning, this might well be adequate. In a growing and increasingly ambitious sector, it is plainly not. The NNL supports research only in as far as the profits from its waste management support business allow. This results in approximately £3M invested annually into research (of a total ~£217m research funding in 2015/2016) which is a frankly paltry sum and as a result, it is unable to act as a true National Nuclear Laboratory of the kind found internationally.

8.2 With its current model, NNL cannot provide the basic capabilities, expertise and facilities that one would need to support an ambitious new build programme. There is widespread nuclear R&D expertise in the UK and a national laboratory should support that activity through the provision of capabilities and facilities with reasonable user access costs – currently they are far too expensive at the point of use.

8.3 Other countries, particularly those with nuclear programmes of their own (US, France, Russia, Korea, Japan), possess national laboratories free from this narrow commercial focus, with a full spread of capabilities

63 Centre for Nuclear Engineering, Imperial College London – Written evidence (PNT0054)

necessary for the support of nuclear activities. They are able to deal with the unique challenges of nuclear research (active materials, licencing, security and safeguards, etc) and engage with industry and academia, in particular with regard to facilities access.

9 Is the remit of the National Nuclear Laboratory (NNL) suitable to provide research and development support to the UK nuclear sector? Is the current funding and governance model for the NNL appropriate to its role and remit?

9.1 As indicated in our response to question 8, the remit of the NNL is certainly not suitable to provide research and development support to the whole of the UK nuclear sector. In particular, it cannot rely on a profit recirculation model if it is to take on the role of a true National Laboratory. Additional funding must be reliably provided to enable the NNL to support research and development in the UK nuclear sector, under the direction of the Executive Authority.

10 Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved? Who has oversight of the whole nuclear R&D landscape, including international activities?

10.1 Nuclear research is spread across national laboratories (NNL, UKAEA, STFC, etc), industry, research facilities (NAMRC, DCI, NNUF), and universities (with notable clusters of capability, for example, at the Dalton Institute, the Centre for Nuclear Engineering at Imperial and the South West Nuclear Hub). There is a great deal of collaboration across all of these organizations, as seen in programmes funded by the Research Councils, (eg Nuclear related Centres for Doctoral Training, EPSRC DISTINCTIVE consortia, NNUMAN, etc) and industrially funded University Technology Centres (eg Rolls-Royce UTCs).

10.2 Collaboration within the nuclear R&D community has been largely developed through necessity, in light of a small community modest and unpredictable funding. There is minimal overall coordination, although we acknowledge the positive presence of the Nuclear Champion network funded by the EPSRC.

10.3 Oversight of the whole nuclear R&D landscape, including international activities is currently one of the remits of the NNL. As stated earlier, it is ill equipped to fulfil this role. Universities, with their natural independence and international collaborations have collective oversight of much of the R&D landscape, although this is not specifically coordinated. This is yet another role for an executive authority, combining the collective awareness of national laboratories, policy makers, industry and universities.

11 Was the Nuclear Innovation and Research Advisory Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be?

64 Centre for Nuclear Engineering, Imperial College London – Written evidence (PNT0054)

11.1 NIRAB proved useful in maintaining a focus on nuclear R&D and indicated those areas demanding additional support in a landscape that had little strategy. In that sense it was successful, although it possibly paid too little regard as to how skills and expertise were to be developed. This may have been a result of the relatively small number of academic staff on the membership. Ultimately its conclusions and opinions were not followed by the executive capacity necessary to drive the research ambitions. An Executive Authority of the kind indicated in our response to question 1 would seem most appropriate, providing vision, direction and deployment of resource to meet strategic aims.

24 February 2017

65 Centre for Nuclear Engineering, Imperial College London, Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) and Professor Grace Burke, University of Manchester – Oral evidence (QQ 1-8)

Centre for Nuclear Engineering, Imperial College London, Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) and Professor Grace Burke, University of Manchester – Oral evidence (QQ 1-8)

Transcript to be found under Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC)

66 Dalton Nuclear Institute, University of Manchester – Written evidence (PNT0018)

Dalton Nuclear Institute, University of Manchester – Written evidence (PNT0018)

Preamble

1. The Dalton Nuclear Institute (DNI)13 provides a focus, both within The University of Manchester and for external stakeholders, in order to promote and further develop the work of the nuclear community at the University and support it in delivering impact, knowledge and skills across the nuclear sector. This community has interests that span the entire nuclear fuel cycle from fuel technology, reactor development and operations through to waste management, decommissioning, fuel recycling and final repository. This response, which is being submitted formally on behalf of The University of Manchester, incorporates the views of that community although some members may also choose to submit personal responses and/or contribute to others.

Overall Responsibility

2. Responsibility on UK nuclear R&D policy must lie with the UK Government, currently BEIS, though some coordination with Devolved Administrations, for example on waste, is needed. Government should be supported by consultation with industry through the Nuclear Industry Council (NIC) and with the research community through a successor body to the Nuclear Innovation and Research Advisory Board (NIRAB). International collaboration and investment are such important aspects of nuclear power that it is worth considering setting up an agency, possibly alongside the National Nuclear Laboratory (NNL), to manage these activities on behalf of BEIS.

Sector Deal

3. In response to the potential for a nuclear “sector deal” as described under the BEIS green paper on industrial strategy, the same issues arise. The nuclear industry has made good progress on integration and communication of its activities and needs over the last few years and there has been substantial Government investment through the NNUF (National Nuclear User Facility) and the formation of the Nuclear AMRC within the HVM Catapult, but arguably these facilities have yet to reach their full potential without a clear nuclear R&D policy and execution framework.

4. The main tactical barriers to development of the nuclear power generation sector beyond the currently planned large Gen III+ plants are: identification and licensing of sites; selection and licensing of designs; securing investment and managing the risks entailed; involvement of UK companies in the supply chain; and supply of qualified staff. However, behind these barriers lies a lack of policy on the type and extent of reactor plant to be developed and how they would be deployed in a rapidly emerging energy mix, demand and distribution future. This needs to address not just the decarbonisation of

13 http://www.dalton.manchester.ac.uk

67 Dalton Nuclear Institute, University of Manchester – Written evidence (PNT0018)

electricity production, but the larger and more demanding imperative to decarbonise energy as a whole, including domestic heating and transport. The policy would also address how future reactors would form part of a future U/Pu/actinide usage, recycle, storage and disposal strategy.

5. Crossing each of these barriers requires a different form of support. This is currently handled through a range of organisations: Office for Nuclear Development (OND), Office for Nuclear Regulation (ONR), Nuclear Industry Association (NIA), Department for International Trade (DIT), National Skills Academy for Nuclear (NSAN) and the Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC). However there is no clear connection between these disparate activities and a policy-oriented approach to ensuring that a forward programme of reactor construction meets the UK’s overall needs. That in turn leads to lack of clarity on future R&D requirements, both short/medium and long term. The NIC has some responsibility but as a committee it has so far proved ineffective in providing the required level of support. It may be that some new body is required to take this role.

6. At present, credible future reactor plants can be divided into three categories – Gen III+ reactors that are developed from the existing Gen III GWe-sized water cooled reactors, small modular reactors (SMRs), likely to use existing PWR reactor technology, and Gen IV reactors using more advanced technologies (though these could also be small and modular). It should be noted that many Gen IV reactor types have actually operated as small/medium sized prototypes in the past (including in the UK) and so there is an existing (though decaying with time) experience base to build on.

7. Appropriate nuclear ‘sector deals’ would be different for the three categories.  Investment: Gen III+ and SMRs will need assistance in finding investment, through mechanisms such as the strike price for electricity and loan guarantees, or possibly direct government equity investment. SMRs and Gen IV reactors will also need support on development and the building of the first demonstration reactors.  Licensing: any construction of new reactor types is dependent on getting slots for Generic Design Assessment (GDA) through the ONR, which is increasingly under pressure. SMRs will also need assistance to minimise costs for sequential building of many reactors, through a streamlined site licensing process. When Gen IV designs reach the stage for demonstration reactor construction they will need assistance on preparing the first safety case, as is currently done in the USA.  Research: Gen III+ support is largely restricted to research on improving safety, such as development for accident tolerant fuels; support to SMRs will be focussed on areas such as development of advanced manufacturing technologies, efficient through-life management, and advanced control and instrumentation. Gen IV reactor research requires a longer term commitment from government, including re-involvement with the international Gen IV Forum and a re- examination of where UK work should be focussed – see paragraphs 16- 19.  Siting: Support is needed in identifying and evaluating sites that will be suitable for SMR construction, new fuel cycle plant and the first demonstrations of Gen IV systems.

68 Dalton Nuclear Institute, University of Manchester – Written evidence (PNT0018)

 Staffing: Expansion of reactor programmes beyond the current new build will require both an increase in engineering and technical staff to work on projects, but also the hot-housing of subject matter experts to lead research and innovation.

SMRs

8. There are many potential advantages of SMRs to the UK:  Opening-up of a wider range of nuclear sites including inland sites;  More flexibility in energy usage, including load following, thermal or hydrogen storage, domestic and industrial heat supply.  Faster construction times.  Low unit capital costs opening new investment routes.  Possibility of introducing advanced manufacturing techniques.  Possibility of UK companies owning IP on reactor or systems designs.  Opening of supply chain to UK companies.  Opening of new overseas markets.  Small-sized, modular units will probably be easier to decommission.  Failure of other countries to invest could give the UK an advantage if we took the risk to host a demonstration SMR project.

9. There are also a number of risks in pursuing an SMR option:  Lower generating costs can only be achieved with larger sequential orders, enabling factory production and modular construction. Otherwise the real loss of economy of scale compared to larger plants may well prevail.  The first SMR plants are likely to be more expensive than current Gen III+ designs in terms of capital cost per GWe and electricity generation cost per MWh.  There are currently many options so investment in the wrong choice would be expensive and result in the UK owning a few dead-end reactors.  Each available option has advantages and disadvantages making it difficult to choose a winner.  It is most likely that the UK needs to have an overseas partnership and there will be risks associated with the current volatile international situation that is likely to continue for the foreseeable future. It is very unlikely that the UK alone would provide a large enough SMR market to justify investment.  Internationally, several countries, notably the USA, South Korea and China, have already made large investments in SMR designs and progress on licensing.

10. At this point, many “advanced” SMRs, particularly those not based on PWR technology, are very much ‘paper reactors’ and it is presently very difficult to form an objective view of the strengths, weaknesses and technical maturity of the competing concepts and designs. It is therefore essential that an objective, transparent methodology to evaluate the different options is put in place. This evaluation must address holistically the whole fuel and life cycle and not just the reactor itself.

69 Dalton Nuclear Institute, University of Manchester – Written evidence (PNT0018)

11. However, the different candidate SMRs offer Government a range of options, from relatively well-developed technologies, where the UK could enter an established consortium and play a defined role, to immature concepts where the UK could have a much more substantial part. The different options offer very different risk/reward scenarios and the choice is for Government to make.

12. The development and deployment of SMRs will raise major societal questions associated with siting and public acceptance; for example the use of SMRs to provide combined heat and power requires deployment close to or in centres of population, which has not historically been the case for UK nuclear plants. The answers to these fundamental questions will greatly affect the utility of SMR technology and it is difficult to estimate benefits, disadvantages and risks until we understand more about the practical deployability of SMR technology, including these non-technical issues. Research on SMRs should therefore not focus exclusively on technical matters but must also address the wider questions of deployment, both in the UK and, if we are to be involved in exporting the technology, overseas.

13. It is likely that any new entrant countries to nuclear will use SMRs as an entry. The ubiquity of deregulated electricity markets in developed countries will also favour SMRs, while larger countries with well separated urban centres will find SMRs easier to integrate into electricity networks. The UK 2014 SMR feasibility study estimated a market size of 65-85 GWe, valued at £250-400 billion.14 The UK could in principle supply about 15% of this market, giving an opportunity of £37.5-60 billion, but the value to the UK would be higher for SMRs built in the home market. If SMRs are successful, then clearly it would be a market of which we would want a share. Alternatively, the UK could concentrate on the development/manufacture of specific SMR components (‘the Airbus model’). This strategy would have lower inherent risk for the UK, but also correspondingly lower potential rewards.

14. Funding of generic R&D on materials, advanced manufacture, digital systems, nuclear data and modelling needs to be increased. Increased support at higher TRL will need the selection of an actual design and this should be the focus of BEIS SMR activity. Design selection will require a judgment on the feasibility of different reactor designs and of systems that could be introduced within 10 years which, realistically, will be PWR-based. See paragraph 10 for suggestions on design evaluation.

15. The preoccupation with withdrawal from the EU, and the associated change of Government, have made progress on the SMR competition difficult. It is disappointing that promises made in the Phase 1 competition briefing have not be fulfilled, specifically publication of: the conclusions from the Techno- Economic Assessment; the outcome of Phase 1; a roadmap; and the specification of Phase 2. The terms of Phase 1 of the competition were vague and it amounted to a consultation with interested parties. Any future competition should have some clear objectives directed at the selection of a

14 “Small Modular Reactors Feasibility Study”, National Nuclear Laboratory, December 2014

70 Dalton Nuclear Institute, University of Manchester – Written evidence (PNT0018)

design and the establishment of a programme to build a demonstration reactor. The feasibility study led by NNL indicated that SMR designs based on LWR technology could be built within 10 years. Phase 2 of the competition should eliminate the designs for Gen IV systems and focus on credible designs that could be producing power by the late 2020s. In view of the long period since the submission of Phase 1 of the competition and the changed circumstances of some of the companies involved, it would be best if the competition were reopened at Phase 2, specifically seeking submissions on a tighter specification for the short-term introduction of SMRs.

Gen IV Technology

16. It is unlikely that electricity generated from Gen IV reactors will be cheaper than GEN III+ reactors unless uranium prices increase very substantially due to the scale of new nuclear build leading to the exhaustion of low cost deposits at a rate exceeding that of new discoveries. Some estimates would defer interest in Gen IV reactors to past the end of the century, while others would postulate Gen IV reactors becoming necessary by 2040.

17. Development of Gen IV reactors to meet cost, safety and engineering requirements will take at least 10 years for established systems like High Temperature Gas Cooled reactors and Sodium Cooled Fast reactors, where the UK has current experience (AGRs) and past experience (DRAGON HTR, and DFR and PFR Sodium Cooled Fast reactors). It will take at least 20 or 30 years for systems where we have little or no experience: Lead Cooled Fast reactor, Gas Cooled Fast reactors, Molten Salt reactors and Supercritical Water reactors. There are currently about 70 concepts being developed world-wide and most of them will never be built.

18. Involvement in a Gen IV reactor at this stage would be very risky, with the exception perhaps of the construction of a U-Battery micro-reactor. A good strategy would be to continue low TRL research on Gen IV materials and systems to work towards selection of a Gen IV option in around 10 years’ time. At the same time a junior role in an existing Sodium Fast reactor programme, specifically ASTRID, would enable existing experience in the UK to be used, develop capability for future work, and allow the UK to be an active member of the Gen IV Forum.

19. If the UK wants a leading role in Gen IV development then, rather than focusing on reactors, where there will be substantial competition and the UK expertise remains only in certain areas such as materials performance, we could play to our strengths and develop other fuel cycle facilities, particularly fuel development/manufacture, and recycle, where we have much more credibility. It should be remembered that the UK has carried out no large- scale development and demonstration of new reactor systems (apart from naval reactors, which are PWRs) since the early 1990s. There is little appreciation amongst the current proponents of “advanced” reactors as to how complex, how expensive and how protracted this process can be.

Governance

71 Dalton Nuclear Institute, University of Manchester – Written evidence (PNT0018)

20. The NNL has played an important role in clarifying issues on nuclear energy policy through position papers and its work with key customers like the NDA. In comparison with equivalent organisations overseas, NNL is strong in its capabilities on the nuclear fuel cycle and radioactive waste management but much weaker on reactor technology, where, for historical reasons relating to the break-up of AEA Technology, the capability is largely held by AMEC Foster Wheeler. The absence of core funding has made it difficult to expand into the broader role required of a ‘National Laboratory’. In view of the new nuclear build programme underway and the possibility of expanded work on SMRs and Gen IV systems, consideration should be given to providing some core funding for capability development in all aspects of reactor technology.

21. It is very difficult to find an authoritative statement of the remit of the NNL and therefore hard to say whether the NNL meets that remit or not. We suggest that a National Nuclear Laboratory’s remit should comprise:  being the UK’s National Capability for nuclear fission;  operating and providing access to specialised nuclear facilities for the UK research community; and  translating low TRL research into practical deployment in the nuclear energy sector.

22. NNL’s current dependence on commercial income creates the potential for substantial conflict of interest between its ‘National Laboratory’ role and the need for commercial viability. The structure and operation of NNL should be such that the potential for such conflict is eliminated. Creation of the Agency mentioned in paragraph 2 and allocation of NNL’s National Capability role to that would allow separation of NNL’s commercial activities and removal of this conflict.

23. Despite the move to make NNL self-governing rather than a contractor-led laboratory being effective, it has proved difficult for NNL to support the sector fully, as it depends solely on specific contracts, mainly from publically- funded organisations. Support for commissioning of the Central Laboratory was very helpful, but some core funding to shape the organisation to support the sector fully is needed.

24. The relationship between the NNL and the UKAEA needs to be considered, particularly as the UKAEA is developing capabilities that are relevant to the nuclear fission sector and as the future of fusion programmes is uncertain with the UK withdrawing from the EU and Euratom. However, the commonalities between fission and fusion should not be overstated. There are areas of common ground related to engineering and materials but also very substantial areas of difference.

25. NIRAB filled a gap in the co-ordination of research activities. It was effective in defining the needs for higher TRL research and the implementation of the BEIS-supported Nuclear Research and Innovation programme.

26. However, NIRAB had little effect on the research funded through the Research Councils. Underpinning research at low TRLs lies in the remit of at least four of the Research Councils (EPSRC, STFC, NERC, ESRC). These vary

72 Dalton Nuclear Institute, University of Manchester – Written evidence (PNT0018)

greatly in their commitment to nuclear R&D and their activities are not well integrated.

27. It is to be hoped that these problems are addressed with the creation of UK Research and Innovation (UKRI). In moving forward to the formation of UKRI, it will be important to address the disconnect between the individual Research Councils, to consider the relationship with any NIRAB successor and to prioritise international nuclear research collaborations.

28. NIRAB was successful in linking all nuclear research activities in the UK (apart from those related to the NDA estate, including geological disposal), but as a committee it had limited impact beyond making recommendations. Moreover, translation of its recommendations into programmes of work has been a very slow process.

29. A permanent successor to NIRAB is needed to provide long term oversight of the UK’s civil nuclear R&D and advice to Government. The successor should also have oversight of R&D in the NDA mission areas, which NIRAB did not, in order to ensure coherence, and should have either control of its own research budget or some clearly defined role in shaping the UKRI programmes.

Additional Comments- Euratom.

30. The intention to leave the Euratom Treaty arrangements as part of the UK’s exit from the European Union has serious implications for research.15 Nuclear research is a global undertaking and for many years the UK has played a full part in this through the Euratom research programmes. Euratom programmes are also open to nations outside the EU, though they cannot receive funding, and many nations (for example Argentina, Australia, Belarus, Canada, China, Japan, Kazakhstan, Russia, South Africa, South Korea, Ukraine, USA and Uzbekistan) participate in Euratom programmes on a ‘pay to play’ basis. By leaving Euratom, the UK will fundamentally change its relationship with what is probably its main vehicle for participation in global nuclear research and risks irreversible damage to the UK research community, just at a time when it is starting to recover from three decades of decline. To avoid this damage, Government needs to ensure that: i. the ‘lost’ European research funding is compensated; ii. there is no hiatus between leaving Euratom and the establishment of new arrangements (the lead time for research projects means that projects running well beyond the time horizon for Brexit are already being developed); and iii. the arrangements are put in place early enough and over a long enough time that projects can include UK partners with confidence.

19 February 2017

15 http://blog.policy.manchester.ac.uk/posts/2017/02/euratom-and-leaving-the- european-union/

73 Mr Simon Dawson – Written evidence (PNT0002)

Mr Simon Dawson – Written evidence (PNT0002)

1. The government should be wholly responsible for the cost of SMRs and should support the relevant Electrical Company for Design Manufacture and Deployment of these.

3. The cost of deployment is significantly lower than full reactors and therefore would benefit being deployed at existing de-commissioning sites which cannot reasonably remove all hazards. These brownfield sites could then be utilised and the further costs of de-commissioning could be built offset into the price per unit of generating energy. The government would generally be the winner by not having to pay out twice.

13 February 2017

74 EDF Energy – Written evidence (PNT0039)

EDF Energy – Written evidence (PNT0039)

Executive Summary

 Nuclear Energy can be an area of economic and strategic national strength, and provide the UK with a safe, reliable, affordable supply of low-carbon electricity.  The Department for Business, Energy and Industrial Strategy (BEIS) has a central role in setting coherent and consistent long term policy for civil nuclear activities, but this should be done in conjunction with other government departments, and in consultation with the industry and the Nuclear Industry Association especially on any future sector-specific industrial strategy  It is vital to support the UK’s nuclear ambitions that we continue to invest in world class research and development and make the most of the talent within our university system, national laboratories and industry in the field of Nuclear, with an appropriate level of international collaboration.  EDF Energy strongly supports the government investment in Nuclear R&D and Innovation. However, it is essential that research is informed by the needs of industry, and that research funding is directed towards those sectors where the UK can maintain a competitive edge.  Consequently, EDF Energy suggests the creation of a permanent successor body to NIRAB, so that to maintain momentum and strategic alignment for R&D across the UK Nuclear Industry. NNL could play a central role in supporting this new Board that should involve representatives from the industry, national labs, academia, government and appropriate regulatory bodies.  NNL and EDF Energy have been working closely and successfully together since 2005. The commercial focus of NNL, supported by world-class active facilities and skills is directly supporting EDF Energy’s lifetime extension of the AGR fleet.  EDF Energy, believes the Industrial Strategy provides a timely opportunity to re-evaluate the role of Small Modular Reactors (SMR) in the context of a wider nuclear strategy. SMR development and deployment presents an opportunity for resetting the UK as a leading nuclear nation. Successful realisation will require many elements to come together: o Strong collaboration, transparency and alignment across the UK Government and Industry. EDF Energy believes the establishment of a Government-Industry Advisory body can help co-ordinate this collaboration and focus on the delivery of the necessary SMR Roadmap. o A clear focus on unlocking a competitive, financeable and international marketable product will be required. o Achieving a balanced approach to collaboration between the UK and other nuclear nations. o SMR innovations through targeted research and development. o Continuity in Policy and support.

UK Nuclear Policy

75 EDF Energy – Written evidence (PNT0039)

Q1 - Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities including international collaboration and, within the UK, for cost- effective and efficient articulation of the different elements of nuclear work?

1. The Department for Business Energy and Industrial Strategy (BEIS) has the policy lead for the civil nuclear sector. With the expanded role of BEIS now incorporating Industrial Strategy, this Government Department is clearly the right place to ensure that the UK has a coherent and consistent long term policy for civil nuclear activities. In doing so, BEIS will need to work closely with other Government departments – notably the Department for International Trade (DIT) on inward investment and on trade issues relating to the nuclear sector.

2. In the Government’s ongoing consultation on Industrial Strategy, industrial sectors are asked to propose themselves as candidates for sector-specific Industrial Strategies. The Green Paper asks that this be done behind strong sector leadership. For the UK nuclear industry this sectoral leadership will come from the Nuclear Industry Association (NIA) which is the industry’s trade body. Hence, the NIA also has a role in helping Government to understand the capabilities of the industry, its recent achievements, its role in supporting the UK economy after the country has left the EU, and in understanding what elements of policy are essential to help the sector flourish.

3. In summary, BEIS has the central role of setting policy, but this must be done in conjunction with DIT and in consultation with the NIA especially on any future sector-specific industrial strategy.

Q2- The Government’s industrial strategy green paper discusses a possible ‘sector deal’ for the nuclear sector. How might the nuclear sector benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal?

4. The Government’s Green Paper on Industrial Strategy introduces the idea of ‘sector deals’. It makes an open call to business to organise behind strong leadership to address shared challenges and opportunities. The UK civil nuclear industry already has a strong ‘single voice’ in its industry body – the Nuclear Industry Association (NIA). The NIA would be the obvious leadership for such a deal for the nuclear sector.

5. The sector deal will include the essential and specific enablers that the industry identifies to underpin a strong industrial strategy for the sector. Initial work on this is ongoing, and we welcome the leading role identified for Lord Hutton especially on competitiveness and skills.

SMRs and Gen IV technologies

Q3 - What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

76 EDF Energy – Written evidence (PNT0039)

6. The UK has, in SMR, a timely opportunity to re-establish itself as a leading nuclear nation by designing and building something that works for the UK energy system, brings industrial benefits to the UK and has export potential.

7. Success will be dependent on a clear and aligned vision, focussed on delivering a truly competitive, financeable and internationally marketable product. This vision will need to be backed by strong alignment and collaboration of UK Government, Industry, Regulators and Investors with appropriate international collaboration.

8. SMR development has the potential to play an important role in meeting the future UK Energy needs, utilising UK skills and manufacturing expertise. Opportunities exist in international energy markets, with additional applications beyond just mainstream electrical generation to grid. SMRs will need to be successfully marketed in the international arena in order to achieve the economies of scale necessary to make it a truly competitive and affordable low carbon generation solution.

9. The combined potential of both the home and international markets present an exciting opportunity for future UK trade exports, leveraging on international investment and collaboration in the Nuclear Renaissance. A successful UK SMR programme is complementary to the UK’s New Nuclear Build strategy and support the UK in achieving its ambition to become a world class nuclear Leader, through delivery of innovation breakthroughs and reinvigoration of the UK nuclear sector. SMR development also gives the opportunity for a balanced international collaboration in nuclear engineering and manufacturing between the UK and other nuclear nations.

10. Consistent with Government strategy, large new nuclear can continue to be invested in, to provide underlying certainty in meeting the UK’s long term energy supply requirements. SMRs offer the complimentary benefit of incremental medium term ‘tuning’ of supply to meet demand by virtue of their potential to be deployed in shorter timescales and smaller capacities. Additional flexibility is provided through the ability to increment the capacity of established SMR sites through the addition of further modules (or temporary non-operation thereof during extended periods of over supply).

11. The shorter timescales stand to be achieved by virtue of SMRs reduced energy size, enabling simplified passive and less interactive safety systems, reduced cooling needs and hence construction footprint. Timescales for Civil construction works are also reduced, in part due to the smaller footprint but also due to the increased ‘in-factory’ standardised modular assembly, and testing. Once the First of a Kind (FOAK) has been demonstrated then these attributes will increase attractiveness of SMR to investors, and to international markets.

12. Further international markets export opportunities exist over and above those with similar UK electricity grid infrastructures, with the potential application of SMR in remote (“off-grid” or reduced centralised grid infrastructure) environments, combined heat and power, desalination etc. SMRs can also make a positive contribution to a more resilient, independent

77 EDF Energy – Written evidence (PNT0039)

and low carbon UK grid supply by virtue of their geographical distribution and aggregation (e.g. potential to site in weaker grid locations etc.)

13. The profile of SMR could also benefit and smooth the Nuclear Supply Chain and Skills demand created by the more binary step changes arising from the long lead time of large nuclear build. Continuity in demand for a combined large nuclear and SMR build and operations programme provides the downstream supply chain with confidence to invest in infrastructure and people. Efficiency improvements for all nuclear should then follow, in turn reducing the delivered cost of electricity. Furthermore, investment in UK nuclear supply chain is also good for the wider economy and could have knock-on increased technical capabilities for other industries (e.g. automotive, transport etc).

14. Other considerations in the context of potential risks, opportunities and disadvantages include: the potential distraction from delivering the large new nuclear strategy, the importance of public perception if locational deployment benefits are to be realised, and competition from other SMR nations.

Q4- What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

15. The potential scale of the global market opportunity has been reported by independent studies such as NNL’s 2014 SMR Feasibility report, which cites a range of 65 – 85 GW16 (200 – 300 SMRs17). These studies utilise a logical sequence of assumptions and can be considered a good guide to the potential global market opportunity. Nonetheless, such assessments are still desk top exercises and greater certainty is needed by all interested stakeholders in SMR development to assess and verify the global potential. We would advocate this verification exercise being one of the initial deliverables of a UK SMR Roadmap. Such an exercise should include experience and representation from Government Trade experts as well as other experts, giving careful consideration to several key elements: o UK Trade Relations and priorities. o Compatibility of the host nation’s supply chain aspiration with that of the SMR Vendor. o Demonstrable financing capability. o A countries commitment and performance to meeting decarbonisation targets. o The size of SMR units (current designs range from <50 MWe to <500 MWe (MegaWatts Electrical) o Appetite for other SMR applications (Heat, Desalination, ‘Off-Grid’ electricity etc.)

16. Several designs of SMRs are currently in development internationally, none of them being commercially available at this point. There is a narrow window of opportunity for the UK to join an existing programme or to initiate a new programme.

16 Assumes SMRs achieve cost parity with large nuclear 17 On an assumed SMR size of 300 MW.

78 EDF Energy – Written evidence (PNT0039)

17. The potential consequence and cost of the UK electing not to take full advantage of the opportunities of SMR can be considered in the context of two high level scenario outcomes.

18. In one scenario, International SMR development stalls, in part due to lack of UK engagement, and SMRs are not deployed on a commercial scale. Short to medium term development resource requirements would be reduced. However, the opportunity to have access to a secure small-medium scale low carbon generation asset, compatible with meeting the changeable demand needs of the UK Energy sector, would be missed. Similarly, the opportunity to create export value, intellectual property and nuclear skills development would also not materialise.

19. In the second scenario of the UK not taking full advantage of SMR. The UK does not take a proactive role in the development of SMR but SMR is developed by another lead nuclear nation. Again, this has some short to medium term resource savings and is arguably a lower initial risk profile. The UK would still retain the option to become a potential SMR customer if it concludes that SMRs are a necessary and affordable part of the future UK Generation Portfolio. Indeed, it could even be the host nation of the First of a Kind (FOAK) SMR should it chose to do so. However, the UK would then become an importer of SMR technology and know-how, having missed the opportunity to realise the value potential and returns on investment afforded through taking a lead role in the technical development, innovation, and demonstration phase. Opportunities may still exist under this scenario for UK Supply Chain involvement, but the level of influence or cost for doing so would be dependent on the relationship with the lead developers.

20. Under both scenarios, the development and retention of UK nuclear skills and expertise would be more constrained than under a scenario in which the UK takes full advantage of the opportunities of SMR and takes a lead role. Taking less advantage of SMR could also impede the UK in achieving its strategic aspiration to be seen as a global leader in the nuclear renaissance.

Q5- Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to coordinate UK actions including international engagement on SMR development and future deployment?

21. The investment in Nuclear R&D by Research Councils (in particular EPSRC) has grown over the last decade from a very low level. This investment has managed to rebuild a coherent research community. The UK is internationally competitive in several areas of Nuclear R&D. These skills and expertise could be leveraged to contribute to any nuclear programme, including SMR. The R&D and Innovation programme commissioned in November 2016 by BEIS is another positive move. While not specific to SMR, several outputs of the programme will directly support the development, the licensing and the construction of any SMR designs in the UK. We consider that further R&D investment is appropriate but that first

79 EDF Energy – Written evidence (PNT0039)

and foremost greater clarity on the Nuclear Strategic direction and roadmap, including SMR, should be developed in order that R&D investment can be targeted at common and priority nuclear development areas.

22. We would advocate the UK Government taking further steps to coordinate international engagement on SMR development. Many of the priority issues and questions facing interested Stakeholders are common and could benefit, both in terms of credibility and resource leverage, by adopting a collaborative cross industry and international approach. Such an approach would support the development of key areas such as policy; verification of technology innovation (including R&D prioritisation), market size and deliverability claims, international licensing co-ordination and consideration of the financial challenges of SMR deployment.

23. We believe that the UK SMR Programme would benefit from the formation of an SMR Advisory Body consisting of informed and experienced representatives from Government, Industry (including technology, manufacturing and licensed owner operator representation), Finance, Regulatory Bodies and Academia. Such an Advisory Body could support the development of a coherent UK Roadmap and the associated deliverables and proof points that such a roadmap would require.

Q6- Are the criteria set out by the Government for the SMR competition appropriate? If not, what should the criteria be? What timescale should the Government be working to in choosing an appropriate SMR design for the UK?

24. The competition criteria and process for the UK Government SMR competition is unclear and this creates ambiguity on the objectives and timescales for SMR. EDF Energy welcomes the launch of the Government’s Industrial Strategy consultation and this House of Lords Inquiry. We consider this provides a much needed opportunity to set the right context for SMR going forward in dialogue with all SMR stakeholders as part of the development of a coherent SMR Roadmap, which is consistent with, and in context of, the development of a wider nuclear and industrial strategy.

25. EDF Energy would advocate the development of a UK SMR Roadmap providing clarity on the requirements for all stakeholders with criteria such as: o Clarity on Technology priorities and associated aspirations on timing and innovation: o Clarity on whether UK is seeking an SMR that will compete as a scaled down PWR (i.e. close coupled requiring less innovation) or a fully compact and integrated design (requiring greater innovation and potentially greater development time). o Aspirations and timings to develop next generation technology (e.g. molten salt). o Timescale for connection of a FOAK SMR to UK Grid. o Export requirements and any known target markets. o The application requirements (Grid electricity generation, remote grids, heat supply etc.)

80 EDF Energy – Written evidence (PNT0039)

o Appetite for international partnering, shared IP and Supply Chain. (Noting international collaboration may provide more efficient means to fund, deliver and secure exports). o Competitive Levelised Cost of Electricity (LCOE). o Capability to Finance the SMR. o Capability to License (UK and international). o Siting.

Q7- Should the UK be involved in the development of Gen IV technology? If so, what funding and support should be put in place to place to help the UK establish a world leading position? Should our activity include development of one or more test reactors?

26. Although it is thought unlikely that GEN IV plant will be commercial until 2050 or later, the current minimal UK engagement in this area of international R&D needs to be increased if the UK wishes to re-establish itself as a major nuclear country.

27. The contribution of the UK to the development of Gen IV technology should be done primarily through a stronger participation in international programmes to leverage its national capabilities and influence international research programmes.

28. The UK has some specific and unique experience to offer from the operation of ‘high temperature - graphite moderated - gas cooled’ plants. Greater UK engagement should in the first instance exploit these areas of existing strength. This will ultimately support UK supply chain to access international market.

29. A direct support from the Government is expected, as Gen IV Programmes are too long-term to attract significant private investment.

30. EDF Energy is not currently involved in any projects related to Gen IV.

Governance

Q8- Is the NNL fulfilling its remit appropriately? Can it deliver the required research to support the UK’s future nuclear energy policies? How does it compare to equivalent organisations in other countries?

NNL and EDF Energy: a successful collaboration

31. NNL and EDF Energy have been working closely together since 2005 to develop the provision of a through-life science and technology partnership. It culminated with the signature of a Lifetime Enterprise Agreement (LEA) in 2017, ensuring the availability and reliability of key facilities and the retention of SQEP nuclear skills, technical knowledge and capability to support EDF Energy’s lifetime extension of the AGR fleet.

32. EDF Energy currently spends an average of £17M per annum with NNL mainly on Post-Irradiation Examination of fuel and graphite. This work is mainly carried out at B13 Sellafield.

81 EDF Energy – Written evidence (PNT0039)

33. The collaboration extends to R&D. In January 2014, EDF Energy, EDF SA and the NNL signed a letter of intent to coordinate their effort to develop long term R&D collaboration on skills, research activities and infrastructure / facilities. Current R&D collaboration includes radio chemistry, carbon deposition on spent fuel, and Modelling & Simulation.

34. As part of the strategic partnership between the NNL and EDF Energy, NNL invited EDF Energy onto NNL’s Technical Advisory Board (TAB). The purpose of the TAB is to provide advice to the NNL Board and Executive Leadership Team on the impact of Science, Technology and Engineering in underpinning NNL’s Strategic Plan and NNL’s strategic objectives. EDF Energy’s membership on the TAB ensures the objectives of its through-life management strategy are considered within NNL’s S&T programmes.

35. NNL’s model leads to a strong commercial focus, which is beneficial to the delivery of solutions and impact to EDF Energy and to the nuclear industry in the short to mid-term.

Comparison to equivalent international organisations: a singular model

36. NNL is a government owned, government operated national laboratory, which operates on a commercial basis. This is quite different to the organisation and funding model of equivalent organisations in other large nuclear countries (e.g. USA, France, China). In these countries, a significant part of the funding of the national labs is coming from government agencies.

37. In France, the Nuclear Division of the CEA beneficiates from a highly- qualified staff of more than 4000 employees, active facilities, and test reactors. Their activities cover the whole nuclear chain (fuel design, reactor design, reactor operation, fuel recycling, waste, decommissioning) and the different time horizons (existing nuclear fleet up to Generation IV).

38. Regarding Gen IV, the CEA is leading the development of ASTRID reactor (Sodium Fast Neutron Reactor), supported mainly by public funding. EDF is one of the partners of the project, representing the nuclear operator in the consortium.

39. Regarding the support to the existing nuclear fleet, EDF are contracting part of their research activities to CEA (about 40 m€ pa of direct funding from EDF to CEA). In 2012, the “Tripartite Research Institute” (Institut de Recherche Tripartite) has been set up by the French Government. It aims at better coordinating the research activities led by the CEA, EDF and AREVA; and at giving a stronger focus to the shorter-term support to the nuclear industry.

Q9- Is the remit of the National Nuclear Laboratory (NNL) suitable to provide research and development support to the UK nuclear sector? Is the current funding and governance model for the NNL appropriate to its role and remit?

R&D is needed to support UK’s nuclear ambitions

82 EDF Energy – Written evidence (PNT0039)

40. Nuclear Energy can be an area of economic and strategic national strength. It can provide the UK with a safe, reliable, affordable supply of low-carbon electricity and with commercial opportunities for our supply chain. As a result, it is vital to the health of the nation’s economy that we continue to invest in world class research and development and make the most of the talent within our university system, national labs and industry in the field of Nuclear. International collaboration is crucial as well, so that to leverage funding and to gain access to international results so to learn from other countries’ experience.

41. To maximise the impact of the investment in R&D, it is however essential that research is informed by the needs of industry, and that research funding is directed towards those sectors where the UK can maintain a competitive edge.

42. R&D is also vital to attracting people with certain key technical skills and to maintaining and developing them for the future.

A reinforced role of NNL in the coordination of R&D

43. NNL has reinforced recently their Innovation Research and Development (IR&D) programme, looking to deliver longer-term projects supporting the UK’s nuclear capability. This is a positive evolution, complementing the commercial focus, which is beneficial to the delivery of solutions and impact to the industry in the short to mid-term.

44. The IR&D is although limited, giving to the NNL less ability to engage directly in longer-term R&D than equivalent organisations in other countries.

45. NNL and UK universities are also engaged in longer-term R&D through public funding from research Councils (in particular EPSRC) and international collaboration (in particular European projects).

46. In the context of Brexit and exit from Euratom, a more joined up approach could enhance the impact of the longer-term R&D and then support better the UK’s nuclear ambitions. NNL could play a role there without a profound and radical change of the funding and governance model, and without being placed in competition with universities for the access to UK public funding.

Q10- Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved? Who has oversight of the whole nuclear R&D landscape, including international activities?

47. The nuclear R&D landscape is complex, with diverse sources of funding (either public or private) and numerous organisations delivering part of the R&D activities.

48. The EPSRC Nuclear Academic Community provides a certain level of coordination. It has been effective in developing a community across

83 EDF Energy – Written evidence (PNT0039)

different research centres in fusion and fission. However, it is not set up as a vehicle to oversee and influence the overall R&D strategy.

49. The development of local R&D “hubs” (e.g. South-West Nuclear hub and ANRC in Strathclyde), complementing the existing centres of expertise (e.g. Dalton Institute in Manchester), is a positive move. It supports multilateral discussions between industry and academic partners, and ultimately the identification of common challenges and the development of collaborative projects. However, each of the “hubs” represents only a subset of the wide technical scope of nuclear R&D and a subset of the nuclear community.

50. The co-ordination should then clearly be improved, so that to make the best use of the funding and achieve the greatest impact.

Q11- Was the Nuclear Innovation and Research Advisor Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be?

The positive role from NIRAB should be pursued

51. The Nuclear Innovation Research Advisory Board (NIRAB) has played a very positive role to develop a shared view on where research and innovation is needed to underpin Government and industry's nuclear strategy.

52. The recommendations issued in 2016 present a comprehensive and prioritised programme of R&D that represents the view of the whole UK Nuclear community. As an evidence of the success of NIRAB, their recommendations have been directly used by BEIS as a basis for the R&D and Innovation programme they commissioned in November 2016.

53. Now that a national Nuclear R&D Programme is initiated, it is key to maintain a strategic oversight as well as a more operational coordination.

54. For the strategic oversight, an Advisory Board should be put in place with the following remit:  Maintain momentum and strategic alignment for R&D across the UK Nuclear Industry.  Review the progress of the Nuclear R&D Programme vs roadmaps.  Agree significant update to the roadmaps, depending on the progress of the programme and the evolution of national and international context.  Facilitate links and engagement with International Programmes.

55. This Board should involve representatives from the industry, national labs, academia, government (BEIS, Research Councils, Innovate UK, UKRI) and regulator. Inputs from industry (nuclear operator, developers and manufacturers) are crucial to maximise future impact and industrial benefits of the public funding. EDF Energy is ready to play a strong role in this Forum, as we did for NIRAB. This Board should report to BEIS to provide advice and guidance.

84 EDF Energy – Written evidence (PNT0039)

56. In complement to the strategic oversight, arrangements should be put in place to ensure value from public investment and confidence in delivery:  To integrate and review the output and delivery of publicly funded civil nuclear research programmes.  To periodically update the civil nuclear R&D landscape review, as a means of monitoring the health of the landscape and the effectiveness of Government interventions.  To feed in the Advisory Board.

57. NNL, as a national lab bridging academic research and industry, is ideally placed to support the coordination of UK Nuclear R&D.

24 February 2017

85 EDF Energy, Nuclear Decommissioning Authority (NDA) and Office for Nuclear Regulation (ONR) – Oral evidence (QQ 20-30)

EDF Energy, Nuclear Decommissioning Authority (NDA) and Office for Nuclear Regulation (ONR) – Oral evidence (QQ 20-30)

Transcript to be found under Nuclear Decommissioning Authority (NDA)

86 Energy Technologies Institute (ETI) – Written evidence (PNT0012)

Energy Technologies Institute (ETI) – Written evidence (PNT0012)

Introduction 1. The Energy Technologies Institute (ETI) is a public private partnership between energy and engineering companies and the UK Government which is able to draw on the business and engineering expertise of key global players engaged in the UK energy sector (ETI private sector members: BP, Caterpillar, EDF, Rolls-Royce and Shell).

2. Over the past nine years the ETI has developed strong credentials in national energy system analysis, informed by the latest industrial and engineering expertise. This enables us to explore the lowest-cost decarbonisation pathways, under a range of assumptions, constraints and uncertainties. Our analysis has been widely cited by academics, government and by the Committee on Climate Change in its advice to government.

3. This submission is based on ETI analysis of projects we have commissioned and also on rigorous whole-system analysis informed by our public and private sector members and our portfolio of technology development and knowledge building projects18.

4. The response concentrates on the potential benefits, challenges and opportunities of deploying small modular reactors (SMRs) in the UK.

Summary Of Response 5. The ETI’s response concentrates on its recent projects and whole energy system analysis to better understand how SMRs can potentially contribute in the transition to a 2050 low carbon economy. Analysis indicates that SMRs could be potentially deployed as part of this transition, and their value depends on their expected capital cost. Potential UK deployment levels also depend on when an SMR design can be expected to receive regulatory approval together with the subsequent rate of UK deployment. Their value to a cost optimised UK low carbon energy system is enhanced if SMRs are connected to potential future city scale district heating systems and used to provide low carbon heat as well as generating electricity.

Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities including international collaboration and, within the UK, for cost-effective and efficient articulation of the different elements of nuclear work? 6. Responsibility should lie with Government ministers, supported by advice from expert departmental officials and interaction with industry. Guidance documentation from the International Atomic Energy Agency19 describes the requirements for national Governments to put fundamental national frameworks

18 Further details can be found in the ETI report ‘Options, Choices, Actions: UK scenarios for a low carbon energy system transition’, available via the ETI website www.eti.co.uk 19 Nuclear Safety Infrastructure for a National Nuclear Power Programme Supported by the IAEA Fundamental Safety Principles. INSAG-22 published September 2008. http://www-pub.iaea.org/MTCD/publications/PDF/Pub1350_web.pdf

87 Energy Technologies Institute (ETI) – Written evidence (PNT0012) in place including legislation, policies and regulation. Implementation of these policies into programmes of work can be undertaken by organisations outside of Government, but there is a clear role for Government in ensuring that the UK has a clear and consistent long term policy for its civil nuclear activities.

What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely? 7. Research projects delivered by the ETI have examined, within the UK context, the potential deployment of SMRs and Giga Watt scale reactors into a cost optimised transition to a low carbon economy20. The projects considered the range of sites potentially suitable for nuclear power station development21, and the enabling activities necessary to bring forward an SMR development programme in the UK22.

8. Nuclear power is a proven low carbon baseload technology. Provided that deployment is cost effective alongside other low carbon technologies, the ETI’s analysis indicates that new nuclear power can have a significant role in decarbonising the UK’s electricity generation as part of an affordable energy system transition.

9. The ETI’s research in 2014 recognised that there was uncertainty regarding the economics of SMRs, and that it would require significant innovation in design, manufacture, construction and operation for SMRs to be more cost effective for baseload electricity generation than cost competitive designs of Giga Watt reactors23.

10. However, SMRs could also be a cost effective solution for delivering low carbon combined heat and power alongside Giga Watt reactors generating electricity. This potential role for SMRs would depend on large scale district heating networks being deployed in the UK as part of the solution to decarbonising the use of heat in homes.

11. The economics of SMRs should be tested and uncertainties should be expected until plants are commercially deployed, successfully demonstrated and benchmarks created. Capital cost is the most important economic metric for SMRs and the ETI’s sensitivity analysis using ESME regarding potential for SMR deployment was undertaken in 201524. Within cost optimised whole energy system modelling for the UK, this analysis explored variations in capital cost, operations date for an initial UK plant, and potential use to satisfy heat demand

20 ETI Insight Report October 2015; The Role For Nuclear In a Low Carbon Energy System http://www.eti.co.uk/insights/the-role-for-nuclear-within-a-low-carbon-energy- system 21 ETI’s Power Plant Siting Study delivered by Atkins. August 2015 http://www.eti.co.uk/library/power-plant-siting-study-summary-report-and-peer-review- letters 22 ETIs’ SMR Deployment Enablers Project delivered by DAS Ltd http://www.eti.co.uk/library/das-summary-report-smr-deployment-enablers 23 ETI’s Alternative Nuclear Technologies project delivered by Mott MacDonald http://www.eti.co.uk/library/alternative-nuclear-technologies-summary-report-and-peer- review-letters 24 ETI’s sensitivity analysis using ESME regarding potential SMR deployment http://www.eti.co.uk/library/nuclear-sensitivity-study

88 Energy Technologies Institute (ETI) – Written evidence (PNT0012) through district heating systems. The analysis indicated the greatest value to a UK cost optimised energy system of SMRs delivering combined heat and power, with their value being further increased through first UK deployment dates of 2030 or earlier and at the lower range of indicative capital cost. The ETI’s indicative cost analysis was intentionally undertaken without the input of a range of reactor vendors; the Government’s subsequent SMR Techno Economic Appraisal was designed to engage participating SMR vendors to better understand costs and deployment timescales and is expected to provide a more comprehensive analysis regarding costs and deployment timescales than that reported by the ETI in 2015. 12. The economics of SMRs are expected to be improved through an increased proportion of the plant being standardised for factory manufacture. Deployment of a standardised design in the UK and more widely elsewhere has the potential to further reduce unit costs. If SMR deployment in the UK involves significant UK content, then there is the potential for such a programme to support UK economic growth but this was not evaluated within the ETI’s projects.

What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs? 13. The market opportunity for nuclear depends on a number of factors including the cost of nuclear alongside other technology choices. If SMRs can become more cost effective than Giga Watt reactors then a larger market may be accessible. However, if the economics for SMRs are uncertain or uncompetitive compared with Giga Watt reactors then there may still be a smaller niche market for SMRs in remote off grid locations, where the reliable supply of power and heat are the most important requirement.

14. Depending on SMR economics, this niche may grow to include other cogeneration opportunities such as water desalination or district heating energisation. A feasibility study into potential Russian deployment locations for SMR CHP demand25 and CNNC’s SMR development for deployment in China demonstrate26 the potential interest in cogeneration from SMRs. Finally this niche may include deployment opportunities in markets and locations where there is interest in nuclear, but for which Giga Watt reactors are too large, insufficiently flexible or unaffordable. SMR market projections are indicated the National Nuclear Laboratory’s 2014 SMR Feasibility Report27. There are further more recent estimates regarding SMR market potential in the more recent 2016 report by the Nuclear Energy Agency within the OECD28.

25 World nuclear news http://www.world-nuclear-news.org/NN-Small-reactors-for-heat- and-power-in-Russia-1212161.html 26 CNNC’s presentation at the IAEA in August 2015 https://www.iaea.org/NuclearPower/Downloadable/Meetings/2015/2015-08-25-08-28- NPTDS/DAY2/2._ACP100_technical_and_economic_aspects.pdf 27 NNL’s SMR Feasibility Study Report December 2014. http://www.nnl.co.uk/media/1627/smr-feasibility-study-december-2014.pdf 28 Small Modular Reactors: Nuclear Energy Market Potential for Near-Term Deployment. Published 2016 by the Nuclear Energy Agency of the Organisation for Economic Co- operation and Development https://www.oecd-nea.org/ndd/pubs/2016/7213-smrs.pdf

89 Energy Technologies Institute (ETI) – Written evidence (PNT0012)

15. If the UK can lead or participate in the development of an SMR project with the prospect of better economics than current large reactors in deployment elsewhere, then there is the opportunity to: i. Improve the security and cost effectiveness of UK transition to low carbon economy by 2050 ii. Increase UK manufacturing and construction content comprising high quality jobs compared with deployment of imported reactor designs iii. Export elements of the supply, construction and through life support to other jurisdictions with associated UK economic benefits iv. Acquire learning in respect of design integration, design for manufacture, and organisational integration using digital tools to strengthen potential participation in Gen IV reactor development.

16. Without SMRs, the UK could still potentially deploy a significant capacity of up to or beyond 18 GWe of new large reactors by 2050 using imported reactor designs and as part of a balanced energy mix (the capacity of 18 GWe represents projects already announced by developers at Hinkley Point, Sizewell, Wylfa, Oldbury, Moorside and Bradwell and with reactor designs already committed in regulatory assessment). Alongside life extension of the existing civil nuclear power plants, the NDA’s decommissioning programme, the development and construction of a nuclear waste repository, and replacement of the UK nuclear deterrent, such a programme is not unambitious for the short to medium term, but would provide a weaker platform to engage in international collaborative efforts to develop future nuclear fission technologies.

About the ETI 17. The Energy Technologies Institute (ETI) is a public-private partnership between global energy and engineering firms and the UK Government.

18. Our mission is to accelerate the development, demonstration and eventual commercial deployment of a focused portfolio of energy technologies which will increase energy efficiency, reduce greenhouse gas emissions and help achieve energy and climate change goals.

19. We carry out three key activities: • modelling and strategic analysis of the UK energy system to identify the key challenges and potential solutions to meeting the UK’s 2020 and 2050 targets at the lowest cost to the UK • investing in major engineering and technology demonstration projects to de-risk and build capability both technology and supply-chain solutions for subsequent commercial investors • enabling effective third party commercialisation of project outcomes.

20. The ETI has developed an internationally peer-reviewed national energy system design tool (known as ‘ESME’ - Energy System Modelling Environment29), to underpin our strategic techno-economic analysis of the UK energy system. ESME models choices across power, heat, transport and infrastructure sectors and is informed by evidence drawn from our private sector members, our technical projects and a range of expert advisers. As such it enables the ETI to deliver evidence-based insights on how to deliver affordable, secure and low

29 http://www.eti.co.uk/project/esme/

90 Energy Technologies Institute (ETI) – Written evidence (PNT0012) carbon energy for Britain in the decades ahead, including identifying credible, lowest-cost pathways to secure low-carbon energy in future.

Written evidence submitted by Nigel Richardson, Public Affairs Manager on behalf of the Energy Technologies Institute (ETI) February 2017.

22 February 2017

91 Professor Martin Freer, University of Birmingham – Written evidence (PNT0058)

Professor Martin Freer, University of Birmingham – Written evidence (PNT0058)

This is a submission from Prof Martin Freer, University of Birmingham. He is former Director of the Birmingham Centre for Nuclear Education and Research and lead of the 2012 University of Birmingham Policy Commission which produced the report “The Future of Nuclear Energy in the UK”30. This report set out the options and made recommendations regarding technology options, Gen III and Gen IV, waste management, thorium, public opinion, finance, sector management and the climate change context. Freer co-wrote a submission on SMRs for the HoC Energy and Climate Change Committee (Appendix 1 – not published here31) on behalf of the Centre for Low Carbon Futures and subsequently provided oral evidence to the Committee. He has been an advocate of SMR developments in the UK and the need to develop technologies which sit alongside SMR reactors that enable them to be commercially viable. He led an expression of interest to DECC to develop “Integration of SMRs with cryogenic energy storage for cost-effective peak shaving and efficiency enhancement.” This is an energy storage system which permits SMRs to be more flexible and exploits waste heat.

The comments below reflect his personal opinions rather than those of the University of Birmingham. Many of the answers to questions below are addressed in Appendix 1 (not published here)32, with further notes on SMR reactors in Appendix 2.

Questions 1. Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities including international collaboration and, within the UK, for cost-effective and efficient articulation of the different elements of nuclear work?

There needs to be a body independent of Government which provides informed advice to Government/BEIS on priorities, in a similar way to the Committee on Climate Change. The key elements to decision making are i) current operation, life extension and new build and ii) future technologies including fuel cycles. To- date NIRAB has been effective in shaping the priorities for the UK nuclear sector with clear identification of priority areas for investment matched against areas of UK expertise and leadership. There is however, a need to separate the immediate requirements of the UK nuclear industry from the future R&D priorities (e.g. associated with Gen IV and SMRs). The strong voice of the nuclear industry has the potential to focus on near term challenges rather than future opportunities and hence skews investment. Hence, there is a need to separate

30 http://www.birmingham.ac.uk/Documents/news/Nuclear-Energy-summary-pdf.pdf 31 http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/en ergy-and-climate-change-committee/small-nuclear-power/written/8518.html 32 http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/en ergy-and-climate-change-committee/small-nuclear-power/written/8518.html

92 Professor Martin Freer, University of Birmingham – Written evidence (PNT0058) the development of areas i) and ii) above to develop medium and long term strategy.

SMRs See Appendix 1 (not published here)33 for comments on most of the questions below. 3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely? 4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs? 5. Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to coordinate UK actions including international engagement on SMR development and future deployment? 6. Are the criteria set out by the Government for the SMR competition appropriate? If not, what should the criteria be? What timescale should the Government be working to in choosing an appropriate SMR design for the UK?

There is a great deal of potential advantage to the UK developing SMR designs linked to core expertise held by RR, developing the supply chain and creating UK leadership. However, the commercial case for SMRs looks marginal and there is a need to do more than exploit just the electrical power output from an SMR. This has led to proposals for exploiting waste heat in district heating etc… This looks challenging as it would require close location of the SMR to an urban environment (and hence may only be viable in an industrial context requiring power and heat), but indicates the opportunity for the UK to not only develop the core reactor technology, but the energy environment/system that the SMR would drop into. In this way the UK would have IP in the whole energy system which could be deployed within international markets.

One idea that the University of Birmingham has been exploring with its partner Highview is to link the SMR to an energy storage capability. This is described below:

To balance demand and supply at off-peak hours, nuclear power plants (NPP) often have to be down-regulated, particularly when the installations exceed the base load requirements. Part-load operations not only decrease the efficiency and increase the electricity cost but also impose a detrimental effect on the safety and lifetime of NPPs.

The consortium of University of Birmingham and Highview proposed to DECC a novel solution by integrating nuclear power generation (from SMRs) with cryogenic energy storage (CES) technology to achieve an effective time-shift of electrical power output as well as a significant efficiency gain. CES stores excess electricity in the form of cryogen (liquid air/nitrogen) through an air liquefaction

33 http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/en ergy-and-climate-change-committee/small-nuclear-power/written/8518.html

93 Professor Martin Freer, University of Birmingham – Written evidence (PNT0058) process at off-peak hours and recovers the stored power by expanding the cryogen through a turbine at peak hours. The combination of nuclear power generation and the CES technologies provides an efficient way to use the wasted heat from NPPs in the power extraction process, delivering around three times the rated electrical energy of NPPs at peak hours. Simulations have already been carried out on the proposed process (on an NPP), which show that the round trip efficiency of the CES is higher than 70% due to the elevated topping temperature in the superheating process and thermal efficiency is also substantially increased. A top line economic assessment has also been carried out which shows the cost of the integration is about ~30% of pumped hydro and 5% of batteries.

There are a set of distinct advantages that the integration of CES would bring to SMR technology. An integrated SMR+CES system would reduce the likelihood of an SMR (or set of SMRs) needing to be down-regulated in order to follow lower demand profiles. This means that less time would be spent with SMRs operating at below full capacity. The subsequently reduced need to down-regulate power output from SMRs would lessen the impact on the overall performance of the nuclear fuel and the aging of the associated equipment. Therefore this integrated system has the potential to address both the economic issues and the possible safety aspects associated with down-regulation of NPPs.

This is an example of where there are advantages of broader thinking at a system level, rather than a focus on the SMR technology alone.

Yes being involved in Gen IV is important. A more likely proposition than building UK based test reactors is to ensure the UK is properly involved in international programmes, with funding for R&D which means that the UK is able to deliver intellectual horsepower. An assessment of the potential Gen IV technologies and the preferred ones from a UK perspective is provided in the report of the Birmingham Policy Commission on “The Future of Nuclear Energy”, Chapter 5: http://www.birmingham.ac.uk/Documents/research/SocialSciences/NuclearEnerg yFullReport.pdf

Governance 8. Is the NNL fulfilling its remit appropriately? Can it deliver the required research to support the UK’s future nuclear energy policies? How does it compare to equivalent organisations in other countries?

The skills and capability that the NNL owns is an important resource within the UK nuclear sector, particularly associated with fuels and the fuel cycle. Some of their facilities are state-of-the-art though not all are fully exploited. There is a need for further investment to reach a level of internationally leading. However, the schizophrenic nature of the laboratory can make it hard to engage with and hard to understand how it delivers the national strategic need. Its historical GoCo model orientated it to deliver commercial solutions where it often acted as a

94 Professor Martin Freer, University of Birmingham – Written evidence (PNT0058) middle `man’ translating expertise from Universities then sold to the customer. It had aggressive contracts which made co-ownership of IP challenging and it was clear that the financial bottom line was the guiding principle, rather than serving the national good. This commercial approach resulted in a lowering of the quality of the in house research expertise and research quality to the point that it was hard to say that the best research being done nationally was inside the national lab. In this way the NNL is not like any other national lab that one would find elsewhere where arguably the facilities held by the national lab attract the best quality research and they become a focus for scientific innovation. Although NNL has tried to reshape itself and emphasise the growth of published research, it still behaves in a quasi-commercial mode, appears to have favoured partner Universities and struggles to serve the wider good of the field. In the past NNL had argued that it was the envy of the world because of its commercial nature, but I remain to be convinced that it has the power and capability to deliver large scale projects the nature of which would see the UK take a lead in nuclear R&D. A more appropriate mode of operation needs to be developed where the orientation of the priorities of the lab are for the greater national good. This means a greater level of Government core funding to NNL to support largescale national projects which act as a focus for the nuclear research community.

No. I believe that a stronger core funding model needs to be applied to the NNL to allow it to do non-commercial R&D which i) allows state-of-the-art research capability and expertise to be developed and ii) large scale national projects to be developed which will attract international collaboration and investment.

From a slightly removed perspective NIRAB was successful in drawing together key elements of the community and creating a set of future priorities. There is a need for an organisation such as NIRAB to continue to do this. The high profile chair of NIRAB, plus the integrity of the individual, was a key element of the success. It is essential that the thinking of the committee is free from commercial interests.

24 February 2017

Appendix 1:

Submission by Centre for Low Carbon Futures (CLCF) made to the House of Commons Energy and Climate Change Committee http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocu ment/energy-and-climate-change-committee/small-nuclearpower/written/8518.html

95 Professor Martin Freer, University of Birmingham – Written evidence (PNT0058)

Appendix 2

Notes on selected aspects of SMRs prepared in advance of the Oral submission to the House of Commons Energy and Climate Change Committee

Potential role of SMRs in the UK

- SMR benefits: load following, higher burn-up fuels, longer fuelling intervals, significant use of passive safety, coolant systems which use natural circulation rather than pumps (convection), self-regulation of fission using moderators which change properties with heat (negative temp coeff) - Time scale for SMRs unlikely to be less than 20 years – HPC 2023. Some have operational lifetimes of 60 years (others recycle with 10 years) - Uranium is a resource that is finite (some estimates indicate as low as 60 years for high development of NP). - Need to think about sustainability of NP: either use of thorium (3-4 times more abundant) in which case a pebble bed type reactor may be worthwhile technology, less likely a thorium based MSR. Pebble bed uses high temp gas cooled and there is good UK expertise in this area, TRISO fuels. - Alternatively, fast reactors such as PRISM (GE-Hitachi) which can exploit 238U but also consume 239PU – essentially extending reserves by a factor of ~60 (60x60 years). - PRISM (Na cooled fast reactor) first proposed for making current Pu stockpile inaccessible by using with reactor and then it will be in a high radioactive environment. - Better to exploit the Pu and U tails in a fleet of fast reactors: There are enough uranium ‘tails’ (238U ‘residues’ from the enrichment process) in the UK to fuel a new build fleet of several tens of GWe of fast reactors for their entire design lifetime, i.e. the UK already has sufficient fuel stocks for future fast reactors without the need to buy any more uranium or to carry out further mining. However, a fissile ‘driver’ fuel is required to kick-start the process, and this is where the UK’s historic plutonium stocks could be used. - Requires proper long term strategy for the fuel cycle – France and China likely to move to a closed fuel cycle. Issue is that it will cost more to reprocess the fuel rather than burying it.

China:

- Best option, is strong alignment with developments in China. Number of small reactors under development by CNNC: CNP300 (PWR), ACP100. - CGN partners in the HPC project. Sizewell C next and then HRP1000 at Bradwell. - Opportunity to be the shop window for Chinese SMR. - HPC project has been established such that significant fraction of the supply chain points to the UK (up to 70%). Could a similar approach be productive with a CGN SMR?

96 Professor Martin Freer, University of Birmingham – Written evidence (PNT0058)

- This would take advantage of the UK industry base; RR, Forgemasters, Sellafield (fuel cycle), NAMRC…

US:

- US approach to 50:50 funding @ Savannah River is a good approach, but lack of orders are proving problematic. Westinghouse SMR project is on hold and Babcock and Wilcox (mPower) seem to be losing interest. - US projects: NuScale (PWR with RR), Holtech (PWR), Hyperion (Pb-Bi fast reactor)…. - NuScale with RR involvement may be the best current bet for UK leadership if a supply chain can be developed via RR. High TRL technology with a well-developed fuel cycle PUREX. PWR technology close to nuclear submarine power systems. - Not clear if this approach is going to be sufficient to see a reactor technology come to market.

Cost of Establishing a Demonstrator:

- US: $450M over 5 years for a couple of demonstrator plants. - Ambition the level of developing a new fighter jet (IoP report) - If UK were to build a demonstrator then would need to find a niche not covered by US or China programmes. URENCO U-Battery (5-10 MW) might be an option, but would need to better understand the market – probably not within UK (remote locations, e.g. Siberia where the Bilibino reactors produce both heat and electricity). - <50MW reactors, probably not for UK deployment, and IAEA has studied these markets for less developed countries. Nuclear batteries need low refuelling frequency and hence high burnup fuels, with typically higher enrichments (proliferation issues). - Some SMRs will be able to load follow, which large scale reactors cannot. This can be achieved by switching between electricity and heat production; co-generation.

Regulation Challenges:

- 50 different SMR design concepts - GDA has been established to process large scale reactors with active control systems. - Philosophy of SMRs different with large degree of passive safety and physical processes that self-regulate the fission. For example, in fast reactors, higher temperature leads to larger capture cross section (Doppler broadening) and reduced fission. - Cost and incentives: it is understood that cost of the GDA is borne by the utility. For large utilities this is not overly burdensome. But for small owner/operators (e.g GF) this may be a significant barrier. - SMRs offer some opportunity for diversification of utilities in the nuclear space. Perhaps some greater level of risk sharing around the GDA (Gov+Ind) could lower the barrier. - Get ONR to work more closely with US regulator around SMR certification – US have greater experience in this space currently.

97 Professor Martin Freer, University of Birmingham – Written evidence (PNT0058)

Proliferation:

- SMRs could lead to greater distribution network of fuel distribution. There is a need to limit the frequency with which the reactors are refuelled. Challenge is that due to the smaller core size that the retention of the neutron flux is not as efficient (increasing fuelling costs) and greater fuel burn up is required in order to limit frequency. Higher burn up requires higher fuel enrichment, from 5% increasing to 20%, this is close to weapons grade U. This ironically the need to reduce the frequency increases the proliferation risk.

Economics:

- Typical scaling factors associated with power stations are to the power of 0.6. This would imply for a 200 MW SMR cf a 1GW NPP 40% of the cost for 20% of the power. - Argued that this is offset by factory construction, learning from replication, co-siting of multiple reactors…… - Experience with nuclear propulsion systems shows that factory based construction can save 30-35% in construction costs. - SMRs are predicted to have lower capital and financing costs (66% cf 73%) compared with LWR – from simplified designs, integrated power systems, shorter construction schedules (3 cf 5 years) and ability to self- finance (operation of operating reactors to finance the construction of new ones). Phased deployment can result in a reduction in the negative cash flow of 35% for 36months between units - compared with GW scale. - O&M costs are higher for SMRs (19 cf 16%) based on minimum number of staff - Fuel costs higher (15% cf 11%) more complex fuels, higher burnup, and more developed fuel cycle. - Greater flexibility as can respond more quickly to changing market conditions. - Break even for nuclear is ~7Euros/tonne for carbon tax for coal and ~37Euros/tonne for gas. It is likely that SMRs will not be cheaper than GW scale power stations, but offer greater flexibility. - Study by Westinghouse for IAEA showed a group of 4 335MWe SMRs was only 5% higher than a single 1340 MWe reactor.

UK expertise:

- AGR reactors currently operational (inherent safety – increase temperature, lower probability of fission). - Historical sodium cooled fast reactor programme – closed in 1990s.

Research Base:

- Currently narrow due to under investment - Future challenges overlap strongly with those of PWR reactors – irradiation, corrosion and stress corrosion cracking. - Fast reactors/high temperature reactors. Corrosion is challenging in PB-Bi (more so than Na cooled) and MSR corrosion not understood. Operation of

98 Professor Martin Freer, University of Birmingham – Written evidence (PNT0058)

materials that can perform over extended periods at high temp and higher fast neutron flux – same challenges as for the GenIV type reactors. - Reactor modelling: Detailed understanding of passive safety features, negative reactivity over extended periods – needed for GDA. E.g. Core Disassembly Accident (CDA - where core collapses into a reduced volume resulting in elevated reaction rates and high pressure of fuel and explosion cracking the protective barriers), or core Meltdown – two US fast reactors have had partial core meltdown. - Fuels. Many need novel fuel manufacturing, new fuel cycles, robustness of fuels.

Thorium or not:

- One of the attractions of thorium is that it is 3-4 times more abundant than uranium (though this might not be the same for the exploitable reserves). Countries such as India and Norway have considerable natural thorium resources and India in particular is actively pursuing the development of a thorium fuel cycle. - Thorium alone cannot be used as fuel since it exists in nature only as the isotope 232Th, which is not fissile. This means a more complicated fuel cycle is required often involving a mix of reactors in order to breed fissile 233U from 232Th and then fully exploit the 233U. For example, India’s plans include three stages 1) ‘CANDU-like’ pressurised heavy-water reactors using natural uranium fuel and normal light-water reactors (LWR) produce plutonium, 2) fast breeder reactors (FBR) then use the plutonium to breed 233U from thorium, and finally 3) advanced heavy-water reactors (thermal breeders) burn the 233U while breeding more from thorium. In this case it is the 233U that provides in the long term the bulk of the fissile material (as opposed to 235U and 239Pu in the uranium-plutonium fuel cycle). However, this three stage cycle requires several decades before being fully able to exploit thorium, and India is only now nearing completion of the first stage-2 reactors, with the first final stage reactor not foreseen before the 2020s. There are also alternative thorium fuel cycles involving only two stages. Being fissile, 233U could also be used in a weapons programme (instead of 235U or 239Pu). Indeed, the US explored the development of a mixed 233U-plutonium device in Operation Teapot. - However, a particular problem with the thorium fuel-cycle is the inevitable production of small quantities of 232U, which has a relatively short half- life (69 yrs) and whose decay series includes a number of high-energy gamma decays, making handling spent fuel and reprocessing challenging, though it is argued that this also means the thorium cycle is more proliferation resistant than the U-Pu cycle. - Building a thermal thorium reactor is a little more challenging than a uranium fuelled reactor as it can be difficult to breed more 233U than is consumed – correspondingly the neutron economy of the reactor needs to be very good. On the other hand, it is possible to breed fissile material with slow neutrons (i.e. thermal as opposed to fast), and it is also possible to use a thorium-plutonium fertile mix to destroy plutonium while building up fissile 233U. Moreover, thorium fuel leads to significantly higher safety margins in most reactor designs (e.g. thorium oxide melts at a higher

99 Professor Martin Freer, University of Birmingham – Written evidence (PNT0058)

temperature than uranium or plutonium oxide – indeed; it has the highest melting point of all known oxides). - The concept was originally developed in the USA at Oak Ridge during the 1950s-70s, initially as part of the military programme and with the highlight being the operation, for four years at the end of the 1960s, of a lithium-beryllium-uranium molten salt reactor at ambient pressure and a temperature of 600-700oC. The pilot was successful but demonstrated there are a number of challenging corrosion issues to be resolved. Design work continued in the US on a U-Th molten salt breeder in the 1970s, though funding was stopped in 1976. At about this time, though not using molten salt, a 1MWth aqueous homogenous suspension reactor was operated in the Netherlands with continuous reprocessing outside the core to remove fission products, demonstrating one of the attractive features of fuel in liquid form. - The Molten Salt Reactor is currently receiving a limited revival in interest by virtue of the fact it has been included as one of the six generic designs for investigation by GIF. It has also been argued that since the fuel is already molten, core meltdown issues are avoided. However, despite its inclusion as one of the six GIF advanced concepts, GIF members such as Russia and, more recently China, seem mainly interested in funding related research on a purely national basis or with only limited cooperation at the international level. - There are advantages in the use of thorium as a fuel, not least of which is the abundance of the element. However, the (2010) National Nuclear Laboratory position paper observes that “It is estimated that it is likely to take ten to fifteen years of concerted R&D effort and investment before the thorium fuel cycle could be established in current reactors and much longer for any future reactor systems” and also that “The thorium fuel cycle does not have a role to play in the UK, other than its potential application for plutonium management in the longer term”.

Public Perception/Opinion:

- Issues around transportation of active material post use – currently most high level waste is held on site in storage ponds or dry store. - Nuclear safety: Although nuclear power is safer than may other technologies (e.g. the global use of nuclear energy has saved an estimated 1.8 million lives by replacing much more harmful fossil fuel generation34) there are strong public concerns around safety and waste. - Waste: UK needs a GDF, but also a longer term strategy regarding the fuel cycle and fuel reuse and fast reactors. - Emergency Planning Zones: for Fukushima, needed an evacuation zone of tens of km. It has been argued for SMRs this could be reduced to the reactor exclusion zone. This could result in reactors being located close to cities or areas of significant human activity (large factories). - Not understood how UK population would react to such scenarios – cannot imagine the reactors being embraced.

34 A Pushker and J E Hansen (2013) Prevented Mortality and Greenhouse Gas Emissions from Historical and Projected Nuclear Power. Environ. Sci. Technol., Vol. 47 (9), pp. 4889–4895

100 GE Hitachi Nuclear Energy – Written evidence (PNT0030)

GE Hitachi Nuclear Energy – Written evidence (PNT0030)

1. Based in Wilmington, North Carolina, GE Hitachi Nuclear Energy (GEH) is a world-leading provider of advanced reactor technology and nuclear services.

2. GEH is pleased to provide its response to the Science and Technology Committee’s call for submissions.

3. We believe that the Department for Business, Energy and Industrial Strategy is the appropriate body for co-ordinating the UK’s civil nuclear policy, given its overall responsibility for energy and business policy. Regarding international collaboration, it will be important for BEIS to work closely with the Foreign and Commonwealth Office in particular, and the Department for International Trade when it comes to developing opportunities to export expertise in SMRs in the future. From an industry perspective, it is most important to ensure that the responsible body has sufficient funding and impetus to take the actions needed to grow the nuclear sector.

4. In our view a Sector Deal for nuclear energy would be beneficial in helping to ensure that the policy priorities for the nuclear sector are taken into account. There are a few specific challenges that this is an opportunity to address.

5. Firstly, as the UK proceeds with its new nuclear build programme along with the continuation of its decommissioning programme, a Sector Deal could address the well-documented skills gap in the sector, and a particular concern that the expertise held by the existing workforce will be lost as many move towards retirement. The Sector Deal is a great opportunity for government and the industry to collaborate to identify the specific gaps which are opening up, and put in place the educational opportunities needed to meet them.

6. Secondly, the Sector Deal should seek to enhance nuclear R&D in the UK which today is amongst the lowest when compared with other nuclear nations. Whilst we welcome the government’s commitments in 2016 of £20 million to support innovation in the nuclear sector out of the £250m research and innovation programme announced in the 2015 Spending Review, it needs to grow and grow more quickly to build on the UK’s

101 GE Hitachi Nuclear Energy – Written evidence (PNT0030)

existing areas of expertise, particularly in the areas of advanced reactor and recycling developments which will be important in the strategic direction of the UK’s nuclear future.

7. Finally, the Sector Deal should take the opportunity to address the long- term challenges affecting the UK nuclear sector. In particular, we believe that a clear plan is needed for the implementation of a long-term solution to the challenge of plutonium management. This has been under review for many years and it is time for the UK government take advantage of the energy potential which can be generated from the UK’s 140t plutonium stockpile which is the largest in the world. For example, this stockpile could be used to generate over 15% of the UK’s electricity needs for at least the next 60 years by deploying a series of GEH’s PRISM SMRs, utilising UK factory fabrication and modular construction. By employing such a solution, the UK would be making best use of a significant national asset.

3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

8. SMRs should be seen as a potential complement to the UK’s current large- scale nuclear new build programme. The potential benefits of deploying SMRs in the UK could be very substantial. SMRs can make a viable contribution to the UK’s energy mix, and can provide wider economic benefits including high-value sustainable jobs and export opportunities for UK suppliers. In terms of its energy generation potential, by 2035, SMRs could generate up to 7 GW of energy in the UK in addition to the planned 16 GWe from new large-scale nuclear new build programme. For comparison, as of today, Great Britain’s total generation capacity is 75 GW.

9. In our view the UK government should be focussing attention on advanced or next generation (Generation IV) SMRs which can provide more benefits than just low carbon electricity such as recycling spent nuclear fuel to close the fuel cycle and plutonium disposition. These are both areas where the UK could benefit significantly and establish itself at the forefront of this technology in the global marketplace.

10. Globally, research has shown there is a potential market of between £250bn and £400bn for SMRs and much of the benefit of that market could flow to the UK if it was to take the lead in developing this technology. As SMRs are designed to be largely made in factories, this would provide the potential for growth in manufacturing as well as opportunities for development and deployment of new manufacturing techniques.

11. Finally, investing in advanced SMRs would secure the UK a future at the forefront of the nuclear sector, attracting and helping to retain the brightest and best engineers of the future, which would be of considerable value in terms of future economic growth. Such a programme would create thousands of new, highly skilled jobs in the UK.

4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

102 GE Hitachi Nuclear Energy – Written evidence (PNT0030)

12. The feasibility study conducted by the National Nuclear Laboratory (NNL) published in 2014 estimates that there is a very significant market for SMRs, especially where they fulfil a market need that cannot be met by large nuclear plants. The report estimated SMRs could supply approximately 65-85 GW of new capacity by 2035, valued at £250-£400 billion; and a UK market of around 7GWe.

13. This is therefore a significant opportunity for the UK. The UK is well positioned to take a lead in what could be a huge market. However, if the UK does not choose to capitalise on this opportunity, it will naturally risk missing out on this market as other countries move ahead in this area. Several other countries are actively encouraging the development of small modular reactors, or considering doing so.

14. We welcomed the launch of the government’s SMR competition, the first of its kind in the world and a serious step towards the development of an SMR for deployment in the UK. We are keen to see the competition continue, and it is important that government funding and commitment for this programme is maintained. In particular we would like to see the publication of an SMR roadmap which was identified by BEIS to be made in the autumn last year but has so far not been forthcoming. It is disconcerting that there no indication of the next steps in this programme since it was first launched which could lead to the loss of a significant commercial opportunity for the UK nuclear sector.

15. With regard to international engagement, we would welcome further work by the UK government with other countries to develop SMRs. Many other countries are interested in the potential of this technology, and face similar challenges to the UK. The government should explore all such opportunities to collaborate in order to expedite development and deployment of new technologies.

16. The initial eligibility criteria for phase 1 of the competition are appropriate in our view, although we still await further guidance from government on the next phase of the competition and what the criteria will be for this. Government needs to provide much greater clarity on its objectives for a SMR programme and then organisations such as GEH will be able to respond accordingly.

17. Regarding the timescale, whilst we cannot give specific dates, we believe the government should prioritise the development and deployment of an

103 GE Hitachi Nuclear Energy – Written evidence (PNT0030)

advanced SMR technology. It should be an ambition to have one operating in the UK by 2030 at the latest.

18. In our view, the UK should be involved in the development of Gen IV nuclear technology as it could benefit significantly from a Gen IV programme. The UK has the world’s largest stockpile of plutonium and continues to accumulate spent nuclear fuel and Gen IV technology could provide an ideal solution particularly if Gen IV technology forms the basis of an advanced SMR programme. This would enable the government to take a phased approach in implementing this technology whereby the initial focus is on low carbon electricity (as a SMR), then introduce plutonium and then finally spent nuclear fuel recycling. The end result could have a significant impact in reducing the requirements of the UK’s geological disposal facility.

19. In our view, as a first step the UK should consider becoming a more active member of the Generation IV International Forum, and seek to work with other countries to develop these technologies. This will reduce the financial risk of the UK compared to acting alone.

20. Following the House of Lords Select Committee on Science and Technology report published in November 2011, the change in remit of the NNL in 2013 to be government owned was a step in the right direction. However NNL still relies on funding from the commercial sector for R&D on current reactor operations, waste management and decommissioning and so perhaps is somewhat constrained from being able to pursue more forward- looking R&D.

21. In order to enable NNL to underpin the development and commercialisation of advanced nuclear technology, the Government should consider providing some funding to enable NNL to fulfil its Government Advisory role.

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22. There are a number of different bodies undertaking nuclear research in the UK and these are supported by a range of different funding. We believe that NNL is in a position to oversee and co-ordinate these different streams given its government advisory role.

23. Yes it was successful in identifying recommendations for the UK’s research programme which led to the launch of the first £20m phase of the BEIS Nuclear Innovation Programme which is an important first step in progressing NIRAB’s research recommendations. It was encouraging to see that NIRAB had concluded that there was a clear gap in the UK’s R&D activity into next generation nuclear reactor technologies, including SMRs and Generation IV reactors, and their associated fuel cycles. This is an area of increasing activity in leading nuclear nations worldwide and in which the UK should play a key role if the vision for the sector is to be met.

24. In our view, a body such as NIRAB would be beneficial in providing independent advice to government.

24 February 2017

105 Government – Department for Business, Energy and Industrial Strategy (BEIS) – Written evidence (PNT0029)

Government – Department for Business, Energy and Industrial Strategy (BEIS) – Written evidence (PNT0029)

1. The Department for Business, Energy and Industrial Strategy (BEIS) welcomes this inquiry and is pleased to provide evidence on behalf of the Government.

Background 2. The Committee’s 2011 report on Nuclear Research and Development Capabilities was welcomed by the Government of the day and remains a key consideration in the development of the current nuclear innovation programme and its supporting actions.

3. Following the Committee’s report, an ad hoc advisory board was formed under the guidance of Sir John Beddington, the Government Chief Scientific Adviser, to consider its recommendations and propose suitable actions to address them. The work of this ad hoc board was instrumental in the development of the 2013 Nuclear Industrial Strategy and its supporting documents (The Civil Nuclear R&D Landscape Review, a Nuclear R&D Roadmap, a Long Term Nuclear Energy Strategy and a Nuclear Industrial Vision Statement).

4. The 2013 Nuclear Industrial Strategy set out a number of actions including the establishment of a Nuclear Innovation and Research Advisory Board (NIRAB) with a suitable technical secretariat, the Nuclear Innovation and Research Office (NIRO). These bodies were tasked with providing independent, expert advice on the research and innovation needed in order for nuclear energy to play a significant role in the UK’s future low carbon, secure energy mix.

5. Alongside the advisory structure a cross-public sector group of significant nuclear research funders was created under the auspices of the Low Carbon Innovation Coordination Group (LCICG). This group consisted of members from DECC, BIS, Innovate UK, Research Councils, NDA, MOD, FCO and HMT. It was co-chaired by Government office for Science and DECC. The group’s remit was to provide greater coherence and coordination in public sector funding of civil nuclear through information sharing cooperative activities.

6. In November 2016 the Government announced the cessation of the LCICG and the formation of the Energy Innovation Board to provide strategic oversight and coordination of all energy innovation programmes. A similar nuclear thematic group is in the process of being set up under the auspices of this body.

7. In the 2015 Spending Review, the Government announced funding for “an ambitious nuclear research and development programme that will revive the UK’s nuclear expertise and position the UK as a global leader in innovative nuclear technologies”.

106 Government – Department for Business, Energy and Industrial Strategy (BEIS) – Written evidence (PNT0029)

8. In November 2016 the initial £20m phase of the nuclear innovation programme was launched (https://www.gov.uk/guidance/funding-for-nuclear- innovation), covering five key areas: Advanced Fuels; Materials and Manufacture; Advanced Reactor Design; Recycling and Reprocessing; and Strategic Tools and Nuclear Facilities. Government is currently considering the form and delivery of the next phase of the nuclear innovation programme in the light of the evidence provided by NIRAB and other sources.

9. Maintaining and building on our world-leading fusion expertise and securing alternative routes into the international fusion R&D projects such as the Joint European Torus (JET) project at Culham and the ITER project in France, also remain a priority. The Government is working closely with the UK Atomic Energy Authority on ways to achieve this.

Leadership and Industrial Strategy 10. Responsibility for coherent and consistent nuclear policy lies with Government. BEIS leads on UK civil nuclear policy with DIT helping UK businesses with new exports and enabling new inward investment and international collaboration. The responsibility for delivery and increasing UK supply chain is shared with industry principally through the Nuclear Industry Council.

11.On 27th January 2017, the Government set out its aim to build and industrial strategy that addresses the long-term challenges to, and opportunities for the UK economy. The Green Paper describes the Government’s vision for a modern industrial strategy together with early actions we have committed to take. We aim to have an open and collaborative conversation about the skills, research, infrastructure and other factors needed to get right to drive long term growth in productivity.

12. The Green Paper identifies the Nuclear Sector as a key element of the wider industrial strategy and Lord Hutton, as Co-Chair of the Nuclear Industry Council and Chairman of the Nuclear Industry Association, has been asked to lead a possible ‘sector deal’ for the nuclear industry. HMG has asked industry to present ideas how the sector could take actions to transform their strategic prospects, and how the Government could increase the prospects of success.

Small Modular Reactors (SMRs) 13. SMRs offer a number of potential benefits to the UK, both in terms of providing a secure and low-carbon energy source as well as offering broader industrial benefits, including the creation of high-value jobs. The modular nature of construction could lead to shorter deployment times and, owing to improved economies of volume, lower long-run costs as compared to large- scale nuclear reactors. This potential has led a number of other countries around the world to investigate the part SMRs could play in their energy mix. As a result, the future global market for SMRs could potentially be large and this could represent a significant business opportunity for the UK nuclear supply chain.

14. Studies by the UK’s National Nuclear Laboratory and the international Nuclear Energy Agency have estimated the possible size of the global market for electricity from SMRs in 2035 at between 20 and 85 GWe. This range of

107 Government – Department for Business, Energy and Industrial Strategy (BEIS) – Written evidence (PNT0029)

estimates reflects the inherent uncertainty in modelling prospective markets for a novel technology in the medium to long-term. Such a market might be worth up to £400bn, according to the National Nuclear Laboratory. However, this estimate assumes that SMR costs will fall rapidly to enable SMRs to become competitive with comparable low carbon technologies. The necessary scale of deployment would require significant investment, and any UK developers would be participating in an increasingly competitive market, with several SMRs already in development internationally.

15. While offering potential benefits, it should be noted that some SMRs employ novel technology that is unfamiliar to the UK regulators. Any SMR reactor proposed for deployment in the UK would be subject to robust and independent regulatory scrutiny and would only be allowed to progress if the UK regulators were satisfied with its safety, security and environmental aspects. The Government recognises this and has been engaging with UK regulators to fully understand the nature of these challenges. SMR siting considerations will differ from those of conventional new build and this is an area which Government will explore further as it defines its approach to SMRs.

16. The Government recognises that delivery of an SMR in the UK would require a coordinated approach from a number of parties, including the Government, regulators, the UK supply chain, investors and international partners. For instance, ensuring the UK nuclear industry is able to compete for high value, long term and sustainable contracts requires coordination across the supply chain.

17. We anticipate that as SMR development proceeds across the world there will be benefits to international collaboration, for example in areas such as design assessment and licensing, and we welcome the UK regulators’ current engagement with international counterparts on SMRs. This is important given that many SMR designs are in the early stages of technological development and the benefits of engagement at this point are potentially greater. The Government will proactively engage with other countries with an interest in SMRs as appropriate when opportunities arise; however, the direction the Government’s international engagement will take is ultimately dependent on our broader approach to SMRs.

18. The Government’s support for SMRs should be seen in the context of the wider nuclear innovation programme detailed earlier. The work areas included in the £20m initial programme will deliver benefits to the whole nuclear sector, including in the development of any future UK SMR.

19. One of the central risks around SMRs is that the commercial case remains unproven since, to date, there has yet to be an SMR demonstrated or deployed anywhere in the world. Given this uncertainty, it is essential that the Government’s approach is informed by thorough evaluation of a robust evidence base.

20.Government launched Phase One of an SMR Competition in March 2016 (https://www.gov.uk/government/publications/small-modular-reactors- competition-phase-one) giving interested parties an opportunity to present

108 Government – Department for Business, Energy and Industrial Strategy (BEIS) – Written evidence (PNT0029)

their views on the benefits and risks of SMR deployment. The criteria set out by the Government for entry to Phase One were designed to encourage a wide variety of entrants to participate, enabling the gathering of evidence from a cross-section of interested parties, including reactor vendors, specialist manufacturers and service providers.

21. The structured engagement held over summer 2016 gave competition participants the chance to express their views on timescales for SMR deployment and potential barriers to that deployment. We are therefore aware of industry’s views and these are being factored into our wider considerations on SMRs.

22. Alongside other sources, such as a Techno-Economic Assessment and continuing discussions with regulators, the findings from our meetings with competition participants form one part of the evidence base that the Government is using to inform policy development.

23. Phase One of the SMR competition remains open and policy development remains under way. The Government will provide further information on next steps for the programme in due course.

Generation IV technologies 24.The current nuclear innovation programme, launched in November 2016, seeks to develop the UK’s capability and credibility in areas that will support the development of a range of nuclear technologies, many of which underpin Generation IV, advanced reactor, designs.

25. The Government, together with academia and industry, are already engaged with international partners to explore areas of potential cooperation in Generation IV projects.

26.As part of the SMR competition we have been engaging with a number of Generation IV technology vendors to explore their potential and better understand the social, economic and environmental implications of their possible future development.

27. The UK was a founding member of the Generation IV International Forum (GIF), the main international grouping of countries interested in developing advanced nuclear technologies. Whilst the UK’s individual membership is currently “non-active”, we engage with the group through the membership of the European Union. In the last 2 years, Government has re-established direct engagement with the secretariat of the GIF, and has provided the organisation with information on the UK’s nuclear innovation programme.

28. We continue to keep the status of the UK’s individual membership of the GIF under review, particularly in the light of the nuclear innovation programme and any opportunities that it may bring for future international cooperation.

Governance 29.The UK has two national laboratories dealing with civil nuclear, the National Nuclear Laboratory and the UK Atomic Energy Authority.

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National Nuclear Laboratory (NNL). 30. The National Nuclear Laboratory (NNL) has unique facilities, capabilities and expertise across the whole fuel cycle and works closely with a network of industry and academia to provide impartial strategic advice to Government on developing nuclear research programmes, programme management and monitoring, and to act as technical ambassadors for the UK on the international stage.

31. Governance of NNL is performed by BEIS and UK Government Investments (UKGI). Following a strategic review undertaken by UKGI (the Shareholder Executive at the time), in 2012 NNL moved from being a GoCO (government- owned, contractor operated) to a Government Company (GovCo). This move allowed a more direct relationship with Government with a clearer line of accountability. The 2013 Nuclear Industrial Strategy reaffirmed the NNL’s role in supporting UK national programmes across the civil nuclear sector.

32. A Memorandum of Understanding was signed by DECC, UKGI and NNL in June 2016 to agree key principles in NNL’s role, including increasing interaction between BEIS and the NNL Board and management team. NNL and BEIS are exploring the best way for NNL to provide independent strategic advice to Government, by separating the work NNL delivers for and on behalf of Government from their commercial function.

33. NNL’s operating model differs from other National Nuclear Laboratories, in that it receives no direct grant funding. Instead NNL operates commercially, winning contracts from both private and public sector parts of the nuclear industry, and re-investing any profits back into facilities, technical expertise and its own R&D programmes.

34. It also supports the UK’s R&D landscape more broadly, by carrying out work for BEIS under contract on the nuclear research programme, and through delivering products and services through its commercial business for customers that are in turn responsible for or involved in the UK’s national programmes. This commercial work is essential to the long term viability of the organisation (and maintaining the facilities) and in providing the cutting edge, knowledge and experience needed to underpin its support to Government.

UK Atomic Energy Authority (UKAEA) 35.The UKAEA is another of the UK’s national nuclear laboratories and operates the Culham Centre for Fusion Energy (CCFE). The facility is based in Oxfordshire and is the centre of the UK’s fusion research activity, hosting the Joint European Torus (JET) – the world’s most advanced magnetic confinement fusion reactor. CCFE is also home to the Materials Research Facility (MRF) and the Remote Applications in Challenging Environments (RACE) facility, both of which are driving the emergence of spin-out industries associated with fusion research.

Advisory Framework. 36. The Nuclear Innovation and Research Advisory Board (NIRAB) was created in 2014 to provide independent, expert advice on the research and innovation

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needed in order for nuclear energy to play a significant role in the UK’s future low carbon and secure energy mix. The Board was chaired by Dame Sue Ion and consisted of experts, appointed in their personal capacity and drawn from industry, academia and key research facilities.

37. NIRAB was established as an ad hoc advisory board with a three-year lifespan and, as such, the Board dissolved in December 2016.

38. NIRAB has been supported by a technical secretariat, NIRO, which is hosted by the NNL and consists of a small number of staff seconded from NNL and Industry.

39. Over its three years of operation NIRAB has produced a number of informative annual reports together with recommendations on a programme of publically funded research and innovation needed to unlock the full potential of the UK’s nuclear sector. NIRAB has also, at the request of Government, provided expert ad hoc advice, on a number of subjects including international opportunities for collaboration, provision of medical isotopes and the potential impacts on the UK nuclear research landscape of leaving the EU.

40. Government has found the breadth and depth of NIRAB’s advice to be of high quality and their recommendations have been an important element of the evidence base underpinning Government’s current ambitious nuclear innovation programme.

41. As a secondary benefit, NIRAB and NIRO have also helped to create greater cohesion and collaboration across the research landscape, acting as a community hub for the entire nuclear research base. Dame Sue Ion and Gordon Bryan, the head of NIRO, have represented the sector in a number of fora, providing a respected voice for the community as a whole.

42. Following the launch of the first phase of the Government’s Nuclear Innovation programme last November and the upcoming Industrial Strategy, the nuclear innovation landscape has changed and the remit of any future advisory framework would need to reflect this.

43. Government is currently considering its future options for accessing independent expert advice on nuclear research and innovation and an announcement will be made in due course.

24 February 2017

111 Government – Professor John Loughhead OBE, Chief Scientific Adviser, Craig Lucas, Director of Science and Innovation for Climate and Energy and Jesse Norman MP, Minister for Energy and Industry, BEIS – Oral evidence (QQ 31-37)

Government – Professor John Loughhead OBE, Chief Scientific Adviser, Craig Lucas, Director of Science and Innovation for Climate and Energy and Jesse Norman MP, Minister for Energy and Industry, BEIS – Oral evidence (QQ 31-37)

Transcript to be found under Government – Jesse Norman MP, Minister for Energy and Industry, Department for Business, Energy and Industrial Strategy (BEIS)

112 Government – Craig Lucas, Director of Science and Innovation for Climate and Energy, Jesse Norman MP, Minister for Energy and Industry and Professor John Loughhead OBE, Chief Scientific Adviser, BEIS – Oral evidence (QQ 31-37)

Government – Craig Lucas, Director of Science and Innovation for Climate and Energy, Jesse Norman MP, Minister for Energy and Industry and Professor John Loughhead OBE, Chief Scientific Adviser, BEIS – Oral evidence (QQ 31-37)

Transcript to be found under Government – Jesse Norman MP, Minister for Energy and Industry, Department for Business, Energy and Industrial Strategy (BEIS)

113 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37)

Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31-37)

Tuesday 28 February 2017

Watch the meeting

Members present: Earl of Selborne (The Chairman); Lord Broers; Lord Hennessy of Nympsfield; Lord Hunt of Chesterton; Lord Mair; Lord Maxton; Baroness Morgan of Huyton; Lord Oxburgh; Viscount Ridley; Lord Vallance of Tummel; Baroness Young of Old Scone. Evidence Session No. 4 Heard in Public Questions 31 - 37

Examination of witnesses

Jesse Norman MP, Minister for Energy and Industry, Department for Business, Energy and Industrial Strategy (BEIS); Professor John Loughhead OBE FREng FTSE, Chief Scientific Adviser, BEIS; Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS.

Q31 The Chairman: Could I extend a very warm welcome to the Minister and his two colleagues who have joined us for this, the fourth evidence session. We are returning to matters nuclear and nuclear research specifically, having done a number of reports over the years, most recently in 2011. We are being broadcast, so I wonder if the Minister could introduce himself, for the record, and then his two colleagues introduce themselves also. If you would like to make an opening statement, please feel free to do so. Mr Norman. Jesse Norman: Thank you very much indeed, my Lord. Thank you to the Committee for inviting myself and my phalanx of official colleagues to answer your questions. My name is Jesse Norman; I am the Minister for Energy. I must say I am slightly depressed by the fact you have included John’s various professorial degrees and titles but not Craig’s or, indeed, my own. I wonder if that is an inherent bias towards engineering and science in your approach. Professor John Loughhead: We hope so. Lord Hennessy of Nympsfield: Perhaps you had better list them. The Chairman: Put them on the record. Jesse Norman: Certainly not; they have nothing to do with what we are talking about. The Chairman: That is probably why it is not on your name plate.

114 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) Jesse Norman: Touché. Professor John Loughhead: Good morning. My name is John Loughhead; I am chief scientific adviser at the Department for Business, Energy and Industrial Strategy. Craig Lucas: Good morning. My name is Craig Lucas; I am the director of science and innovation for climate and energy at the Department for Business, Energy and Industrial Strategy. The Chairman: Thank you very much. Lord Ridley would like to start.

Q32 Viscount Ridley: The industrial Green Paper came out recently and it included the Hutton review on competitiveness and skills in the nuclear industry. Part of the early work from that is supposed to result, we understand, in a sector deal for the nuclear industry. Could you explain how the nuclear sector would benefit from such a deal and what a sector deal might usefully include? Jesse Norman: Sure. Maybe I can kick off on this and invite colleagues to comment. We have just had a meeting of the newly reconstituted Nuclear Industry Council, which is chaired by myself with Lord Hutton. That has focused on the idea of a nuclear sector deal. The Committee will be aware we have thought quite hard about whether or not such sector deals are an important part of industrial strategy, and they have various potential uses. Let us not forget, this is the industry coming to government with a proposal that is in its interest, which we can somehow support and facilitate in government. The overwhelming interest that we in government have—and I think the industry shares—is twofold. First and foremost, it is to reduce its costs and, in so doing, to reduce risk in the supply chain, to build capacity, in due course, not merely to supply domestic needs at lower cost but to open up export markets for its skills. The second is skills themselves. Obviously, that has been a significant focus of the Committee’s work and of our interest. That is maintaining skills in three areas; not just what you might call the highest-end research and development, which is often about a particular professor or academic with PhDs, et cetera, around them, but what you might call the vast bench strength of engineering skills that sit across the sector. A particular interest of mine is recycling and improving the skills of the workforce as well as bringing in new talent. I particularly have in mind the result of the decommissioning of the AGR fleet. We will have a lot of quite skilled nuclear engineers, and it would be rather good to find ways of improving their skills, repurposing and targeting them and then deploying them elsewhere in the industry. Those are the two key focuses of the sector deal we are discussing. Baroness Young of Old Scone: I was going to ask a question about whether you think the players in the nuclear industry have enough oomph to do what you described: the industry coming to government with a proposal. My experience is more with the aerospace sector, where we have a lot of very proficient pushy players who are capable of doing that job. The way you described the sector deal was very immediate and

115 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) tactical rather than strategic. I am thinking that there is probably enough oomph to do that job, but who is going to do the job of looking forward 10, 20, 30 or 40 years to what the industry, the skills and the deal needs to be for the future? Jesse Norman: Thank for you for that. I am also the Minister for aerospace—that is my one remaining industry segment—so I have some point of comparison between the two sides. I would not describe anything I have said as remotely tactical. The question of how you build skills is a long-term question. The question of how you build capacity and reduce costs in an industry which thinks typically in decades, is a long-term question. So I am afraid I would disagree with you on that aspect. There are players with oomph on all sides of the equation in the nuclear area. We obviously have the EDFs and the new builders who have potentially significant sway, but we also have a decommissioning industry and players in and around government who, I take it, have significant oomph—although I am not quite sure what you mean by oomph. In fact, in a way the problem is the opposite problem. The problem is that you have some very important interests around the table, all of which deserve to play a part in a wider deliberation: you have technology, industry and government. The question for government is how you knit those together into a strategy that delivers on behalf of the taxpayer and the nation as a whole. In a way it is not so much whether each of them has oomph but whether or not they can be brought together in a way that delivers a comprehensive package for everyone. That is what we are starting to focus on with the issues of cost and skills. I do not know if colleagues want to come in on any of that, but I would invite them to. Baroness Young of Old Scone: Is it the sector’s job or government’s job to look for the long-term strategy? Jesse Norman: It is government’s job to preserve the long-term interests of the country as regards industrial strategy, taxpayer value, research and innovation and all the other aspects. The issue of strategy is a more complex one than, I think, is sometimes realised. There are some areas in which you can say, “We more or less know what the field of operation is and we can be therefore very clear about what the strategy might be”—we can hold certain things as parameters and within that we can operate a strategy. In the case of nuclear you have several things that make that harder than perhaps it should be. One is existing players, who inevitably have a tendency to defend their own interests. A second is rapid technological change outside the industry, which is constantly raising the question of, as it were, cost within the industry. The third is a question of technology change in so far as it affects the energy mix and, therefore, the scale of deployment of nuclear technology as part of a wider conception of what energy supply ought to look like. Of course, another one would be changing demands for the potential sale of technology or skills overseas. All those things go into the picture. As you know, we did, in fact, produce a nuclear energy strategy in 2013 in which many of those issues were reflected. Lord Vallance of Tummel: Passing comment, I cannot let it go by that

116 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) the one company you mentioned specifically that had oomph was EDF, which of course is French and which, together with AREVA, which is the manufacturing side in France, forms a cornerstone of French industrial strategy in this area. Is it compatible to have French industrial strategy lining up with ours? How does it all fit in that way? Jesse Norman: I do not see that there is an enormous tension. One of the questions raised in your deliberations as a Committee is the question of whether we should be a kind of world-class technology-owning nuclear power or a third-class technology-using nuclear power. I am afraid I regard the premise of that question as misguided. The reason for that is that we have had times in the past 40 or 50 years when we have been a technology-owning power. We did it with Magnox and with AGR. I would invite any member of the Committee to tell me a successful export using that technology. It does not look as though either of those technologies had any of the export potential often claimed for them. In fact, there is one, which the Committee may be aware of; it is a North Korean reactor that was pirated using Magnox technology. So we have a potential future use for our decommissioning skills in Magnox in North Korea, if we choose to use them. Lord Hennessy of Nympsfield: That is a bit unfair. We sold two Magnoxes to legitimate powers. One was to Italy and I forget where the other one was. Was it Japan? Jesse Norman: Then we have two more. We have since had an AGR fleet. My point is we can get very taken up with the ownership of technology, but a lot of the value of the technology lies in all the ancillary things you put around it. As regards the ownership of the technology, if one looks at some of the current owners, they are not absolute bywords for profitable, successful companies. Lord Hennessy of Nympsfield: Point taken. Lord Maxton: If you do not mind me saying this, Mr Norman, you are the Minister for Energy only for England; you are not the Minister for Energy for Scotland, which has turned its back completely on nuclear energy. The AGRs in Scotland, of course, will be closing. Are you going to attract these skilled people from the AGRs in Scotland to work in England? Jesse Norman: I would hope that there would be the opportunity for people with expertise and skills in any AGR to work wherever in the UK they felt their skills would be best deployed. Lord Maxton: They are not going to be working in Scotland any more. Jesse Norman: If the Scottish Government wish to use their skills in other ways, it is fully up to them to do so. Lord Oxburgh: Do we have a civil nuclear strategy at present? Jesse Norman: Yes. We published a nuclear strategy paper in 2013. Lord Oxburgh: Does that hold good today? Jesse Norman: It provides a basis. For the reasons I have described, the issue of strategy is a rapidly shifting one and we have to be careful to

117 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) keep it up to date. We have just published a wider industrial strategy, which I am sure the Committee will recognise, and you will recognise, Lord Oxburgh, is a pioneering attempt to articulate the principles which ought to be guiding wider economic activity in its biggest sense, and those of government alongside it. It may be, in due course, that we want to refresh our energy strategy within that framework but, at the moment, the nuclear strategy remains what it is.

Q33 Lord Oxburgh: Whether one is talking about a nuclear strategy or a broader industrial strategy, there is a question of timescale. I have to say I was not entirely clear from the industrial strategy, when one is talking about value for money and taxpayers and so on, what length of view it is appropriate to take. The reason for emphasising this is that the timescales associated with heavy engineering—and a lot of nuclear is heavy engineering—are long. They are not one Government long; they are two Governments, three Governments or four Governments long. We cannot afford to chop and change, so we need something which is as widely agreed as possible to carry us through in the longer term. Are we anywhere near that? Jesse Norman: I think, my Lord, you are sounding like an advocate for the Government’s policy. Having published the industrial strategy as a Green Paper, as a consultation document, and having had a series of ministerial visits around the country to promote it and seek local input— and doing it in an entirely nonpartisan way, designed to elicit support from other political parties and, indeed, from people of no political party— the Government’s policy is designed to build precisely the kind of longer- term consensus about our economic policy that can properly undergird several changes of government, if necessary. Lord Oxburgh: How does the Nuclear Industry Council fit into this? Jesse Norman: The industrial strategy leaves scope within it for different deals to be struck with sectors—as indeed deals can be struck with cities or regions, as with the Midlands Engine for Growth, the northern powerhouse and the Aberdeen City Region Deal to support the oil and gas industry, et cetera. This is a sector deal that could sit within that perfectly happily. The Chairman: Could one of your advisers, if not yourself, tell us when the Nuclear Industry Council last met? Jesse Norman: Last week. I chaired it. Luckily, although I have an appallingly bad memory, I do not need a prompt. The Chairman: I was not expecting you to have a total recall of that. How often does it meet? Jesse Norman: It had become too large, by common consent, and was not functioning as effectively as it might. One of the decisions we took with the new Government, as a new department, was to attempt to rebuild and reconstitute it in a way that would make it not merely suitably representative but more effective. This was the first meeting we had under those circumstances. We were going to have an earlier one but parliamentary business intervened and I was insistent that I should be

118 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) there because I think it is very important for government to give a lead alongside the industry in these things. The current expectation is we will meet two or three times a year, I think; more when we have business to decide, to frame issues and get some specific accountability into the system and less, perhaps, when we are running a project. It has a very able secretariat in the form of the Nuclear Industry Association, so there will be a lot of continuity, we expect, between those meetings. The Chairman: Do you see it as the organisation which might lead on the sector deal which has been referred to in the strategy? Jesse Norman: I think it is the right forum for a sector deal. A sector deal, by its nature, could come from any industry forum or body, but that is the most wide-ranging and, therefore, fits most naturally into that remit. I certainly hope it will. Lord Hennessy of Nympsfield: Jesse, you are a scholar politician with more than a dash of vision, if you do not mind me saying so. Do you see the hills humming to the sound of small modular reactors in our future? Are you an enthusiast? Jesse Norman: As you know, we are in the middle of a competition on this issue. I do not want to get ahead of that, but I would say that I am a loving man from the state of Missouri. The state of Missouri is “The show me state” on its number plates. I love the industry and I love the projects and ideas, but I want to be shown the value. That may fall into one of two categories, and there are lots of potential ideas out there. One category is the ones that are, as it were, nearest to market, and there my question is, “Show me the market; show me the route to market”. Or there might be ones that are a long way away from the market—generation IV and advanced type reactors—and on those, to me, the question is more about science and technology; it is about research and what contribution they can make to the way in which we are thinking about it. I am not a scientist myself, although I have taught the philosophy of science, but I have a great interest in having a successful, effective research base. I also think that alongside that there has to be a lot of other activity that has a more utilitarian justification. Lord Hennessy of Nympsfield: I think we were due a statement, were we not, in November, on the competition, which did not happen? Am I right? Jesse Norman: I do not recall the detail. There certainly had been an expectation that it would be finished by the end of last year, but the change of Government and one or two other things that you may recall last year had the effect of disturbing the timetable somewhat. But we are certainly hopeful of getting it back on track, in terms of an announcement, relatively soon. Lord Hennessy of Nympsfield: Before Easter? Jesse Norman: I am not going to be drawn because I have seen that sharks can lie in those infested waters. Viscount Ridley: Can I follow up on that? One of the dangers in announcing a competition but then not being able to announce the result

119 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) of it is that you have, effectively, paralysed work in some of these areas. Not you personally, but the Government have. It is very difficult for anybody to talk to Ministers about it to find out the way of thinking because you are sub judice, in some sense, and there is a feeling of, “We might have worked a bit faster if we had not had this competition hanging over us”. Jesse Norman: I do not think that that is impossible. I do not think it was perfectly named as a competition; it was more a kind of call for ideas across a much wider spectrum. I will ask Craig to say a few words on this, and John, if he wants to, but we have not, as far as I am aware, had a lot of pushback about blight. I do not know, Craig, whether you want to comment on any of this. Craig Lucas: We are very sensitised to that risk, if you like. I would also say that this is a very complicated area and the range of things that has come forward to us has meant we have had to do a lot of thinking about the evidence presented and what is a viable proposition and what is not. The long-term nature of this decision, to some degree, justifies the level of effort we have been putting into it, I think. Lord Hunt of Chesterton: Is this plan for modular reactors, or indeed your plans generally, very British-centred? We have had evidence this morning from a colleague from EDF Energy, which has a research capability in Britain which is growing very large. He and indeed the officials from nuclear safety were commenting on how we can, could and should be developing a very significant collaborative programme with France. Is that part of your thinking? Professor John Loughhead: On the research and technology side there is quite extensive interaction already. I have had a couple of meetings with the chairman of CEA talking about those complementary areas where the UK and France can best support and exchange information with each other; there are commercial contracts that some of the bodies such as NNL have and there are some commercial contracts for provision of equipment that span both countries. That is the case. If you are talking about more adventurous longer-term reactor design, I think that requires more consideration over which companies might be taking the lead in the development and marketing of such systems. Jesse Norman: I do not know if Craig wants to say anything, but to add to that, the competition was open to all comers; it was not a nationally drawn competition that restricted itself to UK technologies only. I think there is scope, without risking vision, for a bit more imagination in this area. If, for example, EDF, as you know, which manages our existing AGR fleet, were to come to government and say, “We wish to commission a new kind of small modular reactor design as a successor to AGRs and we will put four or six of them on each site and we would like to have a conversation with you about technology and development”, that would be a topic of great interest to us. We would have that conversation with them with alacrity. The point of this is to allow ideas to flourish. That includes commercial ideas as well as research ideas. Lord Broers: How are you going about assessing all of these

120 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) alternatives? I know there is a lot of industry out there talking about it, but have you assembled a highly competent engineering-based team to advise you on how to assess this competition? Jesse Norman: The best thing I can do is hand over to my highly competent engineering-based team. Craig Lucas: Perhaps I can kick off and you can add. There is an engineering-based assessment. We have done an extensive piece of evidence work to look at the state of maturity of the different technologies and the likely level of costs they might achieve. One of the things that comes out of that is that the possible technology outcomes are of a very wide range, which reflects the relative maturity of the sector. Therefore, in assessing that, we not only need to look at that question but the question of investability more broadly and the question of the amount of value that UK plc could capture. All those factors are in play in what we are looking at. I do not know if I have missed any key point there, John. Professor John Loughhead: The only point I would join is that the expertise that has been brought to bear has come from both within and without government resources. There has been quite a lot of use of industry expertise in making that assessment. Lord Broers: You are looking at this as a high-priority item, because it is moving very fast, of course, as you know, especially in China and other places. If we want to get in on a deal we cannot sit around in a grand British way, considering it for too long and being too sure of everything; we have to get in there and do something. Craig Lucas: I might respond that all R&D investment is a calculated risk. That is the nature of the investment. It is a question of being in a place where you are sufficiently clear that the calculated risk is reasonable, I guess. The Chairman: Did you want to add anything, Professor Loughhead? Professor John Loughhead: No, I am just delighted to hear that Lord Broers has witnessed a nuclear industry moving with alacrity and speed. Jesse Norman: Anywhere in the world. You said China, where it is doing so. Of course, China has certain advantages in the way it deals with possible disagreements about energy policy over our own Government. One other thing to say is that that view assumes that it is clear what has to be done. That is to say, if one takes as an assumption that there is— and I am not saying there is not—a technology that is ready to go and that failure to implement it is therefore a potentially culpable act on behalf of government, and if that turned out not to be so, the viewpoint would be undermined as a result. The Chairman: Can we move on to skills, and Lord Mair?

Q34 Lord Mair: I want to ask about skills and about R&D. I guess my question is to Professor Loughhead. What should the Government or your department do to better co-ordinate R&D in the nuclear sector? There are lots of different bodies, as we know, doing various pieces of research. Do you think that that should be better co-ordinated in some way and that

121 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) your department is probably the right one to do that? Professor John Loughhead: There are a number of different funding organisations and there are a number of different actors in the scene. There are two areas where, in recent months, there has been a greater ability to co-ordinate. First, following the recommendations of this Committee some years ago, an advisory body was set up which gave advice on priorities and content of programmes. That, if you like, is the top-level strategic issue. We have subsequently, in the last nine months, set up within government the Energy Innovation Board which provides a cross-cutting prioritisation and direction into those energy innovation activities, including nuclear—not restricted to nuclear—which informs the different public sector funders. Then, of course, there is R&D that is conducted through purely commercial resources, over which we have no direct control—but, through dialogue within the community, we hope that they will be better placed to select where they put their money. Lord Mair: Does it seem very disparate, with lots of different parts of different bodies doing research? We heard earlier this morning from the EDF witness. It seems very different in France; it seems to be much better co-ordinated and directed from an R&D point of view. Professor John Loughhead: We operate a very different system in the UK to that in France, where it is a hierarchically controlled and centrally directed programme. That is not the case here. However, going back to what I just mentioned, I think there are mechanisms in place which provide both a prioritisation process and a means within which decisions on particular facilities can be made. We have the normal research quality assessment as well, which is an important point. It is a more distributed system, but I would say that it is probably not accurate to deduce that, therefore, it is totally fragmented and unco-ordinated. That is not the case. Lord Mair: Can I follow up on skills, which is related, I think? What do you think should be done by the Government to promote and ensure that the right skills are available? Professor John Loughhead: Is this skills in the sense of skills for research or skills for the industry overall? Lord Mair: Actually, both. Professor John Loughhead: Perhaps I will answer first on the research skills. There has been for some years now a research council-funded programme to maintain an activity and a training programme in the nuclear space. That was expanded approximately five years ago with the formation of doctoral training centres and other programmes which have added to that landscape. The programmes have expanded in recent years. The information we have is that the flow of graduate level and postgraduate qualified engineers, scientists and other nuclear skills coming out of that has increased. Whether it is sufficient is a little bit of a challenging question. I rely on the laws of supply and demand. There is a demand for people now to go on these training courses and that demand is being met by the provision that is being made. It is very difficult to predict exactly what numbers will be required five years in the future.

122 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) Lord Mair: Our witnesses earlier this morning were pretty clear that there was a problem: that there were not enough skilled people being prepared for whatever our nuclear industry develops into. Professor John Loughhead: In the research space? Lord Mair: Both. Professor John Loughhead: Okay, I have not addressed the second point. I do not know whether you wish to say anything about the more general skills question. Jesse Norman: I am perfectly happy to do that. We have Fiona Rayment looking very closely at the question of the skills needs of the industry, and that ranges across all of the three categories that I described earlier but with a particular focus on, as it were, the more working engineering skills. On the R&D side, we are continuing to invest at an extremely high rate in the nuclear industry. Government spending in the year 2015-16 was £120 million on nuclear research. That is going up at the moment. We have just announced an enormous increase in overall R&D funding which is biddable into the Industrial Strategy Challenge Fund by the nuclear industry. So there ought not to be any absence of opportunity for research-based projects to bid for funding that can sustain the skills required in the key areas. Craig Lucas: When you look at the way that nuclear projects are structured and delivered, it is a quite labour-intensive model. When we look at innovation and some of the areas of innovation that are identifiable as an opportunity, they will require a different skill mix and they will require fewer higher-skilled people and higher GVA per head and all the rest of it. It is important that we do not bake in the existing assumptions and approach, where R&D and innovation might find different ways of working that will require a different skills base. To some degree, investment in R&D informs that as well. Lord Hunt of Chesterton: We discussed this morning the question that part of it is training and there is research but there is also, in some sense, the vision thing, as it were. When you think about how universities got engaged in some of the big environmental issues 10, 20 or 30 years ago, there are some big universities which do not have a significant major nuclear programme: there are no students pouring into this area as one of the most exciting areas. Nor in the universities is there a connection between fusion and fission, and some of the most exciting ideas are bringing these two together. Euratom was involved in this, and so on. One of the questions is pulling all this up into an exciting future. At the moment, there are not enough universities, just to give an example based on what I observe, as engaged in this as they should be and, therefore, not enough students are becoming interested in it. It is partly money, which the Minister has mentioned, but there are also some other factors involved. Jesse Norman: I was making the opposite point; I do not think it is about money. There is plenty of money swilling around the system. I do not think every university should feel it is under a national obligation to undertake nuclear research. Inevitably, people will be skilled in different

123 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) areas. In a way, my Lord, I want to ask you: what counts as “enough”, as in “not enough money” or “not enough is being done”? I can understand what “not enough” means when Fiona Rayment comes to me and says, “We do not have enough bench strength in this area to support this”, or Paul Howarth comes to me and says, “In the National Nuclear Laboratory we are short of people with specific expertise in X, Y, Z, P, Q, R”—but I am not sure what is meant by “enough” as a general matter. How much is enough? Potentially we could spend £1 billion and some people would still be saying it was inadequate. Lord Hunt of Chesterton: If you look at the paper we had, for example, from Professor Lee at Imperial College, it was pretty critical written evidence along those lines. Obviously, the Government have a big fission programme and they also have some fusion programmes. I have talked to Professor Loughhead about this. We are investing a lot of money, Europe is investing a lot of money, the private sector is pouring money in—and I declare an interest—to new kinds of fusion, which has a timescale not dissimilar to the fission timescale. At the moment, there is not enough; there could be more to engage, and this could become a more central part of the whole British technical scientific programme. At the moment, we have our fusion programme, our fission programme and the industry thing whereas in France, as we heard this morning, they get together— the French President is there, for God’s sake—they have this committee and they have the CEA, which is like the old Atomic Energy Authority. We used to have the old Atomic Energy Authority; half of them were in the House of Lords at one point. It was different. We do not have that push. The Chairman: Before you address that, could we hear from Lord Vallance and Baroness Morgan and put them all together? Lord Vallance of Tummel: To get into the quantities for a moment, could you let us know how much is spent in the UK on R&D in this area from the public purse and the private purse? Jesse Norman: Very happily. Baroness Morgan of Huyton: I am sorry; I forgot to declare an interest earlier on. I am a member of the Council at King’s College. Can I widen this away from money? Lord Hunt was talking earlier not just about money but the vision coming from government to excite the next generation. When I think back to when I was a teenager, nuclear power and the whole story seemed incredibly exciting and very captivating, I think, for that generation. Certainly my impression now, in the school system, is that nobody talks about this, and it is a pretty narrow group of people who decide to take this further at university and beyond. I am interested in hearing from the Minister about whether he thinks that there is a role for government in engaging and providing a story and a vision to captivate the next generation in this area. I feel that is missing. Jesse Norman: Sure. Every generation is going to have its particular areas of focus, and for this generation they tend to be consumer electronics and Google, and all the things that go along with that. Baroness Morgan of Huyton: The environment, green energy. In a sense, one could argue we missed a bit of a trick.

124 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) Jesse Norman: I would put it the other way round, which is that this Government are doing more to support technology, engineering, careers, training and education. With a decent following wind, next week they are going to announce support for a project very close to my heart, which is a specialist technology and engineering university in Herefordshire. If that comes off that would be marvellous; that will be a complete upending of a lot of existing ways in which we think about how to teach those subjects. There is a tremendous emphasis in the school system now on the preparations for those subjects through mathematics and the sciences. That is not to say that I do not think government could do more to enunciate the value of the white-heat technologies as regards nuclear, because I think that is true. I do not feel bad about what the Government are doing to encourage people into technology and engineering degrees at the moment because it is probably as much as any Government have done in living memory. I do not know, Craig, whether you want to add something. Craig Lucas: I will add a couple of factual things. We track the skills area through the NIRAB landscape survey. In overall terms there has been an increase in the nuclear research base since 2011-12 of about 15%. The largest increase has been in universities, but the configuration of which universities fund what is changing. In some senses, that is not necessarily a problem because the skills mix and the needs are different. For example, there are emergent areas such as robotics and autonomous systems which require different skillsets. So to some degree there is some quite positive stuff in the landscape, and some of that is an inevitable product of the industry changing and modernising. On the spend point, the total sector spend in 2015-16 was around £215 million. We do not have a fully accurate figure for private sector spend but, as far as we can identify, there was £41 million of self-identified private sector spend in that number, and £54 million from overseas, which is mostly for fusion funding. We are making up the balance. The Government are doing the heavy lifting in that regard. The Chairman: Could we move on to the NNL? Lord Hunt.

Q35 Lord Hunt of Chesterton: Can you explain how the NNL’s role is leading in this country? As I have mentioned, we have a different approach from that of France, as we heard this morning. I wonder whether, Minister, you would like to explain. Jesse Norman: Again, I am more than delighted for Craig and John to join in, but the thing about the NNL is that there are several sets of potential things one could say. First, the NNL has proved to be a great success. That is the first thing. It now has something like 25% of its funding from non-government sources and the majority of the funding it gets from government sources is competed. So that is a great success. Obviously, it is at the industry end of nuclear research. Of course, we also have the UKAEA, which is at the, as it were, scientific and academic R&D end of nuclear research. Within the NNL there are potential conflicts between the commercial imperative it faces and a role for government. I think those are more potential than actual at the moment, but we are

125 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) undoubtedly—and this Committee has been very helpful in that regard— thinking, and have been for some time, about the best way to preserve an independent advisory function for government versus what you might call, on R&D, a wider, general remit. Before I invite my colleagues to comment, let me say one other thing. One of my focuses, as a Minister, is something that is implicit in this but I do not think it has been mentioned in the Committee, which is how government can become a better client. When infrastructure projects fail a large part of the reason, in many cases, is because they have a very bad client. I spend a lot of time, as the Committee may know, essentially arguing for a different approach to reducing costs in PFI projects which the Government inherited in 2010. I persist in the view that, if they had taken a different approach earlier, the Labour Government could have saved an enormous amount of money in the way they procured that infrastructure. The reason they did not is because in many cases the clients involved were very bad clients; they kept changing their minds, they were not clear about what they wanted and they were very producer-led—bells and whistles and all this kind of stuff. One of the tasks for government, as I see it, is to become a better client; to be better not just at strategy, which the Committee has very helpfully focused on, but better in how it commissions and manages. This fits into that wider picture. I thought it might be useful for the Committee to know that we were thinking at that level as well. The Chairman: Would core funding help NNL in its role, which is not only to do applied research—commercially relevant research—but to have an advisory role of a long-term nature? Craig Lucas: That is an issue we are actively considering. We have used NNL in a small way for the secretariat function for NIRAB. We found that to be a very effective and useful thing to do. We are thinking about how we could evolve and grow that so that we could access other areas of expertise quickly and easily, but it does involve the NNL taking on some different skills as well. The skills of running high-value laboratories are not necessarily the same skills as some of the other strategic questions we need to answer. Jesse Norman: John, would you like to come in? Professor John Loughhead: No, I think that covers everything. Jesse Norman: I would add a couple of grace notes to what Craig has said. The key, to me, is to be deft about this. We do not want to be building another, as it were, player in an already complex jigsaw puzzle if we can get the value of the advice independently delivered in a way that supports objectives at low cost. It is also important for me to place on record our thanks to NIRAB for the work that it did and to Dame Sue Ion for the leadership that she gave it. That was not, by any means, an easy process, and the fact they came out with a report given, in many cases, quite divergent views and interests and a rather large group of people was a very significant achievement, in my view. The Chairman: Can we move on to SMRs and Lord Broers?

126 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) Q36 Lord Broers: We have talked about this a lot. On the problem we have been talking about of inspiring young people, some of those giving evidence to us did bring up the fact that, if you want motivation, things such as putting a man on the moon inspire people. SMRs might offer that opportunity for us. Minister, you have pointed out that the nuclear industry has not been the most profitable in the world, but in the future things might get better and there might be sectors where we could perform. With our base, a lot of us have felt that SMRs might be an initiative that could be a sort of “man on the moon” initiative and inspire the industry and get young people, teenagers, to see this. After all, to almost all of us engineers there is only one solution to the CO2 problem if we are going to meet our goals: we must have nuclear—and modular nuclear might be a very effective way to do this. Jesse Norman: I do not think I commented on the industry’s profitability, only on whether it was a profitable strategy for government to be involved in technology ownership in the nuclear area. I think there is a mixed record on that front, to say the least. Many other areas of the industry can be successful and profitable, and indeed the global exports for us over time in decommissioning and reprocessing are obvious areas. On the issue of SMRs, I would be delighted to have a world-class SMR technology that could be tested in this country, developed in this country and rolled out around the world on a competitive and cost-competitive basis. As a Government, we remain very interested in that possibility. If we are talking about SMRs that are close to market, I would like to see where the markets are before I invite my colleagues to commit the first pound of British public funding to it, over and above the enormous and increasing amounts of money we already invest in related nuclear R&D. That is the process we are looking at, at the moment. The Chairman: The amount of money dedicated to civil nuclear research was lower in 2015-16 than the level in 2010-11. Jesse Norman: I do not have the numbers in front of me. I cannot comment on that. The Chairman: It is not a fair representation to say that these are vast sums, but I take your point that you want to get value for money. Jesse Norman: I think I said that the Government were committing vast sums. I think the Committee would agree that £120 million of total government nuclear research last year is a significant amount of money. The £2 billion we have committed to additional innovation and support for the industrial strategy is a significant amount of money and all that is available to nuclear R&D to bid for in various forms. Viscount Ridley: I want to press one more time to try to pin down a rough date as to when we will hear more on the SMR question. I know you have had a go at answering that, but would you mind having one more? Jesse Norman: I have not had a go at it, but I have given you an answer, which is I am not going to give you an answer but it will be as

127 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) soon as we can do it. That is a perfectly clear answer. It may not be the one you want but it is a perfectly clear answer. Lord Hennessy of Nympsfield: When you used the phrase “a complex jigsaw puzzle” a moment ago, I could see the ghosts of many, many Ministers past behind you. It has been 72 years since the first Cabinet committee was set up to bring coherence and strategy to all of this. Why have we, one generation after another, made such a horlicks of it? Why can we hope that your generation will de-horlicks it? Jesse Norman: It is a very interesting question as to why nuclear energy has proceeded in a stop-start fashion over time. There are very few countries which can claim to have got this right. It is not absolutely clear to me, by the way, that other countries that have claimed to be great success stories would, in retrospect, regard their view as having been the right one. They have often not faced the kind of democratic pressures that British Governments face and they often have spent an enormous amount of money to achieve what they have tried to achieve. Do not forget, if I may say so, that there are other aspects of British energy policy which have been conspicuously successful, but not in the nuclear area. By the way, as the Committee will know, we remain at the forefront of any European nation in terms of the reductions in carbon emissions we have achieved over the last few years. So there is a lot to be proud of overall. However, we have migrated towards a strategy which is designed to manage risk. These projects are large, very expensive and very hard to build. A risk-averse strategy is not necessarily a bad one, under those circumstances. Lord Maxton: The answer is “politics”. Lord Vallance of Tummel: I wonder if you could tell us a little bit more about the criteria you use. There is a competition, and you are not going to tell us when that is going to come out, but you must be able to tell us the criteria you use in assessing the risk of particular projects. Jesse Norman: Craig, I think that is one for you, old friend. Craig Lucas: I partially answered earlier but, to elaborate, there are two classes of project clearly emerging in this process. One is the relatively mature near-to-market type of project, which is a technology we can understand and quantify. On those you can look at what their likely route to market might need to be and what the likely market size might need to be for them to achieve the cost reduction that they would need to achieve. By the way, that market would have to be a global market; we are not a sufficiently large market on our own to do that. Then we can consider what the industrial content for that might be. If we look longer term at the more advanced technologies, I think different criteria apply and we can be more focused on their research merit, per se, and what value that IP might create for UK plc overall. Lord Vallance of Tummel: What proportion of government investment would go into these very different types of project? Craig Lucas: That will form part of the decision we make.

128 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) Lord Vallance of Tummel: We do not know the risk appetite, in other words. You would know what the risk appetite was if you were going to say, “Yes, more than half is going to be in the long term and less than half in the short term”. We are not there yet. Jesse Norman: It is a perfectly fair comment. As I mentioned earlier, the thing is not to get too hung up on the word “competition”. When the previous Government used the word they implied that there was a level playing field, a stable set of technologies and, as it were, people would compete. Therefore, apples would be measured against apples in terms of output, technology cost, degree of local content and all the other things. We are discovering that we have apples, oranges, pears, pomegranates and a large number of other things. It is a very interesting exercise from the Government’s standpoint because it reveals a lot of latent information in the market, but it is not necessarily a helpful exercise from the point of view of running a competition because it becomes very hard to trade off in an authoritative way what the differences are. The Chairman: Baroness Morgan, did you want to come in on this or have we dealt with it? Baroness Morgan of Huyton: I wanted clarity. When you refer to the approach of the previous Government, are we talking about David Cameron’s Government, the coalition Government, or are we talking further back? I am not being difficult; I do not understand the period you are talking about. Jesse Norman: Sure. In this case I was referring to the Government at the time when the competition was launched. That is to say, what was going through their mind when they launched the competition. Baroness Morgan of Huyton: Thank you.

Q37 The Chairman: We are near the end. I would like to bring together two questions, with Lord Hunt’s agreement, on generation IV and Euratom. When we last looked at this area in 2011 we very much favoured a more active role for the United Kingdom in the Generation IV International Forum. We thought that if we were going to be, as you have urged us today, a skilled user rather than necessarily an owner, we needed to keep up to speed with emerging technologies for 2030 onwards. We did not think we were likely to do that unless we participated much more fully in the Generation IV International Forum. The answer from government was that our membership of Euratom would see us right. Of course, that is in doubt now, through the Brexit Bill. So what is your strategy for keeping us involved in the development of generation IV or, indeed, other emerging technologies? Jesse Norman: Let me talk about the Euratom side, which is the political side, and then, if I may, my Lord, I will invite colleagues to comment on the other side. As the Committee will be aware, as a Government, we have taken an extremely proactive forward-leaning stance as regards Euratom. It will be a regrettable necessity, from our point of view, that notification has to be filed at the same time as Article 50. We remain very engaged with European partners in the EU and among nation states on

129 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) Euratom. We are actively working up alternative arrangements. We are not formally allowed to discuss any of these things because of the Barnier edict, but it is receiving a great deal of thought within government. There are clear routes forward, from our point of view, which would allow us to continue to deal in the same way with the issues of safety, safeguarding and trade, et cetera, that Euratom preserves. I want the Committee to understand that we take this issue extremely seriously and we are devoting significant resources to maintaining and, potentially, even enhancing some of the benefits that we currently achieve from it. The Chairman: And generation IV technology? Professor John Loughhead: Some of the innovation programme that BEIS is supporting directly will be as applicable to generation IV technologies as it could be in the nearer term to generation III+. There are one or two items which are specifically looking at elements of potential generation IV and, if we look at the programme underwritten and paid for by the research councils, there are elements of looking at generation IV in those. The issue with generation IV is that it is still at the exploratory stage. There are various pieces of work going on to do tests at component level of certain concepts, but it covers, as I know the Committee is well aware, a very wide range of potential future nuclear reactor concepts. There is no clear line emerging in that. It is very much a matter of keeping ourselves in a position to potentially play a role in the future. The Chairman: The point we made in 2011, which remains true to this day, is that we do not pay a sub. We are an observer; we do not participate; we are non-active. Professor John Loughhead: Correct. The Chairman: That remains so. I am asking whether it is likely to continue to remain so. Professor John Loughhead: It is maintained under review. To date the decision has been taken that we have been able to get the benefits we think we need through the current arrangement. The Chairman: I have a suspicion that when we come to bring together our thoughts we will not have deviated from our original conclusion of five years ago that if we are going to take seriously the ability to be a skilled user, recognising the dependence we will have on nuclear energy for heating and much else, we need to be participating in these international clubs, such as generation IV. Professor John Loughhead: May I respond to that? I take your point, and the point I was trying to make was that generation IV as a potential deployable technology is still some decades away. The Chairman: We seem to think that we can wait until someone else has done the heavy lifting and then we can come in later and pick it all up. Professor John Loughhead: I see.

130 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) Craig Lucas: I was going to come back on the broader contextual point that we have no intention of reducing our level of ambition to engage internationally. In the world we are in, the key players in the world still want to talk to us and work with us. We will have to find a different way of configuring those relationships. Jesse Norman: I would say two things. The Committee, of course, is welcome to raise these matters, as with anything else it does, but I hope, when it revisits the findings of its original report of five years ago, it will give the department or its predecessors some credit for the many areas it identified on which substantial progress has been made: development of the long-term strategy; R&D road map; nuclear R&D board funding; commissioning to the NNL; expertise on legacy—I can go through a whole list of things, probably 15 to 20 areas, in which the Government have specifically and warmly responded to the initiative made by the Committee. We are very grateful for that. The Committee might also want to spell out why it believes that additional benefit will be generated via membership through a sub because, from a taxpayer standpoint, it is not clear that, in this or some other cases, being part of something which has a time horizon of that length is a superior use of taxpayer money to deploying that elsewhere in the nuclear industry or, indeed, across government. There are plenty of areas where we have, as a nation, pursued a very successful second-entry strategy and plenty of areas in which we have carried the burden for many other players. I will give you a classic example of that: offshore wind. The commercialisation of offshore wind has been very heavily driven by this country, and lots of other countries are now able to go round and buy very large turbines, very large offshore arrays and floating technologies using approaches that have been pioneered in this country. I do not think we can afford or expect to be leading in every area. I think we remain a very powerful and strong nuclear technology player, and we are recognised as such around the world. We continue to invest in that area; we are upping our game with the first nuclear new build for many years and five more in the pipeline. So the level of ambition is undoubtedly there and on a scale that can only support future technology, and that includes generation IV technologies. The Chairman: We have come to an end. You make a very good point in your conclusion that we have, indeed, much to be proud of. The NIRAB update indeed indicates that the civil nuclear research and development landscape shows a welcome increase in people. We are leading, as you point out, in a number of areas, not least decommissioning and safety. We are world players. I still have my own personal prejudice—and I should not declare it from the Chair—that if we are to have a long-term strategy we need to be seen to be fully involved with the international community, if we are to do what the industrial strategy suggests and put nuclear as one of the 10 pillars on which we are going to increasingly depend. Thank you very much for a very positive session. There has been a lot here. I quite accept, as you said, that we have much to be proud of—but do not expect us to be totally uncritical.

131 Government – Jesse Norman MP, Minister for Energy and Industry, Professor John Loughhead OBE, Chief Scientific Adviser and Craig Lucas, Director of Science and Innovation for Climate and Energy, BEIS – Oral evidence (QQ 31- 37) Jesse Norman: Certainly not; in a spirit of robust scientific provisional inquiry. The Chairman: We will continue to suggest that there is more to be done. Jesse Norman: We welcome that. The Chairman: Thanks to you and your colleagues for joining us today. We are most grateful.

132 Government – Department for Business, Energy and Industrial Strategy (BEIS) – Supplementary written evidence (PNT0060)

Government – Department for Business, Energy and Industrial Strategy (BEIS) – Supplementary written evidence (PNT0060)

Letter from Jesse Norman MP, Minister for Energy and Industry

Further to my appearance before the Select Committee on the 28th February, I wanted to write to provide a couple of points of supplemental information that the committee may find useful.

Firstly, Committee members noted that public sector funding in 2015/16 was lower than 2011/12. I did not have the figures to hand at the time, but the recent NIRAB UK Civil Nuclear R&D Landscape Survey sets out information that may be pertinent:

“The annual level of publicly funded nuclear R&D in 2015/16 (£122.2m) is less than Government funding on civil nuclear in 2010/11 (£140.6m). This is mainly due to a reduction in the overall spending for the NDA SLCs as a consequence of progress in establishing their technical baseline for decommissioning. Excluding the NDA SLCs, public funding for nuclear R&D programmes has remained stable between 2010/11 and 2015/16.”

Towards the end of the hearing we discussed the status of the UK’s membership of the Generation IV international Forum, which we are keeping under review. Time was quite short and I thought it would be useful, for completeness, to set out the steps that would be required for the UK to move to being an active member of the Forum in its own right. These would include:

 Acceptance and ratification of the Framework Agreement  Acceptance of the system arrangements for each of the technologies we are interested in.  Payment of annual fees, the level of which is dependent upon the number of technologies we wish to pursue an interest in.  Active, ongoing participation in collaborative projects relevant to the work of the Forum.

I hope that the Committee will find these points helpful and I look forward to reading your report in the coming months.

23 March 2017

133 Gwynedd Council – Written evidence (PNT0011)

Gwynedd Council – Written evidence (PNT0011)

(English version)

1. Introduction

1.1 As the local authority area for the Trawsfynydd decommissioning Nuclear Power Station, we welcome the opportunity to submit information to your inquiry into Priorities for Nuclear Research and Technologies.

1.2 North West Wales has a tradition of involvement with the nuclear industry – with both the Wylfa site in Anglesey and the Trawsfynydd site’s magnox power stations contributing significantly to the local and National economy and to low carbon electricity production.

1.3 Trawsfynydd Site is located in the Meirionnydd region of the county of Gwynedd. It has provided employment for the people of Gwynedd since 1959 and safely generated over 69 TWh of low carbon electricity in its lifetime. The main interest of Gwynedd Council, with regards to the Site and its decommissioning, is in the socio-economic implications associated with the completion of the current phase of decommissioning, leading to a state of “Care and Maintenance”

1.4 This is expected to be achieved by 2028.

1.5 In the meantime, we anticipate a constant reduction of workers on site. In 2014, over 900 workers were recorded on site. Since the programme of job losses was implemented in 2015, only 200-250 direct jobs now remain on site, with further reductions planned for the years to come. This reduction in jobs is extremely socio-economically significant in an area with a very weak economy, which currently reports: - One of the UKs lowest average wages, with over half its workers earning less than the Living Wage - Scarce alternative employment opportunities, with 91% of businesses employing fewer than 10 people - A consistent rise in the number of residents of retirement age, and a corresponding decline in the number of working age residents - A decline of 9.1% (between 2001 and 2011) in the number of people which possessed any Welsh language skills, and this in an area where over half of residents live their lives through the medium of Welsh.

2. Developing Trawsfynydd to the Future 2.1 The decommissioning of Trawsfynydd Site, and the resultant loss of jobs, has naturally been foreseen since it began operating, and as a result, since the 1980s, Gwynedd Council has been working with the Site Licensed Operators and Parent Body Organisations to proactively investigate maximising employment opportunities onsite, during its decommissioning, and also the best way to create high quality alternative employment in the area when decommissioning jobs come to an end.

134 Gwynedd Council – Written evidence (PNT0011)

2.2 As part of this work, in 2011 Gwynedd Council presented an application to Welsh Government to designate Trawsfynydd Site as part of a new series of Enterprise Zones, and in 2012, Snowdonia Enterprise Zone was officially launched.

2.3 Enterprise Zone status brings with it the specific interest of the Cabinet Secretary for the Economy and Infrastructure with regards to the development of the site, and the jobs which my be created there, and that specific resources have been put in place to investigate making the best use of the site in creating high value employment to the future. A Board of experts has also been put in place to advise the Cabinet Secretary as to the best use of these resources.

2.4 This work has led to the establishment of a strong partnership of agencies, including Welsh Government, Gwynedd Council, Magnox and the NDA, which has worked closely over the past years to lay the foundations for attracting quality jobs to the area.

3. The SMR Opportunity at Trawsfynydd 3.1 The extensive work which has been completed as a result of Trawsfynydd Site’s Enterprise Zone status has led to the conclusion that the best option for the development of Trawsfynydd Site is in attracting an SMR development to site. It is realised that this is a medium term goal which requires a lot of facilitation. The main reason for this conclusion are due to: - the site’s excellent grid connection, which is due to be upgraded - sufficient cooling water capacity, due to its location on Trawsfynydd Lake - the capacity for transporting modules and other elements to site by road, rail (with a purpose built railhead on site) and sea (via nearby Porthmadog) - a highly skilled workforce The site is also under public ownership, through the Nuclear Decommissioning Authority, which could facilitate its release to developers

3.2 A number of independent bodies support Trawsfynydd’s ambition to host an SMR, including the Institution of Mechanical Engineers35, and the ETI36. A recent Welsh Affairs Select Committee inquiry into the Future of Nuclear Energy in Wales37 was also supportive.

3.3 It is with this context that we present our responses to the questions set out by this inquiry.

4. Inquiry Questions

4.1 Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities including international collaboration and, within

35 https://www.imeche.org/policy-and-press/reports/detail/small-modular-reactors-a-uk- opportunity 36 http://www.nuclearinst.com/News/keeping-up-the-momentum-for-small-modular- reactors-nuclear-institute-smr-2016-seminar- 37 https://www.parliament.uk/business/committees/committees-a-z/commons- select/welsh-affairs-committee/inquiries/parliament-2015/nuclear-power-15-16/

135 Gwynedd Council – Written evidence (PNT0011) the UK, for cost-effective and efficient articulation of the different elements of nuclear work?

4.1.1 We believe that ultimate responsibility for the development of long term civil nuclear policy should lie with central government - specifically in BEIS. However the responsibilities of BEIS are many. It therefore makes sense that the National Nuclear Laboratory (NNL) should be in a position to advise BEIS regarding nuclear policy development specifically

4.1.2 The government must recognise that it owns a number of nuclear assets (including Trawsfynydd Decomissioning Site) which could be utilised in driving forward the development of new UK nuclear technologies. There is a need for a body such as NNL to be taking a strategic integrated view of the industry and advising UK Government how best to use these assets

4.1.3 That said, with new nuclear technologies (in particular SMR technologies) including many different designs, we would question the role of government in “selecting” a technology, and would lean towards an enabling role in which any competent technology may be assessed for safety, with a better resourced regulatory framework at the heart of any real change.

4.1.4 We believe that there is a current mismatch between government intervention in the nuclear industry, which has provided an admirable focus on the upskilling of young people and current workers, and also the supporting of large and small supply chain manufacturing companies, to achieve nuclear competence (for example through the Fit4Nuclear programme), but has simultaneously failed to provide an effective impetus for the development of the new SMR technologies which could benefit from this manufacturing and workforce capability.

4.2 The Government’s industrial strategy green paper discusses a possible ‘sector deal’ for the nuclear sector.4 How might the nuclear sector benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal

4.2.1 We would welcome a new approach to the development of nuclear technologies which is industry-led. 4.2.2 The current government SMR competition is a good example of well- intentioned government intervention leading to a frustration in the development of technologies, with no clear outcome for the technology which is ultimately selected. We have long argued that that there is a golden opportunity here for government to offer Trawsfynydd Site (as a publically owned asset) as an incentive to develop the selected technology. As it stands, we are hearing increasingly that vendors are considering withdrawing from the competition, as they see no clear advantage in winning it. 4.2.3 A well planned Sector Deal might allow for more market-driven regulation, with a better resourced licensing system which would remove the bottleneck which currently exists in this country in the progression of new technologies to market. Such a deal could consider matters such as : - the use of sites currently in public ownership (Eg Trawsfynydd as first of kind location for a UK SMR)

136 Gwynedd Council – Written evidence (PNT0011)

- spatial location of facilities such as NAMRC and NNL - the financing of running such facilities (not just Building them) 4.2.4 A natural leadership organisation for such a Sector deal could be the newly re-formed Nuclear Industry Council .

4.3 SMRs

4.3.1 What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

4.3.1.1 We believe that SMRs in the UK afford a number of benefits:

- The production of low carbon electricity - The ability to utilise sites (including existing nuclear sites, such as Trawsfynydd), deemed unable to accomodate large scale nuclear energy facilities at the last Strategic Siting Assessment in 2008. - The high quality jobs which would be created in the development of an SMR at Trawsfynydd, in an area which has very few alternative development options. - The ability to establish a UK nuclear manufacturing capability, developing IP and processes to be marketed throughtout the world

4.3.1.2 We appreciate that SMRs in isolation would not satisfy the requirements of the modern electricity market, but would provide a useful part of the low-carbon mix which will be required to flexibly respond to changing, and increasing consumer demand due to the decarbonising of energy sources in the UKs.

4.3.2 What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

4.3.2.1 Although we do not approach this topic from a scientific perspective, as a local authority, we have followed the development of the SMR agenda very closely over the past 5 years. In that time we have developed strong relationships with technology vendors, academic institutions, government departments and agencies. Although we could not give a figure for the scale of the global market opportunity for SMRs, the overwhelming message which we continue to hear from all parties is that the SMR opportunity is “the UK’s to lose”. The frustration of all parties that this technology is not being progressed in this country has grown steadily over the past few years, and is now at a point in which UK technology vendors are very seriously starting to consider moving their development abroad, to a more supportive regulatory and governmental system. Canada has often been given as an example of a more supportive nuclear system, in which government acts only to assist, and that credible technology vendors can access the regulatory system directly and in a fairly straight-forward manner.

137 Gwynedd Council – Written evidence (PNT0011)

4.3.2.2 The NNL’s 2014 Report, “Small Modular Reactors Feasibility Study” sets out indicative values for the potential scale of the global market opportunities38

4.3.2.3 There is an ‘energy crescent’ across the North West of England and North Wales – extending from Cumbria to Trawsfynydd and including Universities succh as those at Lancaster, Manchester and centres of excellence such as NNL and NAMRC

4.3.3 Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to coordinate UK actions including international engagement on SMR development and future deployment?

4.3.3.1 We do not believe that the Government is doing enough in this regard at present. More facilitating action needs to be taken to allow the private sector to come forward with its proposals For example :- - Strike price - Changes to regulatory assessment, such as aninitial GDA Process, allowing appropriate resourcing of ONR for it to carry out an initial assessment of technologies (not just an assessment slot for 1 technology) - Identification of an initial site for SMR deployment (ideallyTrawsfynydd – a site in public ownership and currently of almost no monetary value to the tax payer

4.3.3.2 It was hoped that the ETI roadmap39, completed in 2016, in tandem with the SMR technology competition might form the basis for a clear way ahead, and yet no tangible progress appears to be being made.

4.3.4 Are the criteria set out by the Government for the SMR competition appropriate? If not, what should the criteria be? What timescale should the Government be working to in choosing an appropriate SMR design for the UK?

4.3.4.1 It is not obvious what the Government wants as output from the SMR competition. It has not set out clearly whether the output is a reactor which can be built on a site in the next 15 years and safely generate low carbon electricity or if it is about developing a UK Manufacturing base as well as low carbon electricty production.

4.3.4.2 The criteria should include :- - Cost, intellectual property potential, export potential and technical maturity

4.3.4.3 The Government should be working to get a working SMR in the UK in the next 15 years. It should identify the site at which the first SMR should be built so that it minimises risks for the technology developer and potential investors

38 http://www.nnl.co.uk/media/1627/smr-feasibility-study-december-2014.pdf 39 http://www.nuclearinst.com/News/keeping-up-the-momentum-for-small-modular- reactors-nuclear-institute-smr-2016-seminar-

138 Gwynedd Council – Written evidence (PNT0011)

4.3.4.4 It seems to us that all parties wish to see this work move forward as soon as possible. Responses to Phase 1 of the competition came to an end last May, and even allowing for dialogue into the Autumn, one might realistically expect UK Government to now be in a position to at least provide an update regarding the launching of Phase 2, even if this is subject to further work being undertaken.

4.3.5 Should the UK be involved in the development of Gen IV technology? If so, what funding and support should be put in place to place to help the UK establish a world leading position? Should our activity include development of one or more test reactors?

4.3.5.1 Yes, we believe that the UK should be involved, specifically by: - providing support for developing technology – appropriate test rigs (such as thermal hydraulic potential development) - Consideration of the development of a Materials Test Reactor - Allocation of a site for first of kind – potential use of Trawsfynydd as adevelopment area for SMR

5. Governance

5.1 Is the NNL fulfilling its remit appropriately? Can it deliver the required research to support the UK’s future nuclear energy policies? How does it compare to equivalent organisations in other countries?

5.1.1 We have a close relationship with the NNL, who have been very supportive of our efforts to try to attract an SMR to Trawsfynydd Site. We can therefore only comment on their remit to provide independent, authoritative advice on nuclear issues, which has been invaluable to us, and they have always given generously of their time. There is some concern that UK Government are not making sufficient use of NNL’s independent extertise to help it take an integrated view of the UK nuclear industry and of policies going forward

5.1.2 We cannot comment on equivalent organisations in other countries

5.2 Is the remit of the National Nuclear Laboratory (NNL) suitable to provide research and development support to the UK nuclear sector? Is the current funding and governance model for the NNL appropriate to its role and remit?

5.2.1 NNL needs to be providing independent and authoritative advice to Government to support Government take forward nuclear matters

5.3 Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved? Who has oversight of the whole nuclear R&D landscape, including international activities?

5.3.1 It is not obvious who has the oversight of all the different Research work being done in nuclear. It would make sense to invest that oversight in one expert body – NNL would be a good body to do this

139 Gwynedd Council – Written evidence (PNT0011)

5.4 Was the Nuclear Innovation and Research Advisor Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be?

5.4.1 The NIRAB final report has pulled together the work of the Group and progress made. This work has given a good direction to nuclear research work in the UK. A similar independent successor body is required following a similar role and remit. If nuclear R&D increases, then clear governance and oversight is required. Such a body can give that oversight.

21 February 2017

Cyngor Gwynedd – Written evidence (PNT0010)

(Welsh version)

1. Cyflwyniad

1.1 Fel yr ardal awdurdod lleol ar gyfer Dadgomisiynu Pwerdy Niwclear Trawsfynydd, rydym yn croesawu’r cyfle i gyflwyno gwybodaeth i’ch ymchwiliad i mewn i Flaenoriaethau ar gyfer Ymchwil Niwclear a Thechnolegau.

1.2 Mae gan Gogledd Orllewin Cymru draddodiad o fod yn ymwneud a’r diwydiant niwclear – gyda pwerdai Magnox safleoedd Wylfa yn Ynys Môn a Thrawsfynydd yn cyfranu yn sylweddol i’r economi leol a chenedlaethol ac i gynhyrchiad ynni carbon isel.

1.3 Mae safle Trawsfynydd wedi ei leoli yn rhanbarth Meirionnydd o sir Gwynedd. Yn ystod ei fodloaeth mae wedi darparu cyflogaeth i bobl Gwynedd ers 1959 a cynhyrchu dros 69 TWh o ynni carbon isel yn ddiogel. Prif ddiddordeb Cyngor Gwynedd, mewn perthynas â’r Safle a’i ddadgomisiynu, ydi ei oblygiadau economaidd-gymdeithasol sydd ynghlwm a cwblhad o’r cyfnod cyfredol o ddadgomisiynu, sydd yn arwain at gyflwr “Gofal a Cynnal a Chadw”.

1.4 Disgwylir i hyn gael ei gyflawni erbyn 2028.

1.5 Yn y cyfamser, rydym yn rhagweld gostyngiad cyson o weithwyr ar y safle. Yn 2014, cofnodwyd bod dros 900 o weithwyr ar y safle. Ers i’r rhaglen o golledion swyddi gael ei weithredu yn 2015, dim ond 200-250 o swyddi uniongyrchol sydd bellach yn parhau i fod ar y safle, gyda mwy o golledion wedi eu cynllunio ar gyfer blynyddoedd i ddod.

Mae’r lleihad hwn mewn swyddi yn hynod o economaidd-gymdeithasol berthnasol mewn ardal gyda economi isel iawn, sydd ar hyn o bryd yn adrodd: - Un o gyflogau cyfartalog isaf y DU, gyda dros hanner o’r gweithwyr yn ennill llai na’r Cyflog Byw - Cyfleoedd cyflogaeth amgen prin, gyda 91% o fusnesau yn cyflogi llai na 10 o bobl

140 Gwynedd Council – Written evidence (PNT0011)

- Cynnydd cyson yn y nifer o drigolion o oed ymddeol, a gostyngiad cyfateb yn y nifer o drigolion o oedran gweithio - Gostyngaid o 9.1% (rhwng 2001 a 2011) yn y nifer o bobl oedd yn meddu ar unrhyw sgiliau ieithyddol Cymraeg, a hyn mewn ardal lle roedd dros hanner y trigolion yn byw eu bywydau drwy gyfrwng y Gymraeg.

2. Datblygu Trawsfynydd i’r Dyfodol 2.1 Mae dadgomisiynu safle Trawsfynydd, a’r colled swyddi, yn naturiol wedi cael ei ragweld ers iddo gychwyn gweithredu, ac o ganlyniad, ers y 1980au, mae Cyngor Gwynedd wedi bod yn gweithio gyda Gweithredwyr Trwyddiedig y Safle a Sefydliadau Corff Rhiant i ymchwilio yn rhagweithiol i wneud y mwyaf o gyfleoedd cyflogaeth ar y safle, yn ystod y dadgomisiynu, ac hefyd y ffordd orau i greu cyflogaeth amgen o safon uchel yn yr ardal pan mae’r swyddi dadgomisiynu yn dod i ben.

2.2 Fel rhan o’r gwaith hwn, yn 2011 bu i Gyngor Gwynedd gyflwyno cais i Llywodraeth Cymru i ddynodi Safle Trawsfynydd fel rhan o gyfres newydd o Ardaloedd Menter, ac yn 2012, bu i Ardal Fenter Eryi gael ei lansio yn swyddogol .

2.3 Mae statws Parth Menter yn dod â diddordeb benodol yr Ysgrifenydd Cabinet ar gyfer yr Economi a Seilwaith mewn perthynas â datblygiad y safle, a’r swyddi y gall gael eu creu yno, a bod adnoddau penodol wedi eu rhoi mewn lle i ymchwilio i wneud y defnydd gorau o’r safle i greu swyddi gwerth uchel i’r dyfodol. Mae Bwrdd Llywio hefyd wedi ei roi mewn lle i gynghori’r Ysgrifenydd Cabinet o ran y defnydd gorau o’r adnoddau hyn.

2.4 Mae’r gwaith hwn wedi arwain at sefydliad partneriaeth gryf o asiantaethau, gan gynnwys Llywodraeth Cymru, Cyngor Gwynedd, Magnox a’r Awdurdod Dadgomisiynu Niwclear, sydd wedi gweithio yn agos dros y blynyddoedd diweddar i osod sylfeini ar gyfer dennu swyddi o safon i’r ardal.

3. Y Cyfle AMB yn Nhrawsfynydd 3.1 Mae’r gwaith helaeth sydd wedi ei gwblhau o ganlyniad i statws Ardal Fenter Safle Trawsfynydd wedi arwain at y casgliad mai’r opsiwn gorau ar gyfer datblygiad Safle Trawsfynydd yw i ddenu datblygiad AMB i’r safle. Sylweddolwyd fod hwn yn nôd tymor canolig sydd angen cryn dipyn o hwyluso. Mae’r prif reswm dros y casgliad hwn oherwydd: - cysylltiad grid ardderchog y safle, sydd i fod i gael ei uwchraddio - digon o gapasiti dŵr oeri, oherwydd ei leoliad ar Llyn Trawsfynydd - y capasiti i gludo modiwlau ac elfennau eraill i’r safle ar y ffordd, rheilffordd (gyda rheilffordd a adeiladwyd i bwrpas ar y safle) a môr (drwy Porthmadog gerllaw) - gweithlu sydd a sgiliau uchel Mae’r safle hefyd o dan berchnogaeth gyhoeddus, drwy’r Awdurdod Dadgomisiynu Niwclear, a allai hwyluso ei ryddhad i ddatblygwyr.

141 Gwynedd Council – Written evidence (PNT0011)

3.2 Mae nifer o gyrff annibynnol yn cefnogi uchelgais Trawsfynydd i gynnal AMB, gan gynnwys Sefydliad y Peiriannwyr Mecanyddol40, a’r ETI41. Roedd ymchwiliad diweddar gan Bwyllgor Dethol Materion Cymreig i Ddyfodol Ynni Niwclear yng Nghymru42 hefyd yn gefnogol.

3.3 Gyda’r cyd-destun hwn rydym yn cyflwyno ein ymatebion i’r cwestiynnau sydd wedi eu gosod allan gan yr ymchwiliad hwn.

4. Cwestiynnau Ymchwiliad

4.1 Ble os unrhyw le ydych chi’n credu y dylai cyfrifoldeb fod dros sicrhau bod gan y DU bolisi tymor hir cydlynol a chyson ar gyfer gweithgareddau niwclear sifil gan gynnwys cydweithio rhyngwladol a, o fewn y DU, ar gyfer mynegiant cost effeithiol ac effeithlon ar gyfer gwahanol elfennau o waith niwclear?

4.1.1 Rydym yn credu y dylai cyfrifoldeb terfynol ar gyfer datblygiad polisi hir dymor niwclear sifil fod o fewn llywodraeth ganolog – yn benodol yn BEIS. Fodd bynnag mae gan BEIS lawer o gyfrifoldebau. Mae felly yn gwneud synnwyr y dylai’r Labordy Niwclear Cenedlaethol (LNC) fod mewn sefyllfa i gynghori BEIS mewn perthynas a datblygiad polisi niwclear yn benodol

4.1.2 Dylai’r llywodraeth sylweddoli ei fod yn berchen ar nifer o asedau niwclear (gan gynnwys Safle Dadgomisiynu Trawsfynydd) y gall gael eu defnyddio ar gyfer gwthio ymlaen y datblygiad o dechnolegau niwclear newydd y DU. Mae angen corff megis y LNC i gymeryd golwg strategol integredig o’r diwydiant a cynghori Llywodraeth y DU ar sut i wneud y defnydd gorau o’r asedau hyn

4.1.3 Wedi dweud hynny, gyda’r technolegau niwclear newydd (yn benodol technolegau AMB) yn cynnwys nifer o ddyluniadau gwahanol, byddem yn cwestiynnu rôl y llywodraeth o “ddewis” technoleg, ac yn pwyso tuag at rôl alluogol lle byddai unrhyw dechnoleg cymwys yn medru cael ei asesu ar gyfer diogelwch, gyda fframwaith rheoleiddo sydd gyda adnoddau gwell yng nghanolbwynt i unrhyw newid gwirioneddol.

4.1.4 Rydym yn credu bod camgymhariad cyfredol rhwng ymyraeth gan y llywodraeth yn y diwydiant niwclear, sydd wedi darparu ffocws edmygol ar uwchsgilio pobl ifanc a gweithwyr presennol, ac hefyd y gefnogaeth o gwmniau gweithgynhyrchu cadwyni cyflenwi bychan a mawr, i gyflawni cymhwysedd niwclear (er enghraifft drwy’r rhaglen Fit4Nuclear), ond sydd hefyd wedi methu ar yr un pryd i ddarparu ysgodiad effeithiol ar gyfer datblygiad technolegau AMB newydd a allai elwa o’r gweithgynhyrchu a’r gweithlu hwn.

4.2 Mae strategaeth diwydiannol papur gwyrdd y Llywodraeth yn trafod ‘cytundeb sector’ posibl ar gyfer y sector niwclear. Sut y gallai’r

40 https://www.imeche.org/policy-and-press/reports/detail/small-modular-reactors-a-uk- opportunity 41 http://www.nuclearinst.com/News/keeping-up-the-momentum-for-small-modular- reactors-nuclear-institute-smr-2016-seminar- 42 https://www.parliament.uk/business/committees/committees-a-z/commons- select/welsh-affairs-committee/inquiries/parliament-2015/nuclear-power-15-16/

142 Gwynedd Council – Written evidence (PNT0011) sector niwclear elwa o gytundeb sector o’r fath? Beth fyddai cytundeb yn ei gynnwys a pwy fyddai’r sefydliad arweinol o fewn y sector ar gyfer cytundeb o’r fath?

4.2.1 Byddwn yn croesawu ymagwedd newydd i’r datblygiad o dechnolegau niwclear sydd yn cael ei arwain gan y diwydiant. 4.2.2 Mae cystadleuaeth AMB presennol y llywodraeth yn enghraifft dda o ymyraeth llywodraeth llawn bwriadau da yn arwain at rwystredigaeth yn natblygiad technolegau, heb unrhyw allbynnau clir ar gyfer y technoleg a ddewisir yn y pen draw. Rydym wedi dadlau yn hir bod cyfle gwych yma i’r llywodraeth gynnig Safle Trawsfynydd (fel ased eiddo cyhoeddus) fel cymhelliant i ddatblygu’r dechnoleg a ddewisir. Fel mae’n sefyll, rydym yn clywed mwy bod gwerthwyr yn ystyried tynnu yn ôl o’r gystadleuaeth, gan eu bod ddim yn gweld unrhyw fantais glir o’i ennill. 4.2.3 Gallai Cytundeb Sector sydd wedi ei gynllunio yn dda alluogi mwy o reoleiddio sydd yn cael ei yrru gan y farchnad, gyda system drwyddedu sydd â adnoddau gwell a allai gael gwared o’r tagfeydd cyfredol yn y wlad hon yn natblygiad y technolegau newydd i’r farchnad. Gallai cynnig o’r fath ystyried materion fel: - defnydd o safleodd sydd ar yn o bryd mewn perchnogaeth cyhoeddus (e.e. Trawsfynydd fel lleoliad cyntaf o’r fath ar gyfer AMB y DU) - lleoliad gofodol ar gyfer cyfleusterau fel NAMRC a NNL - cyllido’r gwaith o redeg cyfleusterau o’r fath (nid yn unig eu adeiladu) 4.2.4 Gallai sefydliad arweiniol naturiol ar gyfer Cytundeb Sector o’r fath fod y Cyngor Diwydiant Niwclear diwygiedig newydd.

4.3 AMB

4.3.1 Beth yw’r buddion, anfanteision a’r risgiau posibl o ddefnyddio AMB yn y DU ac yn ehangach?

4.3.1.1 Credwn y byddai AMB yn y DU yn fforddio nifer o fuddion:

- Cynhyrchiad trydan carbon isel - Y gallu i ddefnyddio safleoedd (gan gynnwys safleoedd niwclear presennol, fel Trawsfynydd), sydd wedi eu ystyried fel methu darparu ar gyfer cyfleusterau ynni niwclear ar raddfa fawr yn yr Asesiad Lleoli Strategol diwethaf yn 2008. - Byddai’r swyddi gwerth uchel fyddai’n cael eu creu yn natblygiad AMB yn Nhrawsfynydd, mewn ardal sydd a ychydig iawn o opsiynnau datblygu amgen. - Y gallu i sefydlu’r DU fel gallu gweithgynhyrchu niwclear, datblygu IP a prosesau i’w marchnata ar draws y byd

4.3.1.2 Rydym yn sylweddoli y byddai AMB ar ben eu hunain ddim yn bodloni anghenion y farchnad drydan fodern, ond yn darparu rhan defnyddiol o’r cymysg carbon isel fydd ei angen i ymateb yn hyblyg i newid, a’r galw cynyddol gan gyflenwyr o ganlyniad i’r datgarboneiddio o ffynonellau ynni yn y DU.

4.3.2 Beth yw’r graddfa o’r cyfle marchnad byd eang ar gyfer AMB? Beth fyddai’r gost petai’r DU ddim yn cymryd mantais llawn o gyfloedd AMB?

143 Gwynedd Council – Written evidence (PNT0011)

4.3.2.1 Er nad ydym yn mynd at y pwnc hwn o safbwynt gwyddonol, fel awdurdod lleol, rydym wedi dilyn y datblygiad o agenda AMB yn agos iawn dros 5 mlynedd. Yn yr amser hwn rydym wedi datblygu perthnasau agos gyda gwerthwyr technoleg, sefydliadau academaidd, adrannau llywodraeth ac asiantaethau. Er nad oeddem yn medru rhoi ffigwr ar gyfer graddfa cyfleoedd y farchnad byd eang ar gyfer AMB, y neges llethol yr ydym yn parhau i’w glywed gan yr holl bartion yw bod y cyfle AMB “i’r DU i’w golli”. Mae rhwystrediaeth yr holl bartion bod technoleg ddim yn cael ei brosesu yn y wlad hon wedi tyfu yn raddol dros y blynyddoedd diweddar, a’i bod bellach wedi cyrraedd pwynt ble mae gwerthwyr technoleg wir yn dechrau ystyried o ddifrif symud eu datblygiad dramor, i system reolaethol a llywodraethol mwy cefnogol. Mae Canada yn aml wedi ei roi fel enghraifft o system niwclear mwy cefnogol, ble mae llywodraeth yn gweithredu i gynorthwyo yn unig, ac y gall gwerthwyr technoleg credadwy gael mynediad uniongyrchol i’r system reolaethol mewn modd syml.

4.3.2.2 Mae Adroddiad 2014 y LNC, “Astduiaeth Ymarferoldeb Adweithyddion Modiwlar Bychan” yn gosod allan y gwerthoedd dangosol ar gyfer graddfa posibl o’r cyfleoedd yn y farchnad byd eang 43

4.3.2.3 Mae ‘cilgant ynni’ ar draws Gogledd Orllewin Lloegr a Gogledd Cymru – ymestyn o Cumbria i Drawsfynydd ac yn cynnwys Prifysgolion megis rhai yng Nghaerhirfryn, Manceinion a canolfannu rhagoriaeth megis LNC a NAMRC

4.3.3 Ydy’r Llywodraeth yn gwneud digon i ariannu ymchwil a datblygiad ar AMB, ac yn ysgogi eraill i wneud hynny? A ddylai fod yn gwneud mwy i gydlynnu camau y DU gan gynnwys ymgysylltu rhyngwladol ar ddatblygiad AMB a’r defnydd a wneir yn y dyfodol?

4.3.3.1 Nid ydym yn credu bod y Llywodraeth yn gwneud digon i’r perwyl hwn ar hyn o bryd. Mae angen cymryd mwy o gamau hwyluso i alluogi’r sector breifat i ddod ymlaen gyda’i gynigion Er enghraifft:- - Pris streic - Newidiadau i asesiadau rheoleiddio, megis Proses GDA cychwynnol, sydd yn caniatau adnoddau priodol o ONR i fedru cynnal asesiad cychwynnol o dechnolegau (nid yn unig slot asesiad ar gyfer 1 technoleg) - Adnabyddiaeth o safle cychwynnol ar gyfer datblygiad AMB (yn ddelfrydol Trawsfynydd –safle mewn perchnogaeth ac ar hyn o bryd bron dim gwerth ariannol i’r trethdalwr)

4.3.3.2 Roedd wedi ei obeithio y byddai map ffordd ETI44, a gwbhlawyd yn 2016, mewn tandem gyda cystadleuaeth technoleg AMB efallai yn ffurfio sylfaen ar gyfer ffordd glir ymlaen, ac eto mae’n ymddangos nad oes unrhyw gynnydd diriaethol i weld yn cael ei wneud.

4.3.4 Ydi’r criteria sydd wedi ei osod allan gan y Llywodraeth ar gyfer cystadleuaeth AMB yn addas? Os ddim, be ddylai’r criteria fod? Pa

43 http://www.nnl.co.uk/media/1627/smr-feasibility-study-december-2014.pdf 44 http://www.nuclearinst.com/News/keeping-up-the-momentum-for-small-modular- reactors-nuclear-institute-smr-2016-seminar-

144 Gwynedd Council – Written evidence (PNT0011) amserlen dylai’r Llywodraeth fod yn gweithio tuag ato wrth ddewis dyluniau AMB addas ar gyfer y DU?

4.3.4.1 Nid yw’n amlwg beth mae’r Llywodraeth ei eisiau fel allbwn o’r gystadleuaeth AMB. Nid yw wedi gosod allan yn glir os yw’r allbwn yn adweithydd y gall gael ei adeiladu ar y safle yn y 15 mlynedd nesaf a cynhyrchu trydan carbon isel yn ddiogel neu os yw’n ymwneud a datblygu sylfaen Weithgynhyrchu yn y DU yn ogystal a cynhyrchiad trydan carbon isel.

4.3.4.2 Dylai’r criteria gynnwys:- - Cost, potensial eiddo deallusol, allforio posibl ac aeddfedrwydd technegol

4.3.4.3 Dylai’r Llywodraeth fod yn gweithio tuag at gael AMB DU yn y 15 mlynedd nesaf. Dylai adnabod y safle ble dylai’r AMB cyntaf gael ei adeiladu fel ei fod yn lleihau’r risg ar gyfer y datblygwr technoleg a buddsoddwyr posibl

4.3.4.4 Mae’n debyg i ni bod yr holl bartion yn awyddus i weld y gwaith hwn yn symud ymlaen cyn gynted a phosibl. Bu i’r ymatebion i Gam 1 o’r gwaith gwblhau ddod i ben diwedd mis Mai diwethaf, a hyd yn oed caniatau deialog i mewn i’r Gwanwyn, gellid disgwyl yn realistig i Lywodraeth y DU erbyn hyn fod mewn sefyllfa i o leiaf ddarparu diweddariad ynglyn â lansio Cam 2, hyd yn oed os yw hyn yn amodol ar waith pellach yn cael ei wneud.

4.3.5 A dylai’r DU gymryd rhan yn natblygiad technoleg Gen IV? Os felly, pa gyllid ac adnoddau dylai gael ei roi mewn lle i gynorthwyo’r DU sefydlu sefyllfa flaenllaw y byd? A dylai ein gweithgaredd gynnwys y datblygiad o un neu fwy o’r adweithyddion prawf?

4.3.5.1 Ydym, rydym yn credu y dylai’r DU fod yn cymryd rhan, yn benodol drwy: - darparu cefnogaeth ar gyfer technoleg sydd yn datblygu – rigiau prawf priodol (megis datblygiad posibl hydrolig thermol) - Ystyriaeth o ddatblygiad i Adweithydd Profi Deunyddiau - Dyraniad o safle cyntaf o’r fath – defnydd posibl o Trawsfynydd fel ardal ddatblygiadol ar gyfer AMB

5. Llywodraethu

5.1 Ydy’r LNC yn cyflawni ei Gylch Gwaith yn briodol? A yw’n medru cyflawni’r ymchwil sydd ei angen i gefnogi polisiau ynni niwclear y DU yn y dyfodol? Sut mae’n cymharu a sefydliadau cyfatebol mewn gwledydd eraill?

5.1.1 Mae gennym berthynas agos gyda’r LNC, sydd wedi bod yn gefnogol yn ein ymdrechion i ddenu AMB i Safle Trawsfynydd. Mi fedrwn felly dim ond rhoi sylw ar eu cylch gwaith i ddarparu cyngor annibynnol, awdurdodol ar faterion niwclear, sydd wedi bod yn amhrisiadwy i ni, ac maent bob amser wedi rhoddi’n hael o’u hamser. Mae peth pryder nad yw Llywodraeth y DU yn gwneud defnydd digonol o arbenigedd annibynnol y LNC i’w gynorthwyo i gymryd golwg integredig o’r diwydiant niwclear ag o bolisiau wrth symud ymlaen

5.1.2 Ni fedrwn roi sylw ar sefydliadau cyfatebol mewn gwledydd eraill

145 Gwynedd Council – Written evidence (PNT0011)

5.2 Ydi Cylch Gwaith Labordy Niwclear Cenedlaethol (LNC) yn addas ar gyfer darparu ymchwil a cefnogaeth datblygol i sector niwclear y DU? Ydy’r model cyllidol a llywodraethol cyfredol yn addas i’w rôl a’i Gylch Gwaith?

5.2.1 Mae angen i’r LNC ddarparu cyngor annibynnol ac awdurdodol i’r Llywodraeth i gefnogi’r Llywodraeth i symud materion niwclear ymlaen

5.3 Oes cydlynu digonol rhwng y cyrff sydd yn cymryd rhan mewn ymchwil niwclear ac, os ddim, sut dylai gael ei wella? Pwy sydd a’r goruchwyliaeth o’r tirwedd niwclear Ymchwil a Datblygu gyfan, gan gynnwys gweithgareddau cenedlaethol?

5.3.1 Nid yw’n amlwg pwy sydd a’r goruchwyliaeth o’r holl waith ymchwil gwahanol sydd yn cael ei gynnal o fewn niwclear. Byddai yn gwneud synnwyr i fuddsoddi y trosolwwg hwn mewn un corff arbenigol – byddai’r LNC yn gorff da i wneud hyn

5.4 Oedd y Bwrdd Arlosesi Cynghori ac Ymchwil Niwclear yn llwyddiannus wrth gyflawni ei rôl? A oes corff golynol barhaol i NIRAB ei angen? Os oes, pa ffurf dylai’r corff hwn ei gymryd a be dylai ei rôl a’i Cylch Gwaith fod?

5.4.1 Mae adroddiad terfynol NIRAB wedi tynnu gwaith y grŵp at ei gilydd a’r cynnydd a wnaed. Mae’r gwaith hwn wedi rhoi cyfeiriad da i’r ymchwil niwclear yn y DU. Mae corff golynol annibynnol tebyg ei angen gan ddilyn rôl a Cylch Gwaith tebyg. Petai Ymchwil a Datblygu niwclear yn cynyddu, bydd angen goruchwyliaeth a llywodraethu clir. Gallai corff o’r fath ddarparu’r goruchwyliaeth hwn.

21 February 2017

146 Professor Neil Hyatt, University of Sheffield – Written evidence (PNT0028)

Professor Neil Hyatt, University of Sheffield – Written evidence (PNT0028)

This is an individual submission. Declared interests: Fellow of the Royal Society of Chemistry; current research grants sponsored by the Nuclear Decommissioning Authority, EPSRC, European Commission and US Department of Energy, and others; member of NIRAB (2013-16).

Responsibility for long term policy for civil nuclear activity 1. Responsibility for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities lies with Government and should continue to do so, to ensure that it remains focused on strategic national priorities but responsive to changing external drivers. In developing policy, Government should ensure it is able to call on independent evidence based advice, as set out in 21-23, and continue to consult on major policy developments. Co-ordination of activities and international collaboration in support of realising policy objectives should be undertaken by an independent advisory body (succeeding NIRAB) reporting to Government.

Industrial strategy green paper 2. The nuclear sector is well placed to benefit from a “sector deal” as defined in the Green Paper, through: long term investment and co-ordination of research and facilities development; boosting skills and high value jobs; and increasing commercialisation of research and export of technology, products, and intellectual property – particularly in nuclear decommissioning and waste management for which the global market is projected to be £50 billion per annum by 2020.45

3. The reformed Nuclear Industry Council could be well placed to lead, consult on, and facilitate, the specification and articulation of a “sector deal”. Key leadership organisations to be engaged would be those with relevant strategic advisory, regulatory, and executive responsibility, such as the National Skills Academy Nuclear, the Nuclear Decommissioning Authority and Office for Nuclear Regulation.

Small modular reactors: benefits, disadvantages and risks for the UK, and more widely 4. The primary potential benefit of SMR technology to the UK is the opportunity to design, demonstrate, licence, and manufacture, an indigenous reactor which would be of interest to the international market. Production of SMR units in the UK would create high skill and high value employment and revenue. The more affordable up front capital cost of SMRs would facilitate deployment, compared to large scale LWR reactors. Potential disadvantages of SMR technology relate to the multiple smaller units required to produce a given generating capacity, which may lead to comparatively higher operating costs and lower fuel resource efficiency.

45 The UK’s Nuclear Future; March 2015; BIS 13-267.

147 Professor Neil Hyatt, University of Sheffield – Written evidence (PNT0028)

5. Conceptually, future decommissioning of SMRs could be achieved at comparatively lower cost, if assisted by the modular nature of construction. However, it is not apparent that this would achieve a net reduction in the quantity of associated radioactive waste, compared to conventional Gen3+ LWR systems, normalised to usable energy output. Further research is required to assess this issue.

6. The key risk to SMR deployment is that the capital, financing and operating costs of SMRs remain the subject of considerable uncertainty and commercial privilege. Government commissioned research is addressing this knowledge gap, however, a lower levelised cost of electricity is not readily apparent. The distribution of many SMR units and spent fuel storage facilities across multiple nuclear licensed sites, would pose enhanced risks of security, safeguards, and emergency planning.

Global market opportunity for SMRs 7. A recent analysis estimated the global SMR market for electricity production to be 65-85 GW of installed capacity to 2035, with an undiscounted market value of £250-400bn.46 However, this opportunity should be consider with caution, because: i) there is fundamental uncertainty concerning the economics of SMRs (5); and, ii) the indigenous market in nuclear-capable nations (e.g. China, USA) may be a barrier to UK exports. The key opportunity for the UK is to be amongst the first providers to the international market in delivering an SMR product, which will maximise the economic benefit in terms of employment and revenue. Alternatively, the UK may exploit the opportunity of the global market, at lower risk, by creating saleable intellectual property or providing services such as licencing, operations, and fuel design, fabrication, management and recycle.

Research and development on SMRs 8. At present, there is a lack of clarity concerning the objectives of the national strategy, and overall economic advantage, of SMRs, which Government should address. If the opportunity is development and export of a UK SMR design, then considerably more investment will undoubtedly be required for technology development and demonstration, and creation of a supply chain.

Development of Gen IV technology 9. There should be strong involvement and leadership of technology development, if Gen IV technology can be demonstrated to be essential for operation of a sustainable UK fuel cycle, or the foreseeable export opportunities are plausible. Arguably, the current evidence in support of both drivers is weak, given that disposition of the current plutonium stockpile via a Gen IV sodium cooled fast reactor has not been shown to be a compelling option.

10. In the absence of clear strategic policy drivers, Government should ensure: i) that there are no barriers to UK innovation related to Gen IV technology or the partnership of historic UK strengths in high temperature gas cooled reactors and sodium cooled fast reactors with current international projects; and ii) research is primarily focused on generic issues which underpin more than one specific technology, including the participation in test reactor development.

46 National Nuclear Laboratory, Small Modular Reactors (SMR) Feasibility Study, December 2014.

148 Professor Neil Hyatt, University of Sheffield – Written evidence (PNT0028)

Remit and role of the National Nuclear Laboratory 11. Overall, NNL can be considered to making a positive contribution to overall UK strategy and research effort, together with other public and private sector organisations. However, there is an obvious tension between the public, commercial, and beneficiary role of NNL in nuclear fission research, and potential conflict with its stewardship role, which would be worthy of review.

12. Evidence presented to a previous inquiry highlighted the need to provide greater access to enable access to the national research infrastructure managed by NNL.47 Progress has been made on this issue, however, much more needs to be done in order to meet the demand of high quality research ambition. Access to facilities at the EC Joint Research Centre and US National Labs has proven more straightforward, in my experience, and has delivered timely and quality research outcomes.

13. As highlighted above (11), NNL is well placed to deliver a substantial proportion of research required to support the UK’s future energy policy. Effective partnership with other organisations should be strengthened and nurtured to deliver some aspects of its role, in terms of engaging expertise and facilities, for example in waste management technology.

Funding and governance of the National Nuclear Laboratory 14. The remit of the NNL is suitable to provide research and development support to the UK nuclear sector. The strong resonance of the strategic remit with the £250M national research programme, should ensure that NNL is well placed to secure substantial funding, in addition to its commercial business, without the need for additional intervention.

15. In terms of governance, extending the length of the NNL management contract (e.g. 10 years, consistent with National Physical Laboratory) should enable the organisation to develop its infrastructure and strategy to deliver longer term research objectives, as previously recommended.48

Oversight of the whole nuclear R&D landscape 16. Over the last three years, NIRAB has exerted the only effective oversight over the whole nuclear R&D landscape, as far as its remit permitted, as set out in 17-20. This ended with its term of office.

Nuclear Research & Innovation Advisory Board and its successor 17. With respect to the remit of NIRAB, as set by Government, it must be considered as highly effective in delivering its role. Examples include: development of an integrated national innovation programme, and allied business case; timely advice presented to Minsters on Small Modular Reactors; and facilitating investment in research infrastructure realised by in-year expenditure opportunities, which have already had a transformative positive impact on UK research, as summarised in the UK Civil Nuclear R&D Landscape

47 House of Lords Science and Technology Committee - Third Report, Nuclear Research and Development Capabilities, 15 November 2011. 48 House of Lords Science and Technology Committee - Third Report, Nuclear Research and Development Capabilities, 15 November 2011.

149 Professor Neil Hyatt, University of Sheffield – Written evidence (PNT0028)

Survey 2017.49 As an example: investment of £800k by DECC in the MIDAS Facility at The University of Sheffield has supported of a research portfolio in excess of £15M, with grant awards to use the facility in excess of £8M.50

19. Co-operation and co-ordination of government, public and private sector organisations, was very effectively facilitated by NIRAB, through Board and sub- group meetings, enabling research plans and priorities to be shared and effectively targeted. An important example, is co-ordination of capital facilities expenditure planned through direct DECC grants, the Henry Royce Institute, and National Nuclear Users Facility. It would be highly beneficial to maintain such a forum for communication in any future Governance arrangements.

20. Fundamental to the success of NIRAB, was an independent, authoritative, and influential Chair and Secretariat. It is highly desirable that in future Governance arrangements, the position of NIRO as an independent Secretariat, with no conceivable conflict of interest, should be preserved.

21. A successor body to NIRAB is certainly justified and desirable, the risk of not constituting such a body would be disintegration of the research landscape, adversely impacting research outcomes and benefits. The NIRAB approach to co- ordination was successful and could continue to be effective either as a time- limited or permanent successor body. Voluntary participation of members on NIRAB proved effective in managing commercial interests which might be difficult for paid appointment.

22. A successor body to NIRAB would require adjustment of remit, to reflect the shift in focus from defining to delivering the national research programme. The key function should address the need for co-ordination of nuclear research strategy, with a view to advising Government on shaping publicly funded research to ensure that near and long term policy objectives are realised, including international collaboration. The body could be tasked with oversight of the quality and impact of outcomes from the BEIS sponsored national programme, but this would need to be carefully tensioned against the strategic advisory role. The constitution of the body should ensure that leading research organisations are engaged, appropriate to the scale of its remit. In order that co- ordination can be effectively managed, this could be achieved with greater use of focused sub-groups.

23. Irrespective of the nature and remit of the successor body, the need for independence cannot be over emphasised; the body should therefore be commissioned by Government, not a third party.

21. Notwithstanding the success in development and funding of the national research programme (17-20), two areas are highlighted for improvement. First, enhanced prioritisation and co-ordination of international engagement activities is required, both to deliver research objectives and as a route to the global market. Second, the recommended prioritisation the national research programme is focused on rather near term and commercially driven objectives, to the detriment of a fully integrated approach in some areas. For example, the

49 The UK Civil Nuclear R&D Landscape Survey, February 2017; NIRAB-123-4. 50 The UK Civil Nuclear R&D Landscape Survey, February 2017; NIRAB-123-4.

150 Professor Neil Hyatt, University of Sheffield – Written evidence (PNT0028) recommended balance of research resource allocated to waste management versus fuel recycle (which will generate future higher activity wastes, that are outside the remit of NDA), may not be sufficient to fully underpin delivery of future fuel cycle scenarios – see Figure 1.51 Whilst it can reasonably argued that early revenue generating research opportunities should be prioritised, the risk of not pursuing a proportionate waste management technology programme is an escalation in final clean-up costs which fall to the tax payer.

Figure 1: Prioritisation of recycle and waste management R&D from NIRAB 124-1 (with permission).52

Exiting the European Union 28. The following additional issues are highlighted due to relevance and timeliness: exiting the European Union and plutonium management.

31. UK nuclear research and innovation programme is at risk of disproportionate adverse impact arising from the leaving the EU due to close collaboration on, and integration of, strategic research priorities and facilities. The EC Joint Research Centre, at Karlsruhe, provides access to research infrastructure not available or accessible in the UK - and which is unlikely to be available in the next decade (e.g. research with weighable quantities of plutonium-238). Research in the UK is at risk of being curtailed in its ambition and significance if access to the EC JRC is not maintained.

32. The UK has a respected and influential role in the two relevant EU technology platforms (IGDTP and SNETP), ensuring that research is well aligned with our national needs. Leverage of the financial resources, expertise, facilities and expertise associated with EU framework and Horizon 2020 programmes, has proven pivotal in sustaining the UK’s own endeavours in geological disposal of radioactive wastes, such as the CAST and REDUPP consortia projects.

51 Prioritisation of UK Nuclear Innovation and Research Programme Recommendations, November 2016; NIRAB–124-1. 52 Prioritisation of UK Nuclear Innovation and Research Programme Recommendations, November 2016; NIRAB–124-1.

151 Professor Neil Hyatt, University of Sheffield – Written evidence (PNT0028)

33. Whilst Government has provided welcome assurance that financial commitments to existing Horizon 2020 projects will continue after leaving the EU, there is an urgent need to address the uncertainty of funding future UK engagement in EU nuclear research projects and access to facilities.

Plutonium management 34. Government policy is that any remaining plutonium which is not converted into MOX fuel, or otherwise reused, will be immobilised and treated as waste for disposal.53 Since commitment to this policy in 2013, the technical maturity of the MOX fuel option has been called into question, given that the US MOX Fuel Fabrication Facility is heavily delayed and over budget.54 A review of the credible options for plutonium management would seem appropriate and timely, in particular, to ensure stockpile immobilisation is technically underpinned, should this be required.

24 February 2017

53 Department of Energy and Climate Change, Management of the UK's plutonium stocks: consultation response, February 2013. 54 N.C. Hyatt, Plutonium management policy in the United Kingdom: The need for a dual track strategy, Energy Policy, 101, 303-309, 2017.

152 Dame Sue Ion, NIRAB – Written evidence (PNT0031)

Dame Sue Ion, NIRAB – Written evidence (PNT0031)

This submission is by Dame Sue Ion, Chair of Nuclear Innovation and Research Advisory Board (NIRAB), in a personal capacity.

Summary

Governance and Nuclear Strategy 1. It is important that the nuclear sector has a clear strategy that is set by Government and industry through the Nuclear Industry Council. The strategy and a nuclear sector deal should aim to create long-term certainty and political stability across parliaments to facilitate investment in and delivery of major national strategic nuclear infrastructure projects.

2. Any new sector deal should include mechanisms to commission and coordinate research into advanced future reactor systems and inform decisions on whether those should form part of the energy mix beyond the current industry planned new build projects. New long-term institutions, or a revision of remit for existing ones such as NNL, may be the most suitable means of enacting this.

3. It is important that new arrangements are put in place to ensure Government continues to have access to independent expert advice post-NIRAB. Such advice is a valuable resource and will support key policy decisions as the global nuclear sector landscape evolves.

Small Modular Reactors 4. SMRs have the potential to deliver significant benefit to the UK’s low carbon energy mix and economy. The nature and extent of benefits will depend on reactor type, of which there are numerous technologies under development which focus on different application and markets.

5. Any investment in a UK SMR programme should aim to maximise the long term industrial growth and economic benefit to the UK associated with high value jobs and exports, which will require UK companies to secure valuable design and manufacturing Intellectual Property.

6. In order to achieve global success an SMR design must; be first (or early) to market with timely regulatory approval and first deployment in the UK; achieve “nth of a kind” at an economically competitive price; have a route to export markets; have an acceptable level of technical and economic risk that will inspire confidence in investors.

Generation IV technology 7. UK research activity into advanced reactors is low in comparison to other leading nations. NIRAB has provided recommendations to Government of priority research that will equip the UK with skills and capability to capitalise on both near term Generation III and longer term Generation IV market opportunities. It will be vital for Government to act on those recommendations if the UK is to be a significant partner in developing future nuclear technologies and if nuclear is to play a significant role in the UK’s mid-century energy mix.

153 Dame Sue Ion, NIRAB – Written evidence (PNT0031)

Response to Inquiry Questions

8. Long-term policy for civil nuclear R&D must reside with Government due to the strategic importance of energy policy and the heavily regulated nature of the sector including compliance with international regulations on safety, security and safeguards.

9. It is important that policy is led by one department and for civil nuclear energy activities this should be BEIS – the merging of BIS and DECC has helped to eradicate areas of potential economic and energy policy conflict, and ensures all major funding bodies of civil nuclear research are within the same department (NDA, Research Councils, Innovate UK). There are several other Government departments with policy relating to civil nuclear activities, including the Foreign and Commonwealth Office, the Department of Health, Defra, and the Department for Work and Pensions (the recently published UK Civil Nuclear R&D Landscape Survey55 details departments with policies which give rise to research needs). There are also the Devolved Administrations and other Government departments with an interest in civil nuclear policy including the Ministry of Defence, the Home Office, the Department for International Trade and the Treasury, and whilst there is of course a requirement for BEIS to consult and comply with broader Government priorities, it must be given the power to devise and enact energy policy.

10. There is a need for stability of policy across successive parliaments for nuclear projects to succeed. Building new nuclear power stations takes longer than a five-year parliament window, and even longer to generate returns on the substantial initial investment, and so a stable policy environment is needed to secure investor confidence from the outlay. Timescales are even longer where research into new nuclear technology is concerned, and a shifting policy landscape will hinder or even halt progress, as was the case in the UK in the late 1990s when the decision to stop funding research into Generation IV reactors. The UK now finds itself having to catch up in areas of essential expertise and to recapture the wealth of knowledge previously generated, through significant investment in new research programmes.

11. The UK energy sector is market led and so it will be important for Government in setting its civil nuclear policy to engage with industry. The revised Nuclear Industry Council is the means to achieve this engagement and to set direction, and articulate this throughout the sector.

Q2. The Government’s industrial strategy green paper discusses a possible ‘sector deal’ for the nuclear sector. How might the nuclear

55 The UK Civil Nuclear R&D Landscape Survey, NIRAB-123-4, February 2017, http://www.nirab.org.uk/our-work/publications/

154 Dame Sue Ion, NIRAB – Written evidence (PNT0031)

sector benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal?

12. A nuclear ‘sector deal’ should involve Government and industry working together to ensure successful delivery of near and long term nuclear projects; industry and the NDA should lead on setting out plans for major infrastructure projects, i.e. building new power stations and waste/decommissioning projects respectively, articulating timescales and procurement strategies such that UK supply chains can develop accordingly; Government should provide facilitative measures to ensure this can happen. This could include initiatives to ensure the necessary skills pipeline and improve the competitiveness of the supply chain, in for example, component and module manufacture.

13. Government also has a role to play in ensuring longer term objectives for the sector remain achievable, in particular in providing funding for research programmes and infrastructure related to advanced future reactor systems which may form part of the energy mix beyond the current industry planned new build horizon. The advice NIRAB has given to Ministers, summarised in its Final Report56 details what the priority research areas are where Government support is needed. A new sector deal should include mechanisms to commission and coordinate research, review output and set direction as the landscape evolves. This includes maintaining access to independent expert advice post-NIRAB (further discussed under question 11). New long-term institutions, or a revision of remit for existing ones such as NNL, may be the most suitable means of enacting this.

14. The Nuclear Industry Council is the right body to lead on delivering the sector deal as a whole. Existing or new bodies should focus on specific aspects of the deal and report into the Council, e.g., the Nuclear Skills Strategy Group to lead on skills.

15. The primary benefit to the sector, if the right deal is secured, will be in providing confidence to UK companies of a secure, stable long-term future for nuclear, with the backing of Government across parliaments as far as practicable. It should allow industry to focus and invest in the necessary activities needed to develop a skilled workforce, develop and implement efficiencies to deliver major infrastructure projects to time and cost, and increase competitiveness of UK companies in a global market place.

16. It is worth pointing out that the above is not a new position or strategy – in 2013 Government, albeit in coalition, published a Nuclear Industrial Strategy and formed bodies such as the Nuclear Industry Council and NIRAB to lead on delivering the vision and objectives set out. The new Modern Industrial Strategy should review the relevance of the existing vision and objectives and understand which of the many initiatives set in train were effective and build on these. Much time and effort has been spent by UK organisations to date and it is important they understand why the same process is apparently starting afresh in order to garner continued support.

56 NIRAB Final Report, 2014 to 2016, NIRAB-117-3, February 2017, http://www.nirab.org.uk/our-work/annual-reports/

155 Dame Sue Ion, NIRAB – Written evidence (PNT0031)

Q3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

17. Numerous SMRs are being proposed or are in development globally. The technologies and time to deployment vary significantly. The closest designs to market are those based on proven LWR technology, with developers claiming an approximate 10 year timeframe to commercial deployment. Advanced SMRs, such as Generation IV type fast reactors, high temperature reactors or molten salt reactors, are at a less well developed stage, but could be designed with certain functionality such as flexible generation, heat generation and desalination. The potential benefits therefore will be heavily dependent on the specific reactor in question. There are some generic benefits which have made SMRs an attractive proposition and are highlighted here.

18. SMRs can produce safe, secure and affordable low carbon baseload electricity, and also be designed for other applications as mentioned above.

19. In terms of financing, SMRs will have a lower total capital cost, shorter construction time, and lower delivery risk due to offsite factory manufacture of modules when compared to large nuclear plant. The result will be a product which is inherently less risky and more likely to provide financial returns in a shorter time period, widening the pool of potential private investors.

20. SMRs whose design is not finalised have the potential to introduce innovation to reduce the cost of electricity through, for example, improved manufacturing techniques, quality control and repeatability in a factory setting.

21. SMRs offer the potential to deliver and sustain significant numbers of high value science and engineering jobs, and an opportunity to design and manufacture a large proportion of the high value components to both domestic and export markets.

22. The extent to which all of the above benefits are realised will be dependent on the reactor in question and the size of the market, especially the economic benefits which rely on UK companies being involved in the design and manufacture of an SMR, securing Intellectual Property which can be exploited in export markets.

23. Disadvantages of SMRs will vary depending on the technology and size of SMRs. However all SMRs by definition will require multiple units across multiple and potentially additional nuclear licensed sites depending on the extent of deployment. Small nuclear should be considered as complementary to large nuclear reactors and not simply as an alternative, given the ability of larger stations to provide the bulk of baseload requirements.

24. As with any new technology, SMR development is subject to various risks:  The concept of SMRs, irrespective of reactor type, is not yet proven commercially anywhere in world. The high degree of delivery and technical risk is potentially too great for private investors and Government support is likely to be needed for the first of a kind (FOAK) unit.

156 Dame Sue Ion, NIRAB – Written evidence (PNT0031)

 The success of SMRs will be dependent on them being cost-competitive in the long term. The nth of a kind (NOAK) cost of electricity generation, which is what business models will be based upon, cannot be categorically proven and therefore there is a risk to achieving cost-competitiveness, with associated knock on effects to the scale of deployment.  From a global market perspective, there is a risk the UK misses out on the opportunity to secure valuable design intellectual property (IP) and knowhow as international vendors develop their designs.  It will be necessary to secure public acceptance in order to deploy an increased number of reactor units and/or potentially sites.  Security and proliferation risks are likely to arise due to an increased number of reactor units and/or sites.

Q4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

25. Many studies including a significant one commissioned by the previous Government have indicated major potential which would only be realised with a significant domestic market and an assured route to an export market, which would imply partnering internationally to achieve this. If the UK misses the current window of opportunity it will lose the chance to be a significant player in the design and supply of primary Nuclear Steam Supply Systems (NSSS) and will revert to being a buyer of technology as with the current Generation III fleet.

Q5. Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to coordinate UK actions including international engagement on SMR development and future deployment?

26. The Government is not presently funding research and development specific to SMRs.

27. Government has, however, stimulated significant domestic and global interest in a UK SMR development programme through a sequence of preparatory activities commissioned since it first signalled its interest in the Nuclear Industrial Strategy published in March 2013 - since 2014 Government has funded approximately £5 million on a Feasibility Study and a Techno- Economic Assessment of SMRs to provide evidence needed to make the case for further investment.

28. This led in part in November 2015 to Government committing to invest £250 million over 5 years on “an ambitious nuclear research and development programme intended to revive the UK’s nuclear expertise and position the UK as a global leader in innovative nuclear technologies. This includes a competition to identify the best value Small Modular Reactor design for the UK”.

29. The SMR competition was launched in March 2016 and received submissions from over 30 domestic and global nuclear organisations, with the initial phase of dialogue with interested parties due to conclude in Autumn 2016 - however at the time of writing no announcement of its conclusion has been made.

157 Dame Sue Ion, NIRAB – Written evidence (PNT0031)

30. In November 2016, BEIS launched competitions for the first £20 million two year phase of the £250 million announced the previous year for nuclear R&D57. This new funding is aligned with NIRAB’s recommendations which aim to develop generic capability in the UK research base that would benefit a range of reactor technologies and sizes, including SMRs. Of particular relevance are Advanced Materials & Manufacturing and Reactor Design.

31. However these actions, whilst generating interest in the SMR community, cannot be credited with stimulating any direct investment from others in SMR development – others will have invested significantly in preparing responses to the Competition Phase 1, but are likely to cease their interest should Government delay any decisions on the outcome of Phase 1 or reign its interest back in terms of funding support for future SMR development.

32. One mechanism for UK involvement in SMR development is through international engagement which is an area Government needs to be heavily involved in to support industry. Any collaboration to develop SMRs should be part of a broader international strategy which is currently lacking and which is one of NIRAB’s recommendations to Government outlined in its Final Report58.

Q6. Are the criteria set out by the Government for the SMR competition appropriate? If not, what should the criteria be? What timescale should the Government be working to in choosing an appropriate SMR design for the UK?

33. NIRAB recommended in its 2015 Annual Report and Final Report that Government needs to set out clear aims and objectives for SMRs and ensure there is alignment with wider underpinning research programmes. Government has not yet articulated its aims or objectives or the criteria by which it will evaluate the SMR competition.

34. The critical challenge for Government will be identifying the ‘sweet spot’ of defining requirements towards different, and often conflicting, energy and economic policy objectives. For example, encouraging off the shelf technology vendors to bring reactors on line sooner at the potential expense of long term economic opportunities, versus a less developed, longer to market design that offers significant IP potential and long term jobs/exports. Consideration will also have to be given to the international aspects of new reactor development and that other governments will also be making similar strategic decisions.

35. From an industrial policy perspective, a UK SMR programme should aim to maximise the long term industrial growth and economic benefit to the UK associated with high value jobs and exports. The programme should support the UK manufacturing sector by ensuring the involvement of UK companies in the completion of any design; thus enabling the development of IP and know-how relevant to design, manufacturing, construction, fuel supply, through life support and decommissioning.

57 https://www.gov.uk/guidance/funding-for-nuclear-innovation 58 NIRAB Final Report, 2014 to 2016, NIRAB-117-3, February 2017, http://www.nirab.org.uk/our-work/annual-reports/

158 Dame Sue Ion, NIRAB – Written evidence (PNT0031)

36. From an energy policy perspective, an SMR should aim to produce safe, secure and affordable low carbon electricity, and, where required, process heat.

37. In order to achieve global success an SMR design, as part of a UK programme, must:  Be first (or early) to market with timely regulatory approval and first deployment in the UK  Achieve “nth of a kind” at an economically competitive price  Have a route to export markets; be globalised such that it can be deployed overseas with little modification  Have an acceptable level of technical and economic risk that will inspire confidence in investors.

38. The timescale for Government to make decisions on SMRs depends on its aims/objectives:  If the aim is to maximise UK benefit from securing valuable design IP in nearer to market reactors then the earlier a decision is made the greater the potential for UK involvement.  If the aim is to pursue next generation reactors with specific application, for example high temperature reactors for process heat, the timescale is longer. However the priority research in the first instance should focus on providing evidence on which systems to pursue. NIRAB has recommended Government invest in developing analysis and strategic assessment modelling tools that are able to generate the necessary evidence for a range of emerging reactor technologies.

39. If nuclear is to play a significant role in the UK’s energy mix by the middle of the century, then the UK needs to be actively engaged in the research and development of future nuclear energy technologies, including some of the Generation IV technologies currently under development worldwide. Research is needed to inform policy on which technologies and fuel cycle options are most suited to the UK’s needs, and also if the objective is for UK companies to own aspects of designs.

40. UK research activity into advanced reactors was an area flagged up in the 2011 House of Lords Science and Technology Select Committee Report on Nuclear Research & Development Capabilities59 as being too low if long term objectives are to be met. In the Review of the Civil Nuclear R&D Landscape in the UK60 published by Government in 2013 research into advanced reactors

59 Nuclear Research and Development Capabilities, House of Lords Select Committee on Science and Technology, November 2011, http://www.parliament.uk/business/committees/committees-a-z/lords-select/science- and-technology-committee/inquiries/parliament-2010/nuclear/ 60 A Review of the Civil Nuclear R&D Landscape in the UK, HM Government (BIS/13/631), March 2013,

159 Dame Sue Ion, NIRAB – Written evidence (PNT0031)

accounted for less than 2% of all civil nuclear research activity by research personnel (38 researchers).

41. A new survey of the civil nuclear R&D Landscape61 based on 2015/16 data has recently been published by NIRAB, and shows that as a proportion of overall activity research into advanced reactors has increased to 4%, which equates to 117 researchers. The increase is observed mainly in universities, and should be viewed as a positive, albeit the numbers in industry and national laboratories in particular remain worryingly low.

42. Total funding for civil nuclear research in the UK, including fission and fusion, was approximately £217 million in 2015/16. Public funding accounts for £122 million of the total, which is lower than in 2010/11 where public funding equated to £140 million.

43. Data on funding for research into advanced reactors was not captured explicitly in the latest landscape survey, but assuming the 4% proportion as per research personnel breakdown suggests funding of the order of £10m in 2015/16.

44. This compares with $100m in 2016 for the US DoE Advanced Reactor Technologies programme62, and €99 million in 2015 for the CEA Investments for the Future Programme63.

45. A global comparison of funding is presented in the recent Landscape Survey by comparing annual civil nuclear research expenditure for OECD countries. UK expenditure on nuclear R&D is low relative to other OECD nuclear nations involved in developing future nuclear reactor technologies. In 2013, the UK had the 7th largest total nuclear R&D budget of the OECD countries. Note the comparison does not include China, Russia, India or South Korea.

46. NIRAB has provided detailed recommendations to Government of the priority research requirements that will put the UK on course to achieving its long-term objectives, which include the desire for “the UK to be a ‘top table’ nuclear nation and a respected partner in international collaborations leading the direction of future technology advances across the fuel cycle.”

47. The initial stages of the recommended programme are reactor technology neutral and have been designed to equip the UK with skills and capability to capitalise on both near term and longer term market opportunities. Capability developed through the recommended research will support the new build fleet and SMR development and, importantly, create a platform to support advanced reactor development in the longer term.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/168039/ 13-631-a-review-of-the-civil-nuclear-r-and-d-landscape-review.pdf 61 The UK Civil Nuclear R&D Landscape Survey, NIRAB-123-4, February 2017, http://www.nirab.org.uk/our-work/publications/ 62 Office of Nuclear Energy, FY 2017 Budget Request, February 2016, https://www.energy.gov/ne/downloads/fy17-ne-budget-request-presentation 63 The CEA Financial Report 2015, http://www.cea.fr/english/Documents/corporate- publications/cea-financial-report-2015.pdf

160 Dame Sue Ion, NIRAB – Written evidence (PNT0031)

48. The recommended research programme (detailed in the NIRAB Final Report64) equates to approximately £250 million over a five year period, and is additional to that already funded by the NDA, Innovate UK and the Research Councils. Given the timescale (> 10 year) of new nuclear technology development, continuation of funding will be need beyond this phase as appropriate.

49. Government contribution in the early stages is required to address market failure due to the high cost and risk barriers, and will gradually decline as industry investment is stimulated when technologies approach commercialisation.

50. Government asked NIRAB to prioritise its recommendations to meet an anticipated £125million 5 year budget. The resulting £125 million programme65 is predominantly aimed at developing generic capabilities, but a modest proportion would specifically address Generation IV needs.

51. As mentioned in the response to Q5 above, BEIS launched competitions in November 2016 for the first £20 million two year phase of the £250 million announced the previous year for nuclear R&D. Whilst this is welcome and represents a significant milestone, it is relatively small scale and needs to be followed with a subsequent phase that ramps up and fully delivers on the £250 million funding announcement.

52. The recommendations include maintaining access to irradiation test facilities, specifically the Halden reactor in Norway and the Jules Horowitz Research Reactor Project in France (due to be online in 2022). The development of a UK materials test reactor was not considered a priority in a funding constrained environment, and would be difficult to justify when we have the opportunity to collaborate and use those in existence overseas.

53. It is worth adding that securing access through payment of subscriptions to overseas test reactors is only worthwhile if supplemented with the programme funding and direction to truly engage with research at these facilities.

54. NNL is fulfilling its remit as best it can within the constraints it operates under, i.e. operating as a wholly commercially funded organisation, aiming at the same time to act in the national interest, for example by maintaining at risk high level skills.

55. NNL does not have sufficient funding to deliver the R&D to support UK future nuclear energy policy needs. It receives no direct public funding and competes for research funding opportunities like any other commercial

64 NIRAB Final Report, 2014 to 2016, NIRAB-117-3, February 2017, http://www.nirab.org.uk/our-work/annual-reports/ 65 Prioritisation of UK Nuclear Innovation and Research Programme Recommendations, NIRAB-124-1, November 2016, http://www.nirab.org.uk/our-work/publications/

161 Dame Sue Ion, NIRAB – Written evidence (PNT0031)

organisation. It is only able to re-invest low £millions per year in research from its operational profits.

56. NNL has a wealth of experience and Subject Matter Expertise but it does not currently have capability or capacity across all areas of the fuel cycle required to deliver the extent of UK R&D needs. For example it has little experience in reactor design or advanced manufacturing.

57. NNL’s research facilities are world-leading in some areas, particularly its Central Laboratory at the Sellafield site.

58. There is not a comparable organisation with the same governance structure as NNL i.e. a commercial organisation acting as a national laboratory without government funding. In other countries national laboratories tend to be majority financed from government, focussed on supporting a national programme, with the remainder from the private sector. Examples are Oak Ridge National Laboratory66 in the US, which is over 80% Government funded, CEA67 in France which is 51% Government funded, JAEA68 in Japan which is 80% Government funded and AECL69 in Canada which is 80% Government funded.

59. NNL’s present commercial funding and governance model prevent it from fully acting to support future national energy policy.

60. It is imperative that any future amendment to NNL’s remit is clear to the rest of the industry and that it did not have an unfair commercial advantage if it were to receive public funding.

61. The public funding landscape is complex in the civil nuclear sector as is highlighted in the NIRAB Final Report. This emphasises the importance of Government ensures the necessary arrangements are in place to fully coordinate and manage its research portfolio.

62. NIRAB has, in part, fostered cooperation and coordination by providing a forum at which Government Departments and Agencies and Industry have been able to discuss priorities and share plans for funding research. The Nuclear Innovation and Research Office (NIRO) has also supported NIRAB in attending

66 https://science.energy.gov/laboratories/oak-ridge-national-laboratory/ 67 http://www.cea.fr/english/Documents/corporate-publications/cea-financial-report- 2015.pdf 68 https://www.oecd-nea.org/law/legislation/japan.pdf 69 http://www.aecl.ca/site/media/aecl/2016_AFR_Eng.pdf

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other coordinating bodies such as the NDA Research Board, the National Nuclear User Facility (NNUF) steering group and the Nuclear Waste and Decommissioning Research Forum (NWDRF). NIRAB reached the end of its 3 year term in December 2016 and has been disbanded.

63. In 2013 Government formed the Low Carbon Innovation Coordination Group Nuclear Sub-Group (LCICG NSG) to coordinate public funding of nuclear research. The LCICG NSG consisted of members of BEIS, Innovate UK, RCUK, NDA, MoD, FCO and was co-chaired by the Government Office for Science and DECC.

64. In November 2016, the Government announced the formation of the Energy Innovation Board to provide strategic oversight of all energy innovation programmes and coordination of energy innovation activity. This replaces the LCICG.

65. The former LCICG was, in effect, more of a communication exchange forum than a coordination of public funds as decisions were still made in individual departments, and often seemingly uncoordinated, with no real attempt to maximise synergy, address gaps or avoid duplication. It will be important to continue to monitor how effectively public sector funding is coordinated with new Energy Innovation Board in place.

66. BEIS notionally has oversight of the nuclear research landscape, and asked NIRO and NIRAB to update the Landscape70 report in 2016 to provide data to show how it has changed over the three year intervening period in order to measure the effectiveness of policy. The recent update shows that the concerns raised by the House of Lords Select Committee in 2011 and in the previous Landscape in 2013 about the number of researchers in advanced reactor systems and fuel fabrication remain, with activity levels still too low to deliver any kind of ambition for new nuclear beyond the currently planned fleet.

67. Additional concerns were previously raised regarding the ageing nature of the workforce and the impending loss of highly skilled personnel through retirement. There is evidence of this having occurred in the UK’s national laboratories, where there has been a significant loss of their most experienced staff.

68. NIRAB was valuable to both HMG and industry in a number of ways  HMG got an expert consensus set of recommendations that took into account the views and needs of industry, academia and national laboratories  The NIRAB members got an insight into Government needs and thinking and had the opportunity to share information across industry, academia and national laboratories

70 The UK Civil Nuclear R&D Landscape Survey, NIRAB-123-4, February 2017, http://www.nirab.org.uk/our-work/publications/

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 Nuclear research funders (public and private) were able to see a broader context for their own interests and were able to network and coordinate with other funders.

69. This type of engagement has led to an improvement in communication and sharing of information over the past three years. It will be beneficial to retain such a forum for communication post-NIRAB.

70. It is important that new arrangements are put in place to ensure Government continues to have access to independent expert advice post-NIRAB. Such advice is a valuable resource and will support key policy decisions as the global nuclear sector landscape evolves.

71. There is more than one mechanism that could be used to deliver the necessary functionality – for credibility the mechanism needs to ensure independence and to have the right calibre of experts giving advice; NIRAB members were all senior, internationally recognised experts in their fields.

24 February 2017

164 Dame Sue Ion, NIRAB and the Nuclear Industry Association (NIA) – Oral evidence (QQ 50-59)

Dame Sue Ion, NIRAB and the Nuclear Industry Association (NIA) – Oral evidence (QQ 50-59)

Tuesday 7 March 2017

Watch the meeting

Members present: Earl of Selborne (The Chairman); Lord Borwick; Lord Broers; Lord Cameron of Dillington; Lord Fox; Lord Hennessy of Nympsfield; Lord Mair; Lord Maxton; Baroness Neville-Jones; Lord Oxburgh; Viscount Ridley; Lord Vallance of Tummel; Baroness Young of Old Scone.

Evidence Session No. 6 Heard in Public Questions 50 - 59

Examination of witnesses

Dame Sue Ion, Chair, Nuclear Innovation and Research Advisory Board (NIRAB); Lord Hutton of Furness, Chair, Nuclear Industry Association (NIA).

Q50 The Chairman: We welcome back Dame Sue Ion, who has helped us many times in the past on our previous inquiries. We look on this very much as following up the last report—thank you. We also welcome to Lord Hutton, who we are delighted to have with us to help us. As we are all aware, there may well be a Division during this evidence session, in which case we will stop for 10 minutes or so, so that both Lord Hutton and members of this Committee can all do their duty, whatever it may be. For the record, because we are being broadcast, I invite first Dame Sue and then Lord Hutton to introduce themselves for the record. If you would like to make an introductory statement, please feel free to do so. Dame Sue Ion: I am Sue Ion. I am the outgoing chair of NIRAB, the Nuclear Innovation and Research Advisory Board. I also happen to chair the European Commission’s Euratom Science and Technology Committee, and I have just accepted a role as honorary president of the National Skills Academy for Nuclear. Lord Hutton of Furness: I am chairman of the Nuclear Industry Association here in the United Kingdom. I also co-chair the Nuclear Industry Council and am leading the work on the new nuclear sector deal. The Chairman: Thank you. If you are content, we will go straight on into the questions. As I say, we will probably be a bit short on time on this, not least because of the Division. Baroness Young, would you like to start? Baroness Young of Old Scone: A number of the people who have given evidence so far feel that there is not a sufficiently clear long-term strategy that persists which would allow the rest of the nuclear industry and all the various partner bodies to get behind it and add what they have to add. I wanted to ask each of you where the backbone for the delivery

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of such a strategy might come from in the future, so it is the vision thing, as Prince Charles would put it. Is it the Nuclear Industry Council, is it an independent successor to NIRAB, or is it the glued-together partner input that the NNL were describing? Where do each of you see this drive to get a strategy coming from? It is clear that politicians do not hang around long enough to do that job. Dame Sue Ion: What is required is something that successive Governments will support that is driven by both government and industry because of the long-term nature of the nuclear sector. The previous Administration, following your Lordships’ last recommendations, had a Nuclear Industry Council and a nuclear industry strategy, which set out pretty much what you would expect to see in a long-term vision for the sector. The only problem was that it was aspirational and did not set out how or how much it would cost to deliver all the elements that were identified. Hopefully, the new Nuclear Industry Council, which I am sure Lord Hutton will say more about, will be a place to review that previous iteration and, with government, determine a way forward which will make things happen. So far as the lead departments are concerned, we have now the merged BEIS covering energy and industry, which is a good step forward because energy, industry and national security are all linked in one way, shape or form, so a departmental lead for any Government of the day in that form is really important. The Government need to set out their aims and objectives for nuclear over the long term because they shape pretty much everything that follows, whether it be the industrial strategy or any research that underpins it. You have to think long term because, when you compare nuclear technology with other low-carbon technologies, the benefits will only be returned in the longer timescale and a significant nuclear contribution will be needed if the UK’s aims and objectives are to be fulfilled. Lord Hutton of Furness: I agree with everything that Dame Sue has said. I think we have a vision in the 2013 nuclear industry strategy which is a good one. The Nuclear Industry Council, which was set up at the same time to help oversee the implementation of that strategy, struggled in the first couple of years to really make its mark. I think it was too big and it was not focused on the strategy, but became subsumed into a lot of operational-level detail, which really could and should have been done elsewhere. With the new council, we have a chance to press the reset button and get going again on this. The nuclear sector deal, which I am sure we will come on to, should help to reinvigorate that partnership. When it comes to nuclear, I agree with what Dame Sue has said, that there have to be three people in this relationship: this Government, this industry and the research community. Every successful nuclear nation has found a way of forging an effective partnership between those three constituent elements. I do not think we have done that particularly well in recent years and we have an opportunity to do that more effectively going forward. That is certainly what I want to do in the new Nuclear Industry Council and, with the work on the nuclear sector deal, I think we have an opportunity to start that process.

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You have to start with a vision. We have one that is certainly workable, but we have to keep it under review and make sure it is delivering the aspiration. I do not think aspiration is a bad thing. I do not think you can have vision without aspiration. We all have to ask ourselves the question of what sort of nuclear nation we want to be. Do we want to be a top- table nuclear nation, which is the role we have always occupied and done so brilliantly in the last 60 years, or are we going to settle for some other role which might not be the full-spectrum range of capabilities that we have got used to? I am certainly not prepared to give up on any of those areas of excellence and expertise where the UK has shone so brilliantly in the last 50 or 60 years, but that will require some pretty hefty policy decision-making and we need to get on with that pretty soon. Although it is long term, we have to make sure that investors and the private sector, who will take a lot of this forward, get the right signals at the right time so that they can start making the commitments they need to make as well. I think there is a risk that if we do not press on with this pretty quickly we might lose a golden opportunity.

Q51 Baroness Neville-Jones: I would like to ask you about the sector deal that you have mentioned. From what you have said, Lord Hutton, it rather suggests to me that you see a possible range of options that such a deal might cover. What would you see as the optimal position that any deal might comprise and what would its benefits be, both for industry and the nation? Lord Hutton of Furness: That is to be determined. To put it into, hopefully, a helpful context for the Committee, we met for the first time as the new Nuclear Industry Council only a fortnight or so ago and we had a pretty extensive discussion about what, for industry, we would like to see from the sector deal, and I think it is true to say that we want to set the bar pretty high. The Government have made it clear to us that there is no template, no box into which we have to squeeze everything, which I think is helpful. They have also made it clear that we can do this in stages. With what we need to get on with right now, today, to help the industry, we have a huge set of challenges right across the whole spectrum—new build, decommissioning, fuel cycle issues—so we will look at issues to do largely with skills and competitiveness in the first instalment of the nuclear sector deal because we recognise that these are massive challenges. So far, we have got off to a reasonable start. We have brought together a group of people within the council to help fashion this. The Nuclear AMRC and the National Nuclear Laboratory will be involved and, I hope, the Nuclear Decommissioning Authority will too, so I think we have all the right people in the room engaged on trying to fashion this, but it is too early to say exactly what this deal will look like. Ministers want to get on with it, and we are happy with that; we think we should press on. I have talked about the need to be decisive and make decisions and get on with things, so we do not want to kick this can down the road at all. I hope that we will have something that we can talk about and air in public by the end of the summer. Baroness Neville-Jones: You say, and it is fair enough, that you can do it in stages, but do you not need a vision of where you are going in order

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to decide what your stages need to be and will be? Lord Hutton of Furness: We do. We have been assured, and we are pleased to have received this assurance, that the 2013 nuclear industry strategy remains the goal for which we are all striving, and the goals in that strategy are pretty ambitious. We now need to make the various decisions, and there are many pending, to start to move in that direction. The nuclear sector deal is not seeking to devise a new strategy for the sector because we have a perfectly workable one. We are now looking to operationalise, if you like, in a practical way what we can do now to help deliver that ambitious strategy that was set out in 2013, which the industry very strongly supports. Baroness Neville-Jones: Do you think that perhaps you can add some acceleration to the speed at which we have been moving, because it has been slow? Lord Hutton of Furness: The council will certainly try to do that. We are industry led and it is absolutely not in the industry’s long-term or even short-term interests to disappear for years into a room and emerge in due course, no. Every part of the industry faces challenges today and we need to crack on and try to find a way of responding and rising to those challenges, so we are absolutely not interested in pushing this into the long grass at all. Lord Fox: BEIS has established industry sector deals with other industries. Which of those industries have you looked at? The Aerospace Growth Partnership is one model and the Automotive Council is another, which are two I know about. Have you looked across the BEIS sector spectrum, and which bits will you cherry-pick of those other deals for your sector? Lord Hutton of Furness: I do not think we look at it as a cherry-picking exercise, to be honest. Of course, we will look at the other models. Lord Fox: But there are good examples that you could cherry-pick. Lord Hutton of Furness: Sure, and we will look across all those other examples and fashion something that is sensible for the nuclear industry, but we have literally only recently begun to do that work in the last week or so and I do not want to sit here and pre-empt any of that. There are plenty of good examples. Generally, the industry is very positive about the nuclear sector deal and we are very supportive of this initiative and think that the Government are doing the right thing. Lord Maxton: In another incarnation, you were Secretary of State for Defence. The one issue that has not been raised, and, to some extent, it answers Lord Hennessy’s problem, is the relationship between the nuclear power industry and the international proliferation of nuclear weapons. That has obviously always been in the minds of people and is one of the questions that is always raised about the SMRs—that selling them abroad is a proliferation issue in nuclear knowledge and materials. What is your answer to that question, because I think it is, to some extent, at the core of what we are trying to do? Lord Hutton of Furness: It is a hugely important issue. The Ministry of Defence is represented on the Nuclear Industry Council, which is

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incredibly important. What we have found in the last few years, of course, is that the timetable for nuclear new build in the UK has all become very compacted together. So we have three major developments within close proximity to each other, coming at the same time as the Ministry of Defence and the Government are committing to the future nuclear ballistic missile programme as well. It is all hands to the pump in that sense because we have an awful lot to do in a much more compacted timescale, so we value the involvement of the MoD in helping us to plot that course. On the proliferation issue, this is, in part, to do with our relationship with Euratom going forward. Our non-proliferation commitments are clear and are intertwined with the Euratom Treaty obligations, so we must find a proper way to progress those as we leave the European Union. We cannot have a period when there is any gap. I know that there is a very fraught debate going on about the terms of our exit from the European Union, but, when it comes to the nuclear industry, and the trade in goods and services in nuclear, there really is not any opportunity to fall back on something else, unless we are absolutely sure that we have all the pillars in place on the nuclear safeguarding arrangement. Britain plays a strong role in proliferation. I am very strongly supporting that, and I hope the Government will continue to put their elbow behind that because it is in all our interests that we secure nuclear material around the world and make sure that it is not used inappropriately. The Government certainly have a job of work on their hands now, given that they are exiting Euratom, to make sure that this does not fall off the cliff either because that would be a very bad thing. Lord Hennessy of Nympsfield: I think it is fair to say that the history of civil nuclear power in our country over 70 years is a mixture of triumph and tragedy. I do not think there are any iron laws of history and I think, as Mark Twain said, history does not repeat itself but sometimes it rhymes. What are the don’ts that you take from the history of our past, because we have had some pretty glittering cul-de-sacs that we have gone into before now? What is it about your efforts, and Dame Sue’s, that gives this a chance of not being yet another false renaissance? Dame Sue Ion: It depends on which perspective you are looking at it from. You have made a good point, Lord Hennessy. If you had asked me 10 or 15 years ago if I would advocate the deployment of three, possibly four, reactor designs going forward in the UK as their first-wave renaissance, then I would have looked at you incredulously. Having got to that position now, I would say that my view has changed significantly because, whereas in the past we set about developing new systems from scratch and did not standardise those at all in any way, shape or form, when you look at the systems that we deploy now, all of them are part of global nuclear fleets, with all the lessons that have been learnt along the journey of the vendors and the deployers in the other countries of deployment. We are, effectively, getting the benefit of being able to more speedily deploy three, possibly four, designs with the different supply chains that they bring with them to give us the security of energy supply that we need. I think it is a good thing that we have different designs, albeit from standardised fleets.

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When it comes to the question of the SMR, again the benefits will only be realised if we deploy fleet deployment and get the maximum volume and maximum factory-build content of those systems. But perhaps we will discuss SMRs later. Lord Hutton of Furness: I would agree with everything that Dame Sue has said. I am not sure I could improve on that. The Chairman: Dame Sue, going back to the way that a possible sector deal might be formulated, does the structure of how it is formulated, as set out by Lord Hutton, make sense to you? Dame Sue Ion: Yes, it does. I fully agree with Lord Hutton’s explanation of the forward work of the Nuclear Industry Council. I have a position on that council, as does the National Nuclear Laboratory in the form of Professor Howarth, so I think that research and research needs are represented at the highest level on the council as this goes forward, and we will be working to ensure that any sector deal includes the mechanisms needed to commission and co-ordinate the research that is essential to underpin the direction that is set.

Q52 Lord Mair: On that point, Dame Sue, the whole question of co-ordination across the various bodies doing research for the nuclear industry, what is the best way of co-ordinating that? NIRAB, of course, has now been wound up, so what do you think should be its successor? Dame Sue Ion: Given the complexities of the nuclear landscape and the particular issues that it brings with respect to safety and security safeguards as well as the content of any research programme, it is important that there is a body that is able to scrutinise the whole of that landscape. NIRAB’s role, as a committee, was to oversee that landscape and what it looked like. In terms of bringing together the co-ordination, that was executed by the hard work done by NIRO—the Nuclear Innovation and Research Office—which was the secretariat that supported NIRAB. For the first time in probably a decade, we were able to look at all publicly funded research and development and, so far as we were able, much of the private sector’s ongoing investment in the current landscape. It is important to have that because otherwise you stand a chance of duplicating—which is bad, because it wastes public money that could otherwise be diverted to filling the gaps, which is probably more important. You need some body which brings together all aspects of the publicly funded research so that you can see what is being spent, not necessarily to direct it but at least to share information. One of the benefits of the work that NIRO did with NIRAB was that everybody knew what was going on, so it was possible for the research councils, in their managed calls, to call for work to plug the gaps that were then known about and it was possible for the Nuclear Decommissioning Authority to understand what was happening elsewhere in the landscape so that it did not inadvertently duplicate what was necessary. Lord Mair: The “some body” that you refer to, who should that body be? Dame Sue Ion: The Government need to put something in place that will oversee the totality going forward. They have a high-level body, the Energy Innovation Board, which in theory should co-ordinate public

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funders of all energy research, not just nuclear. But, frankly, it would not do justice to the nuclear part of it because it would not have sufficient time to give it the scrutiny that is necessary. There are any one of a number of ways that that co-ordination could be provided, Lord Mair, but it could possibly be given to the National Nuclear Laboratory as part of its role going forward. There is no reason, since it is a publicly owned body, why it could not fulfil that role if asked to by the Government.

Q53 Lord Oxburgh: I have a few more-detailed questions. First, has NIRO expired along with NIRAB, or does it still exist? Dame Sue Ion: NIRO still exists at the moment. NIRO is a perfectly formed, very efficient body of four individuals who have done an absolutely stunning job over the last three years. It is made up of two secondees from the National Nuclear Lab and two secondees, as it happens, from the private sector, although the positions were open to academics and private sector personnel. In order to do the job that is required going forward, you would probably want a slightly bigger NIRO that has the flexibility, as was said in the previous evidence session, to bring people in and out, to keep them refreshed and to have the expertise according to the need. Lord Oxburgh: Maybe I read this wrongly into what you said, but NIRO had a budget to help fill the holes in the existing pattern of research programmes. Is that correct? Dame Sue Ion: No, neither NIRAB nor NIRO had any money whatsoever to dispense out into the wider world. NIRO was funded by what was then DECC, now BEIS, in terms of the salaries of the personnel who sat within it and that is all. We had no executive authority to dispense funds. All we had was the requirement to provide advice on what should be funded to plug the gaps. Lord Oxburgh: To whom did that advice go? Dame Sue Ion: It went to the Ministers of State at the time. Lord Oxburgh: So the hope was that they would follow this advice and put money in various places to achieve what you had in mind? Dame Sue Ion: That is true and, over the three years of NIRAB’s work, after each year, we issued an annual report that specified where the gaps were and where the essential funding needs were, and we sat back in hope and aspiration. To be fair to the Government, a number of investments were made mainly in capital infrastructure, which was extremely welcome, but throughout our existence we have urged Governments to fund work in those capital assets, so programmatic work which enables the funding of scientists and engineers to do the work that is required. So far, the only funds of that type that have been committed of the £250 million that was promised in the CSR have been £20 million, which is currently out for competition. It is a good start, but, three years down the road, we need to see the commitments fulfilled of the money that was sought. Lord Oxburgh: Now on the NIC, to whom does the NIC report? Is it the Secretary of State?

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Lord Hutton of Furness: It does directly report to the Secretary of State, yes. Lord Oxburgh: Does he or she have an obligation to respond to the council? Lord Hutton of Furness: It is not a statutory obligation, but it is an effective obligation. Lord Oxburgh: It is an expectation? Lord Hutton of Furness: Yes. Lord Oxburgh: How are the individuals chosen to represent the industry? Are they truly representative of the industry from the industry’s point of view, or is it a series of people perhaps chosen by the Government, or something like that, whom they would like to have represent the industry? Lord Hutton of Furness: I think the process of selecting members of the Nuclear Industry Council was a collaborative one; the Government did consult the Nuclear Industry Association about the membership of the council. I do not think there was a public advertisement process. Lord Oxburgh: But, essentially, it is a government decision? Lord Hutton of Furness: Appointments to these sorts of bodies are always government decisions, but it was collaborative.

Q54 Lord Broers: This question has largely been asked, so I will ask another. The original question was, “Was NIRAB a success? What body would be best-placed to continue this government advisory role, and what relationship should any successor body have with the NIC?” I think we have talked a lot about that, but there is maybe more. Dame Sue, are you confident that your final report will be carefully read and that what it recommends will be taken up by government? Another question I would ask is a rather sceptical one. I read your report quickly and looked at a lot of the tables. We keep saying that we are a world force in nuclear and all the rest of it, but, when you look at our spend compared to other nations, it is pretty derisorily small, particularly compared to France, Japan or the United States. Is it the old British thing that we are so much cleverer and we can do it in the garage, or are we not really internationally competitive? Dame Sue Ion: I will answer that in two parts, if I may, Lord Broers. I will develop first the question about NIRAB’s success and then come back to the question you have asked. I guess I am the wrong person to ask about NIRAB’s success really; you ought to ask the membership and the Department of State that it served. The one benefit that it had was that it had representatives right across the sector—from uranium conversion to enrichment, to fuel manufacture, to reactor operations, reprocessing, waste management and decommissioning and fusion—from industry at the highest level and by matching very senior academic expertise. Basically, the Government got the best advice they could get and they got it for free. NIRO performed the two roles of advice and co-ordination. For a body giving advice going forward, the important thing is that it should

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be independent, that it should have the right calibre of expertise and that there should be a clear idea from government as to what that relationship is. Is it a directly appointed board or one convened by a third party? It does not matter which, as long as people are clear and as long as that relationship with government is clear. As to the relationship with the NIC, R&D will be an important component of any new sector deal, so any replacement body ought to report into, and receive direction from, the NIC to make sure that everything is aligned. You do not have to have a big standing body all the time; it depends what advice you need at any one point in time. What might be more appropriate is a slightly more flexible pool of senior people which a chair could draw down on, depending on what question was asked. If we go on to the question about whether the Government will look at the report that was given, my general view is that the officials who see the reports, as well as the Ministers, are very keen to have it and receptive to it. I have the expectation that the report will be acted upon and I would urge that the promises that were made are delivered. We are world class in some respects, and we are still very world class in waste management and decommissioning because we are performing some of the most difficult challenges globally, and there is no doubt that our industry and our science and engineering base in that area stacks up with the best in the world. In the areas where your Lordships expressed concern last time, the areas where we are vulnerable are those of advanced fuels and advanced reactors. We were starting off from a base that was already vulnerable five years ago and there has been almost no investment in those areas since that time, which is why speed is of the essence in terms of the commitment to deploy the funds that we sought. We want to make sure that we do not drain out the subject matter expertise before it is too late. Lord Hutton of Furness: I have very little to add to that, Chairman, other than to say that the industry itself was very strongly supportive of what Dame Sue did and what the whole NIRAB approach brought to the table. It is desperately important that there is a body such as NIRAB there to advise Ministers. If we are to make progress here and are to use the scarce resources that we have got effectively and intelligently, there has to be a proper guiding hand. The Chairman: So, the sooner the better that we get on with that? Lord Hutton of Furness: I think so.

Q55 The Chairman: Perhaps I may move on to the NNL. I think many of us are very impressed by the scope of the work it is undertaking—the support for the nuclear sector, advice to government—but it is an unusual model, to say the least; it has no core funding. There must always be a danger of conflict of interest or perhaps people holding back because they are not clear to what extent there is, indeed, an ability to avoid conflicts of interest. Is it a suitable model or could it be improved? Lord Hutton of Furness: I think it is a model that could be improved. Setting it up under a commercial mandate makes absolute sense, but a question arises. If we want someone to occupy this advisory role—being a

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source of independent advice to government—we are pretty clear that the NNL could do that, if that is what Ministers wanted, but it would need to be properly resourced to do it, and just not in order to make sure we had the right expertise available when we needed it, but also to deal with your point, Chairman, about conflicts of interest. Its role here in this regard was quite distinct and discrete and could not be challenged or called into question. I think the NNL is a highly credible organisation. The industry has a very great deal of support for the NNL and it would be one of the options, I think, that Ministers could look at if they wanted to find a way of managing the R&D spend and getting at the same time the best and most up-to-date scientific input to Ministers. Dame Sue Ion: I would agree with what Lord Hutton has said. Certainly the commercial construct is valuable because it demonstrates that it is delivering competitively and with value for money, which is always a good point. In terms of comparators with other nations, every other nation that has a national lab uses that national lab to deliver high-level technical expertise into the Government of the day, but it pays those national labs an element, not necessarily huge amounts, of funding to make sure that, when wanted, the advice can be drawn down from the national lab or from the national lab in conjunction with other experts. Some form of adjustment to the way in which the national lab is funded to allow for that activity and to allow it to co-ordinate, if that is what Ministers want, would be appropriate. The Chairman: So there is a case, is there not, for core funding there? Dame Sue Ion: There is a case for core funding, yes.

Q56 Lord Fox: Dame Sue, you have already hinted, or said explicitly, that there is a time-fuse on the current skills we have to be able to take advantage of what opportunities for renaissance there are, so how would you characterise the time we have with the contemporary skills, and what will you both be doing or planning in your two organisations to develop the skills that we will need going forward? Dame Sue Ion: It is time-critical because we are short in some areas. We are particularly short in what I would class as national lab space or in industry development space—what are traditionally called the technology readiness levels 4 to 6, so before it is ready for commercial deployment, but beyond the reach of the research councils. That is the area that was vulnerable at the time of your Lordships’ previous review, and it is the area that is still vulnerable. It has not received the funds it needs, but the funds are identified within the NIRAB recommendations. It is important that that area of applied research is particularly is addressed. That is where you get your long-term subject-matter experts developed, who have 10 or 15 years’ standing in the sector and grow to be internationally respected people. So it is important that that gap is plugged. Within the university sector, the research councils have invested significant amounts over the last four or five years that have made a difference, particularly in the universities that have strong nuclear- focused programmes, such as Manchester, Sheffield, Oxford, Imperial and Bristol. The university base is in better shape than it was and that is reflected in the numbers in our landscape review, which is just published

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and which I think is available to your Lordships as you take this review forward. One interesting dimension of the university landscape is the extent to which some of our key positions are underpinned by overseas nationals. When we are looking to sustain the UK skills pipeline, just in terms of loose figures, about 20%-plus of our leading academics are non-UK; between 50% and 60% of our post-doc research assistants are non-UK; and around 30% of our PhD students are non-UK. That is incredibly good for ensuring volume and capacity within the university sector and the high quality of personnel that you would want to have focused on nuclear- relevant issues but depending on Home Office policy and BREXIT outcomes it does mean there is a risk to the UK skills pipeline. Lord Hutton of Furness: This is something that the Nuclear Industry Council and its work on the new sector deal will be looking at very closely. In recent years, we have been very good at mapping the demand for nuclear specialists and technologists. We have to be absolutely sure that we focus now on the supply side of that equation. We know where the pressure is building up, we know where the skill shortages are, pretty well. We just have to make sure that we spend the time that we have, and it is not particularly long, to make sure that we have a delivery mechanism behind the work that we have done on mapping demand. Things such as the National Nuclear College are going to be very important, but of course it goes wider and deeper than that. It is not just skills specifically in the nuclear sector, we should be worried about the skill challenges in the construction sector as well. Lord Fox: The whole engineering field? Lord Hutton of Furness: Yes, the wider engineering field.

Q57 Viscount Ridley: Can I go on to SMRs and particularly straight to the heart of what may be a bit more of a political question, which is: what has happened to the SMR competition? I think you will have picked up that this Committee is a bit perplexed by the contrast between the urgency that you are mentioning and that we heard in the previous session, on the one hand, and, on the other, the fact that we have not heard anything about the competition. It is now many months since we were due to hear something, and we were given no date last week by the Minister. Has this competition been kicked into the long grass, in your opinion, and, if so, by whom and why? Lord Hutton of Furness: I honestly wish I could answer that question in the way that you posed it. We absolutely were delighted by the Government’s interest in SMRs three or four years ago. This has immense potential for the UK and, if we are talking about the vision thing, it is difficult to imagine that SMRs would not be at the front and centre of that. We are, and remain, disappointed that, having kicked this off and risen expectations so much, we have not had anything back at the points when we were promised that there would be some way forward. I do not doubt for a second that there are some enormously big policy considerations sitting on Ministers’ desks here. The decision to commit to the next generation of reactor technology—SMRs in this case—is a very big call, but that is what Governments are there to do. They are not there to avoid

175 Dame Sue Ion, NIRAB and the Nuclear Industry Association (NIA) – Oral evidence (QQ 50-59)

the big decisions, they are there to take the big decisions, and this is probably one of the biggest ones, I would think, the Government will take in this sector for a generation. A lot will depend on getting this decision right. They have big decisions to make about whether they go for, for example, a smaller version of the current reactors that we are building or something of a more innovative design. Either way, if they are going to maintain the interest of the commercial sector here, they really have to be clear about which direction they want to go in and about the wider environment too. Dame Sue referred to the benefits of a fleet programme, and they are overwhelming. It is absolutely clear that if we want to extract the most cost-effective and best technology solution, we should go for a fleet. Do we need a fleet price then for each of those reactors as part of the contract for difference or not? I think that we probably do. There are some very big decisions to make, and we have to be clear where the sites for these SMRs will be. We are not clear about either. So there are probably half a dozen really big big-ticket decisions to be made, and it is probably now time to make them. If we want the UK to have any skin in the game when it comes to the next generation of reactor technologies, I think this is the big call. The industry is very clear that we want the Government to crack on with this. We think that there is a great opportunity not just for plugging some of the low-carbon energy gaps we will have here in the future but plugging into a potentially very significant export market. NNL estimated that there is anywhere between £250 billion to £400 billion-worth of export market here. I think we should be in there and we should take advantage of that, but we have to make a decision. We cannot go forward in a vacuum; we have to know where we stand. I am confident from my conversations with Ministers that they know the size of the potential prize here, but I want them to crack on now and do the things they said they would do, which is to set out the next steps in this competition; otherwise there is a danger that it will fizzle out, and that would be a tragedy. Dame Sue Ion: The Government have to come clean on what they are expecting from industry. Is it first to grid? Is it cheapest power? Is it the most UK jobs created in the derivation of a fleet? Is it maximum power for the sites available? You get a different answer technologically to each one of those questions or combinations of those questions. The Government need to make it clear to the sector what they want from a potential SMR mission, and that will help to narrow down the choices that would otherwise be made. Viscount Ridley: Could you make the argument that the competition has, in a sense, blighted or sterilised that conversation about those questions because it has made it sort of semi-sub judice, if you like? Dame Sue Ion: No, I do not think so. They have not gone far enough down through which questions each technology consortia should answer. There is a massive amount of benefit to be had. One of the questions to earlier witnesses was why would they do it, and it is because it is almost impossible to finance the large nuclear plants. They are extremely difficult because of the balance sheet implications for the companies that have to come together in getting the finance to get the build, so it is capital outlay

176 Dame Sue Ion, NIRAB and the Nuclear Industry Association (NIA) – Oral evidence (QQ 50-59)

and timescale to delivery. That is where the SMRs, potentially, have a really big role to play with the much lower capital outlay, the much greater potential for building in-factory before you ever get to site and, hence, the shortening of the timeline for the financing, so a four-year delivery is not unreasonable compared with an eight to nine-year delivery on a large plant. That is a massive difference in the overall financial construct. Lord Hennessy of Nympsfield: You have both vividly described this decision on the SMRs. It is a talismanic decision, is it not? It is indicative of so many things. Could it be—I have no idea—that BEIS was exhausted by getting Hinkley through? Also, there is the question of No. 10, which likes to call things in; it called in Hinkley. Could it possibly be that No. 10 is rather distracted by wider questions and that it will not make a move on the SMRs until it has gone through No. 10? It is a style-of-government question, is it not, or maybe it is? What do you think? You know the system very well and you know the people very well. Lord Hutton of Furness: I obviously do not know them as well as I used to. I am not sure I can provide a definitive answer to why there has been a hold-up. Some of the issues are pretty big-scale issues and I think the Government necessarily want to make sure that they are setting the right compass point. We should also be clear that, if the Government decide, for whatever reason, not to go down the SMR route—which I think would be a great mistake, by the way—the future for the nuclear industry would still be a very positive one in the UK. We would be delivering major new projects and we have world leadership in decommissioning and in other areas of expertise. It would not be game over, but we would forgo, clearly, a very significant range of potential benefits if we decided not to go down the SMR route. We, in the industry, believe very strongly that we want to see the UK in that developing space of new reactor technology; it is the role we can and should be playing. I am left to conclude that the reason for the delay is that the Government are reflecting on the enormity of these decisions rather than there being any other Machiavellian purpose or process under way—about which I know absolutely nothing, by the way. Either way, I think the time has come when we need to make a decision pretty quickly, if we are going to maintain the momentum that has been built up here in the UK in the last two or three years, where people are looking to us to be in the lead in the development of SMR technology. I hope that there is the ambition and the aspiration here in government to make sure that the UK nuclear sector can play that role in the future because I believe that we can and the benefits would be enormous for the UK.

Q58 Lord Vallance of Tummel: I would like to come back to a question which I think you heard in the earlier session. The evidence we have had so far suggests that the UK market on its own is not enough to sustain SMR development and manufacturing industry, and therefore the future must depend upon overseas markets and so forth. First, is that correct? Secondly, if it does depend upon international markets and international partnerships of one kind or another, what is happening on the partnership front? Who should we be partnering with? Is this a governmental question or an industry question? I do not know the answers.

177 Dame Sue Ion, NIRAB and the Nuclear Industry Association (NIA) – Oral evidence (QQ 50-59)

Lord Hutton of Furness: The global market for low-carbon energy is enormous and, if we are looking to our future as an exporting nation, particularly a nation that exports high-quality, precision manufactured goods, I think there is a very powerful argument, as I tried to put earlier, for our being in this particular room, because the SMRs—small modular reactors—could meet a very substantial part of that global demand for clean energy. When it comes to issues to do with commercial partnerships or joint ventures and who we should we work with, those decisions are a little bit further down the road, and obviously the Government have to be present while those discussions take place. The Government have to take the idea forward about how they want to bring forward the potential development of SMR technology commercially. There are a number of companies here and around the world which could be very important commercial partners in that, but that is a decision that can properly be taken only once we are clear about which path and what sort of technology route we want to go down. It will be a partnership, of that I am quite sure, between government and the private sector, but who those private sector partners will be is a question that cannot be answered at this stage, I think. Lord Vallance of Tummel: We heard earlier on that this was a race and that the starting gun had already been fired. If you do not know whether this is a three-legged race or a race on our own, how do you think we are going to win it? Perhaps I could ask Dame Sue for her view. Who should be driving the idea, which is a big strategic idea, of getting into international markets, assuming we can crack the technology and the economics here? Dame Sue Ion: In bringing together the various consortia that have pitched into the current competition, as it is, there are a number of globally significant players within that. On the comment about the race and the small window of opportunity, unless the UK decides that it wants to deploy on UK soil in a short timeframe, these systems will be deployed elsewhere. The first to market and the pull that it would bring will probably be more important for this initiative and technology than it would have been for other ones. If we are not in there with the first or one of the first to deploy, the UK will miss out. The technology will be deployed elsewhere and we will become a technology procurer again, as we are now, instead of a part-developer, grower of IP and manufacturer on a large scale. Lord Vallance of Tummel: But can we do it on our own? Dame Sue Ion: I think that there will inevitably be some form of partnership in taking forward whatever technology is chosen. Lord Hutton of Furness: I would agree with that. I think it is perfectly possible to imagine a UK consortium taking this forward, yes, but I think it will be a collaboration of some kind, and it may well involve partners from other countries.

Q59 The Chairman: Moving on to Euratom, the Government are clear that leaving the European Union requires us to leave Euratom as well, and they quote the European Union (Amendment) Act 2008. If that is the

178 Dame Sue Ion, NIRAB and the Nuclear Industry Association (NIA) – Oral evidence (QQ 50-59)

case—and the Government in their White Paper do state that the precise relationship with Euratom is a matter for negotiation, but an important matter—do you think the Government are clear yet as to what that relationship should be, and how do you feel the timetable on this should work? What do you feel the relationship should be? Lord Hutton of Furness: I am not sure that anyone really knows quite how this is going to end, where it will end and what the relationships will look like as we come out of Euratom. We would very much prefer to find a way to stay inside the Euratom Treaty, but it looks like that will be impossible. We have to avoid a cliff edge because in this context a cliff edge means that you cannot go on trading in nuclear goods and services, because you would be outwith the internationally recognised framework of nuclear safeguards. It is qualitatively different here in terms of having no deal as far as the Article 50 process is concerned, because even if we are out I assume we will be trading under some other international regulatory framework, WTO or whatever, but British companies can still trade goods and services. That will be immeasurably more difficult here, unless there is a set of transitional arrangements reached. When it comes to research and development, I think we should look at the associate membership status that Switzerland has and their route to participation in some of the Euratom R&D programmes. That will not cover the full spectrum of benefits that we get from being members of the Euratom Treaty, including the safety and safeguards regime, so we will have to have a framework for doing that. I wrote to the Secretary of State a month or so ago when the draft Bill was published, asking him to set up a task force with industry and government together to plan the future, if we are going to leave Euratom. To date, we have not had a response from the Secretary of State to that letter. I hope it is forthcoming—I hope it is waiting to be signed off. I think that the thing to do is to sit down and develop a plan for this pretty quickly, involving industry, government and the R&D and science community, to make sure that we preserve the really important benefits of the Euratom Treaty going forward. I am willing to accept the Government’s argument that we have no choice in this context, given that we have made a decision to leave, because these two treaties have become so closely bound up together it would be perverse to leave the European Union but still find ourselves with membership of the Council of Ministers and seats in the European Parliament and all the other things that go with membership of the European Union. I wish there had been more thought given to this in the last nine months. If it were so obvious that we had to leave the European atomic energy community, I would have liked to have seen a little bit of some of that groundwork now so that we could be better placed to shape the exit from Euratom. I do not think that work has been done and we do not have much time to do it now, I think. Dame Sue Ion: I would agree with Lord Hutton in that. There were three important elements of the Euratom Treaty, and I gave evidence, with others, to the BEIS Select Committee last week. There are the arrangements for safeguards, which is the monitoring and the looking after of nuclear materials, where we will have to evolve other

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arrangements through our regulator with the International Atomic Energy Agency. There are the arrangements under the Euratom Supply Agency, which are nuclear co-operation agreements which allow any trade whatsoever to take place, whether it be services, goods, movement of materials. We cannot do any of that without other nuclear co-operation agreements and treaties in place which pretty much mirror what the Euratom Treaty says. That is what gives us cover, as a nation, to trade internationally in the nuclear world. Those are the important things that need to be fixed urgently. We cannot wait for the finalisation of Article 50 because, on the day that we come out, if we do not have cover, we cannot trade. The issue with research is more of a negotiation. Sitting under Euratom has enabled us to move the best intellectual talent around Europe very freely and easily, which maintains quality as well as capacity. It has given us access to very high-cost facilities, us to theirs and them to ours, so some form of bilateral or trilateral arrangements will be helpful to ensure that that exchange and sharing of facilities and people continues. We have had leverage funding for very expensive research and shared knowledge and we have had influence in what gets researched within the European community. The fusion part of the equation is very much more heavily impacted than the fission side, as Professor Chapman indicated in his evidence, and it is very important that arrangements are put in place to ensure that the UK’s world-class expertise in fusion is maintained going forward. Our companies have had access to very lucrative contracts coming from the fusion side and we must make sure that our expertise, as a nation, is still able to be deployed in that. On the fission side, for research, waste management, geological disposal and current reactor operations, that has been possible and very helpful. On the advanced reactor systems, to be honest, Euratom is not that helpful to us because the work that Euratom funds on advanced reactors and systems is tiny in the overall scheme of things because the Euratom Treaty requires unanimity of the member states and not all nations in Europe are favourably disposed towards nuclear energy and those that are not veto work on advanced systems, so that is not particularly beneficial to us. The Chairman: Between the two of you, you have made a most compelling case for making sure that this is resolve—and resolved quickly, if one thinks of the implications of moving nuclear material around, for example, or the inspection of sites. If ever there were a case where the Government, surely, are culpable of a failure to consult and a failure to anticipate, I think a lot of people in the nuclear sector, would say this is it—not least those at Culham, for example, who are heavily dependent on Euratom and were surprised, to say the least, to find Euratom mentioned specifically in the Explanatory Notes of the Bill. Is there a case here, given that it is so very different from all the other negotiations which have to be undertaken now for Brexit, for the Government simply to have an international consultation ahead of everything else and to say, “This is an issue that has to be resolved and we need help quickly to resolve this”, in case we face the cliff which Lord

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Hutton referred to? Lord Hutton of Furness: I think we should press all the buttons that we can to resolve this in the most sensible way possible. We certainly need to open discussions with the Euratom organisation pretty quickly. I am not aware that we have actually started that yet either. The Chairman: The Government are clearly well aware of how important it is, and they say so in the White Paper. It is a concern, but it is perhaps indicative, as Lord Hennessy would say if he were still here, of how odd it is that we always fail to ask the right questions at the right time. I am afraid that this is a fairly spectacular failure to plan ahead. We have got to the end of the session. We have not been interrupted by a Division and, for once, looking at the screen, I am grateful to the usual suspects for going on for rather a long time. Thank you very much, Dame Sue and Lord Hutton, for helping us with our inquiry. There are a lot of issues which we are returning to from the 2010 inquiry and a lot more that have developed since then, which have become ever more urgent, but at least one has to recognise that nuclear is now, thank goodness, recognised as one of the pillars on which the industrial strategy will depend, and that is something we should recognise as an important development. Once more, thank you very much indeed.

181 Mr Robin H Jones, Reactor Physicist, Wylfa Nuclear Power Station – Written evidence (PNT0003)

Mr Robin H Jones, Reactor Physicist, Wylfa Nuclear Power Station – Written evidence (PNT0003)

Submitting as an individual, not on behalf of Magnox Ltd

The evidence provided in this submission specifically addresses the following questions posed in the call for evidence, although not in any order:

3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

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1. The UK could benefit greatly from the deployment of SMRs in the UK, specifically at the Trawsfynydd nuclear licensed site. The site of the decommissioned Magnox reactors at Trawsfynydd already has a nuclear site license therefore is unlikely to receive much negative public reaction to the development of SMRs on the same site. One of Snowdonia National Park’s main issues with the current Trawsfynydd site is the impact of the large reactor buildings on the landscape, and as such the NDA has a commitment to reduce the size of the reactor bulidings. The proposal to site SMRs at Trawsfynydd therefore should not cause similar concern for the National Park.

2. Trawsfynydd is also a perfect site for proposed SMRs as there is an excellent nuclear skills base already in the area, including those skilled workers based at Wylfa Nuclear Power Station.

3. The close proximity of Bangor University to Trawsfynydd could be utilized for research and development purposes. Imperial College London currently has an agreement with Bangor University to potentially develop an Advanced Boiling Water Reactor (ABWR) test facility in the area (I believe in the Science Park under construction on Anglesey). Bangor University is in urgent need of funding, which has recently forced them to close several schools which have been in existence for generations. Bangor University through

182 Mr Robin H Jones, Reactor Physicist, Wylfa Nuclear Power Station – Written evidence (PNT0003)

government and private funding in nuclear research and development could become a leader in nuclear development. They could also complement the work that NNL delivers, collaborating well due to their relatively close proximity in the north west of the country. I believe that currently the NNL is not fulfilling its remit appropriately, for example, there is a zero power research reactor (the VR-1) in Prague which I have visited and worked on, which is exactly the type of R&D the UK should be doing as a world leader in nuclear technology.

4. The government is not doing enough to fund research and development on SMRs. We have two of the world leaders in military nuclear development in Rolls Royce and BAE Systems but the government is not encouraging them to develop SMRs for the civil sector. It is too concerned with spending incredible amounts of money on Trident where we could be spending this money on nuclear development such as SMRs and then selling the technology to other countries to generate revenue. There is such a potential for SMRs, especially for export to countries that cannot afford the risk, time and investment on projects like EdF’s Flammanville, Hinkley C and Olkiluoto which are years behind schedule and vastly over cost.

5. There is a real risk that if the government does not take advantage of SMRs then the skilled workforce at the decommissioning Magnox sites, and in the (not so distant) future from the closure of the AGRs will be lost. Now is the time to be a world leader in SMRs, which would also pave the way for Gen IV reactors such as molten salt reactors which share similar passive safety systems the SMRs do.

13 February 2017

183 Professor William E Lee, Imperial College London – Written evidence (PNT0004)

Professor William E Lee, Imperial College London – Written evidence (PNT0004)

Professor Bill Lee FREng FCGI FIMMM, President the American Ceramic Society, Professor of Ceramic Science and Engineering, Department of Materials, Imperial College London

I was until July 2016 Director of the Centre for Nuclear Engineering at Imperial College London, until December 2016 a member of the Government advisory Nuclear Innovation and Research Advisory Board (NIRAB) and until September 2016 a member of NNL’s Technical Advisory Board. Previously, I was Deputy Chair of the DECC Committee on Radioactive Waste Management (CoRWM, 2007-13) and Special Advisor to the HoLSTC on the nuclear call for evidence in 2013. I am a member of the National Nuclear User Facility (NNUF) working group. I have supervised 60 students to successful completion of their PhDs and have an h index of 46 (Web of Science) and 51 (Google Scholar including books) and over 10,000 citations have been made of my published papers. I am currently on sabbatical from teaching and administration (but not research) at Imperial College and so have time to respond in a personal capacity to this call. I respond only to those questions where I believe I have relevant expertise and knowledge.

Question 1. Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities including international collaboration and, within the UK, for cost-effective and efficient articulation of the different elements of nuclear work?

Within Government supported by an advisory committee with the expertise to take a national (rather than regional) and international perspective including members from national laboratories, industry and academia. I believe it is the UK Government’s responsibility to use taxpayers’ money to enable secure infrastructure such as electricity supply. It is more sensible to use UK taxpayers’ funds rather than e.g. overseas Government money to underpin nuclear power station construction in the UK.

Question 2. The Government’s industrial strategy green paper discusses a possible ‘sector deal’ for the nuclear sector. How might the nuclear sector benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal?

I have some knowledge of Government support for the aerospace sector (especially Rolls Royce) and how it is used to support university research but the award process seems opaque to me although this may be because I am not working at a senior enough level in this sector. While there has been some direct Government support for nuclear in 2014 through DECC calls in Accident Tolerant Fuels, High Temperature Materials Testing and Fuel Recycle Technologies leading to university research centres the process from my university perspective was neither open nor transparent.

184 Professor William E Lee, Imperial College London – Written evidence (PNT0004)

Examples of sector deals in nuclear are already evolving, including the DECC Calls described above, the Joint Research Institute with China (JRIC) involving NNL and the China National Nuclear Corporation (CNNC) supported by £25M of UK Government funds, the Nuclear Advanced Manufacturing Research Centre (NAMRC) of Sheffield and Manchester universities, and the BWR Research Hub and Network between Hitachi-GE Nuclear Energy Ltd, Bangor University and Imperial College. I envisage further such deals in future involving “small” including SMRs in fission, Small Spherical Tokamaks in fusion and increasing SME’s involvement in nuclear. What is missing is coordination of the evolving sector deals.

If a coordinated sector deal is put in place the mechanism of award has to be open and transparent and seen to be so. Lord Hutton should be aware of this need. I envisage the leadership organisations to be the post-NIRAB body (described below in my response to question 11), NIA, UKRI, and the merged NNL/CCFE (described below in my response to question 9).

Question 7. Should the UK be involved in the development of Gen IV technology? If so, what funding and support should be put in place to place to help the UK establish a world leading position? Should our activity include development of one or more test reactors?

Yes, it is a disgrace that we are no longer in Gen IV and I was shocked when the UK withdrew from the 2005 Framework Agreement. Some UK universities are already engaged in new reactor research but funding levels are derisory (due to the EU’s anti-nuclear bias meaning it only supports decommissioning and waste management and safety research, and to limited support from UK Government). Brexit provides us with an opportunity to reengage at an appropriate level which should be as full members with significant input into new reactor design and testing. Our improved facilities infrastructure (funded by Government over the last few years via NNUF, DECC) is missing a test reactor which would give us back real global credibility. With careful design (and it may require more than one) we could also cover the production of medical isotopes. I was Chair of a small NIRAB working group highlighting the global loss of medical isotope capability and the UK’s over reliance on imports.

Question 8. Is the NNL fulfilling its remit appropriately? Can it deliver the required research to support the UK’s future nuclear energy policies? How does it compare to equivalent organisations in other countries?

NNL does not compare well to similar institutions overseas (and they are aware of this having done such comparisons themselves) but this is largely due to its funding model with no Government support for fundamental research, and to a lack of leadership in convincing Government of such a need. I do not believe in its current set up it will provide sufficient world-leading research to support UK future nuclear energy policies. Question 9. Is the remit of the National Nuclear Laboratory (NNL) suitable to provide research and development support to the UK nuclear sector? Is the current funding and governance model for the NNL appropriate to its role and remit?

185 Professor William E Lee, Imperial College London – Written evidence (PNT0004)

No. They need an appropriate level of Government funding to support the required research. I would merge NNL with the Culham Centre for Fusion Energy (CCFE) under a UKAEA type umbrella organisation bringing fission and fusion research together. This would align NNL’s industrial context and contacts with CCFE’s world leading research and infrastructure (e.g. MAST and JET).

Question 10. Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved? Who has oversight of the whole nuclear R&D landscape, including international activities?

No. NIRAB have attempted this the last 3 years with some success but there is room for improvement. For improvements see my response to question 11.

Question 11. Was the Nuclear Innovation and Research Advisor Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be?

NIRAB did a reasonable job in advising Government but Government is cherry- picking the NIRAB advice on which it wants to act. Also, NIRAB was supported by NIRO which had a significant NNL centricity because that’s from where it’s original members were appointed. Reports were largely (well) drafted by NIRO and only tweaked by NIRAB, whose members were perhaps not fully committed to investing significant time as they were not even paid travel expenses to attend meetings. Yes, a post-NIRAB body is needed but one that has some teeth and can hold Government to account and ensure it is looking long term, a crucial factor in the nuclear sector. It would need to oversee the sector deal (via the bodies described in my response to question 2 above), link with the new UK Research and Innovation (UKRI) oversight body, coordinate with the Nuclear Decommissioning Authority (NDA), the nuclear industry (e.g. via the Nuclear Industry Association and the Nuclear Industry Council although the latter does not appear to be functioning) and develop a coordinated global strategy based on links to Gen IV, OECD NEA, IAEA, ITER, Euratom (or what follows) and via the links already in place with leading nuclear countries such as the USA, Japan, S Korea, France, Canada, China and India.

15 February 2017

186 Mr Piers Manson and Mr R Nash – Written evidence (PNT0023)

Mr Piers Manson and Mr R Nash – Written evidence (PNT0023)

Authors: Mr Piers Manson, BSc, MBA, MIoP, MSaRS and Mr R Nash, BSc

The questions asked by the committee were as follows. Our responses are given immediately below each question.

General

A1. We believe firstly that nuclear research in this context means that research which supports the development of nuclear power and also the nuclear fuel cycle. This then is applied research and development aimed at promotion of the nation’s energy security, the development of reliable and controllable low carbon electricity generation and the promotion of the UK’s industrial base. Fundamental research into matters of basic nuclear physics is a separate and academic matter which should be subject to different funding and different governance.

Addressing the question, we believe that responsibility for ensuring that the UK has a coherent long term policy for civil nuclear activities should lie somewhere and this should not be a matter that is unaddressed by government policy or left to diffuse and uncoordinated interests to develop in a piecemeal way.

This should be in the hands of a single dedicated and expert agency or authority which has adequate state funding to meet its objectives. Oversight of strategic aims is a matter for government, but the details should be left to the delegated expert agency /authority. Links to and cooperation with universities and industrial players should be encouraged, as should the involvement of private sector funds, which of course will be tied to the specific objectives of the private funding provider. There is a need to foster a “UK plc” approach, with a 20+ years strategic plan for new build and a 100+ years remit for decommissioning support.

A2. We must recognise that the current state of the UK nuclear industry is such that we will not see any significant developments in nuclear science or our nuclear industrial capability unless there is some form of state assistance and state funding. The UK does not hesitate to provide generous state funds to research into renewables, nor does it hesitate to

187 Mr Piers Manson and Mr R Nash – Written evidence (PNT0023)

make even the poorest and most vulnerable pay for such electricity through statutory levies on their electricity bills. Comparable commitment to support nuclear R+D would be a fair and measured position.

The nuclear sector would benefit from such an approach. There is currently only one candidate for receipt of such funding, and that is Rolls Royce Ltd. No other UK engineering company has the manufacturing or technical strength needed. AMEC is a name that may come to mind, but it has long since lost the ability to do real engineering on its own account and is now content to seek its income as a consultant. NNL, The Dalton Institute and what is left of the UKAEA are in no way suited to such a development. UK state aid should not go to any foreign organisation, no matter how great are its promises to use UK capabilities and resources. However, for the state simply to make funds available to one Company under these circumstances is probably not acceptable, serving again to highlight the need for a stronger and central lead.

The statement above only serves to highlight the need for a strong and single point for UK nuclear R+D. This would be a new organisation in similar vein to the original establishment of UKAEA with the clear goal of collating and developing nuclear R+D knowledge within the UK.

Small Modular Reactors (SMRs)

Q3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

A3. SMRs offer the possibility to expand the nuclear role beyond its traditional one of providing a reliable, affordable but inflexible base load of electricity supply. SMRs can be made to be “load following” thus allowing nuclear capacity to cope with the daily and hourly fluctuations in electricity demand. The potential for a production line to be set up for SMRs also offers the prospect of lower costs.

The risks are those associated with any untried and potentially expensive high technology development. We do not believe that there are any new safety risks with SMRs. Indeed, higher safety margins are possible and offer the prospect of siting SMRs nearer to the location of the electricity demand rather than at some special and remote “nuclear” site.

Q4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

A4. I have no particular knowledge that allows me to answer this question, however the successful development of reliable SMR technology where safety concerns have been minimised is bound to provide commercial opportunities for the UK.

Q5. Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to

188 Mr Piers Manson and Mr R Nash – Written evidence (PNT0023)

coordinate UK actions including international engagement on SMR development and future deployment?

A5. We believe that more could be done by the Government to promote a UK designed and built SMR, as is the case for UK nuclear R+D generally. The UK is still constrained by the Energy Act 2003. No politician since has had the vision or the courage to undo this piece of malevolence. In particular, there is no overall energy policy so that the nuclear contribution can be set in context, no leadership in nuclear R+D and no promotion of the interests of UK industry. No other country is as careless as this.

A6. We have no particular knowledge that allows me to answer this question. Is competition the right criterion, or should a new “UKAEA” be set up with a strategic goal of developing the SMR technology within a set time frame? The Government cannot choose what does not exist! They can only facilitate its development.

A7. Yes, the UK should be involved in development of GEN IV technology. It is important to walk before you run, and any start in this area should be modest. The UK currently has no domestic manufacturer active in this area, and there is thus little immediate prospect of a return for UK plc. The UK does still possess a world leading understanding of fast breeder reactors and their safety benefits, and this would be one possible place to make a start.

On the question of test reactors, the obvious candidates would be:

 A materials testing and medical isotope producing reactor,  A follow-on fast reactor to capitalise on the knowledge from the Dounreay PFR,  An SMW of UK design.

Governance

A8. We do not know if NNL is fulfilling its remit appropriately, but we do know that it does not have an appropriate remit to fulfil in the first place! It was mainly conceived as an attempt to spin off the R+D directorate of BNFL, as that organisation was so recklessly destroyed by Mrs Hewitt and Mrs

189 Mr Piers Manson and Mr R Nash – Written evidence (PNT0023)

Beckett. Most of its turnover comes from demands from Sellafield Ltd. The creation of legally separate entities demanding and delivering this R+D has imposed considerable costs in allowing these transactions to take place on a quasi-commercial basis. Considerable saving could be made if most of NNL was simply re-absorbed into Sellafield Ltd. The rest of NNL could be the basis, along with other bits and pieces left over from BNFL and the UKAEA of the new R+D agency/authority that is discussed above.

A9. Reactor design and development initially flourished when the R+D headquarters was at Harwell with close geographical links to key science and engineering university departments. From there research activities were coordinated at sites across the UK. The central focus for nuclear R+D has been lost in the UK and this needs to be reinstated.

A10. Clearly the answer is there is insufficient control and co-ordination of nuclear R+D. The ideas raised in A9 need to be considered.

Q11. Was the Nuclear Innovation and Research Advisor Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be?

A11. I do not know if NIRAB was successful; I am too far removed from those circles. However, the mere creation of NIRAB was a success because it was the start of a recognition that dismantling the UK nuclear industry had not brought any benefit. I strongly believe, as seen in my earlier answers, that the UK needs to make significant strengthening of its arrangements for its management of nuclear R+D and for the amount and purpose of such R+D.

A further comment

Missing from the list of questions is the research into associated technologies for example development of specialist materials, or specific engineering skills. Future nuclear development relies on having available specialist skills that may well have been lost with the decline of the UKs manufacturing capabilities.

23 February 2017

190 Dr Leslie A Mitchell FREng – Written evidence (PNT0007)

Dr Leslie A Mitchell FREng – Written evidence (PNT0007)

This is a personal submission to the committee. I am now largely retired from a senior technical role in the nuclear industry but still have some consultancy work.

A first impression of the invitation to make a submission is that what is being sought is a prioritised list of technical topics where data or understanding is lacking but, upon consideration, it becomes apparent immediately that the priorities cannot be determined independently of consideration of the changes in the structure of the industry over the past 25 years.

The early UK nuclear industry consisted of three state controlled organisations, the Central Electricity Generating Board (CEGB, the power station operator), the United Kingdom Atomic Energy Authority (UKAEA, the developer of systems) and British Nuclear Fuels (BNFL the supplier and processor of fuel) together with one or more architect engineers who designed and oversaw construction of plant aided by numerous sub-contractors. At the time of privatisation of the CEGB it was in the final stages of building Sizewell B, then a world class plant, had plans for several identical stations with the inquiry for Hinkley C in progress. The UK was still at the forefront of nuclear power with a strong technical capacity across the full range of disciplines necessary to support design, construction and safe operation of nuclear plant, built on the back of a commitment to research by all three of the state organisations. But this programme was not to be and no further plant has been built. The mission for the Magnox reactors was clear at the outset, they were approaching the end of life, and so the role of research and technical staff has been to eke out the life, prepare for and enter the decommissioning phase. Over the past 25 years the Advanced Gas Cooled Reactors (AGRs) have moved into this position and only Sizewell B has substantial operating lifetime left. Without a nuclear future the role of UKAEA (to explore new systems) was seen to be redundant, technical skills applicable to other industries were sold and the remainder focussed on decommissioning its sites. Fuel manufacture in BNFL has been sold to an international company, there is a short future in reprocessing fuel and decommissioning of the Sellafield site is now the major occupation.

What has been the effect on R and D in the UK? Obviously, there has been virtually no work on new systems and the base supporting reactor operations has narrowed considerably; if it is not related to end of life it has probably disappeared. Meanwhile work on decommissioing has expanded through the need for new techniques for dismantling and waste management. The successor organisations to the original players have all shed staff utilising early retirement schemes but, fortunately there were enough youthful employees to maintain an adequate level of core competence for the less ambitious role that has been followed. There has been some recruitment but this has been limited both by plan and by practicality. An industry in decline, dismantling plant rather than building it, does not present the most exciting prospect to those choosing a career. The net effect has been a very significant reduction in the size of the UK pool of staff with the competence to be front-line workers in nuclear safety and an increase in the average age of those involved. Indeed, many retirees from the

191 Dr Leslie A Mitchell FREng – Written evidence (PNT0007) former and current operating companies are retained as consultants and without whom the industry would be suffering today.

But matters have begun to change. Concern over carbon emissions has generated renewed interest in nuclear power in the UK but in “Monopoly speak” this is not a question of “returning to GO and collecting £200.” The starting point is now radically different and we need to consider how investing in R and D could be of benefit to the UK in today’s restructured world and then consider what topics might be appropriate.

There are four and possibly five overseas companies seeking approval for their designs of plant for which they will definitely fulfil the architect engineer role and it would seem that they wish also to be the future operator and therefore the licence holder. Sadly, there is no British contender for either role.

In the past, the UK would have undertaken R & D in pursuit of a number of objectives:

1. To develop new systems or upgrades to existing designs.

2. To support design calculations, particularly, with regard to safety systems to demonstrate that residual risks are ALARP (As low as reasonably practicable.)

3. To ensure that the safety envelope and operating rules and procedures are built on the most up to date knowledge.

4. To ensure that state of the art inspection and monitoring systems are used.

5. To provide the most up to date understanding of any known deterioration mechanisms that might limit safe lifetime.

6. By providing an adequate breadth of technical understanding to provide a rapid informed assessment of and response to any unforseen event.

Item 1 in the above list would have been a major driver as one would expect as R & D is usually forward looking. But, without a UK player volunteering to fulfil the architect engineer role, it is difficult to see how the UK could exploit investment in research for the benefit of UK industry. It would require the result of any such work to be put in the public domain to allow others to exploit it and probably charge for the intellectual property should the UK choose to invest in a plant utilising the data.

But the other five objectives all serve to support operations of nuclear plant. because the regulatory system enforced by the Office for Nuclear Regulation (ONR) in the UK is fairly unusual in an international setting. The ONR is not prescriptive about what must be done to establish a safety case, instead it places the responsibility for making an adequate case firmly on the licensee. The following is an extract from the ONR Guide “Licensee Core and Intelligent Customer Capabilities.”

The primary responsibility for the safety of a nuclear installation rests with the licensee. The licensee must be able to demonstrate sufficient knowledge of the

192 Dr Leslie A Mitchell FREng – Written evidence (PNT0007) plant design and safety case for all plant and operations on the licensed site. The licensee must be in control of activities on its site, understand the hazards associated with its activities and how to control them, and have sufficient competent resource within the licensee organisation to be an ‘intelligent customer’ for any work it commissions externally.

The wisdom of this policy is fully demonstrated by any examination of the root causes of the world’s three major nuclear accidents i.e. Three Mile Island, Chernobyl and Fukushima.

When dealing with licensees with overseas parentage, I would expect ONR to insist that there is adequate resource based locally to ensure speed of response to any incident. This is going to present a very considerable challenge; at a time when the UK competence is at a low ebb we could be looking at the need to populate several licensee companies with staff with the appropriate range and level of expertise. At the same time we should not fail to consider the needs of the regulator in overseeing several different reactor designs in addition to the current decommissioning programme.

To meet the spirit of the responsibility placed on the licensee, the in-house resource needs not only to have staff trained in the required range of disciplines but also an imbued enquiring attitude. Throughout the life of the plant they must continuingly question whether their safety cases are based on the most up to date knowledge and whether they could be described as “world class.” In yesterday’s organisations, people who fulfilled such roles had often come from a background in research and, in my experience, this has been a major factor in ensuring the safe operation of nuclear reactors in the UK.

Of course we could look to the parent companies to provide a nucleus of appropriate staff but it needs to be remembered that the companies in question do not see their activities confined to the UK and have aspirations to build plant elsewhere. This route is unlikely to provide a total solution and could bring cultural problems with a lack of understanding of the requirements of the UK regulatory regime.

Thus my conclusion is that, if any of the proposals progresses to implemtation, there will be a need for training across a wide range of disciplines covering topics such as fuel performance and limits, reactor physics, fluid flow and heat tranfer, relevant materials properties, structural analysis, inspection and monitoring, human factors, external events and transport of radioactivity in the environment. If all of the proposals proceed to implementation the need will be very substantial. A component of this training should be research based with the objective of ensuring that safety assessmentss are based on the most up to date knowledge and as a by-product generating a pool of staff at the top of their discipline with the required enquiring attitude. For this to be successful it will be essential that the the licence holders are fully involved and the work is not carried out independently of them.

With regard to more detailed topics for research, I feel that it would be arrogant for me to be too specific in view of the time since I was active on the front line, but I am mindful of two things. The first is that it is not just the UK that has had a recession in the interest in nuclear technology, it has been almost a world-wide

193 Dr Leslie A Mitchell FREng – Written evidence (PNT0007) event. The second, which is slightly counter to this, is simply a recognition that it is likely with all of the overseas architect engineers that the designs on offer will have been developed using data banks and design codes other than those currently employed in the UK. Together these two thoughts leads me to the personal conclusion that I would need to take stock of the status in each of the relevant technical areas before making a judgement on international best practice. I may not be alone in this. Regardless of that, the first stage in a properly constructed research project is to do just that i.e establish the current state of knowledge. Commissioning high quality reviews would identify areas of weakness for more active research investigations.

17 February 2017

194 Moltex Energy – Written evidence (PNT0037)

Moltex Energy – Written evidence (PNT0037)

1. Moltex Energy welcomes this opportunity to respond to the Science and Technology Committee’s call for evidence.

2. Moltex Energy is a UK reactor developer with a novel SMR design that could produce power at a cost competitive with fossil fuels. This is estimated at less than £29/MWh for an Nth of a kind plant and deployable in under 10 years.

3. The UK is excellently placed to enable demonstration of multiple SMR technologies once policy roadblocks are removed.

4. The fuel for the initial reactor is fabricated from spent oxide fuel or plutonium, potentially at a lower cost than fabrication of fuel from mined uranium. This is due to the simplicity and low proliferation risk of the process. Subsequent reactor configurations that require further research and development include thermal reactors and breeder reactors. These require modifications of the fuel assemblies and coolant only, not substantial redesigns of new reactor systems.

5. This should continue to be led by BEIS with collaboration from other departments such as DIT and DfE.

6. Given the historical policy risks associated with nuclear and sudden changes in policies by other governments, it is important that the UK sets a clear policy that enables private investment and innovation.

7. A ‘sector deal’ would be beneficial to industry to demonstrate the Government’s commitment to nuclear.

8. A deal could involve a standard flat rate strike price for Gen IV reactors or SMRs to develop a demonstration plant. This would be a strike price offered to all developers who can develop their technology with it. It would unlock the major obstacle to funding which is access to a market. It would also enable a competitive market place.

SMRs

195 Moltex Energy – Written evidence (PNT0037)

3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

9. If policy obstacles are removed, Moltex Energy’s Stable Salt Reactor can be demonstrated in the UK in less than ten years. The potential export opportunity that this would unlock could be transformative to UK manufacturing. Moltex estimates generation of an additional £1.7 trillion to the UK economy by 2050, mostly in manufacturing, along with 13 million man years of employment opportunities. This is calculated using the methodology developed by a US consortium led by Idaho National Laboratories.

10.A risk is that a new technology is demonstrated to be cheaper than the Stable Salt Reactor. Public perception could also change if there is another nuclear incident in the UK or elsewhere.

4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

11.The NNL feasibility study estimates a market of 65-85GW by 2035 for small scale SMRs with the same economics as today’s nuclear. When the economics change to be lower than coal or gas, the market size increases by a factor of a hundred or more in the same timeframe. According to the International Energy Agency’s forecasts, a market of 1350GW would be available.

12.See response to Q3 for the potential socio-economic impact to the UK if a small fraction of this market is achieved.

13.The cost to the UK if it allows the technology to be deployed internationally is that it will lose the potential economic generation and job creation by exporting the technology. It will be forced to purchase advanced nuclear or SMRs from international companies.

14.The Government has committed substantial funds for research and development on SMRs. The funds allocated so far are only suitable for capability building across the industry. The Government must ensure that support is given towards technology deployment before it is too late and the technology will be developed internationally.

15.The lack of clarity on the Government’s position is preventing private research and development and deployment funding.

6. Are the criteria set out by the Government for the SMR competition appropriate? If not, what should the criteria be? What timescale should

196 Moltex Energy – Written evidence (PNT0037) the Government be working to in choosing an appropriate SMR design for the UK?

16. There are no criteria for the SMR competition.

17. The criteria should be simple and relate to the needs of the UK taxpayer. Examples include cost, deployment timelines, energy security, waste management and economic benefit.

18. The need for Government to clarify a policy for SMRs is urgent as other nations are progressing deployment at a faster rate. The UK will soon be forced to purchase a technology internationally.

19. The potential advantages associated with Gen IV technologies are far greater than Gen 3. The market for Gen IV is much larger if they are proven to be low cost.

20. The SMR proposed by Moltex Energy is a Gen IV technology that is deployable in less than ten years and has the potential to produce electricity cheaper than coal or gas. A 300MWe demonstration reactor that would unlock this potential is estimated to cost less than £1 billion, around 5% of the capital cost of Hinkley Point C.

21. The UK could use existing mechanisms such as the strike price to encourage SMR and Gen IV reactors which would enable a world leading position.

22. Moltex Energy does not require a test reactor. Safety risks will be mitigated before deployment through the licensing process. The first plant is proposed to be a commercial demonstration.

Governance

23. The NNL is not remotely comparable in scope, capability or mission to other national nuclear laboratories. The Canadian Nuclear Laboratory and at least one of the US National laboratories are actively engaging with Gen IV vendors, providing reactor sites and supporting infrastructure to such vendors. The UK currently lacks any organisation capable of taking on a comparable role to the Canadian and US laboratories.

9. Is the remit of the National Nuclear Laboratory (NNL) suitable to provide research and development support to the UK nuclear sector?

197 Moltex Energy – Written evidence (PNT0037)

Is the current funding and governance model for the NNL appropriate to its role and remit?

No Comment.

No comment.

11. Was the Nuclear Innovation and Research Advisor Board successful in carrying out its role?

Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be?

24.NIRAB has publicly admitted that its exercise in suggesting R&D for the UK was severely limited by the absence of any strategy for the future development of UK nuclear, beyond an intention to “buy in” foreign reactor technology. If there is to be a successor to NIRAB then it must operate to a clear strategy. There is very little point in spending taxpayers’ money on development of capabilities in the nuclear sector in the absence of any clear vision for what those capabilities are intended to achieve. To do so virtually guarantees massive waste of resources.

24 February 2017

198 National Nuclear Laboratory (NNL) – Written evidence (PNT0046)

National Nuclear Laboratory (NNL) – Written evidence (PNT0046)

The UK’s National Nuclear Laboratory (NNL) is a Government-owned body, operating as a commercial business providing nuclear analysis, research, technology solutions and insight to customers in the UK and overseas. With a workforce who have many thousands of years of accumulated nuclear industry experience between them, NNL hosts a large portion of the UK’s nuclear research & technology knowledge. Our input and advice are always based on robust scientific and technical analysis, and are independent of Government policy.

Although we are owned and operated by Government, we receive no direct Government funding. Our turnover – around £100M per annum – all comes from customer funded projects. NNL’s mission is: “To be the key UK civil nuclear fission R&D provider by: • Delivering high value independent, authoritative advice and a quality service to our customers; • Creating value for stakeholders by maintaining the commercial basis for our business and sustaining a strong positive cashflow for reinvestment in programmes and capabilities; and • Increasing our influence on the UK nuclear research agenda.”

This note provides a submission from NNL to the House of Lords Science and Technology Committee’s Inquiry into “Priorities for Nuclear Research and Technologies”. We address each of the Committee’s questions in turn below.

1. Overall responsibility for nuclear policy sits with the UK Government – and BEIS is the appropriate department, working closely with other branches of Government as appropriate, including DIT, DfE, MOD, FCO and HMT. But nuclear policy, like any other, must be informed by evidence, and BEIS does not have the necessary specialist technical expertise across the nuclear fuel cycle. BEIS therefore needs access to impartial expert advice on scientific and technical matters.

2. The UK Government (through BEIS) owns the National Nuclear Laboratory (NNL) – an organisation which brings together unique facilities for safely handling radioactive materials, around 1,000 staff (with many thousands of years of nuclear industry experience between them) and a carefully curated network that reaches into the wider nuclear industry, academia and other national laboratories in the UK and overseas.

3. The primary source of technical advice for civil nuclear fission matters should therefore remain NNL; this is consistent with the purpose of national laboratories in other countries, a key part of whose remit is to advise government. NNL draws on the expertise of its own staff, and the

199 National Nuclear Laboratory (NNL) – Written evidence (PNT0046)

expertise within its extensive network nationally and internationally, to provide the UK Government with evidence-based strategic technical advice on nuclear matters.

4. The nuclear industry is ideally placed to contribute towards many of the ten pillars of the Industrial Strategy to support increased productivity and growth across the country. Specifically, the nuclear sector can make a substantial contribution in the areas of:  Investing in science, research and innovation;  Developing skills;  Upgrading infrastructure;  Encouraging trade and inward investment;  Delivering affordable energy and clean growth;  Cultivating world-leading sectors; and  Driving growth across the whole country.

5. It is important that the structure of the sector is re-examined and refined to promote innovation and ensure that this potential contribution to UK growth and prosperity can be realised. In some respects the industry’s current structure is a legacy of governance and policy arrangements from decades ago. Leadership from the newly-reconstituted Nuclear Industry Council will be crucial – bringing all parts of the industry together to work with Government to identify a nuclear sector deal and to deliver the full long-term benefit of the Strategy.

6. The nuclear industry should aim to contribute to the UK’s economic growth and productivity by reducing the cost and maximising the efficiency of the nuclear sector and its supply chain, including through innovation. An efficient and successful nuclear sector will help deliver sustainable and affordable low-carbon energy, and will save the taxpayer money in dealing with the nuclear legacy. An innovative and highly skilled UK nuclear sector should be well placed to exploit the UK’s expertise and intellectual property in export markets globally.

7. In order to achieve this, a genuine commitment is needed to a coherent and sustained programme of research and development, innovation, and skills development. On skills, NNL encourages a strategic approach to the development of nuclear skills at all levels and across the sector, through the Nuclear Skills Strategy Group (NSSG), with a particular focus on regeneration of the next generation of subject matter experts.

8. A sector deal for nuclear should address the following aspects, each of which would deliver substantial benefit to the sector in addition to delivering wider benefits to the UK economy:  A refined structure for the UK nuclear industry, to facilitate delivery of the full economic benefit which the sector can offer;

200 National Nuclear Laboratory (NNL) – Written evidence (PNT0046)

 Research and innovation programmes, particularly in converting science to solutions – at mid-Technology Readiness Level where new technology is developed and proved; and  Nuclear R&D facilities and infrastructure, including securing access for the UK to international facilities and enabling international access to UK-based facilities;  Nuclear skills (in particular the regeneration of subject matter experts in key areas of nuclear technology).

9. NNL will be making a separate – more detailed – submission to the BEIS Industrial Strategy consultation in due course.

SMRs

3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

10.SMRs offer a different potential approach to nuclear energy. They do not exploit economies of scale since they have a power output typically less than 25% that of large reactors of the type about to be built in the UK. Instead, SMRs target economies of production where capital costs are reduced through nth-of-a-kind learning and where the cost of capital is reduced through faster construction times. Taken together this reduces financial risk.

11.SMRs could help deliver baseload power, balancing the variable output from renewables, while themselves offering more flexible supply than large-scale nuclear plants. SMRs also offer the potential to supply district heating and power to more remote communities. Some SMRs make passive safety a feature, which reduces the need for operator intervention to mitigate an unexpected event.

12.The economic case for SMRs should reflect national and international market considerations which are currently uncertain. The “energy case” should complement new carbon-free energy technologies including new nuclear build (based on large reactors) and renewables.

13.However, SMR designs are not fully substantiated, and there are R&D, engineering and regulatory challenges to overcome. Costs and timescales do not scale with power output, so the associated costs will be disproportionately higher than for large reactors. Novel fuel designs or fuel cycles will also increase the time and cost of licensing and commissioning. R&D programmes are needed to help establish the scale of potential benefits and to reduce uncertainty.

14.Overall therefore, it is important to recognise that – while SMRs offer a range of potential benefits – the economic case for these is yet to be fully demonstrated. Some further work is underway to investigate this, but the findings have yet to be published. The potential market for SMR technology contains risks and competition as well as the opportunity to realise benefits.

201 National Nuclear Laboratory (NNL) – Written evidence (PNT0046)

4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

15.The 2014 Feasibility Study71 on SMRs, produced by an NNL-led consortium, estimated the international market to be 65-85 GWe by 2035, with a domestic market of up to 7 GWe. SMRs could deliver low-carbon power to countries where electricity needs are dispersed, grid capacities are limited, and there is a need to balance electricity production against renewables or deliver dual use.

16.On an economic basis, the domestic UK market alone is unlikely to provide the full economy of replication to achieve nth-of-a-kind learning. UK considerations should reflect both domestic and the international deployment.

17.SMRs are likely to be deployed commercially by 2030 to the international market. Should the UK choose not to engage in this market, Britain will continue to buy-in international nuclear technology which would contribute to low carbon energy targets but limit economic benefit in terms of jobs, domestic business and international exports.

18.SMRs are not a proven technology and have not been deployed commercially. NNL’s assessment indicates that even the most mature SMR concepts offer some potential for UK design input that could generate intellectual property. As noted earlier, R&D is needed in order to identify the development priorities for individual reactor designs and then to reduce uncertainty through advancing the technical and commercial maturity of the concept.

19.The UK nuclear sector has capability in areas such as ‘design for manufacturing and assembly’, advanced manufacturing, construction, fuel, and operations & maintenance. A coordinated UK R&D programme aimed at reducing cost and increasing productivity could generate intellectual property for the UK, as noted above.

20.Developments in the international SMR market continue. Potential UK engagement in this market will require clear policy objectives on SMRs as the basis for setting a domestic SMR strategy that includes international engagement.

21.NNL can support the UK Government by providing independent technical advice on the evidence needed to inform UK SMR policy objectives. NNL

71 Small Modular Reactors (SMR) Feasibility Study; National Nuclear Laboratory; December 2014 http://www.nnl.co.uk/media/1627/smr-feasibility-study-december- 2014.pdf

202 National Nuclear Laboratory (NNL) – Written evidence (PNT0046)

can also enable the co-ordination, integration and delivery of any future domestic SMR R&D programme.

22.The potential for a domestic SMR programme would be informed by a number of areas of government policy on domestic energy and economic growth from domestic deployment and export.

23.Six criteria should be considered in a potential domestic SMR programme: i. Design maturity. Sufficient to provide confidence in the technology (and a clear understanding of what R&D remains to be carried out), but with scope remaining for creation of UK intellectual property; ii. Current or potential UK supply chain engagement. In design, manufacture and construction to maximise productivity and economic growth; iii. Deployment cost. Scope for cost reduction by lowering capital cost and accelerating construction timescale to optimise first-of-a-kind costs, and levelised cost of electricity from the economies of replication; iv. Regulatory readiness. Including the Generic Design Assessment and access to a potential UK site for a first-of-a-kind build. An SMR design that satisfies regulatory approval in both the UK ‘goal-based’ and US ‘rule-based’ regulatory regimes would be an advantage to export; v. Nuclear fuel. Whether fuel can be supplied by the domestic supply chain; vi. Export potential. Maximised through the ability and commitment to access global markets.

24.In terms of timescale, given that SMRs are being developed internationally, the UK should prioritise its policy objectives as a first step towards defining a potential domestic programme and identifying a potential developer. As noted above, NNL can play an important role in both determining the R&D needs for any particular SMR and in delivering the programme of work to advance the design.

25.SMR technologies include both Gen III (+) and Gen IV, although the likely timescales for deployment are longer for Gen IV, since these are less well- developed and require more radical fuels and fuel cycles. Timescales for deployment of Gen IV technologies are at least 15-25 years.

26.The UK should engage actively in international Gen IV programmes, to ensure that a future decision on potential deployment can be made with the necessary understanding of the reactor designs and how best to capture value for the UK. UK assessment of advanced technologies must

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include the potential use of fast reactors, and also the opportunities for dual purpose (heat and power generation) concepts such as the U-Battery micro-reactor design.

27.The international nature of the nuclear sector is important; not just in relation to UK scientists accessing international facilities but to attract the international community to come to the UK to access to our unique capability (eg Nuclear AMRC, NNL’s Central Laboratory, university facilities such as The University of Manchester’s Dalton Cumbrian Facility).

28.The international context allows us to learn from good practice elsewhere – for instance in developing the appropriate structures between industry and laboratories to enable cost effective innovation within the required timeframes. In the US for example, the energy department’s Office of Nuclear Energy (US DoE NE) has launched its GAIN (Gateway for Accelerated Innovation in Nuclear) programme to advance nuclear power through providing the access to the technical, regulatory and financial support necessary to move innovative nuclear energies toward commercialisation. This gives technology vendors access to innovative financing solutions, nuclear R&D infrastructure, land use for demonstrations, and access to nuclear experience. GAIN is programme managed by Idaho National Laboratory on behalf of the US DoE. Through this approach, private companies are investing millions of dollars in novel advanced nuclear systems, with the US government providing a safe and secure test bed for proof of concept.

29.Also in the global context, other leading nuclear nations are very keen to see the UK return to the Gen IV table to share key experience, insight and expertise. For example:  The UK is the only nation to have run a fleet of commercial high- temperature gas-cooled reactors, providing leading-edge experience of structural materials for high temperature reactors.  The UK also has a great deal of experience in the analysis of options for plutonium-burning reactor concepts and associated fuel cycles.

30.It is important that UK priorities are agreed with government. It is not obvious that Research Council funding is focused on the priority areas that government and NIRAB have identified, e.g. maximising value from SMR development.

31.In relation to development of test reactors – the UK should pursue this, but we cannot do so alone. Nuclear R&D is international in nature, and facilities development such as materials test reactors need to be built on international collaboration, e.g. the Jules Horowitz Reactor development in France.

Governance

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NNL mission and performance

32.NNL is the UK’s national laboratory for nuclear fission. It provides strategic technical advice to government and stakeholders, provides R&D leadership in national programmes, and delivers products and services on a commercial basis to customers – most notably Sellafield Ltd, EDF Energy and MOD (the latter delivered via a contract with Rolls Royce). But NNL also has an extensive and diverse range of customers across the public and private sectors in the UK and overseas, covering all aspects of the fuel cycle. NNL re-invests any surplus generated from commercial work into innovative R&D programmes, facilities development and skills.

33.NNL’s mission is: “To be the key UK civil nuclear fission R&D provider by:  Delivering high value independent, authoritative advice and a quality service to our customers;  Creating value for stakeholders by maintaining the commercial basis for our business and sustaining a strong positive cashflow for reinvestment in programmes and capabilities; and  Increasing our influence on the UK nuclear research agenda.”

34.NNL is performing well as a commercial business and receives high approval scores from its customers and stakeholders. Delivering R&D in a commercial manner ensures that we do so to time, cost and quality and that we keep focused on the end customer needs. This, in turn, requires us to understand in depth the challenges of our customers and to help them to address these in an efficient and effective manner. Our commercial model also incentivises the whole organisation – the more work we deliver to time, cost and quality, the more surplus can be re- invested in NNL’s own R&D programmes, people and facilities.

35.A new partnership agreement is in place with Sellafield Ltd, supporting NNL’s ongoing work on R&D to deliver innovation that accelerates programmes and drives down cost at the Sellafield site, where NNL has already contributed directly to some very large cost savings. We have a comparable partnership agreement with EDF Energy, covering our work to support its fleet of UK nuclear power stations.

The case for NNL’s operating model

36.NNL’s hybrid model (a national lab providing impartial advice to government, yet also a commercial provider of services to the nuclear sector) has at times led to a perception of confusion of mission or of a hampered ability to deliver the remit. NNL believes that the model in fact brings very considerable benefits. In particular: - The need to operate and compete commercially leads to discipline and efficiency, and incentivises innovation and good customer service; - NNL’s ongoing commercial work keeps its experts up to date with industry practice and developments, grounding their advice to government in real-life experience; - Cost to the taxpayer is minimised.

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37.We take pride in the essence of this model and the way it is able to maintain strategic technical capability required by the UK, both now and in the future, while reducing cost to the taxpayer. To regenerate the skilled capability we hold, if the UK were to lose it, would take decades.

38.However, given the scope of the potential of the UK’s nuclear sector, and the expressed ambition of the UK Government in this area, we are working with BEIS to propose a significant enhancement to the operating model. This would separate NNL’s provision of advice to Government from our commercial work to bring clarity of purpose, enhanced governance and improved government access to independent technical advice. This was envisaged in a recent MoU between BEIS and NNL.

39.The current level of NNL’s earnings to reinvest is necessarily limited by the scale of its commercial operations rather than being determined by the UK’s strategic need. For example, NNL is not currently able to coordinate or perform the breadth of long-term research in advanced reactors (Gen IV) and fuel cycles needed to inform government policy fully or to secure future value for the UK. This could be addressed through some direct R&D funding if the UK Government were to judge that the national interest would be served thereby.

40.The balance of near and longer-term work which NNL currently supports under its self-directed programme is skewed towards impacts which are deliverable on a 5 year timeframe. In all cases, priority is given to work which can:  Drive down cost;  Improve performance or productivity; and / or  Generate trade (UK or international) and inward investment.

41.The importance of NNL being a competent nuclear operator is vital to both growing nuclear skills in our people and being seen as a credible player in the nuclear market. Solving complex problems for our customers, often through the use of cutting edge technology, is key to differentiating NNL in the nuclear market, which in turn generates income, creates value and stretches our people. Again, the potential exists for core funding from government to make possible a longer-term approach which – in addition to our commercial work - could exploit NNL’s links to universities, industry and other national labs in order to maximise the benefit to the wider UK economy.

International Comparisons

42.NNL has a similar remit to national laboratories in other countries, but our commercial operating model, which recycles earnings into national laboratory activities with no direct Government funding, is unique.

43.In other countries, a key role of a national laboratory is to provide the advisory function into Government, coupled with the skills (and often a site – such as the case of Idaho National Laboratory) to underpin the development and commercialisation of advanced nuclear technology. These laboratories also deliver nuclear energy R&D.

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44.A notable further difference is that in countries such as the US, the relevant Government organisation (US Department of Energy, in this case) includes a substantial cohort of nuclear technical expertise. The limited number of people with specialist technical nuclear capability within UK Government departments makes impartial expert advice from the NNL even more important.

45.In overseas analogues, the national laboratory also establishes its own advisory board to ensure the appropriate scrutiny of the laboratory’s activity and the advice provided by the laboratory to Government. A national laboratory also provides a vital focal point for a country’s international engagement, and in that context, NNL executives sit on a number of the advisory boards of our international counterparts (eg Idaho and Oak Ridge in the US and CEA in France).

46.Our response to Q8 makes a number of points relating to NNL’s operating model which we do not repeat here.

47.NNL is a public corporation, or Government Company (GovCo). In 2013 it switched from being a Government-Owned, Contractor-Operated (GOCO) organisation to direct governance by UK Government (GOGO). Governance throughout has been provided on behalf of the department (DECC and now BEIS) by the Shareholder Executive (now UK Government Investments, UKGI).

48.Having ownership through BEIS with governance provided via UKGI brings the opportunity to share best practice from other businesses within the UKGI portfolio. Additionally, NNL’s Board brings a considerable amount of expertise and experience from across the nuclear sector and elsewhere.

49.An important element of NNL’s operating model is to ensure that appropriate accountability arrangements continue to be in place to scrutinise work and advice. This function is already provided on an advisory basis by NNL’s independent Technical Advisory Board (TAB), chaired by Mike Weightman (NNL non-executive Director) and attended by government Chief Scientific Advisors from BEIS and FCO, Sellafield Ltd, EDF Energy, The University of Manchester and Imperial College.

50.The nuclear R&D landscape remains crowded, and while relations between all parties are generally collegiate and constructive, there is inevitably some scope for rationalisation.

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51.Enhanced co-ordination between research on clean-up and decommissioning and the new build / fuel cycle arena would exploit synergies more strongly, e.g. in advanced manufacture. Research links between the civil and defence nuclear sectors (nuclear submarine propulsion) would benefit productivity and the UK supply chain. There are numerous bodies funding different strands of research – often reporting into different Government departments, which does not always encourage collaboration between the various programmes.

52.NIRAB made a substantial contribution to improving links and oversight in some of these areas, but lacked the remit to implement significant change or governance. Similarly NIRO made a useful contribution through its role as secretariat to NIRAB and through the advice it delivered to government. Neither of these organisations will survive in their current form beyond March 2017, so there is potential for sector-wide leadership, visibility and co-ordination to diminish without active measures to re-introduce some form of wider oversight.

53.No single body currently has complete oversight of all the nuclear research being carried out. However NNL is well placed to play a co-ordinating role, including providing an international perspective, as part of its strategic function supporting government. NNL already plays a central role in the nuclear landscape- holding the chairmanship of both the Centre of Nuclear Excellence and the Nuclear Skills Strategy Group, whilst also acting as the lead UK body in international collaborations such as the UK-China Joint Research and Innovation Centre, the Halden Reactor Project and the Jules Horowitz Reactor. NNL senior leaders also participate on international committees that shape international nuclear policy (eg the NEA Nuclear Science Committee) and that advise on technology, strategy, policy and focus of other National Laboratories in the US (Idaho National Laboratory and Oak Ridge National Laboratory) and France (CEA).

54.Any decisions on improving co-ordination across the full landscape of nuclear research should be made in conjunction with any refinements to the overall structure of the UK nuclear sector, as discussed in Q2.

11. Was the Nuclear Innovation and Research Advisory Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be?

55.NIRAB (and NIRO) were created to identify any gaps in the UK relating to Nuclear Energy R&D and to propose a programme of long-term research to fill them. This resulted in recommendations to Government for the creation of a Nuclear Innovation R&D programme, components of which are currently being procured. In this regard, both the NIRAB and NIRO were successful,

56.However, government now requires a broader coordination of programmes across the UK and internationally, integration of programme needs with skills and facilities, and access to authoritative, independent advice on the

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implications of the programmes procured. This will require an enhanced advisory function to government which could be provided through NIRO.

57.NIRO is currently hosted by NNL and made up of employees from NNL and nuclear supply chain companies. NNL recommends that enhancing the remit of NIRO as an advisory function to government to provide thought leadership and advice on Nuclear Energy R&D, whilst providing continued oversight and direction on Nuclear Energy research would enable strategic oversight to be provided.

58.For this to occur NNL could create a separate advisory division (NIRO), outwith its commercial structure, for the provision of independent nuclear advice. This advisory function would be made up of seconded experts from NNL and UK Nuclear Industry.

59.Appropriate oversight would also be required and could be carried out through a variety of approaches including the creation of an ad-hoc technical advisory committee separate to the NIRO, use of NNL’s already operating Technology Advisory Board, or reporting into a BEIS technical committee. BEIS is currently working with NIRO and NNL to explore how NIRO’s functions can be continued and enhanced following the end of its three year contract in March 2017.

Other issues

60.We feel it is important to highlight the impact of the UK’s decision to withdraw from the EU and the Euratom treaty. Historically, one of the main benefits from the UK being an active member of EU/Euratom programmes has been the access and influence the UK currently has had on the EU R&D agenda and priorities. We would hope that transitional and longer-term arrangements would also provide similar benefits – which go beyond simple funding. Further specific benefits have included leverage of skills and expertise, together with mutually beneficial access between international facilities.

61.From a purely NNL perspective, the impact of withdrawal on our business is less dramatic than on UKAEA, where a substantial proportion of funding is potentially jeopardised by withdrawal from Euratom. Nonetheless, we would very much hope that the UK could remain engaged in EU programmes in some way.

62.Looking to the future, the importance of bilateral collaboration agreements with countries such as France, and beyond the EU with countries such as the US, Japan and China, will become greater.

24 February 2017

209 National Nuclear Laboratory (NNL) and UK Atomic Energy Authority (UKAEA) – Oral evidence (QQ 38-49)

National Nuclear Laboratory (NNL) and UK Atomic Energy Authority (UKAEA) – Oral evidence (QQ 38-49)

Tuesday 7 March 2017

10.45 am

Watch the meeting

Examination of witnesses

Professor Paul Howarth, Chief Executive Officer, National Nuclear Laboratory (NNL); Professor Ian Chapman, Chief Executive Officer, UK Atomic Energy Authority (UKAEA).

Q38 The Chairman: Good morning, gentlemen. We are most grateful to you for joining us today. I have to start with an apology. As you know, there are other, even more important, matters going on in this building today and there may well be Divisions during this evidence session—if not this one then certainly in the next session. If that happens we will suspend proceedings for about 10 minutes to give us a chance to vote. We are being broadcast, so would you, for the record, like to introduce yourselves? If you would like to make an introductory statement before we get into the questions, feel free to do so. I do not know whether Professor Howarth would like to start. Professor Paul Howarth: My name is Paul Howarth; I am the Chief Executive of the National Nuclear Laboratory. By way of introduction, I would like to say many thanks for the opportunity to give evidence today. The timing of this inquiry is a great benefit given where we are in the UK in our nuclear industry policy and strategy. The announcement of a Nuclear Industry Council to support the development of the industry strategy and the prospect of having a nuclear sector deal means that, potentially, we are in a strong position as a country, looking at the future of our nuclear industry as a whole. From my point of view in setting out to support that vision, science, technology, research and innovation play a key role. This inquiry is not just about research and technology, certainly as far as the National Nuclear Laboratory is concerned, in the fission industry; it is also about innovation and how the UK can be in a forefront position with regards to both the domestic and the international nuclear agenda. As far as NNL is concerned, we sit at the heart of that. We sit between industry and academia. We strongly support industry. We add significant value to

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our industry, as it stands, and we are in a position to strongly support the Government’s aims and aspirations, and indeed the industry’s aims and aspirations, as far as the future nuclear industry strategy is concerned. I think the timing of this is very beneficial. It is a once-in-a-generation opportunity for us to align an industry strategy with a sector deal with a strong partnership between government and industry, and we can see research and technology at the forefront of that. As government’s National Nuclear Laboratory, we strongly support and stand ready to support those aims and objectives. The Chairman: Thank you. Professor Chapman. Professor Ian Chapman: My name is Ian Chapman and I am the Chief Executive of the UK Atomic Energy Authority. I would like to echo a lot of what Paul has said. Right now is a very transformative time for the nuclear industry; there is a lot going on, both good and bad. The nascent industrial strategy within BEIS at the moment offers the opportunity for a nuclear deal, and I think there is a big onus on us, as a community working with government, to come up with a nuclear deal that is the right thing for the sector. There is the formation of UKRI, a new body to look at research and innovation, and how the nuclear bodies play into that is important as that body is formed. There is the recent merger between DECC and BIS, which is bringing together a lot of the constituent parts of the nuclear industry that were fragmented between the two departments and have now been united, which again gives us a way to look at that landscape and try to benefit from the complementarity and synergies that exist. At the same time it looks as if we are exiting Euratom, which will have a significant effect on the nuclear industry. In conclusion to my introductory remarks I wanted to, parochially, make a point about fusion. A large fraction of the questions of this inquiry were focused on nuclear fission. I think it is important that we recognise that the UK is genuinely a world leader in the research and development of nuclear fusion. We have a great asset—a jewel in the crown of UK science—Culham, and the UK Atomic Energy Authority has a key role to play within the formation of a nuclear sector deal.

Q39 The Chairman: Thank you very much. That is a very helpful start. You will recollect that previous reports from this Committee called for a long- term policy. Having set up NIRAB, which has fulfilled its role for the limited period it was established, what steps do the Government now need to take to ensure that the United Kingdom has a consistent long- term policy for civil nuclear activities? Where do we go from here? Professor Paul Howarth: I will give you my perspective, as far as the fission industry is concerned. To date we have lacked a clear vision and strategy as far as the nuclear industry is concerned. We are a country that has all the right components as a major nuclear nation to be at the top table. We have not played our cards well to date. It is not lost; I think we are still recognised internationally as a leading country and I think that that can support our domestic programme as well as our international activities, both thought leadership and the export opportunity for UK industry. We now need to set out a long-term vision, and this requires a partnership between industry and government to get agreement on what

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that long-term vision looks like. We had the first Nuclear Industry Council meeting about a fortnight ago, and I was quite keen to see that we set that vision out for about 30 to 40 years’ time and that we clearly articulate what that looks like across the nuclear fuel cycle as far as fission is concerned—I am sure Ian will comment on where fusion sits in there as well. For me that is the first thing we need to do: set out the vision. The second thing is that we need to look at the organisation and the structure we have in place of the various bodies that have responsibility in this area. Do we have the landscape right? Do we have all the organisations doing exactly the right thing they should be doing? Are any organisations constrained? Are we missing anything? A key activity is to make sure that the landscape is right as far as the organisations are concerned. The third aspect is one of developing the public-private partnership and what needs to be put in place between industry and academia. This is not about an ask of industry as far as financing is concerned but about the mechanisms, the infrastructure and supporting the skill base—for example, supporting research and technology—setting the right climate for delivering that long-term vision. For me those are the things we need to put in place, and we have a good opportunity now to be able to do that and get us into position for the next 30 to 40 years. Professor Ian Chapman: I will start by commenting on the fact that while we have inquiries such as this and we spend a lot of time thinking about the direction of the nuclear industry, it is important to start with the fact that we have a very healthy nuclear industry and a great deal of capability in this country. We are genuinely world-leading in a number of aspects: in decommissioning, in regulation and in aspects such as our research and innovation. We start from a pretty healthy bedrock. I agree with all that Paul has said in that I think it is important that we have ambition and we show a vision for the future, not just a future on a five- year timescale but a long-term vision where, by the middle of the century, we are aspiring to be world-leading in a number of aspects—in next generation SMRs, perhaps, and, I would hope, in fusion. I do not think we are going to be in a position where we become a world leader in delivery of gen III but we have a very capable supply chain, we have a very capable research and innovation infrastructure and we can, with ambition, return to being a world leader in the next generation of nuclear plants.

Q40 Lord Oxburgh: It is well known that we have half a dozen or more bodies within the UK supporting nuclear research in one way or another. At the moment, a number of people offering us evidence have pointed out that while NIRAB was there, there was a degree of co-ordination between these, limited by the authority that NIRAB had. What ought to be in place to get the best from our national investment in this diverse group of interested organisations going forward? You have both been reasonably optimistic in your look forward. Does that depend on—if I may put it this way—getting our act together internally?

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Professor Ian Chapman: The formation of BEIS offers some opportunity, in that previously those organisations were fragmented between two government departments. Now having them under the same roof will certainly help. Personally, I am not a huge advocate of conglomeration, of merging all these different entities into one overarching very large nuclear organisation. Those organisations, I think, function highly and well because they have clarity of purpose. In large part, they know what they are there for. Putting them all within one organisation may not help; it gives multiple goals to one head. Lord Oxburgh: We can pursue that a little. I am not sure that anyone has proposed putting them all within one organisation. You describe a series of separate bodies which are clear about their goals, but is there anyone looking to see whether those goals, put together, amount to a national strategy? Professor Ian Chapman: Yes, I agree with you that that is still lacking. The Nuclear Industry Council will help in that regard and, as I say, I think the formation of BEIS offers an opportunity because you now have a government department tasked with this. I would hope and advocate that there is a successor to NIRAB, a body such as that, which has representation from these different bodies and is brought together under one government department with an onus to develop that vision. Lord Oxburgh: Is there sufficient capability in BEIS—and you might want to comment on this separately—to fulfil the governmental role, if you like, being an intelligent customer for what these different organisations might provide? Professor Ian Chapman: Within the Civil Service I would say no, but within the partner organisations very much yes. I would encourage the department to use its partner organisations to the fullest extent and benefit from the expertise that resides there. Lord Oxburgh: What partner organisations are you thinking of? Professor Ian Chapman: The two of us to start with but others as well. The Chairman: Professor Howarth, would you like to come in on this? Professor Paul Howarth: Yes, thank you. I agree with everything that Ian has said, and he makes a very valid point that the starting perspective is the fact that the departments have come together in BEIS. As the National Nuclear Laboratory, we felt that we were almost between two departments. While we reported to DECC, we obviously had strong links into BIS. Bringing everything together, in BEIS, sets the agenda nicely. As far as the advice and competence within government departments is concerned, we run differently from other countries and we interface with our counterparts in other Governments. One way of doing it is that you put a lot of that expertise into the Government as staff. The disadvantage in that model is that those individuals are not necessarily up-to-date practitioners as far as what is happening in the particular field. In the UK we have some capability within the Civil Service that can interface with, as Ian refers to, the partner organisations. The key thing is to properly engage those partner organisations and recognise the capability there. Today, I would say, from National Nuclear Laboratory’s

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perspective, because of our model and how that has changed and evolved over time, there has been, perhaps, a reluctance to fully engage us and use the full competency that exists within our organisation to be able to advise the Government over the right way forward. That, however, is changing, and over the past year or so we have been working more closely with the department; there is a strong team there now and we are looking at how we interface with that department as well as support all the delivery. The great advantage of the model we have at the moment, and it will be similar for Ian, is that in these partner organisations we have world-class nuclear capability. We are practitioners; we are doing it day in, day out; we are handling material—we are handling nuclear material and Ian’s team is similarly doing high-tech science—and that is a valuable asset that can be utilised to advise government over the right trajectory and input to policy. However, we need to improve that and so it is a refinement of the model of the National Nuclear Laboratory we are looking at to be able to realise that. Lord Mair: Can I follow up on Lord Oxburgh’s question about this difficult issue of co-ordinating all the different bodies involved in research in the nuclear space? To ask NNL about this, you said earlier that you are bridging between academia and industry. Do you have a difficulty prioritising when it comes to research? Is your funding model such that you are having to do industry-driven research? You talked about your relationship with academia. Can you say a bit more about that? Professor Paul Howarth: Sure. I find that our model works when we balance off a number of things. We have to balance off three things. One is revenue, the second is margin and the third is value. I will explain those further. First of all, revenue is about the size of the organisation. We need to be a certain size because we operate some absolutely state- of-the-art critical assets. The value of these, to rebuild tomorrow, is going to be a few billion pounds and they are recognised as absolutely world- leading facilities for nuclear research. We have a certain fixed cost base. We also have within the organisation subject matter experts across the nuclear fuel cycle, and we maintain and develop that expertise and capability. That makes us a high fixed cost base industry. We retain these experts; we do not just cycle them up and down as a consultancy depending on the volume of work we do. We retain and develop them on behalf of the UK when they are needed to support the programmes of research. The second aspect is that we deliver that effectively by a means which is efficient and effective. We deliver to time, cost and quality. We do the research that the industry absolutely needs in order to deliver its programmes. That brings me on to one of the other aspects, which is value. We always look at what we do in terms of value to support the industry. Typically, over the past 12 months—annually—we probably added circa £1 billion-worth of value by reducing costs to various programmes at Sellafield, EDF Energy or other generators or for Ministry of Defence programmes, to name some of our main customers. Value is a key thing. We only look at what we do that adds value to the UK’s national programmes.

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The third aspect I mentioned is margin. Because we run a commercial model that keeps us lean, efficient and effective, we make a surplus, but in the model that we have at the moment through government all that surplus goes straight back into the business. None is taken out as a dividend by government; we put that back into developing our facilities platform or reinvesting in our staff, in terms of science, technology and engineering. Those are the three things I balance off. We sit in the middle space of technology-readiness levels 4, 5 and 6 for technology development. This is a unique space. Previously in the UK we probably have not put as much emphasis on this area as other countries have. I need to make sure that I have subject matter experts who understand the latest developments in academia but, equally, can point at industry. I have people who one day will be working on a plant in Sellafield and the next day will be lecturing or undertaking PhD-level research within a university. Having people who run up and down that spectrum is absolutely invaluable, so I need a strong link in a strategic manner with key universities that provide a pipeline of people but, also, undertake the necessary research to support aims and aspirations. Effectively, I help to provide that link between industry’s aims and objectives and academia.

Q41 Lord Hennessy of Nympsfield: As a country we are in our seventh decade as a civil nuclear power nation. In your different ways, you are the lineal successors of the great founding fathers, Penney, Hinton and Cockcroft, are you not? Why is it that we are still agonising about the question of co-ordination? It must be very frustrating. You have devoted your professional lives to nuclear R&D and the commercialising of it. What is it about us that means we cannot crack this problem even after 70 years? Professor Paul Howarth: I will start but I am sure Ian can contribute as well. We have been through, over that period, quite a transformation in our nuclear capability. A lot of the organisations originated from the Atomic Energy Authority, then came organisations such as British Nuclear Fuels that I was involved with, and then we have come to where we sit now as the National Nuclear Laboratory on the fission side where we look after that strategic capability. Ian has a similar story with the history of the UKAEA and the Culham programme. We have been through a big transition. Even if we look 10 years ago, we were not clear over the direction of travel of nuclear within the UK. We did not know whether we were phasing out or building new nuclear reactors. In 2007, obviously, the consultation was launched on new nuclear build. Not only have the organisations changed but the trajectory has changed in terms of the nuclear programmes within the UK. This is where I think we have a real opportunity over the next 30 to 40 years. We can set out that vision and we can aim for the UK to be a top-table nuclear nation. We have all the right pieces of the jigsaw; we just have to build the picture appropriately. Professor Ian Chapman: I could not agree more. I do not think the problem exists within the co-ordination of those organisations; it is consistency and high-level support from government about the direction

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they want for the industry. If the Government consistently back the nuclear industry and hold to a long-term vision, the organisations will interact in an appropriate way to support that vision. Personally, I do not think the fundamental problem lies within co-ordination between the different bodies and organisations; I think it is an overarching direction of travel set at a high government level. Lord Maxton: Neither of you mentioned the word “politics”. Is not the political situation part of the problem that you have been facing and that Lord Hennessy has raised? Even now, there is a part of the United Kingdom, which I live in, Scotland, which does not take part in this programme at all. In fact, the party in power has openly said there will not be any nuclear power stations built in Scotland. Professor Paul Howarth: My perspective on that is nuclear moves on a very long time cycle, much longer than politics. Lord Maxton: Politics does not, no. Professor Paul Howarth: Political positions will come and go but, from my point of view, whichever way you do the calculations in looking at how we address the energy trilemma in the future, in terms of affordable energy, security of supply and low-carbon emissions, you get back to one answer, and that is you need every tool in the toolbox: nuclear, fossil fuels and renewables. A component of nuclear is, without doubt, needed. I recognise that politics will change and will come and go but I think the time constant that I am working on is over a longer period. Lord Maxton: I am with you, but there are politicians who are not with you. That is one of the major problems we face. Professor Ian Chapman: I agree with that. In some of your previous evidence sessions you have had a discussion about the French model and whether having big organisations which overarch is a success. The difference with France is that it has had a very high-level consistent government line that it backs nuclear, not that it has had the CEA, AREVA and EDF. The difference is that it has consistently said, “Nuclear power is a big part of our portfolio”, and there are no fluctuations in that line over decades. It is that consistency which enables the industry.

Q42 Baroness Young of Old Scone: Could I add one supplementary to that? If lack of a consistent backbone is one of the issues, what body do you see inserting that backbone on an ongoing basis, if you cannot depend on politicians? Professor Paul Howarth: It comes back to the advisory input to the Civil Service from partner organisations. Certainly as far as National Nuclear Laboratory is concerned, while we focus heavily on adding value to industry and supporting those programmes, it is how we can utilise that capability to support what might come up as potential need for advice within government. Take, for example, the recent interest in small modular reactors or generation IV systems, or whatever they may be; we need to ensure we are drawing down on the expertise. I do not look at the National Nuclear Laboratory as being the only source of providing that advice and input. We supported NIRAB by setting up the Nuclear Innovation and Research Office, and that model was successful. I opened

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it up to enable academics and other industry bodies to provide resource into that part of the organisation; I do not think that I should restrict that advice purely to the National Nuclear Laboratory. I think there is a vehicle there and there is a model that we can use that has supported NIRAB to date. It is possible that there could be an extension and a development of that and that we utilise that model to bring in expertise from different organisations—as I say, not just NNL—and use that as the conduit to provide advice into the government department. Baroness Young of Old Scone: You are unique in the world in the way that you are funded. Some commentators have said that means that you are very good at what you are funded to do by your commercial funders but are less well-resourced, for obvious reasons, in other areas. Would you like to see a change in the funding basis? Professor Paul Howarth: I am very proud of the model we have. We are unique. I have worked in national laboratories in Europe, Japan and the United States, and this is a unique model. I know that other countries are extremely interested in the fact that we run a national laboratory which does not rely on grants from government but relies on sources of funding from industry. I do not think it needs a wholehearted change. There is a refinement to the model that is needed. To date our work has been focused on supporting and delivering to industry, but what has happened is that the government department, BEIS, has been looking at how it interfaces with this capability such that there is not a perception in any way that there is any conflict of interest. We have been working with the department for the past 12 months now to address this. I believe there is a solution to this. We can put an ethical barrier within the organisation and I can have a team of people sitting away from delivery- for-customer work on a day-to-day basis who are directly providing advice, guidance and support to government which sits on the other side of the ethical barrier. For me it is a refinement. The issue is that that needs to be effectively funded, and so we need to look at a mechanism for how government draws down on that technical advice. As I mentioned, that model is not restricted to NNL people sitting the other side of that barrier; we can second people in from other organisations, from academia and from industry—Ian’s team. Whatever it is, other people can be seconded in to provide that advice to government. For me it is a refinement rather than a wholehearted change. Baroness Young of Old Scone: Before I finish, could I ask Professor Chapman for his view on the backbone issue? Professor Ian Chapman: I agree with Paul. There is a great deal of expertise within the partner organisations of BEIS and the Government should draw down on that capacity. That probably means there should be a successor to NIRAB, or some body such as that, which is responsible for setting strategy in that arena. Baroness Young of Old Scone: Do you see that as a stand-alone independent body, much in the way that NIRAB was? Professor Ian Chapman: The way Paul described it makes sense: you second people from the capable organisations—the NDA, ONR—into an organisation so that you then have the technical expertise to set strategy

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and direction, but you have a sort of ethical barrier between them and their host organisations, so that they are providing impartial advice to government on policy. Professor Paul Howarth: Perhaps I could add to that, Baroness Young. We talked earlier about where other countries might have that capability sitting in the Civil Service. The advantage of this model is that it keeps the capability fresh and alive because you move people to and fro across that barrier. They may be doing some work on handling plutonium, for example, in one of the facilities; the Government may require some advice and, effectively, they are the other side of the ethical barrier and directly provide that advice. The Government are drawing down on people who are absolute practitioners. If you go into a hospital and have a consultation appointment, you want it with someone who you know is practising and has not just read a book on it. This is what we are able to do. This is the means by which the Government can draw down on state- of-the-art nuclear expertise and capability that exists within our organisation and that Ian has.

Q43 Lord Oxburgh: You talk about this transfer of expertise internally. To what extent do you make use of overseas experts? I do a lot of work in Singapore, which is a small country with a number of big projects and big ambitions, and they totally depend on external advisers. Are we without these, or to what extent do we use them? Professor Ian Chapman: I can speak from my organisation. We are completely embedded in the international arena. We were reviewed last year quite nicely; an independent panel said something like, “The current UK fusion programme is completely central to the international effort”. We place great value in that collaboration and being central to that international effort. That is at all levels. At the working level we have reciprocal secondments and then, at high levels within our advisory committees, we sit on advisory boards elsewhere and we have international people coming to us. It is completely embedded in our culture. Lord Oxburgh: What about NNL? Professor Paul Howarth: It is interesting that other countries take the view that, if we are the national laboratory then we must look like the national laboratories in other countries. Therefore, there is a strong degree of engagement with the key nuclear countries. That is a healthy link and we are recognised as one of those top-table nuclear nations because of our nuclear capability in fission, just as much as fusion, as Ian describes. The role of the national laboratory is, again, to bring in that expertise and capability. If I am undertaking support work for Sellafield, for EDF Energy, or for whoever it is as a customer, my job is to look at the current state of the art of that technology. That does not mean I am looking just internally within my organisation; I am looking across a whole plethora of different organisations and international bodies to bring that capability. Take, for example, solving a challenge at Sellafield. To make sure that we deliver on that, I would say that it is my job to bring in world-class capability from wherever it is. Ian might have certain capability that could be brought in—it could be SMEs, it could be

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innovators or it could be other national labs overseas. That is the role I see of the national lab. Lord Oxburgh: You do not, as a matter of routine, have external people on your advisory committees? Professor Paul Howarth: We are developing a new advisory committee that we have set up, the technical advisory board, which reports to the main board of NNL. At the moment, we do not have any overseas representatives, but we can, if we need to, draw down on overseas expertise. For example, going back to Fukushima, in some of the analysis and calculations we did to support government we were directly interfacing with counterparts in CEA and the Idaho National Laboratory to share and exchange our models.

Q44 Lord Fox: You have both made it clear, as partner organisations, that you are ready to do more with BEIS. What do you think stands in the way of them drawing down on your available services and expertise? You have talked about ethical barriers. Is there, in some sense, a concern on the BEIS side that you are on both sides of the argument? If it is not that, what is it that is, perhaps, inhibiting BEIS? Professor Ian Chapman: From my point of view, it is just that it is an embryonic department and they have not established a body yet. NIRAB had a term, it reached the end of its term and BEIS is still in a state of formation. I expect that they will put in place a successor organisation akin to that to make use of the expertise within partner organisations. I must say that, from my point of view, the engagement with BEIS is very good at the moment. The Chairman: Would you have expected the organisation you were looking for to be in place by now, at the moment NIRAB ceased? Professor Ian Chapman: Or soon thereafter, yes. There has been momentum developed from the NIRAB process and the interactions associated with that. I think it would be prudent to make use of that momentum. As I say, the nascent industrial strategy definitely offers an opportunity in that regard.

Q45 Lord Hennessy of Nympsfield: Could I ask Professor Chapman a specific question? What lessons could NNL and the fission community learn from the way you have tackled fusion at Culham? You were director of tokamak research before doing this, were you not? Is there something you can put across? Professor Ian Chapman: Sure. Our model is very different from NNL’s in that the way we are structured is that we win competitively research funding from the research councils. With that research funding, we try to knowledge-transfer into the supply chain so that the supply chain makes profit. We are not seen as competing with the supply chain, and certainly it is not our raison d’être—our way of thinking. We do not have the commercial acumen that sits within an organisation such as NNL; we are not operating in that space. We do not think about the bottom line. We think about pushing the boundaries, we think about doing cutting-edge R&D and facilitating the supply chain to do commercial work in fusion.

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Based on that history of R&D in fusion, fusion is now moving into what I call the delivery era with the advent of the project ITER in the south of France, and of the order of half a billion in commercial contracts have come into the UK supply chain. We partner on almost all of those, and we provide the fusion expertise. We do not make any money out of it; the supply chain makes money out of it. We have a very different set-up but are equally effective in different ways.

Q46 Lord Broers: What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely? If your conclusion is that they have a place, which I suspect it may be, how on earth do we get on with this thing and succeed as a nation that supplies the world with SMRs? Professor Paul Howarth: There is a lot of debate around SMRs at the moment, and there has been a lot of vendor interest over proposing SMR systems. A lot of those vendors have recognised that the UK could be a potential market for SMR technology. I think it comes down to what we were talking about earlier, which is providing that advice and guidance into government. I think that still more needs to be done to bottom out the market opportunity for that technology. Again, I would say, the national lab and the Nuclear Innovation and Research Office stand ready to support government in being able to determine the market assessment and how effectively we move into that market. If I were to say, “Let us short-circuit that and say, yes, there is a market opportunity, so what does that look like and how would we progress?” the options are—and I describe this as a spectrum—on the one hand, we can develop a fully indigenous, UK system. I am talking light-water reactor, at the moment; I will come on to gen IV in a minute. For a light-water system we could develop a fully indigenous UK system. Right across at the other end of the spectrum we simply buy a system from overseas. If you are at the former end of the spectrum it is potentially higher risk but the rewards could be higher because of the benefit to UK domestic industry and supply chain and the export potential. It is high risk but it is potentially a higher return. At the other end of the spectrum, where we simply buy a system from overseas, there is less return and benefit to the UK but greater certainty as far as meeting our energy policy aims and objectives. Effectively, we need to do work to balance off the benefits between hitting our energy policy aims and objectives and the commercial opportunities for UK plc in developing that technology. There are, of course, options in the middle of that spectrum where we could partner with a potential vendor. A piece of work, in my view, needs to be done to bottom this out. Once we have done that we can work out how to effectively implement that programme. Gen IV is a slightly different debate, and we will probably come on to that later, but that is the work that needs to be done for SMRs. Lord Broers: Who should do it? Professor Paul Howarth: Who should do the assessment work? Lord Broers: Yes.

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Professor Paul Howarth: I would like to offer the National Nuclear Laboratory and the capability there, bringing in expertise from private sector sitting on the other side of the ethical barrier, effectively, to provide that independent impartial advice to government to determine the best way forward. Lord Broers: How much would it cost? Professor Paul Howarth: It would be difficult for me to give a figure off the top of my head, but this is an assessment exercise done by a small team of people that we should be able to get done in a relatively short amount of time. If we are going to do this we need to get on with it because SMR is raising interest in a number of countries. There is potentially a significant market opportunity out there, but it is a race. The first to market will then be in an extremely strong position. It comes back to one of the things I was saying earlier, that we have all the right pieces; we just have to play our cards better as a country. For example, our regulator, as I am sure you are aware, is recognised as absolutely gold standard. We need to think about how we play giving a licence to a reactor system that would be recognised overseas; it would be an extremely competitive advantage—a unique selling point—to have had that reactor go through the UK licensing system. Again, I would turn to the Nuclear Industry Council to then determine how best we go about implementing it in a public-private partnership. Lord Broers: How does this relate to the competition? Professor Paul Howarth: A competition has been undertaken. I still think we need to review the outcome of that, and do so in the context of the Nuclear Industry Council. We need to sit down and look at that long- term vision and determine whether, as a country, we see the opportunity for SMRs fitting within that vision. I think it does; I think you can move through that fairly quickly and then we can look at how we can implement it. Lord Broers: That competition has been lost in the wilderness somewhere, has it not, for the last six months? Professor Paul Howarth: It would not be for me to comment on where that competition is up to or the outcome associated with it. I would take the view, using ourselves as the national laboratory, that we can substantially support the Government in defining a way forward. We can put that to the Nuclear Industry Council for ratification. I recently came from a meeting in Washington where the United States is doing everything but in name to set up a nuclear industry council and an industry strategy. They are looking at the role that the national laboratories play as technology testbeds and demonstrators for future reactor systems. There is a lot of interest in generation IV systems, high- temperature gas-cooled reactors. Again, as a country, we have an absolutely unique capability in graphite-moderated high-temperature gas- cooled reactors. While we should look at light-water reactors, we absolutely could progress the UK as a top-table nuclear nation for looking at advanced reactor systems. Again, we need to do the work, and I would turn to the partner organisations, such as ourselves, to undertake that and to do it quickly.

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Lord Vallance of Tummel: Can we come back to the indigenous end of your spectrum with SMRs? We have had quite a bit of evidence which suggests that the UK market is not large enough to sustain on its own a development and manufacturing base and, therefore, we would be highly dependent on secure international markets. Even with international markets, we would probably be dependent on partnerships of one kind or another. That is moving to the middle of your spectrum. Is that analysis right? If so, where do we stand on the partnerships? Given that this is a race, if it is a three-legged race you need to have your partner in place early on. Who should be seeking the buyers? Is this a commercial thing for industry or is it for government, or what? Professor Paul Howarth: Those are all extremely valid questions and those are the exact questions we need to answer. I think a definitive piece of work needs to be done to address those. I started by saying there is an industry strategy, there is the Nuclear Industry Council, there is a sector deal to be put in place; we need that piece of work to be done to answer those questions and then we can look at how it fits with the strategy. Is it endorsed by the council? Is there a public-private partnership that then is put in place to enable that to happen?

Q47 Lord Hennessy of Nympsfield: Listening to the witnesses we have had so far—I can only speak for myself—there is a distinct pattern among the researchers and developers which you follow, which is a sense of zest and enthusiasm about a possible renaissance; “top table”, is your phrase. That is quite a contrast to the officials from BEIS and, indeed, the Minister, Jesse Norman. It is as if they have scrammed; it is as if it is not happening. This is worrying because the contrast is palpable. I know you do not want to be drawn into it, but you are close enough to the people involved in BEIS. What is sapping their zest and energy for this top-table impulse that you have been so eloquent about? Professor Paul Howarth: That is difficult for me to answer. Lord Hennessy of Nympsfield: Have a go. Break loose. Professor Paul Howarth: I can understand their position, in that they perhaps need to present a more measured position. Lord Hennessy of Nympsfield: Why? Professor Paul Howarth: It is difficult for me to answer that. Lord Hennessy of Nympsfield: Have a go. I know you have thoughts; you just do not want to say what they are. Professor Paul Howarth: The thing that needs to be addressed is how the department engages in getting the right input to its policy advice. As we have referred to, that comes from the partner organisations. I would say that that link, at the moment, is still tenuous. We simply have not been operating in that mode long enough to have a strong degree of engagement where we can help to advise the department on the direction of travel. It is still early days for them to move into that way of working. The intentions seem to be good and we are getting good signals that that is how they wish to engage with us. The Chairman: Before we move on to gen IV, did Lord Ridley want to

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come in on this? Viscount Ridley: I think the point I was going to make has been covered by Lord Hennessy. Lord Oxburgh: You have not told us why anyone would want to buy an SMR. Professor Paul Howarth: I go back to the meeting I was at in Washington. A senator was there from Alaska and she said that most of her communities in Alaska are off-grid and the cost of energy generation in Alaska is extremely high because, effectively, it is oil coming in on ice road trucks. It is extremely expensive. For a community such as Alaska they are interested in small reactors that can be deployed in remote locations. Lord Oxburgh: This is small, distributed sources of power. Professor Paul Howarth: That is one of the potential uses. That is probably the extreme case. There are countries that do not have the grid infrastructure to support large monolithic gigawatt plants that can cope with hundreds of megawatts. Lord Oxburgh: That does not apply in the UK, which we are focusing on here. Professor Paul Howarth: I come back to our Magnox reactors. They would be classed as medium-sized reactors. Some of those sites in the UK are not appropriate for large gigawatt plants but could be appropriate for modular reactor construction. Lord Oxburgh: Do you think modular would be less expensive? Professor Paul Howarth: It depends which way you look at it. The financing is more palpable than the cost and the outlay associated with large gigawatt plants in certain circumstances, depending on which other countries we are referring to. Lord Oxburgh: The alternative is to think the Magnox sites might be suitable for more conventional things, if you like, gen III+, of 500 megawatts or a bit bigger. Professor Paul Howarth: It could be. In terms of the move into this, we have sites that potentially could be utilised for small modular reactors, or medium-sized reactors, and we have a licensing system which other countries are very interested in, so it looks as if, on that spectrum, there could be a number of ways of addressing this that could be attractive to the UK and to UK supply chain companies. Lord Fox: You said the financing is “more palpable”. Can you explain what you mean by that? Professor Paul Howarth: The capital cost outlay for large plants of gigawatt-plus; it is the financing cost which dominates the levelised generation cost of electricity. Lord Fox: You are talking about a quicker return.

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Professor Paul Howarth: It is a quicker return. It is less immediate outlay and a faster return. You might still build a gigawatt in total but you can stage it over time. Lord Broers: My observation is that the political uncertainty is based on the fact that the public, overall, are still worried about the safety of nuclear power—incorrectly, probably. I have heard arguments either way but I come out with the feeling that SMRs could be easier to reach a certain level of safety than the larger plants. Would you agree with that? Professor Paul Howarth: There are certain safety features for SMRs that make them, essentially, attractive compared to existing conventional plants. Again, we need to do a definitive study that helps to address these, as we were talking about earlier. It is criteria we need to go into.

Q48 Viscount Ridley: You have both touched on the point that we may not be able to lead in gen III but we have a golden opportunity to lead in gen IV because of the experience of gas-cooled reactors and because of the strength of our research depth. Can you elaborate on that a bit more and explain why the UK should, perhaps, leapfrog but certainly be ready to go on generation IV? Particularly, can you narrow down the aspects of generation IV that are of interest to you? Professor Paul Howarth: Again, it is a very valid question. Have we definitively answered this in order to inform our strategic vision for nuclear in the UK? The answer is, definitively, that has not been done. I come back to saying that this is the sort of question that we are able to answer for government to determine whether generation IV reactor systems should feature as part of the future landscape within the UK. Viscount Ridley: Can you specify? Do you mean molten salt, liquid metal, pebble bed? What do you think? Professor Paul Howarth: There is a whole range of different reactor systems out there. In particular in the UK, our experience is there is a lot of international interest in high-temperature gas-cooled reactors that are graphite moderated at present. We could look at how we utilise that capability in the future. Equally, we have experience in more advanced generation IV systems—sodium-cooled fast reactor systems—and so working in partnership, for example, with France on the ASTRID programme could be attractive to us. The issue here is that it is easy for developers to propose what would be referred to as a paper-based reactor system, but to get through to a delivered system is difficult. You have big error bars associated with a paper-based reactor system; there is a huge amount of uncertainty. The claims are unfounded as far as whether it is a safety-related issue or an economic issue. You need to get those error bars down as quickly as possible so you are absolutely certain over the cost of that reactor system and the merits. That is the work that, effectively, national laboratories do. We sit in the technology-readiness level space that can determine how you get those error bars down and what work needs to be done. Effectively, Ian is doing that on the fusion programme. It is a long programme but it is to reduce those error bars to get to certainty. That is exactly what we need to do. Viscount Ridley: There is one big difference, which is that we do not yet

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know that fusion can be made to work commercially, or even physically, for long enough. Professor Ian Chapman: Physically, we know that fusion happens because we have achieved it in JET. I am extremely confident that ITER will reach its goals and will demonstrate fusion on a commercial scale. Fusion has been waiting for that demonstration. Viscount Ridley: Why go to gen IV? Why not forget all this and let us just do fusion in 40 years’ time or 30 years’ time, or whatever it is? Professor Ian Chapman: My personal feeling is that we need a mixed portfolio and we should be tackling both things. I do not think it is either/or and to have a policy which is either/or is dangerous because it is eggs in one basket. You should tackle both. Viscount Ridley: How much of a problem is it that we are bystanders at the Generation IV International Forum? Should we be paid-up full-time members? Professor Paul Howarth: As far as gen IV is concerned, historically we were active in that programme. Personally, I think we should be involved in that programme and we should be involved for various reasons. As a country looking to deliver its energy challenge, let alone whether there is industry benefit here, we need to understand whether these systems are appropriate or not and how quickly other countries are moving through this spectrum. We should not absent ourselves from that; we need to be at the table and we need to understand that capability. In terms of the national programmes in nuclear at the moment that we support, as far as the national lab is concerned—legacy waste management, decommissioning, continued operation—the one programme missing when the House of Lords looked at this a number of years ago was in advanced reactor and advanced fuel cycle technology; hence the setting-up of NIRAB to undertake the piece of work to identify the programme that needs to be delivered. I would say that the national lab can deliver that programme of work and maintain our national capability. It is not just about the national lab delivering it, though; we can help to orchestrate it and bring in other players in academia and industry who can support that programme. Ian has relevant capability as well that we can bring in, so we can assemble a generation IV technology programme.

Q49 Lord Fox: What effect do you assess leaving Euratom will have on the UK’s participation in long-term research and collaboration? How do you think the Government should be going about replacing that relationship? Professor Paul Howarth: Should I go first on this one as well? Professor Ian Chapman: It is probably more transformative for us. There are three main things we get from our participation in Euratom at the moment. The first is participation in ITER. ITER is the next-step fusion reactor which will prove on a commercial basis that fusion works. The second is our operation of JET. JET, essentially, is what ITER is based on. We operate JET on behalf of the Euratom community here in the UK. That is worth about £50 million to us, at the moment, which comes from the Commission. We pay into the fusion R&D programme around £20 million and we withdraw around £60 million, so we are a huge net beneficiary.

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The third thing that we benefit from is participation in what is called the EUROfusion programme, which is a conglomeration of all the European fusion laboratories working together to produce a design for a reactor which follows ITER. We need to find a way to sustain the benefits that we get from those programmes. How do the Government go about doing that? I think there is a range of options, which go from associate membership to the UK funding all of this independently, still having open doors and collaborating openly. There are points in between those two extremes where you participate in some parts of Euratom and not others but you do not need to be an associate member. I think there is a panoply of options. As part of the negotiation for leaving Euratom we should absolutely try to get the best deal not just for the UK but for our partners, and work out the best deal to make sure that that collaboration continues to be strong. Baroness Neville-Jones: Are you able to say what you think a best deal would be? Are there models already in existence? Are there countries that have some kind of associate status? Are they suitable for us? Professor Ian Chapman: There are associate members. Those are bespoke models, which are negotiated with the Commission between those partners. Are they suitable for us? That depends entirely on what the Government want to get out of the negotiation. Baroness Neville-Jones: In your view? Professor Ian Chapman: In my view there is a best path, which may not be associate membership, but this is absolutely a spectrum of options and we need to negotiate and find the best route through that. I cannot prejudice which direction we should go in but I think there is a range of options we can take. The Chairman: Clearly, an early decision would be helpful for everyone. Professor Ian Chapman: An early decision would be helpful for us, certainly, and involvement in that negotiation. I must say, BEIS is involving us in that policy formation. The Chairman: Some of us did our best on the Floor of the Chamber to prod the Government into declaring their hand on this, with perhaps limited success. We could have continued for much longer. In all fairness to the next two witnesses, we must conclude this session. We are most grateful to you for helping us in our deliberations. If, when the record is circulated, there are any minor amendments you wish to make, please return them. We were a bit rushed at the end. If you feel you did not have an opportunity to adequately respond, please send any supplementary evidence or further thoughts to the clerk, if you so wish. Once more, thank you both for your oral evidence today and for the written evidence, which has all been most helpful.

226 National Skills Academy for Nuclear (NSAN) – Written evidence (PNT0048)

National Skills Academy for Nuclear (NSAN) – Written evidence (PNT0048)

Introduction

1. The consultation is welcomed and timely as the nuclear industry plays a crucial role in meeting the drive to a low carbon economy and in ensuring security of energy supply. Research plays a critical role in the development of skills, the importance of the skills development agenda isn’t particularly well reflected/acknowledged in this call for evidence. In particular, R&D is heavily dependent upon higher level skills and therefore presents a golden opportunity to develop the next generation; this is the focus of this submission. It relates to Question 1 (Responsibilities), Question 2 (Sector Deal), and Question 3 (SMRs).

2. NSAN was established in 2008 and is a strong and vibrant organisation led by over 120 employer members. It has over 50 Provider Members including 8 Universities. Whilst NSAN has the word ‘skills’ in its title this includes higher level as well as technical level skills and the two are viewed as equally important and complimentary. NSAN is a recognised delivery partner of the recently formed Nuclear Skills Strategy Group (NSSG). Over the years NSAN has developed a significant range of products and services with, and for, the nuclear industry to help address the skills challenges it is facing, including higher level skills and R&D. More work is now needed to capitalise on this especially in the area of higher level skills development.

Question 1 - Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities including international collaboration and, within the UK, for cost-effective and efficient articulation of the different elements of nuclear work?

3. The overall responsibility should be with the employers in collaboration with Government via the Nuclear Industry Council (NIC). In terms of skills this responsibility lies with the NSSG for the strategy and for delivery with key, well established organisations such as NSAN and hopefully (as it develops) the National College for Nuclear. Within Government the development of skills now lies with DfE and in this role DfE need an increased focus on industrial sectors, recognising the different needs and requirements of each, developing and flexing policy accordingly. It would also be very helpful for BEIS to play a lead role in this area as part of the skills pillar of the industrial strategy, building on their knowledge and experience of working with key industrial sectors and employers. It is important that BEIS has access to expert and industry wide advice, the primary vehicles for this are the NIC and the N Group for cross industry matters and the NSSG and NSAN for skills related matters.

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the next generation. It is therefore essential to accelerate SME development in the near term to fill this gap through, for example, using research programmes to develop expertise in the next generation, or establishing mentoring schemes, possibly across different organisations, to transfer knowledge. Such arrangements would also be useful in accelerating the ‘speed to competence’ of experienced workers transferring into the nuclear sector.

5. Some skills aspects of the UK’s future nuclear programmes (SMRs, management of uranics, management of plutonium, managing Higher Activity Waste, advanced nuclear reactors) are dependent on Government decisions. The nuclear Labour Market Intelligence model, under the direction of the NSSG and supported by, and inputted to, by all the nuclear relevant Skills Bodies, has identified potential skills gaps in these areas. The NSSG’s Strategic Action Plan lays out the required actions to fill these gaps and suggests there is a role for Government in ensuring the SME population in these areas is secured. Government should act to meet this need.

6. Research, particularly low to medium Technology Readiness Level research, is very effective in attracting and developing potential SMEs and this should be recognised more fully than it currently is. Support should be given to funding research in those areas where there is, or is expected to be, a shortage of SMEs.

7. Imminent changes in the skills development landscape offer opportunities to transform SME development. In particular Degree Apprenticeships, combined with work-based postgraduate training, and collaborative initiatives between Government, employers and delivery bodies should be explored. The Nuclear Science and Engineering Trailblazer Apprenticeship (Degree level) is already proving very popular with many employers. This can lead onto higher level programmes such as the Aston/NSAN PGCert in Nuclear and will form an ideal platform for the development of future SMEs, this approach should be recognised and supported by Government.

Question 2 - The Government’s industrial strategy green paper discusses a possible ‘sector deal’ for the nuclear sector. How might the nuclear sector benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal?

8. Today, the nuclear industry is in the spotlight with unprecedented growth planned over the next decade. This will inevitably result in pressure points in the regional skills infrastructure, competition for skills and unfilled demands across the nuclear sector. The desire to increase R&D activities will inevitably result in unique demands for High Level Skills. Consequently, a sector deal for nuclear is of paramount importance. Although not the focus of this review a Nuclear Sector Deal should focus on the development of appropriate skills at all levels, enabling the UK workforce to be appropriately skilled to access careers and opportunities in the sector.

228 National Skills Academy for Nuclear (NSAN) – Written evidence (PNT0048)

9. The re-constructed NIC is an ideal partner to lead on any sector deal for nuclear, with the NSSG, supported by NSAN and other relevant skills delivery partners forming the skills work stream.

10.The skills task is challenging, but achievable through engaging public and private sector partners alike. Over the past few years there has been successes from a number of skills groups and organisations involved in the sector (NSAN, ITBs etc.), with many significant and meaningful developments and skills interventions developed and put in place, now it is time for a step change in terms of implementation of these interventions. The NSSG’s Strategic Plan summarises and sets out the current actions necessary to address the key risks, blockers and issues facing employers, training providers and partnerships. The skills chapter of a sector deal needs to be based upon this plan and needs to fully build on and utilise the industry led (and often Government funded) developments/initiatives to date to tackle priority issues ensuring a value added approach for both Government and industry.

11.During 2014 - 2016 a successful Nuclear Industrial Partnership project was in operation, led by NSAN and its employer members with a workstream focussing on developing nuclear Subject Matter Experts (SME) for the future. There were excellent results from this in accelerating speed to competence for high level (niche) skills, in a partnership involving NNL, NSAN and Dalton Institute. Although the programme ended in September 2016, it was already beginning to bear fruit, with 119 people (of which 50 were female) successfully completing the programme. We believe that a sector deal could consider a similar programme as part of the R&D initiative.

12.The nuclear skills agenda and the work of NSSG and NSAN directly supports the ten pillars of the Industrial Strategy, as follows:

Industrial Strategy – Ten Pillars How are NSAN supporting the Pillars? 1. Investing in science, research Supporting SMR development and and innovation ensuring R&D has the right high level skills via its work with NNL and Dalton on the SME programme 2. Developing skills Supporting the delivery of the NSSG Skills Strategy by successfully developing and implementing employer led solutions to address the skills challenges aligned to the NSSG risks 3. Upgrading infrastructure Working to help develop the skills required for the major infrastructure projects, working collaboratively with ECITB and CITB 4. Supporting businesses to start By developing and delivering and grow appropriate nuclear relevant training programmes and business

229 National Skills Academy for Nuclear (NSAN) – Written evidence (PNT0048)

support to allow employers to recruit, train and develop skills 5. Improving procurement. 6. Encouraging trade and inward Developing partnerships with investment overseas organisations as appropriate e.g. INPO and INSTN 7. Delivering affordable energy All actions are in support of the and clean growth Nuclear Programme and hence support the development of clean affordable energy 8. Cultivating world-leading Supporting the ambition of a world sectors class nuclear sector by supporting the development of a highly skilled UK nuclear workforce 9. Driving growth across the Regional activity in: Scotland; whole country Wales, NW & Cumbria; NE; SE; SW and the Midlands 10. Creating the right institutions NSAN has established a very strong to bring together sectors and and effective High Quality Provider places Network with over 50 members across the UK to service the skills and training needs to the nuclear programme. This Network is well placed to serve the nuclear industry in all its locations

13.The benefits of a sector deal for nuclear would be fundamental in meeting the governments’ and employers’ aspirations of being a world leading nuclear country. Whilst the UK is already recognised as having world class academics and facilities, the industry is facing a significant demographic challenge. As the time to competence for SMEs can, quite rightly, take years or decades to achieve, we have to start now, and the investment in R&D can be a catalyst for this.

Question 3: What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

14.The nuclear new build programme hasn’t brought as many jobs and supply chain opportunities to the UK as hoped and expected, a lot of this is due to the nature of the international investments in the programme. The development of a fleet of SMRs could bring significant UK supply chain opportunities and hence lead to high quality UK jobs and career opportunities and the development of higher level skills within the supply chain. This would be of particular impact if a UK consortium approach/design was taken forward.

15.An SMR programme could hopefully be developed and taken forward on a shorter timeframe than the current nuclear new build programme.

16.The main challenge is identifying appropriate sources of funding and capital investment to take an SMR programme forward.

230 National Skills Academy for Nuclear (NSAN) – Written evidence (PNT0048)

24 February 2017

231 North Wales Economic Ambition Board – Written evidence (PNT0059)

North Wales Economic Ambition Board – Written evidence (PNT0059)

North Wales Economic Ambition Board is a partnership of the 6 local authorities in North Wales, the Universities and Further Education colleges in the region as well as the Chairs of the 3 Enterprise Zones in the region and Welsh Government representatives. The Board works across north Wales and has developed an ambitious vision for the future growth of our economy.

The NWEAB also works closely with partners across the border, with the Mersey Dee Alliance and in the Cheshire - Warrington LEP and is putting together a bid for Growth Deal Funding. We are members of the Northern Powerhouse and support their aspiration for the development of energy technologies as a key driver of economic growth.

This response reflects the aspirations of North Wales regarding nuclear developments and how our economy can develop in partnership with centres of nuclear excellence in the North West of England.

There are two major nuclear facilities in North West Wales – Wylfa Power Station (now undergoing de-fuelling) and the Trawsfynydd Decommissioning site. Both of these sites have contributed significantly to the local economy and to safe low carbon electricity generation.

The region has aspirations to develop as a key location for future nuclear developments: linking in with facilities and organisations in the North of England.

Key proposed developments include  The Horizon Nuclear development of two Advanced boiling water reactors at Wylfa Newydd  The development of the Trawsfynydd Decommissioning Site as the site of the UK’s first Small Modular Reactor (SMR) development (Trawsfynydd is ideally positioned for such a development)  New developments associated with Bangor University o development of a boiling water Research Centre o partnership working with other universities and establishments in England with excellence in nuclear Research o development of the Menai Science Park o Welsh Governments aspiration to establish a Research Centre for nuclear developments in North Wales  The establishment of the Deeside Advanced Manufacturing Research Centre to support the industry developing in North Wales – this is a partner organisation of the NAMRC

Over the border, and in relative close proximity in the North of England are  National Nuclear Laboratory (based in Warrington)  Nuclear Advanced Manufacturing Research Centre (based in Sheffield)  Nuclear fuel manufacturing facilities (including Urenco at Capenhurst in Cheshire and Westinghouse at Springfields)  Major supply chain organisations (such as Amec Foster Wheeler based in

232 North Wales Economic Ambition Board – Written evidence (PNT0059)

Warrington); Sheffield Forgemasters  Dalton Institute in Manchester

The wider region has recognised the potential for nuclear energy and is proposing to hold an Energy Summit in 2017 with Government, Welsh Government business and academic support, to promote the potential that exists in the region and to identify potential barriers that could restrict growth.

Response to Questions:

Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long-term policy for civil nuclear activities including international collaboration and, within the UK, for cost- effective and efficient articulation of the different elements of nuclear work?

The need for a consistent and long-term policy for civil nuclear activities is essential for the development of the industry. The responsibility must lie with the UK Government – currently BEIS is the obvious department. However this department has such a broad remit that it should draw on support fro man organisations such as the National Nuclear Laboratory – which should be the repository of strategic knowledge and expertise to support BEIS.

The nuclear sector would benefit from an integrated joined up approach between the public and private sector implicit in a ‘sector deal’. Such a deal should take account of regional differences and the need for regional and devolved government support of such a deal. This should also have longevity

A ‘sector deal’ might involve clarity regarding skills support development, clarity on support for particular areas of the Country to support the industry, clarity and consistency on mechanisms to deliver large infrastructure projects

The newly reformed Nuclear Industry Council would seem to be the natural organisation to lead such a deal

What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

The main advantage of deployment of SMR in UK is the economic benefit emanating from developing a new industry. Setting up SMR deployment so that UK manufactured components provide the bulk of input into the programme, will allow development of the Advanced Manufacturing sector and wider supporting infrastructure.

There is the opportunity to export SMR technology and equipment to other parts of the world and develop international service organisations in such areas

233 North Wales Economic Ambition Board – Written evidence (PNT0059)

What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

The magnitude of the global market opportunity has been identified by NNL in its report on SMR opportunities in 2014

If the UK does not take advantage of the opportunity to support developing SMR – it could lose out on global opportunities. Already organisations such as NuScale are pushing development of SMR in the UDSA. The UK is potentially at risk of being left behind and having to import such Technologies in the future

Government is not doing enough to support Research and development of SMRs. More needs to be done to encourage development and deployment. UK Government could :  Offer Trawsfynydd as the site for the first SMR in UK (Trawsfynydd is ideally suited for this :-It is public ownership, it has the right infrastructure (cooling capacity; grid connectivity; road connections; routes to transport large loads to site), local support, support at a North Wales and Wales level; proximity to centres of excellence for manufacturing in north east Wales and North West England)  Ensure regulators are resourced so that they can screen developments at an early stage  Facilitate deployment of research facilities and ensuring that there is revenue to run the facilities

It is not immediately obvious what the Government wants from the SMR competition.

It may be more appropriate for the Government to set criteria in place and let industry decide on technology

It may be more appropriate for the Government to set clear criteria such as: - Benefit to UK economy - UK Manufacturing opportunity and export opportunity - Maturity of technology

The Government should be advocating the Building of an SMR in the UK within the next 15 years

Governance and questions associated with it

234 North Wales Economic Ambition Board – Written evidence (PNT0059)

We have no comment to make on these questions

24 February 2017

235 NSG Environmental Ltd – Written evidence (PNT0050)

NSG Environmental Ltd – Written evidence (PNT0050)

Letter from Jim Porter, Managing Director, NSG Environmental Ltd

Priorities for Nuclear Research and Technologies 1. In response to the Call for Evidence from the House of Lords (26th January 2017) on the Priorities for Nuclear Research and Technologies, I am responding in my capacity as Managing Director of NSG Environmental Ltd. a specialist SME Company (of 150 people) which provides R&D services to the Nuclear Industry.

Question 1 2. I believe it is important that there is a coherent and consistent policy for nuclear activities in the UK. Due to the long-term nature of the industry certain and secure funding is required to support the provision of civil nuclear R&D. I believe that policy and framework for nuclear R&D activities should be set by government with consultation from a range of bodies including commercial companies and in particular SMEs. The policy should focus on retaining and developing skills in the industry whilst supporting R&D for new build and decommissioning activities. I agree with the remit of NNL providing advice to Government and supporting nuclear R&D programmes. In particular, NNL should retain skills and facilities necessary to the nuclear industry which only a body with government support could provide. However, I am concerned that where there is a thriving commercial capability there is a potential conflict in NNL being advisor, procurer and deliverer of R&D to the sector.

Question 2 3. The ‘sector deal’ should recognise the importance of decommissioning and waste management to the success of the sector and ensure that the NDA is fully supported with its remit. It should be noted that R&D is not always a standalone activity. Successful and cost effective R&D is often associated with delivery of specific decommissioning projects and the risk reduction associated with those projects.

4. As noted in the Call for Evidence I agree that SMRs have a great potential for their application and use in the UK and overseas. A ‘sector deal’ should be supportive in helping UK companies develop and implement their technologies in the UK, so that they can be proven and then developed as an export opportunity to countries around the world.

Question 8 5. The National Nuclear Laboratory has significant value to offer providing clear and informed advice to government. There is a potential conflict between the role as intelligent advisor and its current role competing for delivery of commercial R&D. Our experience is that NNL have a reputation for being late, expensive and poor quality compared with the competition. There needs to be a clear delineation in what is required to enable NNL to offer that intelligent role in ensuring that R&D is appropriate and its commercial activities. It should be acting as a repository of skills which can only be held within a

236 NSG Environmental Ltd – Written evidence (PNT0050)

government funded organisation rather than be competing to deliver that work. The question asks whether NNL can deliver the required research to support the UK’s future nuclear energy policies. I think it should be asking whether it appropriate for it to deliver the required research activities. There are a number of commercial enterprises supporting the current nuclear fleet on both operations and decommissioning who retain expertise gained in the delivery of R&D to the industry and could offer that support to new build and SMRs.

Question 9 6. NNL could provide the UK with some unique and necessary support for the development of nuclear technologies, but it certainly is not the only option for the provision of these services to help support our industry. NNL has some specialist facilities and expertise that exist nowhere else in the UK. However, it does not have exclusive access to some of the brightest and best talent in the nuclear industry.

7. The remit of setting up the National Nuclear Laboratory as the sole centre of expertise is fundamentally flawed due to their business operating model. NNL have a delivery structure in which they endeavour to self-perform all activities. For commercial reasons to maintain funding and revenue, NNL tend to only deliver using their existing staff and they have a vested interest in continuing to do so. Funds are prevented from flowing down to the supply chain which prevents commercial enterprises providing innovative solutions and support. Supply chain companies are not made aware of opportunities to apply their knowledge. NNL’s operating practices and methods of working are not very clearly aligned to those of commercial businesses who wish to take nuclear technologies forward.

8. NNL are being directed to manage all research activities associated with the Sellafield site. This is often due to the unique expertise and facilities developed in many years supporting operations on the site where it would be inappropriate for other organisations to deliver that work. This part of NNL doesn’t align with its role as advisor to government and it would be better for Sellafield Ltd to reabsorb what was effectively its in-house technical support providing the organisations intelligent customer role. It should be noted that even when it would be appropriate to compete or subcontract this Sellafield work work they rarely use supply chain specialists. The effect of this is that innovative companies and individuals are gradually being lost into other industries. NNL should only be directed to deliver work scope that only they can exclusively perform, all other work should be opened out competitively to the UK market and competed on a level playing field, where the best company to deliver should be selected.

9. One example of inefficiency is NNL being subsidised and marketed as an incubator for innovation. They are being paid to hand out grants of such a small value they are of little benefit to commercial companies. The basis of the structure is that they are encouraged to work with NNL to become a commercial success, but NNL does not have the expertise in incubating and developing commercial companies. This money could be better spent opening up real research projects directly with clients such as Sellafield or in new build which would allow enterprising supply chain companies to respond without

237 NSG Environmental Ltd – Written evidence (PNT0050)

NNL acting as a blocking intermediary. Innovative and best practice solutions to real problems are best delivered in a competitive environment.

Question 10 10.There is a difference between R&D in an academic environment and R&D in support of specific projects and technologies. NNL are well placed to coordinate academic R&D activities e.g. at universities and similar bodies. Their current experience is focussed on Sellafield and doesn’t properly encompass other sectors such as Magnox, Dounreay and EDF. It is not efficient and effective for the whole nuclear R&D landscape where commercial interests may best deliver and nurture the UK supply chain. What is required is visibility of R&D opportunities through customer organisations such as the NDA.

Question 11 11.It is telling that I cannot comment on the success of NIRAB because even though we are a successful supplier of R&D services to the nuclear industry we have had no engagement with that organisation. I believe it is important that the role of SME commercial enterprises in the delivery of R&D is properly considered in the future of any successor to NIRAB.

24 February 2017

238 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) – Written evidence (PNT0026)

Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) – Written evidence (PNT0026)

1 Introduction

1. The Nuclear Advanced Manufacturing Research Centre helps UK manufacturers win work in the civil nuclear sector – in new build, operations and decommissioning. We do this by combining academic innovation with industry expertise, to help UK manufacturers improve capabilities and performance along the supply chain. Companies can use the Nuclear AMRC's state-of-the-art workshop to develop and test new processes on production- scale machines without losing capacity in their own factories.

2. The Nuclear AMRC also provides a range of business support to help manufacturers enter the nuclear supply chain and compete worldwide. Our “Fit for Nuclear” (F4N) programme is a unique diagnostic tool which lets companies measure their operations against the standards required to supply the nuclear industry, and take the necessary steps to close any gaps. To date, almost 600 companies have completed the online F4N assessment and over 100 have completed the programme and been granted F4N status.

3. We also run an intensive business development programme for key members of the UK civil nuclear supply chain. Members of the programme – Civil Nuclear Sharing in Growth – have so far reported:  Almost £400m of new contracts won against a target of c.£180m.  Over 4,300 jobs created or sustained against a target of around 2,100.  Over £30m of additional private sector investment.

4. The Nuclear AMRC is backed by industry leaders and government, and managed by the University of Sheffield. It is part of the High Value Manufacturing Catapult, a national alliance of seven leading manufacturing research centres. Further detail about us can be found online (namrc.co.uk).

2 Call for evidence: response to questions

Question 1 “Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities including international collaboration and, within the UK, for cost-effective and efficient articulation of the different elements of nuclear work?”

5. It is the responsibility of UK Government – namely the Dept. for Business, Energy and Industrial Strategy – to ensure the UK has such a policy and determine its content. To ensure a robust policy can be developed by Government, it does though need to be informed by advice and input from the nuclear sector.

6. To that end we welcome the Government’s commitment to the reformed Nuclear Industry Council (NIC), which will provide strategic advice to Government on the UK nuclear sector (including on technology deployment)

239 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) – Written evidence (PNT0026)

and be a key vehicle for enacting and informing Government policy. It will also more closely link the defence and civil nuclear sectors.

Question 2 “The Government’s industrial strategy green paper discusses a possible ‘sector deal’ for the nuclear sector. How might the nuclear sector benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal?”

7. We welcome the support that Government has given to the nuclear sector to date. Maintaining this will be fundamental if the UK is to reduce the cost of nuclear power, tackle climate change and ensure security of electricity supply and do it in a way that maintains and grows the number of high value manufacturing jobs across the country.

8. The potential for a nuclear ‘sector deal’ presents a huge opportunity to more effectively leverage the UK’s nuclear strengths and capitalise on the growth opportunity in the civil nuclear market, for example by:  Selling our expertise more effectively into export markets – particularly decommissioning – and creating new international partnerships (such as with China) that combine national strengths and create compelling value propositions in the global marketplace.  Bringing together the UK’s substantial research capabilities (including in industry) to form more efficient and productive research partnerships, commercialise new innovations and increase the UK’s competitiveness.  Capitalising on our skills in digital and robotic technologies, which could deliver a step change in nuclear safety and manufacturing capability.  Securing greater value to the taxpayer from existing (publicly funded) assets and research facilities, by increasing the proportion of public funding spent on programmes and projects that utilise those assets.

9. It also provides an opportunity to strengthen and diversify the supply chain, such as by building on our successful Fit for Nuclear programme and related activities, and moving towards a vision of a full, indigenous capability across the supply chain for future UK nuclear requirements.

10. Key leadership organisations to the sector deal – with responsibilities for informing, developing and delivering the proposed interventions – would include the National Nuclear Laboratory (NNL), the National Skills Academy for Nuclear, the Nuclear AMRC, the Nuclear Decommissioning Authority, Nuclear Industry Association, the Office for Nuclear Regulation (ONR) and the Nuclear Institute (NI). Strategic leadership would, we expect, be provided by the NIC.

SMRs

Question 3 “What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?”

240 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) – Written evidence (PNT0026)

11. The principal advantage of a UK SMR is it would bring indigenous economic value to the UK. The development process would generate UK intellectual property in innovative processes and designs and, in turn, small innovative reactors could be manufactured in the UK creating jobs and income for UK businesses. This opportunity will almost certainly not be realised with the current gigawatt reactor programme.

12. A second major advantage is that SMRs could form part of a balanced portfolio of energy production as part of an economic transition to a low carbon economy. As a technology, SMRs cannot achieve the same economies of scale as the large nuclear reactors currently being proposed for the UK. Instead, SMRs can take advantage of economies of volume. By manufacturing the plants in a production environment, learning rates and optimised manufacturing methods can be applied to significantly reduce the cost from first-of-a-kind (FOAK) to Nth-of-a-kind (NOAK) reactor. Furthermore, it should be easier to finance an SMR versus a large reactor, due to the lower capital costs.

Question 4 “What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?”

13. The SMR feasibility study carried out in 201472,73, indicated a global opportunity for SMRs to be 65-85GWe or £250-400bn, with a large proportion of this assumed to be from large nuclear nations including China, USA and Russia (up to 40GWe between them). These nations have domestic nuclear technologies and supply chains and, as such, would likely present a substantial export barrier to a UK built reactor.

14. Ultimately however, the development of a UK SMR and any export opportunity will depend on commercial decisions. The two ways in which a UK reactor design might succeed is through its competitiveness and securing a first-mover advantage in the market.

Question 5 “Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to coordinate UK actions including international engagement on SMR development and future deployment?”

15. It is still relatively early days in the technological development of SMR technologies and the Government has provided sensible funding commensurate with how the SMR case has been developing. The economic case for investment is not yet made however and so, if Government feel that SMRs present a credible opportunity to create a new high value supply chain, it will need to provide substantial funding to make the UK a technology leader and support the creation of an indigenous reactor design. Innovation

72 http://www.nnl.co.uk/media/1627/smr-feasibility-study-december-2014.pdf 73 A more recent assessment, led by Atkins / EY and commissioned by Government, is not yet in the public domain.

241 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) – Written evidence (PNT0026)

will also be an important element to ensuring the competitiveness of a UK reactor, which is something the Nuclear AMRC can support.

16. In addition, given the ownership and regulatory structures of the nuclear industries outside the UK, the Government would likely need to play a key part in facilitating access to those markets.

Question 6 “Are the criteria set out by the Government for the SMR competition appropriate? If not, what should the criteria be? What timescale should the Government be working to in choosing an appropriate SMR design for the UK?”

17. We welcome the Government’s interest in the development of SMR technologies and the activity it has generated by the early allocation of funding. This can be seen from the strong attendance at an SMR road- mapping event hosted by Nuclear AMRC in May 2016.

18. This early impetus needs to be maintained however if the Government wishes to see further development activity. In particular, it would be beneficial for industry to understand the Government’s strategy i.e. whether Ministers wish to:  Fund the development of a FOAK SMR and create a potential supply chain.  Focus only on facilitating activities e.g. site licensing, infrastructure guarantees and support through the Generic Design Assessment process.

19. Our opinion is that if a properly funded programme of SMR development (including licensing) is begun in 2017, then this could result in the commercial operation of SMRs by the late 2020s.

Question 7 “Should the UK be involved in the development of Gen IV technology? If so, what funding and support should be put in place to place to help the UK establish a world leading position? Should our activity include development of one or more test reactors?”

20. Generation IV reactor technologies offer potential improvements in sustainability, economics, safety and reliability and have the potential to be deployed in the second half of the century. However, significant research and development needs to be done. Our opinion is that the UK should be involved in this, especially if we want to remain a leading nuclear nation and be at the forefront of innovative technologies, manufacturing processes and materials.

21. Research infrastructure is in place to support these activities through institutions such as the High Value Manufacturing Catapult and NNL. Development of a test reactor will also allow new and novel materials to be tested readily and could support the acceleration of Generation IV development.

Governance

242 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) – Written evidence (PNT0026)

Question 8 “Is the NNL fulfilling its remit appropriately? Can it deliver the required research to support the UK’s future nuclear energy policies? How does it compare to equivalent organisations in other countries?”

22. See response to question 9.

Question 9 “Is the remit of the National Nuclear Laboratory (NNL) suitable to provide research and development support to the UK nuclear sector? Is the current funding and governance model for the NNL appropriate to its role and remit?”

23. We believe it is important for Government to have a national nuclear research and development capability.

24. With regards to NNL, we believe its remit could be clarified. It has both commercial and public functions, but such functions can sometimes come into conflict (particularly as NNL does not receive any direct public funding) and displace each other. Given the impact this could have on NNL’s customers, we would recommend this risk is reviewed and addressed.

Question 10 “Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved? Who has oversight of the whole nuclear R&D landscape, including international activities?”

25. We believe co-ordination could be better, particularly of our international activities. The Nuclear Innovation and Research Advisory Board (NIRAB) played a useful role in highlighting the need for a strategic approach to R&D, but how nuclear research should be coordinated is a difficult question and needs discussing in a broader forum of industry and academia. We would suggest that this is one of the first topics for discussion by the reformed NIC, who might consider forming a working group (or similar) to do some thinking.

26. Organisations like the High Value Manufacturing Catapult are a good way of bringing together Government intent, industry needs and academic research. Learning from such organisations would usefully inform the coordination of nuclear research and development.

Question 11 “Was the Nuclear Innovation and Research Advisory Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be?”

27. NIRAB did a good job at raising the profile of nuclear R&D in the UK and articulating the need for Government to provide specific funds. It was successful against the advisory terms of reference for which it was established and was representative of a wide group of stakeholders. NIRAB didn’t though look at every part of the nuclear sector (such as

243 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) – Written evidence (PNT0026)

decommissioning) and so perhaps didn’t drive R&D activity across the UK as it should.

28. NIRAB had no executive responsibility and accountability to drive research and development activity across the UK. Given the substantial funding that’s potentially available, we would suggest a permanent successor is formed that has executive powers to support the allocation and delivery of R&D funding in civil nuclear, reporting into the NIC and Government. This would differ from NIRAB which only had an advisory function.

29. One option would be to adopt the approach taken in the aerospace sector with the Aerospace Technology Institute. This would result in a private non- profit company or similar – preferably using an existing body – who has a remit to:  Maintain and develop a UK Nuclear Technology Strategy, supported by a network of advisory groups.  Stimulate industry-led research and technology projects that align with this strategy and maximise the potential to deliver UK economic benefit.  Oversee the research and technology pipeline and portfolio.  Co-chair a Strategic Review Committee with Government (BEIS) and advise on project investment.

30. Similar to NIRAB therefore, such a body would establish an overarching technology strategy that has industry and Government buy-in; but unlike NIRAB, it would also select projects that fit within that strategy.

31. To maintain accountability to Ministers, once projects were selected for consideration they could also be technically assessed by Innovate UK and (as necessary) subject to value-for-money assessment by Government. Government could also retain the final decision on which projects to fund, with Innovate UK then responsible for signing contracts and overseeing individual projects.

23 February 2017

244 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8)

Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8)

Tuesday 21 February 2017

Watch the meeting

Members present: Earl of Selborne (Chairman); Lord Borwick; Lord Broers; Lord Hennessy of Nympsfield; Lord Mair; Lord Maxton; Baroness Neville-Jones; Lord Oxburgh; Viscount Ridley; Baroness Young of Old Scone. Evidence Session No. 1 Heard in Public Questions 1 - 8

Examination of witnesses

Professor Mike Tynan, Chief Executive, Nuclear Advanced Manufacturing Research Centre; Professor Grace Burke, Director of Materials Performance Centre, University of Manchester; Dr Michael Bluck, Director of Centre for Nuclear Engineering, Imperial College, London.

Q1 The Chairman: Could I welcome our three witnesses to the first evidence session on this new inquiry that we are undertaking on priorities for nuclear research and technologies? I think you will be familiar with the fact that over the last 15 to 20 years this Science and Technology Committee of the House of Lords has taken an interest in nuclear research and the need to determine strategy over what has been quite a long period, particularly noting the lacuna developing in nuclear research over many years as successive Governments have, quite frankly, failed to grapple with some of the issues. Could I invite the three witnesses, first, to introduce themselves for the record? We are being broadcast. If you would like to make an introductory statement, please feel free to do so. Would Professor Mike Tynan like to start? Professor Mike Tynan: Thank you. My name is Mike Tynan. I am chief executive at the Nuclear Advanced Manufacturing Research Centre in Rotherham, which is owned and operated by the University of Sheffield. I have been with that organisation for almost four years. Prior to that my background was entirely in the commercial nuclear industry. I was chief executive for Westinghouse in the UK and, prior to that, managing director of UK Fuel Business for BNFL at Springfields. My principal interest is the development of a competitive UK supply chain for civil nuclear going forward and to ensure that we get maximum value from the UK civil nuclear industry, both at home and overseas. Professor Grace Burke: Good morning. My name is Grace Burke. I am a professor of materials performance, and I am the director of the Materials Performance Centre at the University of Manchester. I have held that position for the past five years. Prior to that I was a consultant in materials technology at the Bettis Atomic Power Laboratory and with the Westinghouse Science and Technology Center. From my PhD days at

245 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) Imperial College, I have close to 40 years’ experience in nuclear research and development, focusing primarily on materials for nuclear power systems and power generation, and the effects of radiation and environmental degradation. We try, in the Materials Performance Centre, to ensure optimised materials for maximum performance, thus providing safe reactor operations in fission. Dr Michael Bluck: My name is Mike Bluck. I am the director of the Centre for Nuclear Engineering at Imperial College. The college has in excess of 50 years’ experience in nuclear, and the Centre for Nuclear Engineering is an umbrella body that supports research, education and collaboration across activities in the nuclear spectrum nationally, internationally and with industry.

Q2 The Chairman: Thank you very much. I have to remember, as do other members of the Committee, to declare an interest when first we speak. The only interest I have to declare is as a fellow of the Royal Society. Could I ask a very general question as a start? I mentioned earlier that this Committee has taken a long-term interest and has produced several reports about the need for a long-term consistent strategy for nuclear research. Where do you think responsibility lies for ensuring that the United Kingdom has just that? I do not know who would like to start. Professor Mike Tynan: In my view, the principal responsibility for the UK programme has to sit with government, and within government in the Department for Business, Enterprise and Skills. There has to be a mechanism for delivering that responsibility. I think the formation of the new Nuclear Industry Council is a positive step, and that council should be the instrument for taking forward the strategy for civil nuclear in the UK. The Chairman: Would either of the other two witnesses like to add anything? Professor Grace Burke: I, too, believe that the responsibility should lie with the Government. If BEIS is the appropriate organisation for a new entity that needs to be found, I agree. The Chairman: Of course, there are a lot of different government departments. There is BEIS, as it is now called, and there are the devolved Administrations, which have an interest, and clearly there needs to be a degree of intergovernmental collaboration, at which we have not always been conspicuously successful, particularly as there seems to be a completely different nuclear strategy in some of the devolved Administrations. Dr Michael Bluck: Yes, that is a problem. Nevertheless, I would agree that clearly—and I think you have already made the point—we are missing a strategy. That has to come from government. How that plays through in the delivery is open to question. We used to have the UKAEA as was, as opposed to the current incarnation, which was tasked with delivery of that. That should sit under BEIS. You could look at the US model to a degree, where there is a far closer relationship and far more coherent model of nuclear within the DOE. I think they have benefited from that, although the US has its own issues. The Chairman: Professor Burke, I know that you have some experience

246 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) of working in the United States. What could we learn from the research and development system adopted in America? Is there anything that we should take note of in order to have a more effective long-term strategy? Professor Grace Burke: Yes. Following on from what Dr Bluck said, the Office of Nuclear Energy in the Department of Energy is the focal point for the research that is funded in the US, so there is policy as well as research funding. In the UK, most of the funding comes from the EPSRC, the Engineering and Physical Sciences Research Council. I think there has been great benefit from the research councils being linked with the US system. This has been done with the Nuclear Energy University Programs—the NEUP. We have had several programmes where we partner with colleagues in the US. Proposals are written and evaluated in the US under the DOE guidelines. It funded the UK Research Council sponsors of funds, the UK participants, so a team effort has developed. That has been incredibly effective. However, it is very small scale. Generally, a maximum of three or four programmes per joint cycle are funded that way. I think that something along these lines could be expanded and that it would maximise the benefit to the UK by partnering and doubling the funding going into research efforts. It is also good for international collaborations and getting excellent people in training. The Chairman: Could any of our witnesses give a view on the expanded remit of the Nuclear Industry Council compared to the previous role of NIRAB? Professor Mike Tynan: I am a member of the Nuclear Industry Council, so perhaps I could start with that. The role of the Nuclear Industry Council encompasses the entire scope of a programme for nuclear in the UK. I think it is important to ensure that we link civil nuclear with defence, and that strategies for nuclear should encompass the entire market, because that will drive issues such as research and development, supply chain development and skills programmes. If you look at the industry itself and move down through the supply chain, a lot of the suppliers are supplying into the entire industry, which includes defence and civil nuclear. That is one benefit for the Nuclear Industry Council. Secondly, if the Nuclear Industry Council can help to develop an overall strategy, contribute to overall industrial strategy and develop a sector scheme for nuclear, that will encompass the broad range not just of product that we will need for nuclear but all the supporting and facilitative activities that go with it, as opposed to NIRAB, which was a board that attempted to co-ordinate research across civil nuclear and defence. Its principal role was to identify priorities going forward for R&D and it was restricted to that remit. It had no oversight of those programmes. It had no responsibility for executively delivering those programmes. Again, that is a difference from the Nuclear Industry Council: it can take a role in delivering strategy. The Chairman: Thank you. Lord Hennessy of Nympsfield: Can I follow up on that? I should declare that I have nibbled a little at the history of civil and military nuclear power, so I should declare I am a fellow of the British Academy and a professor of contemporary British history at Queen Mary University

247 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) of London. Would I be right in thinking, Professor Tynan, that the Nuclear Industry Council already has that civil military remit right across the piece? For example, will you have anything to do with the development of the PWR3 for the new Dreadnought-class submarines? Professor Mike Tynan: That is interesting, because the first meeting of the new council is not until tomorrow. Lord Hennessy of Nympsfield: Tell us the agenda. Professor Mike Tynan: One of its first challenges is to develop an appropriate agenda to keep it strategic. The previous Nuclear Industry Council was formed from the Nuclear Development Forum in 2007-08, which was focused principally on nuclear new build. It was a forum for government to help to develop and understand how things were progressing with facilitative actions, such as the development of GDA, infrastructure planning and funded decommissioning plans. That turned into a committee that started to get involved in a lot of the detail of civil nuclear and then started to incorporate decommissioning and existing operations. That committee grew organically. The new Nuclear Industry Council, which is much reduced in membership and is intended to be more strategic, should address the defence issue and be prepared to put some action plans in place to make sure it happens. Lord Hennessy of Nympsfield: Thank you. Lord Maxton: The Chairman quite rightly raised the question of the devolved Administrations, but I live in a part of the United Kingdom that has said no to all nuclear energy. It is going to run down the nuclear plants it has and will not build any new ones, even where they are proposed. Does this affect in any way the policies that you would propose? Does it, for instance, affect the research done by the Scottish universities? Professor Grace Burke: I would imagine that if the UK wants to be a world player in nuclear energy, and if the plants are not built here, but if there is an interest to moving to SMRs on an international scale and for the UK to provide international guidance and expertise, the research would still need to be performed.

Q3 Lord Mair: I should start by declaring an interest. I am a fellow of the Royal Academy of Engineering and a fellow of the Royal Society. I am also a professor of civil engineering at Cambridge University, and I am an engineering adviser to the Laing O’Rourke group, which is the civil contractor for Hinkley Point.

My question follows on from what we have heard about and the question of co-ordination between the various bodies involved in nuclear research. Is that good enough at the moment? If not, how can that be improved? Dr Michael Bluck: In one sense, given the remit that we have inherited, which is a remit to deal with waste and decommissioning, I think that we probably do a good job. I think the co-ordination is quite good, given the funding that has arisen out of it.

248 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) On the question reactor engineering, looking forward to a strategy through which we develop reactors, again I think there are some very good relationships between national labs, facilities, universities and industry. There are some very good models. That is not to say it is sufficient for an ambitious project that involved a significant programme. Again, we go back to the issue of co-ordination and some degree of authority that can take action and make strategic decisions and impact right across the sector. We have rightly looked at the industrial aspect of this, but what feeds industry is skills development at all levels. Universities are an obvious candidate for focusing in that area, and they have a great deal of skills in nuclear. Having said that, we lack co-ordination, again because the co-ordination that we have is based on the small number of modest projects that we have fought for together. We are a friendly club but one that probably picks up fairly piecemeal activities, frankly. We are not really engaging, or able to engage, in a large programme. Any large programme of new build, or industrial activity, would have to be supported by an appropriate educational strategy in support of that. The current system is to let universities provide those skills and do what they like, and to hope that demand drives that capability. I do not think that is enough. There has to be a strategic overview to say throughout skills development, “We need to take action to provide that if we are going to fulfil our role”. Lord Mair: May I follow up on that? That is very interesting. Do you think there is a single body in an ideal world that could co-ordinate this in a much better way? Which body should that be? Dr Michael Bluck: In skills development? Lord Mair: Not only in skills development but more in research and development. Is there a single body that should co-ordinate R&D? Dr Michael Bluck: You have to look at where we were when we were building reactors. We had a very coherent set of bodies. We had the UKAEA, of course, and we had the support of the CEGB and its associated national laboratories. They had extremely good relationships with universities that maintained skills and capability throughout. So, yes, I think there is, and I think it is necessary. Lord Mair: Who should do it? Dr Michael Bluck: In this context, everything is under BEIS. That said, we are stretching out into different departments, such as the Department for Education, so it is not the only one. We need something with executive authority that is tasked with meeting a strategy that it could be measured against rather than the piecemeal activities that we currently have. Lord Mair: Are you talking about the Nuclear Industry Council? Professor Grace Burke: I was going to add that the Office of Nuclear Energy of the Department of Energy in the States handles all of that. The industry group that interacts with the DoE on nuclear energy is the

249 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) Electric Power Research Institute and its component that deals with nuclear energy74. Professor Mike Tynan: Can I break down the problem with co- ordination into two pieces? The first is the co-ordination of funding, which is an issue for nuclear R&D. There are different sources of funding. We are now seeing a growth in potential regional funding, so LEPs can fund locally on activities that they believe will create value. You have central funding, which tends to come from BEIS, and that could be on a business programme or on innovation, and the sources of that funding are different. Then you have commercial income on collaborative work on research and development. There is an issue as to whether we understand exactly where the funding streams are and whether they are addressing the right things. I believe that there should be one organisation that co-ordinates research and development activity. Coming from industry, one of the things that works is clear accountability. Who has the clear accountability for delivering a programme that is centrally supported for nuclear R&D in the United Kingdom? In my opinion, that should be a national lab. I am not saying the National Nuclear Laboratory, I am saying a national lab. Currently there are a couple of organisations that fit that bill. One is the National Nuclear Laboratory, referred to as the NNL, and the other is the United Kingdom Atomic Energy Authority. There are lots of other organisations with an interest in nuclear research and development in the UK, but in my opinion it should be brought together under one executive authority, and that executive authority should be responsible to BEIS. BEIS’s principal mechanism for its strategy would be the Nuclear Industry Council. The Chairman: There is a recurring theme in many of the reports that we have done leading up in particular to the industrial strategy, which has recently been announced, of a need to bring together industrial research and academia—publicly funded, that is. Professor Tynan, wearing your Nuclear Advanced Manufacturing Research Centre hat, how would you like to see this develop? Clearly, every sector likes to see better collaboration. What do you think the opportunities are in the nuclear research field? Professor Mike Tynan: The very first comment I would make is that the Government have placed nuclear R&D back on their agenda after a 20- year or so absence. That started in earnest in 2011 with the Beddington report, and we have a reasonable focus on that now. We must not let that slip back off the agenda again. That is the first point I would make, on whichever aspect of nuclear research.

74 Additional information: The US Dept. of Energy Office of Nuclear Energy also receives advice/input from the Nuclear Energy Advisory Committee-NEAC, which is composed of representatives from US national laboratories, industry, universities and foreign experts. In the US, the Nuclear Energy Institute, an industry-based organisation in Washington, DC, campaigns for legislation and regulatory issues affecting the nuclear industry and serves as a “think tank” to influence US policy. Furthermore, the DOE also engages with the Nuclear Innovation Alliance and the Nuclear Infrastructure Council, both of which are nuclear industry organisations.

250 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) From my experience, we should reflect on things we do well and look to build upon that. In the world I live in, which is trying to link government intent and funding with industry ambition and funding, and academic input and research council funding, one of the things that has worked well is the High Value Manufacturing Catapult. That brings seven centres together across the UK and Scotland as local catalysts, not just to focus on what happens in a region with a particular technology but to help to bring a sector focus. We have a sector focus on nuclear, a sector focus on aerospace, a sector focus on automotive, a sector focus on materials such as composites, and a sector focus on processes such as big machining and big welding. Those centres have provided a mechanism for bringing together interested industry, government intent and academic research. It has worked extremely well. Any mechanism such as that that facilitates collaboration, not just on intent and research topics but on funding, and brings commercial funding into it to give some direction so that we can lead from generic research right through translational research into product, brings indigenous value to the entire UK through an R&D programme that supports industry. There are another couple of other things. One of the things I have seen work well in the industry is UKTI, which every year has a showcase over two days of what is available in the UK civil nuclear industry. There is scope for some form of UK nuclear research and development showcase that helps to show people the opportunities that UK research and development. Finally, when we develop a sector deal for nuclear and propose a sector deal, a fundamental element of that should be the forward R&D programme. Lord Broers: You are focusing on one part of that? The Chairman: Are you declaring an interest?

Q4 Lord Broers: I suppose so, yes. I am a fellow and past president of the Royal Academy of Engineering and a fellow of the Royal Society. I am also a member of the US, Chinese and Australian academies, where I have had interests in energy. This question relates to NNL, your experience of working with NNL and whether it has an appropriately defined role and remit. I think, Professor Tynan, you have had direct experience with this and have helped to restructure BNFL, its precursor. How is NNL doing? Professor Mike Tynan: I can talk about it from past experience and current experience. Currently, the nuclear MARSEA’s experience of four years working with NNL is very positive. We find them supportive, collaborative and professional. They have unique experience in the United Kingdom, and probably thousands of man-years of experience in civil nuclear and the challenges it faces. That exists within their organisation. The difficulty for NNL, I think, is that its role as a national lab is unclear. It has a commercial remit and I think that has the potential to reduce its independence. It also drives programmes that are commercially driven and not necessarily on research priorities, so its resource can be diverted from possibly national imperatives by having to focus on commercial business. Neither is the National Nuclear Laboratory a university, so it is not purely academic. Its current mission, between having to sit in this

251 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) quasi-commercial position and to some extent being an independent adviser to government yet funding itself through commercial work and work with commercial clients is a difficult role for it. I think some clarification of that role would help. Also, there are some challenges that National Nuclear Laboratory is specifically equipped to deal with, and that is waste management and decommissioning for the long-term programme. However, we should not forget they have the ability to do front-end work on new technology and for fuel manufacture, and the UK is a fuel manufacturer. I have a positive view of NNL. However, I think its remit, if it is to be the national nuclear laboratory, needs to be significantly clarified. Lord Broers: What about it becoming a catapult? Professor Mike Tynan: That is an interesting concept. Lord Broers: The High Value Manufacturing Catapult is a huge all- embracing one, with particular manufacturing emphasis, but it would seem to me, as we evolve a strategy in nuclear, particularly if we want to become a world supplier of nuclear stuff, that it might be an idea as we begin to understand what catapults can achieve. Professor Grace Burke: My colleagues and I have also had experience with the NNL going back several decades. As a national laboratory to generate the most cost-effective research, development and possibly the catapult concept, ideally it should be fully funded and not diverted into commercial contract work. As it is, it is incredibly difficult to have NNL participants in research programmes in which specific staff are uniquely qualified in the UK and the world. Currently, it is not impossible to have them formally involved with EPSRC programmes as they require direct funding to their participation. If it is a national nuclear laboratory and you intend to get the best world-class research and development out of it, in an ideal world it would be solely funded and not have to rely on soliciting commercial contracts. Lord Oxburgh: I am a fellow of the Royal Society and the Academy of Engineering, various overseas academies and chairman of three small energy-related companies. Can we pursue the NNL position at the moment? I think it is a schizophrenic organisation in the sense that its funding can only come from its commercial activities. On the other hand, it has the role of adviser to government and in fact overseeing a strategy that it has no funds to implement, in essence. Would that be a fair assessment? Professor Mike Tynan: Yes. Professor Grace Burke: Absolutely perfect. Dr Michael Bluck: It is important also to stress the sort of numbers involved in research activity: the contract work that it does principally for Sellafield. The Chairman: Your recommendation to the Committee, when we come to write our report on this, is that it should be solely government funded. Professor Grace Burke: In an ideal world.

252 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) Dr Michael Bluck: If it is doing a good job on waste and decommissioning, there may be no particular reason to interfere with what may be a good system, but if that releases a paltry amount of cash based on that profit that it has only recently been allowed to recirculate into research, then plainly, as everyone has said, it is not fit for purpose as a national nuclear laboratory. Professor Mike Tynan: There are two points about its funding. A principal customer for NNL is Sellafield Limited. Sellafield Limited is funded by the Nuclear Decommissioning Authority, which is funded by government. While the National Nuclear Laboratory competes for work, there is certain work that only it can do. That adds some complexity to the situation. You could argue that government is already funding a substantial part of it anyway. Secondly, we must not forget the United Kingdom Atomic Energy Authority. There is some fantastic skill there, too. Culham is a world- leading facility with 1,000 or more people with tremendous knowledge. It is a tremendous research base for the UK. We would have to consider what a national lab looks like as an entity, rather than saying that the National Nuclear Laboratory should be funded as it currently exists. The idea of a catapult concept that someone can co-ordinate but that brings together some tremendous institutions in a very collaborative and coordinated way, as the High Value Manufacturing Catapult does, is worth thinking about, but let us not forget about the Atomic Energy Authority. The Chairman: Perhaps we should move on to SMRs, and Lord Oxburgh.

Q5 Lord Oxburgh: Yes, indeed. There is a lot of current interest in SMRs. Clearly the proponents of a particular technology are keen to say that it is a great thing, a thing of the future. What do you think SMRs could bring to the UK electricity generation system as a whole? It is probably going to be 10 years before an SMR can make a significant contribution to the UK electricity energy system. The system itself has certain characteristics at the moment, which are broadly clear. Clearly there will be some traditional nuclear, and clearly there will be intermittent sources coming in from it. What do you see as a key role for SMRs in this future system? It will involve significant investment. Can one justify it in terms of the system? Dr Michael Bluck: The answer to that question depends very much on which SMR to a degree. If you want to deploy one in 10 years you are looking at relatively conventional technology. The argument one could make is that they could be located more effectively within a distributed mixed grid, although you then have to throw in the licensing and public acceptance issues. Lord Oxburgh: Yes. Dr Michael Bluck: It is not always clear that it is vital for the SMRs to contribute to that. That is a complex argument. The ability of a fluctuating grid to mitigate intermittency again depends on the technology, because some technologies do not necessarily lend themselves to load following, although some do. Lord Oxburgh: The French flex their big reactors for load following,

253 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) probably damaging them quite a lot. Dr Michael Bluck: They do. They would not necessarily choose to do that, but they would be better suited than large reactors perhaps, depending on the technology, to mitigating intermittency. Lord Oxburgh: Presumably the time constants of response are short because they are small. Dr Michael Bluck: That is right. They can be relatively short, but there are more complex and more innovative approaches to dealing with the sort of timescales that you want that to respond to. It does not have to be an SMR solution; there are other combinations of technologies that you could use with it. Professor Grace Burke: I agree with my colleague. While there may not be huge demand in the UK, the SMRs, even those based on gen III+, the light-water reactor design, have strong possibilities as an international player in the nuclear field, particularly for remote areas. Canada is a particularly well-suited candidate, as are countries in South America, in Africa possibly, and in some European countries. If the UK were to embark on this or continue to move forward on the SMR, I think it would stand a very strong chance of positioning itself as a major international player, an expert in the field, so I would encourage the work on SMRs. Lord Hennessy of Nympsfield: This ties in with the conclusion of the National Nuclear Laboratory’s small modular reactor feasibility study a couple of years ago, when they concluded, as you have, that this is a great opportunity for the UK to regain technology leadership and the ownership and development of all this. I do not know whether you accept this view, but I think that quite a deep psychological scar has been left on our nation since we ceased to be the manufacturer that we like to imagine ourselves to be. A particularly deep, scored scar is the loss of what we regarded in the 1950s and early 1960s as a very promising civil nuclear leadership in the world. Is there not a danger—I do not want to sound sceptical—of what the great Alan Watkins, the political commentator, used to call a new dawnism, and that those of us who are rather keen on a nuclear revival, and I would include myself in that, tend to fall into a kind of psychologically comforting sleeping bag: that this time it might be all right—we did it once, we led the world, we let it go for 20 years, this Select Committee never gave up on the case but many others did. Are we not all collectively succumbing to dawnism? Professor Grace Burke: I do not believe so, because with the state of knowledge that has been gained over the last couple of decades—even with the UK not being really active, particularly in the Gen III+ arena, as there is only one PWR here in the UK—now, internationally and through our linkages, we have come to a position where we can capitalise on our international collaborations, on the new expertise, and move forward in this area. Lord Hennessy of Nympsfield: What has to be there that is not there for that to happen? There is an air of tentativeness about all this, and a kind of alphabetical soup of all the oversight bodies. Where is the driver that this time will make the difference, so there is no more slippage?

254 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) Professor Mike Tynan: For nuclear? Lord Hennessy of Nympsfield: Yes, for the SMRs. Professor Mike Tynan: There are two things to consider with the SMRs, broadly speaking. The favoured models for quickest deployment at the moment are LWR and PWR derivatives. With them you could broadly meet the 10 to 12-year timescale, and we might have something operational by 2030. Who would argue that as part of a balanced portfolio of energy production in the UK it would not be a sensible thing to do? Two things would stimulate that. First, the SMR has to be economically viable and bring indigenous value to the UK. To put that into context, it would have to mean value derived from significantly cheaper energy prices, certainly cheaper than the current prices quoted for gigawatt-plus units, so SMR would need to deliver on that. It would have to create long- term, sustainable, high-value jobs. It would have to stimulate the UK supply chain, particularly for advanced manufacturing. It would have to provide intellectual property ownership for the UK. That would have to translate into value by export sales. One of the challenges is not to forget that the rest of the world might move with SMR—seriously competitive countries such as China could move with it—so SMR development, if you want to deploy globally, could be a first-mover opportunity, and if you do not move first you could be second and you will struggle to get into the market. That is a consideration. The second tranche of benefit is what I would describe as an economic transition to a low-carbon economy. SMR could also provide that. Indigenous economic value and economic transition to a low-carbon economy both sit in the Department for Business, Energy and Industrial Strategy, so it is clear where that would sit. If we cannot provide significant, long-term indigenous value from an SMR, the case is not made. The challenge for developers is to make that case. They are attempting to make that case through the competition. The other challenge is that if you are further down the line, and if it is government investment that we are talking about here, does government invest in long-term technology? I know there is an issue with gen IV technology, so that becomes a bit of a challenge. If we want to develop gen IV technology, is the money available to do that and to develop a current derivative of PWR that would help us in the energy challenge in the short term? Lord Oxburgh: Just to pursue that question, given that a lot of the advantages of PWR are that you can build off site and prefabricate, the economies come into the volume, do they not—the fact that you have lots of them? Professor Mike Tynan: Yes. Lord Oxburgh: Do you have any inkling of the sort of scale of deployment you would need to have for example in the UK for this to be a sensible activity and to provide the base for deployment in other countries? How many would you be looking for? Professor Mike Tynan: It is the second point that is important. If it was just an SMR for the UK market, I do not think that would be viable.

255 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) Lord Oxburgh: No. I am starting from the position that no one is going to buy your stuff unless you also deploy it at home. I am asking what you think is a reasonable number to be thinking of as the UK deployment on which you could build much wider deployment elsewhere. Do you have a view? Professor Mike Tynan: I could speculate that you would need at least 15 to 20 units minimum in the UK. Lord Oxburgh: Okay. That is the sort of feeling. Professor Mike Tynan: Yes. Baroness Young of Old Scone: I was looking at this from the other end of the telescope and starting with British energy. The Chairman: Do you have any interests to declare? Baroness Young of Old Scone: I should declare my interest as a chancellor of Cranfield University and a newly elected honorary fellow of the Royal Society of Edinburgh. The Chairman: Congratulations. Lord Oxburgh: No nuclear there.

Q6 Baroness Young of Old Scone: No nuclear there. Looking at the principles of the current Government’s energy strategy and at the potential development of SMR, how realistic is it that the SMR programme will get to a point where it is genuinely economically competitive in energy output? It is quite a long way away from that at the moment. Professor Mike Tynan: No. I think it is completely viable. If decisions were made now and we could get technology into generic design assessment, we could be through generic design assessment in 2021, 2022. Then, with appropriate investment, it is realistic to see units online before 2030. The big units might come online at Hinkley Point, Wylfa, Moorside and Sellafield in the mid-2020s at the earliest. I suspect that for the bulk of the unit it will be beyond that. The first unit might be online in 2026, 2027. I think that is very realistic and that the developer’s claim to be able to get this in the current wave of development has a solid foundation. Baroness Young of Old Scone: The only comparative costs I have seen on the cost of energy generated in that way have been comparisons with the larger-scale reactors. How about the rest of the energy market? It is pretty expensive energy. Dr Michael Bluck: That is a broader issue. It was said, when Hinkley C was being debated, that these appear to be very big numbers. As you said, there is a great degree of uncertainty in those numbers. As we look forward, everything that we are talking about are 60, 70 or 80-year programmes. In particular, it addresses your issue of new dawnism, as you called it. The short-term, more conventional designs, if you like—the PWR, the light-water reactor designs—are well-understood technologies. It is not a new dawn of some claim to new technology. Of course, we already make reactors of that sort of size for our submarine fleet. They are very different in nature, but the manufacturing challenges are

256 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) challenges we already meet. Some of the significant cost challenges of the very large reactors, the very big capital investments, are in part mitigated by the ability to run a production line of development, so you are tightly focusing skills on a single activity running along the production line rather than having to do this very inefficient thing of building something on site and moving everyone somewhere else. You have tighter control over consistency and quality. Quality is a big issue, as you have seen for the large reactor designs. These are all controllable things. The costs are much more controllable. I do not think there is the technological uncertainty, at least for light-water reactors, that there is for the more ambitious designs down the road. Of course, one possibility is to go for an ambitious design that leapfrogs the technology, but that is a hugely risky activity. It would probably be better to go with a more conventional technology that you have a high degree of trust in. You have some bound on the cost that would give you the capability further down the road. The Chairman: Lord Ridley, did you want to come in? Viscount Ridley: I thought that might be a good cue to go on to the next question. The Chairman: One point, to wrap up. Baroness Young phrased her question in terms of energy production, but as I understand from Professor Tynan we have to think very much wider than energy production. You talked about advanced manufacturing, presumably combined heat and power, chemicals, and the like. Presumably all these have to be put into the economic valuation if a case is to be made, and we must not restrict ourselves to thinking energy. Do I understand you correctly? Professor Mike Tynan: Yes, you do. The Chairman: Thank you. Lord Broers: Chairman, I have one final question on SMRs. What do you see the international competition being? I would see our most serious problem as being that we will think that we can do it in good old British time, and somebody else will do it in about a third of that time. Professor Grace Burke: The Department of Energy in the US has already embarked on an extensive programme funding SMRs, and I believe it has committed a total multi-year sum of about $452 million (2013)75,76. I would imagine that the US will move along quite merrily on that. Lord Maxton: What is the timescale for that?

75 This figure relates to the two advanced reactor designs being pursued by DOE-NE. 76 Furthermore, the DOE Office of Nuclear Energy has committed approximately $82 million cost-shared with two consortia for Advanced Nuclear Technology in 2016, which includes further development of two reactor designs: 1) X-Energy Xe-100 Pebble Bed Advanced Reactor (with BWXT, Oregon State University, Teledyne-Brown Engineering, SGL Group, Idaho National Laboratory and Oak Ridge National Laboratory); and 2) Southern Co. Services Molten Chloride Fast Reactor (with TerraPower, EPRI, Vanderbilt University and Oak Ridge National Laboratory).

257 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) Professor Grace Burke: They have already started the SMR development program (2013), and had allocated approximately $450 million. I am not certain about the end date on this and whether it is a 10-year programme or not.

Q7 Viscount Ridley: I want to take that leapfrog to generation IV technologies: molten salt, molten lead—that sort of thing. Before I do so, I declare that my only energy interest is in coalmining in Northumberland, but Lord Hennessy reminds me that coal has uranium in it, although at a concentration of less than 20 parts per million. The question is: should the UK be involved in the development of generation IV technologies? In particular, should that UK activity include the development of one or more test reactors? Professor Grace Burke: I believe that Generation IV reactors are fairly far off into the future. The price to be involved in this endeavour would be quite high, so I think it will require a lot of serious research funding to develop appropriate designs and the materials research that is needed to go with that. Viscount Ridley: Do we sit back and let the Chinese do it, then? Professor Grace Burke: There are activities going on in Europe and in the States, either via collaborations or partnerships. I believe there is a good route forward if the UK wants to be involved with Gen IV, but there is a long lead time on that (for successful completion). Professor Mike Tynan: There are two bets here. We can participate in existing gen III technology ownership through an SMR, but we are not going to achieve that through a gigawatt-plus reactor; they are designed and through licensing, and have their schemes. SMR allows us to participate in current activity. However, if the UK wishes to be a genuine technology owner, we will have to look 50 to 100 years hence. We simply must do that; there are no short-term decisions in nuclear. My answer to your question is a resounding yes, we should participate in gen IV reactors and, yes, we should develop a test reactor in the UK. That needs a decision that the UK will move back into technology ownership in nuclear and that it will seek to deploy that on a commercial basis around the world. That is the strategic decision that has to be made. As Grace says, that is not going to be cheap. It is a long-term investment and a real strategic move is needed to do that. The alternative, as you say, is that we are a nuclear nation in that we have nuclear electricity on our grid, so do we allow people to come here with their technology and we become excellent operators, maintainers and decommissioners and maintain a nuclear industry that is about a service industry rather than technology ownership? That is part of the debate that will go into the strategy, I think, with the Nuclear Industry Council. Do we move into technology ownership in the long term? My answer is yes, I think we should. Dr Michael Bluck: It is very easy to see gen IV, which is quite a distant technology, from the perspective of 2017. What it will not be, come 2040 or 2030, or whenever we embark on these things, is anything like what we see now. To make decisions based on current technology and the

258 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) challenges there, based on a technological status as we see it, is short- sighted. I agree with Mike that light-water SMR gives us a capability. Together with the co-ordination—we have also discussed those aspects— that is a good stepping-off point and a good step towards engaging in gen IV, or whatever generation is appropriate at the time, that meets these desires to deal with waste. Viscount Ridley: I have heard the argument put that if everybody is trained in light-water reactors there will not be good enough people to train them in molten salt reactors, for example, which is a very different technology. Dr Michael Bluck: Again, that is exactly why we need something to coordinate activity, so that, yes, we are doing light-water reactors but we also have an activity that early on may be more in the university sector in order to start thinking blue skies about some of these activities. That would clearly be an enabling technology. We need strategic oversight so that somebody can decide, “This is an activity that we wish to promote. We do not know where we are in it, but we need to be technologically prepared for it, and this is our light-water activity.” Materials activities are common. The only difference that we are talking about might be the speed of the neutrons and their various different aspects. The expertise, the ability to own microstructure and the effect that has on structural integrity, and all other technologies that Mike has mentioned that are beyond nuclear will be brought to bear. There is no reason why we should make an either/or decision. I would not want to choose a gen IV technology today. Professor Grace Burke: And there are no materials available for those yet. There are severe materials challenges for aspects of Gen IV reactor systems. The Chairman: We are coming to the end of the session. Lord Broers has the final question.

Q8 Lord Broers: What effect will leaving Euratom have on the UK’s participation in long-term nuclear research and development projects? What relationship should the Government seek with Euratom after the UK has left? Professor Grace Burke: I can probably take the first stab at that question, as a non-UK citizen. It is disheartening that the Government are going to withdraw from Euratom, as Euratom predates the EU and the common market. We have built up a lot of collaborations and common policies and shared a lot of expertise with Euratom. It will be a negative on our research environment. It will probably be possible to engage in a similar manner to non-European countries such as the States, Canada and Japan. However, it is a negative. The Chairman: On the Euratom issue, as the Brexit Bill goes through Parliament we will have an opportunity to try to get greater clarity from the Government, which is clearly much needed. It is clear that since Euratom was originally formed we have had something called the European Union (Amendment) Act 2008, which joins the European Union and Euratom at the hip.

259 Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), Professor Grace Burke, University of Manchester and Centre for Nuclear Engineering, Imperial College London – Oral evidence (QQ 1-8) The Leader of the House, in her speech yesterday, which opened the debate that is being conducted at the moment, said, “Our future relationship with Euratom will be a matter for negotiations, and the Prime Minister has made clear that this is a priority area”, and she went on to say how important it is to continue to have effective arrangements for civil nuclear co-operation with our international partners. I think we have an opportunity, during the Committee stage, to try to get greater clarity without necessarily tying down the negotiating hand. The trouble with this particular announcement, which came in the Explanatory Notes on the Bill, is that no one quite realised that if you left the European Union it followed automatically, because of the 2008 Act, that you had to leave Euratom. When you start mentioning some of the other implications, such as being subject to EU law and therefore to the European Court of Justice, you realise that you are in something of a complex area here, and it is not just a question of making sure that we remain collaborative members of Euratom. Lord Oxburgh: May I ask one quick question? Which of the UK nuclear interests interact with Euratom? Where are the Euratom interactions? Professor Mike Tynan: Fusion is the biggest interaction and potentially the programme that could suffer most. The Chairman: There was great consternation at Culham when this announcement was made. I am not sure that they are any the wiser as to what relationship is likely to be developed. That is a negotiating matter. Alas, this Bill is not going to solve it, but we might be able to elucidate the issue. We also have an opportunity in this Committee to ask the Minister further on that, but it is a worry. Dr Michael Bluck: It has an impact on the transport of materials. With greater decommissioning and waste, we are not fully geared up to where we want to be on reactor engineering, and that will require investment. There will be facilities that we do not have, and that may involve the transportation of materials to and from facilities in Europe that we use. The Chairman: This is one area where greater clarity would be nothing but helpful. We heard yesterday how we must not be tied down on negotiating, but given that there is a very clear expression of will to continue our links with Euratom, it would be enormously helpful to spell out where they would like to be on this issue. There we are. I am afraid we have run out time. This has been a helpful start to our inquiry. If there are any issues you would like to come back to us on, which you felt you had not had an opportunity adequately to answer, please feel free to come back. You will, of course, get the transcript for minor alterations if we have made any errors. Could I thank our three witnesses very much for helping us this morning? Thank you.

260 Nuclear Decommissioning Authority (NDA) – Written Evidence (PNT0036)

Nuclear Decommissioning Authority (NDA) – Written Evidence (PNT0036)

Introduction 1. The Nuclear Decommissioning Authority (NDA) is an executive non- departmental public body (NDPB), sponsored by the Department for Business, Energy & Industrial Strategy (BEIS), and created through the Energy Act 2004. For some aspects of our work we are also responsible to Scottish Government. Our core objective is to ensure the safe, secure, efficient and cost effective clean-up of the UK’s nuclear legacy, the largest and most important environmental restoration programme in Europe. The progress we have made so far can be attributed in no small measure to years of research and development and the introduction of innovative technologies.

2. Across the NDA estate there are currently a diverse range of facilities and the characteristics of our 17 sites vary significantly. At Sellafield, our largest most complex and challenging site, we undertake fuel reprocessing (scheduled to be completed by the end of 2020); the receipt, treatment, packaging and storage of nuclear materials and radioactive wastes and decommissioning the nuclear legacy. The technical challenges at Sellafield are diverse; Research & Development (R&D) and innovation have the potential to enable decommissioning to be delivered faster, safer and cheaper. Across our estate the organisations most involved in R&D are Dounreay Site Restoration Ltd (DSRL), Low Level Waste Repository Ltd (LLWR), Magnox Ltd, Radioactive Waste Management Ltd (RWM), Sellafield Ltd and NDA itself.

3. NDA is also responsible for implementing geological disposal as outlined in the 2008 Managing Radioactive Waste Safely (MRWS) White Paper. This is delivered through our subsidiary RWM. R&D will be a key enabler for implementing geological disposal. RWM is required to undertake further research during the geological disposal facility development process to, for example, refine facility design and construction; improve understanding of the chemical and physical properties and interaction of emplaced waste; address specific issues raised by regulators; and support the development of site-specific safety cases.

4. NDA’s interest in R&D focuses on our mission that involves the management of spent fuels and nuclear materials, integrated waste management and site decommissioning and remediation. We are not involved in broader nuclear energy matters. It is important that our knowledge and expertise is made available to the UK’s broader nuclear programme. We encourage sharing and gaining access to global good practice, experience and information about innovative technologies and approaches (e.g. robotics, thermal treatment, graphene).

NDA R&D Strategy and Programme 5. NDA’s responsibilities in relation to R&D are clearly laid out in the Energy Act 2004. We are required to promote and, where necessary, carry out

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research in relation to our primary function of decommissioning and clean- up. Our R&D strategy is that, where possible, R&D is undertaken by our SLCs, subsidiaries and their supply chains as it is an integral part of delivery plans. Where necessary, the NDA itself maintains a strategic R&D programme. Overall strategic coordination for R&D across our remit is provided by the NDA.

6. Investment in R&D develops the key technologies and technical skills that are critical for the continued delivery of our mission over the next 100-plus years. We are, therefore, a significant and substantial funder of nuclear R&D. From 2010 to 2015, our SLCs spent approximately £85 million each year on R&D. In addition, the NDA commissions R&D projects directly, totaling approximately £5 million per year.

7. We invest funds directly into R&D projects that can:

 Inform our UK-wide strategy (e.g. plutonium disposition);  Deliver innovation across multiple sites (e.g. remote decommissioning technology);  Maintain and develop vital technical skills (e.g. radiation science).

8. Our strategic R&D programme is currently delivered through a variety of contractual routes including the Direct Research Portfolio, NDA PhD Bursary Call and innovation calls in collaboration with Innovate UK (see https://www.gov.uk/government/publications/nda-research-and- development-5-year-plan-2014-to-2019 and https://www.gov.uk/government/publications/sbri-funding-competition- integrated-innovation-for-nuclear-decommissioning for further details). The development and maintenance of vital technical skills is delivered through R&D that either also informs strategy or delivers innovation. Key aspects of our overall approach to R&D include the NDA’s independently chaired Research Board and the Nuclear Waste and Decommissioning Research Forum (NWDRF). The latter is a key communication channel within the UK nuclear decommissioning industry to identify common R&D needs, risks and opportunities, share good practice and work collaboratively on innovation.

9. We have a flexible approach that seeks to encourage collaboration and we work in partnership with other public and private organisations (e.g. Innovate UK, Engineering and Physical Sciences Research Council) to increase funding that may be made available. We fund academic studies at many universities to support maintenance of a diverse technical skills base. Our innovation portfolio has also supported programmes particularly aimed at encouraging small and medium-sized enterprises to contribute. A strong and vibrant supply chain is essential not only for the success of our mission but that of the UK’s new nuclear build programme.

10. NDA recognises the importance of making use of international experience to help deliver its mission. We support international R&D projects and initiatives where we can see opportunities for skills development and transfer of knowledge and technology.

Responses to questions asked by the Committee

262 Nuclear Decommissioning Authority (NDA) – Written Evidence (PNT0036)

Q1. Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities including international collaboration and, within the UK, for cost- effective and efficient articulation of the different elements of nuclear work? 11. Setting of policy is the responsibility of Government. Civil nuclear activities within the UK involve a wide range of activities including the enrichment of uranium, manufacture of nuclear fuel, generation of electricity from nuclear reactors, use of medical isotopes, development of new nuclear technology, collaboration with international nuclear organisations, fundamental academic research and nuclear decommissioning. As with many other sectors, these activities are covered by a number of different Government departments, including BEIS, DoH, DfE, DIT and FCO. NDA believes that BEIS should take overall responsibility but with support from other Government departments. The development of civil nuclear policy requires specialist skills and knowledge. The NDA, through its waste management and decommissioning expertise and experience, plays a leading role in the UK’s nuclear sector and has many of the necessary specialist skills and experience to provide advice to Government. An example is where NDA provide advice to Government on policy for management of the plutonium material that NDA owns.

Q2. The Government’s industrial strategy green paper discusses a possible ‘sector deal’ for the nuclear sector. How might the nuclear sector benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal? 12. Many of the skills and capabilities required for civil nuclear activities are common to multiple parts of the nuclear sector including defence. A nuclear sector deal could help initiate new activities that individual components of the nuclear industry would be unable to fund individually and help foster a culture of innovation. The nuclear sector already has initiatives supporting many of the key pillars of the Government’s Industrial Strategy Green Paper e.g. Developing Skills; Investing in Science, Research and Innovation. A nuclear sector deal might include the development of nuclear specific skills and facilities for managing radioactive material. The Nuclear Industry Council (NIC) has recently been reinvigorated and should provide this leadership role.

Q3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely? 13. The NDA does not have a view on the efficacy of SMRs, however, we will continue to help facilitate the development of viable alternative opportunities that have the potential to fill the economic gap left by decommissioning activities in communities around our estate. From this perspective, SMRs could potentially be deployed on or adjacent to reactor sites that are currently undergoing decommissioning or have been remediated. This could accelerate the need to remediate the site, generate income from the land sale and also replacement employment for the local population. The development, operation and decommissioning of SMRs will, however, generate some radioactive waste and this will need to be appropriately managed.

263 Nuclear Decommissioning Authority (NDA) – Written Evidence (PNT0036)

Q4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

Q7. Should the UK be involved in the development of Gen IV technology? If so, what funding and support should be put in place to place to help the UK establish a world leading position? Should our activity include development of one or more test reactors? 15. The NDA does not have a view on the development of Gen IV reactors, however, we will continue to help facilitate the development of viable alternative opportunities that have the potential to fill the economic gap left by decommissioning activities in communities around our estate. From this perspective, Gen IV reactors could potentially be deployed on reactor sites currently undergoing decommissioning. This could accelerate the need to remediate the site, generate income from the land sale and also replacement employment for the local population. Similarly Gen IV reactors could potentially use some of the civil separated plutonium and uranium generated from reprocessing and therefore we maintain an interest in developments. The development, operation and decommissioning of Gen IV reactors will, however, generate some radioactive waste and this will need to be appropriately managed.

Q8. Is the NNL fulfilling its remit appropriately? Can it deliver the required research to support the UK’s future nuclear energy policies? How does it compare to equivalent organisations in other countries? 16. From an NDA perspective, NNL makes a significant contribution to the R&D required to underpin the successful delivery of the NDA decommissioning mission. The NNL’s remit includes providing technology and technical advice across the full UK civil nuclear fission programme. It is delivered through a combination of customer funded projects (including projects funded by the NDA and our estate) and internal R&D projects funded through reinvestment of revenue. Our understanding is that the decommissioning programme is the majority funder of NNL projects at this time. It can be challenging for NNL to prioritise between their different streams of work including customer funded work (including that for government entities) and programmes delivering advice to government. NNL have key capability in many technical areas but the totality of UK technical capability is broader than their current capabilities. To deliver their remit they will need to work in partnership with other national laboratories (e.g. National Physical Laboratory in the UK, Pacific Northwest National Laboratory in the USA) and the wider nuclear supply chain.

264 Nuclear Decommissioning Authority (NDA) – Written Evidence (PNT0036)

17. There are multiple potential future reactor designs and to support all of the options would require very significant investment in R&D. Most countries have therefore prioritised certain reactor designs and technologies based upon the level of their ambition with respect to nuclear energy. The NIRAB proposed R&D programme focussed on gaps in the current nuclear portfolio to support future nuclear energy policies, provided this UK prioritisation and was based upon a combination of both potential benefit to the UK and existing UK capability. The scale of this R&D programme is significantly in excess of the amount that NNL could deliver through reinvestment of revenue and requires skills and capability greater than NNL’s alone. A customer funded R&D programme involving NNL, academia, the UK supply chain and potentially wider international partners would be required. In the majority of countries, the Government acts as the customer and funder for such programmes due to industry’s reluctance to fund such long-term opportunities. If such a programme is not forthcoming in the UK it may be more appropriate to reduce NNL’s remit to focus on existing customer needs rather than attempting to keep options open. In other countries National Laboratories are not traditionally revenue generating entities but rather entities that generate skills and knowledge that are utilised by the wider supply chain to generate revenue.

Q9. Is the remit of the National Nuclear Laboratory (NNL) suitable to provide research and development support to the UK nuclear sector? Is the current funding and governance model for the NNL appropriate to its role and remit? 18. The NNL’s remit is currently broader than the existing UK nuclear fission sector. It will be difficult for them to maintain capability across the full remit without additional funding. There are three core components of NNL’s role:

 Technical advisor to Government and stakeholders;  Delivery of national programmes; and  Stewardship of UK technical capability.

19. From an NDA perspective, NNL makes a significant contribution to the R&D required to underpin the successful delivery of the NDA decommissioning mission. This is particularly the case at Sellafield, where for historic reasons, they have a deep understanding of both the operations carried out on the site and the challenges associated with decommissioning it. NNL have many highly trained and experienced scientists and access to facilities for carrying out R&D with radioactive material, some of which are unique within the UK. Many supply chain companies do however have strong technical capability with regard to nuclear decommissioning and contribute significantly to the NDA estate R&D programme. In many cases the supply chain directly competes with NNL for R&D projects. As NNL receive no direct Government support, NNL must maintain UK technical capability either through customer funded projects or through re-investment of revenue. With regard to nuclear decommissioning, these issues cause a potential conflict of interest and limit NNL’s ability to act as an independent technical advisor and as a collaborator with the wider nuclear industry for the development of new decommissioning technology. A compounding issue in the UK is that many of the current experimental facilities were scaled according to operational requirements or ambitious predictions of future R&D opportunities. This results in a high cost base and the need for NNL to

265 Nuclear Decommissioning Authority (NDA) – Written Evidence (PNT0036)

maintain and compete for significant amounts of operational projects. A funding and governance model which encourages collaboration with UK industry, removes some of the commercial drivers but maintains the requirement to deliver both high quality R&D and value for money would be useful. The approach adopted by BEIS with the National Physical Laboratory (NPL), which involves a portfolio of Programmes monitored by Programme Expert Groups, may be worth further investigation.

Q10. Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved? Who has oversight of the whole nuclear R&D landscape, including international activities? 20. Co-ordination of nuclear research activities is important to ensure good use of public money, advancement of science and knowledge in topics that will enable the nuclear portfolio to be delivered and to foster collaboration and innovation across the relevant organisations. One of the roles of NIRAB (as set out in their terms of reference) was to foster greater cooperation across the whole of the UK’s nuclear research and innovation capability, portfolio and capacity. This was achieved in part by the diverse membership of the Board, comprising senior individuals from Government funders, industry, national laboratories and academia. With the disbandment of NIRAB, co- ordination between the bodies involved in nuclear research may be less efficient and potentially less effective. Without NIRAB, there is no single group covering this remit although there are bodies covering smaller remits (e.g. NDA Research Board covers nuclear decommissioning R&D in the UK) or single functions (e.g. Cross Government Civil Nuclear Sub-Group). Even with NIRAB, maintaining an oversight of the whole nuclear R&D landscape is challenging due to a combination of the breadth of the activities involved, overlaps with other sectors (e.g. robotics and autonomous systems) and commercial sensitivities. A periodic review such as the Civil Nuclear R&D Landscape report with commentary from a body such as NIRAB could be part of a future approach. We would be supportive of involvement in a successor to NIRAB.

Q11. Was the Nuclear Innovation and Research Advisory Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be? 21. From an R&D perspective, NIRAB involved senior individuals from organisations covering the full remit of the UK civil nuclear industry including Government funders, industry and academia. As such it was able to discuss key issues and make recommendations based upon a consensus across the civil nuclear sector. It would not have been able to deliver its advice to Government without the support of the Nuclear Innovation Research Office (NIRO). NIRAB was able to prioritise gaps in the overall portfolio as well as ensure that existing programmes were appropriately focussed and supported. Whilst NIRAB was able to meet most of the requirements of its terms of reference there is still work to be done to meet the requirement to oversee the development of an international engagement strategy for nuclear research and innovation in the UK. Much work in this area is already underway in the absence of an overarching strategy. Overall NDA found NIRAB a useful and efficient mechanism for engaging with multiple organisations and relevant individuals. We found both the external challenge and subsequent support of our R&D programme

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useful. We would recommend a similar Board be established with similar remit and role and with support from a similar organisation as NIRO.

24 February 2017

267 Nuclear Decommissioning Authority (NDA), Office for Nuclear Regulation (ONR) and EDF Energy – Oral evidence (QQ 20-30)

Nuclear Decommissioning Authority (NDA), Office for Nuclear Regulation (ONR) and EDF Energy – Oral evidence (QQ 20-30)

Tuesday 28 February 2017

Watch the meeting

Evidence Session No. 3 Heard in Public Questions 20 - 30

Examination of witnesses

Dr Adrian Simper OBE, Technology and Strategy Director, Nuclear Decommissioning Authority (NDA); Dr Richard Savage, Chief Nuclear Inspector, Office for Nuclear Regulation (ONR); John Donald, Superintending Inspector, ONR; Xavier Mamo, Director R&D UK Centre, EDF Energy.

Q20 The Chairman: Welcome to the second day and third evidence session in our inquiry on nuclear research and technologies. I alert you to the fact we are being broadcast. Would you, please, for the record, introduce yourselves, starting with Mr John Donald? If you would like to make an introductory statement, please feel free to do so. John Donald: My name is John Donald from the Office for Nuclear Regulation. I am a superintending inspector and lead the team that coordinates regulatory research for ONR and interacts with the wider UK nuclear research teams. I have no opening statement. Dr Richard Savage: Richard Savage; I am the chief nuclear inspector with the Office for Nuclear Regulation. I am the regulatory head of ONR. Dr Adrian Simper: I am Adrian Simper; I am the strategy and technology director for the Nuclear Decommissioning Authority. The Nuclear Decommissioning Authority is the non-departmental public body accountable for cleaning up the UK’s nuclear legacy, on which we spend about £3 billion a year of public money. We have a programme of 120 years in duration, and about £120 billion of total liability. So R&D is critical to us. We do not believe that we would be able to complete the mission cost-effectively without the innovations that R&D are able to bring, so R&D is a key part of our strategy. We are very focused, however, on our mission—decommissioning and clean-up. And because we are focused on our outcomes, in that regard, we are also needs-driven in our R&D approach rather than speculative. That colours the approach we take. Xavier Mamo: My name is Xavier Mamo. I am with EDF Energy and director of research and development. Research and development within EDF Energy is a very important aspect. We are investing around £40 million a year, obviously a big part of it targeted towards nuclear research

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but also covering the whole range of our activities from renewables to customer services. The Chairman: We are particularly grateful to Mr Mamo. At the last session we identified a need to hear more about the experience in France on nuclear research and we thought that EDF Energy might be able to help us at short notice. I am most grateful to you for joining the panel at, indeed, a few days’ notice. Thank you very much. I am going to start with a general question. You may well know that this Committee has looked at nuclear research over the years with increasing concern about the lack of continuity in our research base. Indeed, I think the NIRAB committee was, in part, a response to our 2011 Committee report. We were asking for a coherent and consistent long-term policy. Do the Government have such a policy at the moment in the United Kingdom? Who would like to answer that? Dr Richard Savage: Shall I make a start and then the others can chip in? I think, first, from a regulator’s perspective, we are an independent regulator so our focus is on ensuring the safety and security of the nuclear industry. In doing that, we support government policy and have a role in advising government as well, but it is worth being clear that it is not for ONR to set policy. From my perspective, I see policy in government set in a number of areas, with a number of departments that have an interest. Perhaps there is merit in a single government department providing an overall strategic policy co-ordination role that would provide the coherent focus that might be helpful. There is something to be had here and maybe a focus on a lead government department in this area would have some merit. That is my opening thought. Dr Adrian Simper: Government aspires to have a policy in this area and I think many of the component parts are, in fact, in place. We look to BEIS as the lead department to co-ordinate nuclear across government. In putting together a policy for nuclear, however, in some ways it feels slightly strange. Nuclear is not an outcome in and of itself; it is a means. Is the policy an energy policy with nuclear as a component part? Is it an industrial capacity capability—a supply chain capability—with nuclear as a part of it? Is it about the maintenance of a strategic capability? Is it about the UK’s position on the global stage and wanting to be seen as a full- scope global player? To say that we should have a nuclear policy first begs the question of what that policy is to achieve in terms of those outcomes. There is opportunity for further clarity and co-ordination between those potential outcomes. They are not exclusive, but I think a policy needs to be clear on what it is trying to achieve at the end of the day. The Chairman: We will probably come back to the issue as to what should happen after NIRAB to provide some of this long-term policy advice. Baroness Young of Old Scone: Does Mr Mamo want to comment on how his experience of that particular issue has differed here in the UK from other places where he has worked?

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Xavier Mamo: I can probably give a bit of a sense of the way it is organised in France—coming back to the introductory question. I think the difference with the way research for nuclear in France is organised is that, first, there is important involvement from the French Government, on one side, and, on the other side, there is a slightly limited number of actors and players delivering this research and development programme. On one side you have the strategic governance. That is led by a nuclear policy council, which is chaired by the French President of State and brings in Ministers and representatives from the industry, with the clear objective of setting out strategic orientation and priorities for the nuclear sector as a whole. In support of this council there is a nuclear sector strategic committee which brings together all the players and actors in the nuclear sector. It is also chaired by French Ministers, with missions around employment, activity, how to structure the nuclear sector, innovation, research and development and skills, through working groups to build up the agenda and priorities on that. In terms of the operational organisation of the research programme in France, the overall budget for research is roughly €1 billion. Half of it is funded directly through government funds and the other half through private funds, so obviously EDF, AREVA and others are funding this. It is then delivered with one central actor, the CEA—the Centre for Atomic Energy, which manages half of this €1 billion in delivering research and building up skills. There are about 4,000 people working within the CEA. There are then four other actors supporting the delivery of the research programme: EDF, as a research programme managing on its own; AREVA as well; and then some other public players, including IRSN, the technical arm of the nuclear safety body, and ANDRA, which looks more at waste and decommissioning and is running part of the research on that as well. CNRS is a public body linking with academic partners as well, so there is a big difference there; it relies less than the UK on academia and existing partnerships but CNRS is providing that. That is the whole very high-level picture of the way it is organised in France. Lord Oxburgh: Do those different groups performing research interact with each other and, if you like, informally divide up the research responsibilities? Xavier Mamo: They do. First there is a road map that identifies key milestones. Lord Oxburgh: Whose road map? Xavier Mamo: It is the road map owned by the strategic body. Lord Oxburgh: A government road map? Xavier Mamo: Exactly—a government road map that identifies areas for investment in experimental reactors, including gen IV investment. The players position themselves and then there is some co-ordination. One of them is the tripartite institute that brings together CEA, EDF and AREVA to have an operational co-ordination of how the research is delivered and meets those milestones as part of the road map.

Q21 Lord Hennessy of Nympsfield: I have a question for the British colleagues. It is nearly 72 years since Clem Attlee, at the beginning of his

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Government in August 1945, set up a Cabinet committee to do exactly what we are talking about: long-term consistent policy. What is it about us Brits that makes it so difficult for us to do it, even now, after 72 years of practice? Dr Adrian Simper: That is a big question. My immediate response is, compared to my colleagues in France, about the view on the extent to which the state needs to be involved in these kinds of activities. When you look at very long-term projects, they are very capital intensive and pose manageable but, none the less, significant risks that need to be properly managed. There is a whole bunch of features which, unavoidably, means that if you want to have a co-ordinated approach to be successful, the state has to have not insignificant involvement. The UK went through a period of believing that the market could solve all ills, and I do not believe the market could particularly solve the ills of strategic coherence within the nuclear sector. That would be my personal response. Lord Hunt of Chesterton: I have interests in that I am a fellow of the Royal Society and a consultant at Tokamak Energy. Mr Mamo said that there was one agency which was, as it were, supreme above all others, the CEA. If you look back—and Lord Hennessy knows about this—there used to be some very large organisations such as the UK Atomic Energy Authority, and that has been wound down. Do you think, in your recommendations or thoughts for the future, that there will be an attempt to reinvent or marshal a UKAEA approach? Dr Adrian Simper: I would cite some of the work by Gordon Mackerron, for example, or others. There are differences of opinion as to the extent to which the UKAEA focused on building that domestic capability, as opposed to taking what was available on the market, was successful. There has been a big debate about why we ended up with AGRs versus PWRs in the UK—I will not rehearse that here. I do not think we are in a position to make recommendations in that regard. It is a really hard balance to take all the good things that the market and competition, et cetera, provide and balance it with the stability and coherence that state intervention can provide, and get that right so that you are able to take big decisions and have coherence, but you also do not end up drinking your own bathwater and ending up in a parochial cul-de-sac in some of these areas. I think that is very hard. I am glad that it is not my decision.

Q22 Lord Oxburgh: In a way, that discussion moves us into the next topic. We have quite limited co-ordination between the varied performers of nuclear research in the UK. Do you think that it would be advantageous to have more co-ordination there? If so, how might that be achieved? Dr Richard Savage: It runs on from the previous conversation quite nicely, I think. I would sum up the discussion we have just had as the balance between competitive drivers and state stability, for me—which goes back to your 70 years and why we have not got it? It is that sort of thing; competing drivers have caused us difficulty in engendering that strategic stability and co-ordination. ONR very much needs research to support our independent regulatory decision-making, and I suppose we are quite small players in our demands. My observation of where we are supports the conversation in that we have pockets of some really good,

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tactical co-ordination of research, but we start to have difficulties in terms of their strategic co-ordination—and that is where the real benefits are. We could probably all look at the benefits in terms of driving efficiencies, ensuring we do not have overlaps and covering gaps. You could look at the benefits of strategic co-ordination and intuitively we would recognise that they are there. In our own small way, as a regulator, we co-ordinate our research activities with industry and academia, and there is open disclosure about what that is and what the outputs are. Individual organisations will be behaving in a similar way and in a much more significant way than ONR is able to, but it does not give that overarching, strategic co-ordination which I think is what you are driving at. John Donald: From what we can see, there is a lot of good, competent co-ordination at a tactical level. If you look at the NDA Research Board, the Nuclear Waste and Decommissioning Research Forum, the Nuclear Universities Consortium and the national nuclear users’ forum, there are lots of pockets of co-ordination. Collectively, the only place they ever met to co-ordinate or collaborate was, effectively, NIRAB in the last three years. They could work in the same areas and not know about it, or there could be gaps between them and they would not know about them, either. It is also very hard for a small player like we are to try and identify research projects and check that they are not being done somewhere else. It is quite inefficient for us right now having to go round and chase everybody to make sure they are not doing something that we think needs to be done before we then let contracts. You can see the same thing in the way the money flows as well. If you think about research following the money, you have the NDA pot of money, you have the research councils’ pots of money, you have EDF and some of the other nuclear utilities each doing research as well; there is quite a lot of funding for different bodies. They tend, again, to co-ordinate at a tactical level what they are doing but there is no overarching view of it all. Of course, you have the recent BEIS initiative with Innovate UK. There are lots of different strands of money coming in and local co- ordination for each, but the overarching piece does not seem to be there. In our written evidence we thought that it would be a cost to produce and provide that but the benefit from it would probably overplay the cost involved in creating that collaborative environment. Lord Oxburgh: I guess you are saying that NIRAB, while it was still extant, was doing a useful job in this respect. John Donald: Within its terms of reference it was doing what it could, but its terms of reference did not include to fully co-ordinate UK research. It helped produce collaboration but it was not constituted to really develop co-ordination or international co-ordination. It did not do either of those things. It did them to the extent that it could, but it was not driving that agenda; that was not its primary function. Its primary function was more about generating forward tracts of work that needed to be done and advising government where that funding should go and how that should be achieved—which it has done very well.

Q23 Lord Mair: Can I ask you about skills? What do you think the Government should be doing? Is there sufficient support for training for

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future skills? Is there a potential problem here because of the lack of continuity on our nuclear programmes over the last few decades? Is there a difficulty with skills? What should be done about that? Dr Richard Savage: I will make a start. I am sure Adrian will make a comment. It is fair to recognise that capacity and capability in the nuclear sector is a challenge. We have, if you like, a resurgent nuclear programme and that is a challenge for the regulator as well as for the industry. I see some real movement over recent years. With the National Skills Academy for Nuclear and collaborations with industry, the supply chain and ourselves, there has been real movement and innovative approaches to bringing skills through. As a regulator, we know it is only small in terms of the sector, but we now take on and train graduates and apprentices—which has not been our traditional way of building the capability of the organisation. But it is proving very effective in building the capacity and capability of the organisation. These activities support the expansion in the nuclear programme. Today, the initiatives that you see ongoing are addressing the demographic challenge. The question for me is: would it be sufficient to support major growth? If you look at the aspirations, potentially, for new build, there is significant growth in that area. Are the initiatives showing some real progress? Are they sufficient? That is a question mark for me, I guess. Lord Mair: Are you, in fact, saying that there is a problem? Dr Richard Savage: There is a lot of initiative there and the active collaborations, particularly through NSAN and advanced manufacturing facilities, are bearing fruit, but there is potentially a significant expansion in the nuclear sector in the UK and our efforts in this area need to be redoubled, I suppose. It is good but more is needed—that is how I would sum up what I am saying. Dr Adrian Simper: If I could add to that, from the NDA’s perspective of a 120-year mission—and in nuclear, which is relatively specialised—we cannot rely upon the market to supply the skills that we will need. NDA believes that interventions are required and is supportive of all the things Richard has spoken about, and we participate in them. If nuclear develops as some of the projections have it, we will have a significant skills shortage. The Nuclear Industry Association and others have analysed that and the numbers are available. Therefore, we need to have continual attention on this matter and look at our interventions and whether they are succeeding or not. I am pleased to see the increasing number of apprenticeships. All those things are good; the direction of travel is good; but we will have to see how it develops and be prepared to make future interventions. One observation I would make, though, is that, when we talk about R&D and the higher end of science of technology, there is no doubt that R&D is very useful for skills development. Doing R&D, is nothing like being involved at the bench doing the science, to really understand the underpinning of the sector you are working in. It is no surprise, I do not think, that in a technical area such as nuclear many of the senior players in the industry started in R&D. The NDA’s chief executive started, as I did, in the R&D department with BNFL. But we need to be clear about whether

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the primary purpose of R&D is to produce skills or produce technological advancement. At times I worry that too much of the conversation about R&D focuses on the skills output, which is important, at the expense of focusing on the technical advancement, which of course is equally important. The Chairman: Would you like to comment specifically on an observation in the NIRAB report that came out this month, which says that the number of people in industry, national laboratories and universities working on research into advanced reactor systems and fuel fabrication remains very low? Dr Adrian Simper: I think that would go exactly to my point, which is that probably that level of work is the right level of work, to produce people out of the back end of it who have skills and knowledge in those areas and are technically aware in those areas. It is not sufficient to produce a new technology. Lord Hunt of Chesterton: One aspect of the question of skills, and so on, is high prestige. If I may say, there are not very many universities which have the high prestige that, let us say, aerospace has, or some other areas. In France, CEA has a very big presence which, as it were, enables programmes and professors; it is just up there. As you say, it requires skills, high research and, also, high prestige. I used to be head of the Met Office and all universities were scrambling to, as it were, raise that aspect of their work. I wonder whether Mr Mamo could comment on how you could contribute to raising the whole profile. Xavier Mamo: It is about playing to strengths. The systems are different but there is strong expertise in the UK, and it is about how we leverage that and make it visible. I guess further co-ordination could probably help identify clearly where the strengths are. We have seen some moves in that area with the creation of hubs, such as the South West Nuclear Hub. We have a very good experience with the University of Manchester, where we have a modelling and simulation centre where we bring in some of our staff and the PhD students as well—leveraging the university as well. There are different sets of good examples in a co-ordinated way. UKRI may have a role in providing some co-ordination in that regard which will raise that visibility and attractiveness overall. Viscount Ridley: I want to press Dr Simper on his distinction between R&D producing skills versus R&D producing breakthroughs, if you like. I think quite an important issue is whether or not the work on existing technologies inevitably comes at the expense of training people who are good at the next technologies. In other words, if we were to get excited about generation IV technologies—and this is trespassing on a later question, I know—would we not have to tear up the rulebook and stop training people in PWR technologies? Do we not have to think afresh if we are going to leapfrog in some of these areas? We cannot do both. Dr Adrian Simper: These thoughts are barely formed, so I reserve the right to change my mind later! I would say that, in terms of skills development, in many ways it almost does not matter what you are working on as long as it is broadly relevant. Producing people who understand how these systems work in a deep, fundamental way—

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understand the science of these things—whether you are working on a PWR or a BWR or a next generation reactor. If you are doing a PhD you are looking down a straw at it anyway; you have such a narrow focus that it does not really make that much difference. From a skills point of view, I do not think it matters. However, if you want to develop a new technology, you need to set out your vision that you are going to develop a new technology, and that is your focus. The outcome of that new technology rather than, “We understand a bit more about material science; we understand a little bit more about this or that”—that is all good stuff, but I do not think that it produces breakthrough technology. Viscount Ridley: At the end, Kodak was doing wonderful research on the next generation of film when it should have been thinking about digital. Are we at risk of doing that? Dr Adrian Simper: Quite. John Donald: I would probably answer it slightly differently, in that when you look at some of the innovation projects that NDA has launched recently where they are challenging people to put a machine inside a cell, decommission it with artificial intelligence on board and put it into three boxes, high, medium and low, walk away and leave it to do it for a couple of years, come back and it is all done—that is the conceptual challenge. That really tests and challenges innovation across all of the engineering disciplines, and that is the kind of area where we are getting a lot of good value right now. That is technology independent. It does not really matter what technology we go for, whether it is gen IV, BWR, PWR or any other form of reactor technology or chemical engineering system. It does not really matter in terms of those integrating all the disciplines and getting something good, new and innovative. Dr Adrian Simper: Thank you very much, John. That is exactly my point, made much better than I did. It is the focus on the outcome which drives that innovation. Everybody uses the space programme, but nobody said, “Let’s develop new rocket technologies”; people said, “Let’s put a man on the moon”. That pull creates the development of the technology, in the same way as our competition that John referred to. The vision is that you put the autonomous systems into the radioactive facility and it sends you a text when it is all decommissioned and in the boxes. That is what drives the technical innovation, rather than saying, “Invent me a better robot or a better camera—or a better whatever”. Dr Richard Savage: Just to add another dimension, building on the point about prestige earlier, part of this is also about the motivation of young people. The work Adrian is talking about, the clarity on where we are going and what the output will be and having the structure and funding to work on that, is very motivational for young scientists and engineers. In the work we are doing, bringing young graduates into the sector and into the organisations, it is interesting talking to the young people about their motivations. They are not intuitively what I might expect. A recent example for me was about green energy. “Why are you interested in working in the nuclear sector?” “Because it is green energy and I see a future for that”. A significant majority of individuals respond with that answer. It would not be my intuitive response; it is not what I was thinking when I started in R&D many, many tens of years ago. It is that

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prestige, that motivation and having the programmes that draw individuals through that provide the skills you need for whatever they are needed for in the future.

Q24 Baroness Morgan of Huyton: I have a more detailed question on a particular set of relationships for Dr Simper. Can you talk to us briefly about the relationship between the NDA, Sellafield and the NNL; how well or not that works at the moment and how it could be improved? In particular, is it value for money? Are we right that, in a sense, there is a management feed between NDA and Sellafield and the same between Sellafield and NNL? Is that sensible? Is it good value for the taxpayer? What are your views on how that could be improved? Dr Adrian Simper: A very large proportion of NNL’s turnover—I think it is about 65%—is supplying support into the NDA estate, and a very significant proportion of that is on what I will call technical services rather than R&D per se. Sellafield depends very critically on the technical support provided by the National Nuclear Laboratory. We have fairly recently considered whether it makes sense to separate out the R&D functionality of the National Nuclear Laboratory from the technical services organisation, and the conclusion was very clearly that in order to build a sustainable, critical mass within the National Nuclear Laboratory it was right to keep the technical services organisation with the R&D organisation, so we had that continuity of the bluer-skies stuff at one end down to fairly routine analytical services at the other end. We are in the process of putting the relationships and the contracts in place there that will manage those things. There are areas of improvement. I think it is important we have a national nuclear laboratory. A little digression: there are things about nuclear that require mass to be able to be carried out. You cannot do experiments on plutonium in your garage—Richard would have something to say about that, I am sure. You need big infrastructure; big infrastructure is important and expensive. An NNL is really important. There is an imbalance because, although 65% of the work is for the NDA in decommission clean-up, if you listen to NNL, it talks about more exciting things such as space batteries or SMRs, or what-have-you. That is natural. I think we need to get a balance about the focus of the organisation on the various things for which it is accountable. I do think it is value for money. The investment of public funds that goes into that technical support organisation going into the National Nuclear Laboratory helps build mass and helps build competence—and that enables the National Nuclear Laboratory to be more effective. The management fees that get paid are a good way of metricating the system and seeing how well you are performing. It is a simple measure of performance. Since it is all public money anyway through that system, there is no loss from the system. We use those fees in order to incentivise and drive the right behaviours because the evidence is that organisations respond to these drivers. We would be in a much poorer value-for-money position if we had not made the decisions that we would rely upon the National Nuclear Laboratory for these things. I am happy with the direction of travel. For sure, there are some improvements that need to be made and NNL has had a difficult journey to where it is now from its

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formation and the transition from GOCO to GOGO, and all those things that no doubt the Committee has discussed at great length. That has made life hard for NNL but I am happy we are in the right place now and we will settle these things down.

Q25 Lord Hunt of Chesterton: On this question of R&D and getting a connection with France or other countries, do you see an expansion of collaboration between what we are doing in the UK, in government laboratories, and what you are doing in France and across Europe? I know there is going to be a question on Euratom but I just wondered whether there is duplication taking place or is there complementarity between the programmes of, particularly, the British and French institutions? Xavier Mamo: First, I think international collaboration is powerful, especially in nuclear. As mentioned in the introduction, EDF Energy is investing in the UK but it is also part of the EDF group’s broader investment in France, so obviously there is a lot of co-ordination internally in order to play to our strengths. Lord Hunt of Chesterton: Is there some complementarity in the question of dealing with nuclear waste? As I understand it, that has been a big programme with Sellafield, and France has not invested so strongly in that area. Will there be some future greater collaboration in that area? On your comment about nuclear, one of the problems about “greenness” is the question of waste and how we are dealing with that. Is that now seen in the UK as an acceptable solution going forward? Dr Adrian Simper: If I can briefly interrupt on that specific point, NDA and AREVA are working very closely together and, increasingly closely— we have very similar facilities in the UK and in France—working on a waste management approach, developing technologies together and sharing that experience. In waste disposal, the French entity ANDRA and Radioactive Waste Management in the UK—equivalent organisations charged with geological disposal—have very close relationships. Indeed, RWM has an arrangement with ANDRA. Lord Hunt of Chesterton: I am sorry; RWM is? John Donald: Radioactive Waste Management Ltd, the UK body, a subsidiary of the NDA accountable for geological disposal, has an arrangement by which it shares research facilities with ANDRA in France. Those relationships are very close. Dr Richard Savage: I can give you a regulatory perspective as well. ONR has a number of bilateral agreements with overseas regulators and, of course, ASN in France is one of them. We formally meet with ASN on a six-monthly basis. The important aspect is that we share research themes. We have a number of mutually beneficial research themes. Going exactly to your point, two I would mention are around package design for disposal and geological disposal and design, and a number of aspects associated with geological disposal. So, from a regulatory perspective, we have those interfaces. John, you can probably unpack that a little bit more. John Donald: There is not an awful lot more to say, but certainly we have had interactions with ASN’s research team and they are interested in

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sharing our experiences across those two areas specifically. We went through all of their eight current themes, and that is the one where we mapped that we had the most interest and most to share, so that is the one we are going to be working with them on in the next 12 months. Lord Oxburgh: I think Dr Simper has some experience of working in Japan with the nuclear industry. Is that correct? Dr Adrian Simper: Sir, I have been deeply honoured to have been working with the nuclear industry in Japan, particularly in the aftermath of the accident at Fukushima and how we clean that up. Lord Oxburgh: My question was, in the general context of our discussion, are there relevant observations from there? Dr Adrian Simper: Probably not, in the sense that the Fukushima accident was such an extreme and unique event. The social response, the governmental response, the investment and R&D focused on that is such an outlier on any kind of normal distribution that I would not want to draw too many conclusions from it, to be frank. Lord Oxburgh: Okay. Thank you. Lord Vallance of Tummel: While we are on international comparisons, leaving aside the legacies of the past, if you like, decommissioning and waste, which have to be done, I am not getting a real sense as to how important the future is to the UK economy and UK industry. If one looked at, say, the Germans, who have turned their back on this virtually, have they made an immense strategic mistake for German industry or the economy? How important is it to the UK? Obviously, Germany does not think it is that important. Is it that important to us, and why? Dr Adrian Simper: I am not an energy policy specialist; I merely clean up the mess afterwards.

Q26 Lord Broers: Should the Government be focusing heavily on SMRs? Are the criteria set out by the Government for the SMR competition appropriate? If not, what should the criteria be? I might add that perhaps SMRs can be the “landing men on the moon motivation” to get us going. My worry about SMRs, following on from this discussion, is whether we can mount enough enthusiasm to enter the race in a real way. When we look at the Government’s enthusiasm for NIRAB, we learned in our evidence that the Government was so enthusiastic it would not even pay the expenses of the members to attend the meetings. What about SMRs? Can we mount a realistic effort? How much effort should we put there? Dr Richard Savage: I will make a start but I am sure the other members of the panel will have something to say. SMR policy and the route forward for SMRs is for government. As a regulator, we have a role advising government and, through this process, have been doing so with a focus on safety, security and regulation. Undoubtedly, I look at this and there is a plethora of options and approaches, and we can discuss those, but there are also, potentially, regulatory challenges as well, so it is incumbent on me to be cognisant of those and to ensure we have a framework that is sufficiently agile to be able to accept future SMR designs.

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I would say that in the UK it is worth reflecting on the fact that our regulatory framework is technology neutral—it is not focused or based on specific design—and so is fundamentally agile in terms of its non- prescriptive, goal-setting approach. It is agile and provides me with the agility to be able to examine a range of designs. In moving forward, you see a significant range of options, ranging from light-water reactors that you might argue are more proven or akin to our larger light-water reactors, to more novel technology that, potentially, has safety benefits— passive inherent safety benefits—but is less proven and most definitely novel technology. Standing back and looking at that, I see a picture where there is a balance to be had in what would be an appropriate route forward, but it needs to be trodden with caution. There are commercial drivers here, and we can understand those. We have a regulatory framework that can interface with this development, but it needs to be approached with caution, recognising all the challenges associated with the technology. I have given a fairly top-level view, John, but you might want to add something. John Donald: With a goal-setting, non-prescriptive approach for nuclear safety and an outcome-focused approach for nuclear security, we are flexible and agile enough to be able to respond to pretty much any technology, whatever that would look like. We have plenty of experience of looking at fast reactors historically and small reactors and research reactors historically, so the size and the scale will not pose too many problems for us. Sure, there will be learning to be done about the specific technologies in the nuclear core of the machine, but the rest of the engineering is just engineering. We understand that. We understand reliability and security. All those issues can be regulated properly and authoritatively by ourselves. We need to narrow down the field, and until that is done we cannot really commit in terms of doing research in support of an SMR programme because it is not clear to us what direction that is going to go. We could put an awful lot of effort into doing regulatory research into fields that are not relevant or will never come to fruition. We need government policy to be a bit clearer. Once we have narrowed it down to one or a few technologies we can start thinking about what research we need to do. Right now it would be wrong for us to divert ourselves from our core job. Lord Broers: Who is going to do that job? Who is going to develop the competence to choose which SMR to go with, if we were to do it? John Donald: BEIS is taking advice from a number of different organisations, including NIRO and ourselves. Obviously, we would push more on the safety, security, transport and safeguards lines. That is what we are interested in and that is the area where we want to make sure the decision-making is balanced to account for those things. There are other areas—around export, commercial returns and finances—where we are not competent and other players have to advise. So it needs a coordinated team, which I believe BEIS is putting together. It needs our input and BEIS has our input on that. Lord Broers: Is this competition going to provide a clear winner so that the Government can throw the weight of everybody behind it? John Donald: I am sorry; I do not know.

279 Nuclear Decommissioning Authority (NDA), Office for Nuclear Regulation (ONR) and EDF Energy – Oral evidence (QQ 20-30)

Dr Richard Savage: I think you need a government response to that question. The Chairman: We had better keep that question for the second session.

Q27 Lord Hennessy of Nympsfield: A specific question first and then a general one for all of you. Are there specific proliferation worries about the SMRs because of the numbers of sites that have been occupied by them, and so on? Is that a worry? The other question is: your industry has been littered with false dawns. Is this another one? People tend to collapse into this wishful thinking that we can put right all the ills that have gone wrong since 1957, when a Minister in the House of Commons said, in the aftermath of Suez, “If we can’t boast about our civil nuclear programme, what can we boast about?” Is this a psychological compensation for the litany of cul-de-sacs? Dr Richard Savage: I can give you a short answer. I go back to my earlier comment about “proceed with caution”. What I am hinting at is: do not be fooled; it is not necessarily the panacea for all evils. It needs to be approached with caution. In terms of proliferation, I am a safety and security regulator; I have obligations for safeguards, accounting for nuclear materials. Those standards remain unchanged and I will regulate in accordance with UK law as a sovereign regulator and I have an expectation that those standards will be met. A small modular reactor might be small but that does not necessarily equal easier in terms of meeting of the right security requirements and obligations under safeguards. Viscount Ridley: Can I ask a follow-up on that? The Chairman: Could you do both at the same time? Viscount Ridley: I want to press the question of agility and technological neutrality a bit further. While, of course, it is clear that you are very open-minded, obviously, about any design, none the less there are practical considerations that mean that, in effect, you can only do a generic design assessment on one or a few technologies at any one time, and a GDA is a three to four-year process that costs £200 million or so, which is possibly too top-heavy for a technology that might be small and might have a small market. Is there any way to simplify or speed up the GDA process without compromising safety? Dr Richard Savage: Generic design assessment is exactly that—an assessment of a generic design. At the top level the importance, for me, is to recognise it as a de-risking approach or process. It de-risks project time and cost. It takes that all-important design assessment off the critical path before you get to the point of considering construction. It is an important de-risking process. It is a voluntary process; it is not a mandated process in the UK. Vendors in the UK recognise the value in having that engagement of the regulator early: understanding the regulatory issues and the regulatory approaches so that they can be declared early. Again, it is a de-risking, enabling approach. I would also ask, cutting across that: where better to build in safety than in design? It is a really important part of the process to get that examination of design early because that is where you improve safety and

280 Nuclear Decommissioning Authority (NDA), Office for Nuclear Regulation (ONR) and EDF Energy – Oral evidence (QQ 20-30)

security. On your tease at the robustness of the process—four years’ worth and how many million pounds—we are running through a number of generic design assessments now, two of which are due to conclude this year. We have put considerable efforts into learning the lessons as we have gone through the process. The process has been adopted and adapted as we run through, but that is not to say there are not developments still to be had. We could talk about what those might be, but there are options for refinement of the process, perhaps to make it slightly quicker than you have seen in the past. We should take the lessons of what we have already done and use those. For small modular reactors, I would say, intuitively, it is the right process. Where is the commercial benefit in small modular reactors? It is that modular design, manufactured in a factory and deployed in many stations. With a generic design assessment of a particular design, there would be site-specific aspects but very much at a lower level. Intuitively, it is a robust and effective regulatory approach—albeit we can perhaps refine a bit from what we have done in the past.

Q28 Viscount Ridley: Can I follow on with the main question about generation IV? I have mentioned already the possibility that, given we have missed a few boats in pressurised water reactors, we should be leapfrogging our efforts into molten salt, liquid metal, pebble bed—these kinds of things—and trying to get ahead of 2030. In particular, we are members of the Generation IV International Forum through Euratom. That was the reason why, I think, when this Committee pressed on that issue in 2011, we were told, “Don’t worry, we’re doing it through Euratom”. That is off the table now, at least temporarily, and therefore should we be stepping up our efforts to rejoin the Generation IV International Forum? In particular, should we be developing test reactors here? The last one closed in 2015. Dr Richard Savage: I will make a start. This is a difficult question for me to answer because we are straying into government policy and where government focus should be and I am not in a position to be able to answer that. As a regulator, I would say that I need to be in a position to regulate said technologies effectively. My understanding of the policy direction is important so that I can generate the right capacity and capability to regulate effectively. The focus through this, for me, as a regulator, has to be the safety and security of those designs and operation in the UK. I cannot give you a steer on policy and focus. The Chairman: Would Mr Mamo like to comment on that? Xavier Mamo: First, from an EDF Energy perspective, we do not have much contribution towards gen IV, but I think it makes sense to play to strengths, especially coming back to the discussion on where the UK can bring value. In a way, in the field of high temperature materials, there is a strong expertise in existing UK laboratories, so those are probably ways to join existing international collaboration while also clearly leading the way in specific areas. That would be my comment. The Chairman: We are running out of time. We have two quick questions to ask. Could Baroness Young ask the first?

281 Nuclear Decommissioning Authority (NDA), Office for Nuclear Regulation (ONR) and EDF Energy – Oral evidence (QQ 20-30)

Q29 Baroness Young of Old Scone: This is really a question for ONR, and I suspect you may answer it in the same way that you answered the last one. What are your thoughts on trying to develop additional commercial outputs from nuclear plants, particularly from SMRs, in terms of something beyond electricity—combined heat and power or chemicals production? Do you see any regulatory difficulties in that? Dr Richard Savage: The output requirements are a matter for the licensee and government. It is nuclear technology and nuclear activity that ONR would need to regulate, but my focus is on the safety and security of the use of that technology. If it is for energy production or combined heat and power per se, that is not a consideration for me; my focus is on the standards of the design, construction and operation to maintain it safe and secure. Lord Oxburgh: The question is whether doing those extra things immediately brings to mind regulatory problems. John Donald: I was going to say no, I do not think so. Obviously, you have a potential for them to be a lot closer to conurbations, et cetera, but we have the regulations for radiation emergency preparedness, et cetera, so we have a framework for regulating throughout, wherever they are and whatever they are doing. Even if you think about getting into the food chain or radionuclide crossover, it is still about the risk to the public, and so our regulatory framework would be flexible and agile enough to accommodate that. I do not think we would have any problems. The Chairman: Finally, Lord Hunt.

Q30 Lord Hunt of Chesterton: Euratom had a programme which was for transmutation, and one aspect of that is connecting fusion and fission so you then have a method of using neutrons from fusion to reprocess your nuclear fission waste. Of course, the UK has great strength in dealing with the neutron aspects of fusion in the JET programme, which is also in danger for the future. In your vision of the future, do you see this idea of connecting fusion and fission and reprocessing as one of the things you should be looking at? Dr Adrian Simper: I heard the words “false dawn” mentioned earlier. One of the things that strikes me is that the nuclear technologies we are using today and are planning to build are evolutionary from technologies we have been using for many, many decades. Even something as accessible, from a science point of view, as liquid metal cooled fast reactors, have failed, despite being in just everybody’s energy policy, to make their way into commercial operations around the world. I do not know what the future holds—if I did I would not be sitting here; I would be at the bookies—but I do know that nuclear has demonstrated that it is very, very hard to bring technologies which work well from a physics point of view on the drawing board into commercial reality, operating day by day. Lord Hunt of Chesterton: There is quite significant investment going on in this area, as you know. Dr Adrian Simper: Yes.

282 Nuclear Decommissioning Authority (NDA), Office for Nuclear Regulation (ONR) and EDF Energy – Oral evidence (QQ 20-30)

Lord Hunt of Chesterton: We have not talked about investment in the other areas. The Chairman: We have run out of time and we have a Minister and others waiting outside, so I have to bring this session to a conclusion. We could have gone on a lot longer. You have helped us a lot. We have another day of discussion on this. Thank you very much for your help today. We are most grateful, particularly to Mr Mamo for coming at short notice. It was very helpful. Thank you to all four of you.

283 Nuclear Industry Association (NIA) – Written evidence (PNT0041)

Nuclear Industry Association (NIA) – Written evidence (PNT0041)

1. The Nuclear Industry Association (NIA) welcomes this opportunity to respond to the Science and Technology Committee’s call for evidence.

2. NIA is the trade association and information and representative body for the civil nuclear industry in the UK. It represents around 260 companies operating in all aspects of the nuclear fuel cycle, including the current and prospective operators of the nuclear power stations, the international designers and vendors of nuclear power stations, and those engaged in decommissioning, waste management and nuclear liabilities management. Members also include nuclear equipment suppliers, engineering and construction firms, nuclear research organisations, and legal, financial and consultancy companies.

3. Given the extremely long timescales involved in nuclear decision making, a long term and coherent approach is required if the UK’s nuclear industry is to make the most of the opportunities likely to arise as we develop our nuclear sector over the next few decades. This can best be addressed through a strong partnership between Government and industry.

4. Whilst the policy to achieve this must necessarily be led by Government, this should be on the basis of advice from industry. In this context Government and industry have worked well together over the past few years, for example collaborating on the 2013 Nuclear Industrial Strategy. The nuclear sector deal proposed in the Government’s current industrial strategy green paper (see question 2 below) should help reinvigorate this partnership.

5. In terms of Government responsibility the Department for Business Energy and Industrial Strategy (BEIS) should be in the lead, in consultation with other relevant departments as appropriate, for example the Department of International Trade (DIT) in relation to export promotion and inward investment issues. In view of the significant engineering and scientific challenges that will have to be addressed for new nuclear systems and their legacies the research community will have a key role to play, and the National Nuclear Laboratory (NNL) should be responsible for coordinating this input and providing independent guidance to Government.

6. The industrial strategy green paper has picked out nuclear as one of just five sectors earmarked for early deals, and states this will be led by Lord

284 Nuclear Industry Association (NIA) – Written evidence (PNT0041)

Hutton (NIA Chairman). The green paper notes his focus will be on ‘improving UK competitiveness and skills in the nuclear industry’.

7. Lord Hutton led an initial discussion about a proposed approach to and key priorities for a nuclear deal with the Nuclear Industry Council (NIC) on Wednesday 22 February. The NIC was set up to facilitate cooperation between the nuclear industry and Government, with an overarching role to ‘tackle long term challenges facing the industry and to help realise future opportunities through strategic decision making’, and includes key players from across the nuclear industry. The NIC will be the prime forum for developing the sector deal for nuclear.

8. Discussions on the deal are at an early stage but the NIC agreed that it should draw on a long term vision of the industry and nuclear’s role in future energy scenarios, the skills and technologies that need to be developed to position the industry for where it wants to be in the long term, and the R&D priorities to support that vision. The strategic vision will cover the whole fuel cycle and potential future technologies as well as the current new build programme. The NIA is currently working on proposals in cooperation with NIRAB, NNL and other industry bodies with a view to for further discussion in the NIC in the spring.

SMRs

What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

9. In the UK there is major potential for SMRs as a complementary technology to the current 18GW new nuclear build programme. A network of SMRs could provide smart responsive and cost effective electricity to large industrial sites and the national grid. More generally, as a small unit, SMRs could have the potential to help tackle difficult challenges such as financing, infrastructure and siting. For example SMR sites could be deployed on an incremental basis.

10.SMRs could contribute to the UK’s energy security and climate change objectives, whilst providing significant benefit to industry in terms both of immediate work for the UK supply chain and the opportunity to be involved in an important overseas market. As noted above SMRs could potentially be deployed on a huge scale overseas providing massive opportunities for UK industry and a major benefit to the UK economy. In combination with the UK’s current nuclear new build programme this could help reposition the UK as a leading nuclear nation.

11. In terms of potential challenges, the development of a leading SMR design has been estimated at around £0.5-1bn over a five to seven year period. Development would also require continuing Government support in terms of an appropriate regulatory framework, including a GDA slot for licensing the design, and other facilitative related to such issues as siting (including pubic acceptance); justification; and funded decommissioning arrangements.

285 Nuclear Industry Association (NIA) – Written evidence (PNT0041)

What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

12. The NNL’s 2014 feasibility study calculated the potential global market for SMRs as approximately 65-85GW by 2035, valued at £250-400bn. The market could be greater for more competitive designs. The NNL study also suggested there would be a UK market for around 7GW of power from SMRs based on a demand for low carbon generation and site availability.

13. Against this background Involvement in SMR technology could provide an important export opportunity for the UK industry, with high value manufacturing, high skilled and high impact export opportunities that would enable the UK to be in the forefront internationally.

14. An obvious cost of not taking advantage of this opportunity would be that the above benefits would be lost, to the detriment of the UK nuclear supply chain and the wider UK economy. An opportunity to reposition the UK as a leading nuclear nation would also be lost.

15. Whilst the NIA welcomed the interest the Government has shown in SMR technology since the initial feasibility study in 2014, we have been disappointed that the Budget 2016 commitment to publish an SMR roadmap during last year has not as yet been met. The lack of any substantive Ministerial statement has led to concerns in the supply chain that Government may have lost interest, and that a significant commercial opportunity will be lost.

16. It is important that Government makes an early statement about its continued interest and plans for taking the SMR programme forward.

17. There is a need for greater clarity about the Government’s desired outcomes from the SMR competition. The wide ranging approach adopted so far makes it very difficult for companies to take a view on whether their capability and technology fits in with the Government’s objectives, and whether therefore further investment is appropriate.

18. For the next stage of the competition Government needs to provide a much greater steer on its technical objectives, including the broad category of SMR it is looking for (e.g. scaled down version of current nuclear reactors or a more innovative design), and other key requirements.

286 Nuclear Industry Association (NIA) – Written evidence (PNT0041)

19. Industry also needs to see a roadmap as soon as possible, including information on funding, licensing and siting, with firm timeframes for reaching conclusion.

Should the UK be involved in the development of Gen IV technology? If so, what funding and support should be put in place to help the UK establish a world leading position? Should our activity include development of one or more test reactors?

20. The NIA agrees with NIRAB’s recommendations in its 2015 report to Government that the UK should be more active in research into the next generation of reactor technologies, including gaining a stake in Small Modular Reactor development in the near term and in the longer term playing a leading role in the development of advanced reactors.

21. In view of the long time horizons this might best be achieved through participation in international programmes. Such participation would enable the UK to become, once again, an active participant in the development of Generation IV reactors. This would not only raise the international profile of the UK but generate the data needed to underpin the development of UK energy policy. Given the UK’s abundant relevant experience and expertise our contribution would be greatly valued by international partners.

22. Given the long timescales funding for UK participation will not be forthcoming from the market and will need to be put in place by Government.

23. On a related issue, the NIA would like to see the Government commit to and develop a policy for plutonium as soon as possible. This would not only turn the plutonium stockpile from a cost liability into an economic asset, but enhance the UK’s energy security through low carbon generation. It would also set an example in managing plutonium responsibly, and provide high value jobs and skills.

Governance

24. NNL’s ability to fulfil its remit is to some extent circumscribed by its need to operate on a commercially funded basis. This means that it is regarded by both Government and industry as a contractor organisation providing products and services rather than a government laboratory providing integrated solutions.

25. NIA would like to see Government providing some funding to enable NNL to fulfil its Government Advisory role in a more holistic way. This would enable it to underpin the development and commercialisation of advanced nuclear technology as in other leading nuclear countries such as the US and France.

Is the remit of the National Nuclear Laboratory (NNL) suitable to provide research and development support to the UK nuclear sector? Is the

287 Nuclear Industry Association (NIA) – Written evidence (PNT0041) current funding and governance model for the NNL appropriate to its role and remit?

26. See response to question 8 above.

27. Nuclear research is currently supported by a range of different funding bodies, with very little coordination. As a result potential synergies could have been lost, and it would make sense for these different streams to be overseen or coordinated by a single body.

28. In the past NIRAB and NIRO have had a role in overseeing these streams, but will no longer exist from the end of March. It NIRAB is not replaced it would make sense for NNL to undertake this role.

29. We believe the Nuclear Innovation and Research Advisory Board has made a major contribution to the potential future success of the UK nuclear industry through its advice to Government on the level, approach and coordination of nuclear innovation and R&D to keep future energy options open. NIRAB’s recommendations provided the basis for the Government’s commitment in the 2015 Spending Review to spend at least £250m on a 5 year ambitious nuclear research and development programme.

30. It is important that the recommendations listed in NIRAB’s final report are followed up by Government, not least because of their relevance to the nuclear sector deal being taken forward by the NIA as part of the Government’s industrial strategy. Research and innovation will be important if we are to maximise the potential of the nuclear sector in terms of low carbon energy and economic growth. The NIA believes therefore there is a need for a successor body of some type to take this forward.

23 February 2017

288 Nuclear Industry Association (NIA) and Dame Sue Ion, NIRAB – Oral evidence (QQ 50-59)

Nuclear Industry Association (NIA) and Dame Sue Ion, NIRAB – Oral evidence (QQ 50-59)

Transcript to be found under Dame Sue Ion, NIRAB

289 Nuclear Institute (NI) – Written evidence (PNT0033)

Nuclear Institute (NI) – Written evidence (PNT0033)

The Nuclear Institute

 The Nuclear Institute (NI) welcomes this opportunity to respond to the Committee’s inquiry into the priorities for nuclear research and technologies. This submission has been supported by our professional members.

 The NI is a charity registered in England. Its objectives relate to: a. the advancement of education relating to nuclear energy; b. the advancement of nuclear science, engineering and technology; c. in the interests of public safety, the promotion of high standards of education and professional performance amongst those engineers, scientists and others working within the nuclear industry; d. the promotion of the public understanding of nuclear sciences and the impact on society and the environment.

 It is also a professional and learned body with over 2000 individual members, made up of engineers, scientists, other professionals and a number of individuals who have an interest in the NI’s objectives. The NI is licensed by the Engineering and Science Councils to register qualified members as Chartered Engineers and Chartered Scientists.

 The NI has ten regional branches across the UK. It also has two national networks: the Young Generation Network; and Women in Nuclear, which seeks to address the industry’s gender balance and improve the representation of women in leadership roles across the sector.

 The NI has established a Special Interest Group (SIG) focused on the development of Small Modular Reactors (SMRs).

 The NI is not a trade association and does not directly take account of its company members’ views, instead relying on individual members’ views and its charitable objectives to come to an independent position.

The NI’s response to the Inquiry

The NI believes that the UK Government has responsibility for establishing a long term policy for civil nuclear activities and research and development. As has been the case historically, it is important that this is done in conjunction with industry, academia, professional institutes and national laboratories. We see the current development of an industrial strategy as an important vehicle that will

290 Nuclear Institute (NI) – Written evidence (PNT0033) help align and integrate nuclear R&D; the nuclear industrial strategy with wider governmental objectives.

We believe that there is a significant opportunity for the UK industry to collaboratively develop a potential ‘sector deal’ to help increase UK exports, commercialise UK nuclear expertise and improve value for money in the UK industry. It is important to build on the relationships built through the Nuclear Industry Council and NIRAB, and ensure that there is representation from across the sector in developing the sector deal (including SMEs).

3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

Members believe that the development of a UK design and the associated accumulation of Intellectual Property generated through the deployment of a SMR could;  significantly enhance the UK’s nuclear capability both at home and internationally  improve UK security of supply of electricity and  improve the economics of financing nuclear power.

The UK’s current advanced manufacturing capability means it is well placed to preserve its world technology leadership role in the development of SMR technology led by British based business to develop civil designs based on military and civil reactor experience.

Small modular reactors lend themselves to series production and do not require the very large forgings and fabrications characteristic of large nuclear power reactors. They represent a great opportunity for established British businesses to compete with foreign suppliers based on the UK's long experience and demonstrated capabilities.

SMRs have many advantages over large power reactors. These include:  Low unit capital cost  Low demands on local electricity distribution infrastructure  Suitability for series production in a “factory” environment leading to economies from better productivity and multiple orders  Lower potential release terms reducing worst case accident consequences  Potential for inherently safe design using natural convection decay heat removal and use of partially buried containment to improve shielding and resilience to external hazard  Potential for siting close to remote communities or industrial consumers reducing transmission costs and losses  Ability to be “multiplied up” in a nuclear power park as demand grows.  Greater flexibility to match nuclear capacity to demand by adjusting the number of reactors on load at any time.

291 Nuclear Institute (NI) – Written evidence (PNT0033)

 In theory SMR reactors can be removed from their operating site for maintenance and decommissioning provided appropriate transport arrangements are in place.

SMRs do however have disadvantages:  Overall they are unlikely to have either the thermal efficiency or the fuel efficiency of a large reactor with optimised secondary design and fuel zoning etc.  They are likely to be more expensive per installed MWhr than large reactors.

The above issues are particularly significant for smaller capacity power generating units - less than 200MW(e).  Finally, there is no currently available commercial civilianised design for GDA, nor an obvious UK manufacturer ready to undertake design and construction.

An additional challenge for the industry is to ensure that there is sufficient capability and pipeline skills and knowledge to successfully deliver current and future nuclear programmes. We believe it is essential and critical to success that there is continued investment in the nuclear skills, training and leadership arena through the appropriate recognised bodies e.g. National College for Nuclear, NSAN and other training providers and through professional learned bodies such as the Nuclear Institute. The drive to improve the number of quality apprenticeships in the nuclear industry (EdF Energy, Sellafield Ltd, NNL, supply chain etc.) is a positive move that will also help address the capability and capacity risk.

4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

As described in NNL’s feasibility study (2014), the potential global market for SMRs is of the order of £250-400 billion.

We believe that not taking full advantage of the opportunities of SMR technologies would be a wasted opportunity through lost revenue from potential exports, as well as the additional burden on the balance of payments deficit.

The UK does not provide any offering (vendor) for the current generation of nuclear reactors and is unlikely to do so in the medium-term for large scale reactors. There is currently a gap in the market for SMRs and the opportunity for the UK to participate in developing and deploying a SMR could provide the UK supply chain with the opportunity to generate a viable offering to the international nuclear community. A “UK product” SMR offer can also be augmented by a “UK services” SMR offer with lifecycle professional services and engineering and science expertise being deployed over several decades. The UK offer can also extend to final decommissioning.

We believe that the capability exists across the UK nuclear sector to meet the requirements of deploying and marketing an SMR proposition, however, there is a risk that this capability diminishes if not utilised on nuclear programmes. There

292 Nuclear Institute (NI) – Written evidence (PNT0033) will likely be additional competition for these capabilities across the nuclear and other sectors over the coming decades.

It is important that the UK is a leader in the development and deployment of SMR technology from the outset such that the country and our unique nuclear capabilities can capture a proportion of the significant potential global market.

We welcome the government’s commitment and allocation of at least £250M investment over 5 years in an ambitious nuclear research and development programme, including the competition for best value SMR design. However, investment needs to be sustained over the longer term to realise the wider benefits of this programme.

The development and industrial demonstration of a SMR in the UK would be a positive statement to the industry and supply chain. The NI believes that the UK government should enable and encourage companies to move swiftly to industrial demonstration of the technologies to help build confidence and commitment from the supply chain to see this ambitious programme through to completion.

It is important that UK companies are utilised in research and development and design programmes to ensure that intellectual property is held by the UK and an ability to deploy and maintain these systems is maintained within the UK.

We support the criteria as set out by the Government for the SMR competition.

The UK has ambitions of making a return to the top-table, and establishing itself as a world leader in the nuclear sector. This will require involvement and active participation in the development of Generation IV technology. This type of international collaboration will become of paramount importance as the UK seeks to re-position itself on the international agenda post-Brexit.

The UK is currently a non-active member of the Generation IV International Forum (GIF). Having withdrawn from the 2005 Framework Agreement, we are not an active participant in the development of one or more Generation IV systems selected by GIF. The NI believes that collaboration with this

293 Nuclear Institute (NI) – Written evidence (PNT0033) international research and development programme is paramount to ensure that a skills base is created in the UK prior to future deployment.

We believe that research into Fast Breeder Reactors should be a priority as it is in other countries. The UK has historic capability and expertise in this field. In addition the UK has the world’s largest civil stockpile of plutonium which can be used as fuel in FBRs and has the potential to contribute to meeting the UK’s energy needs, as well as safeguarding the fuel. By linking the research and development with a potential test reactor, this could help maintain and grow the UK capability as well as support the UK to re-establish itself in the international community.

Whilst we believe that NNL has the right capabilities to deliver the required research to support the UK’s future nuclear energy policies and fulfil its remit, we believe that the funding and governance arrangements limit its ability to deliver optimum value for money for UK plc. This is discussed more in response to question 9.

NNL’s mission is:

“To be the key UK civil nuclear fission R&D provider by:  Delivering high value independent, authoritative advice and a quality service to our customers  Creating value for stakeholders by maintaining the commercial basis for our business and sustaining a strong positive cashflow for reinvestment in programmes and capabilities  Increasing our influence on the UK nuclear research agenda.”

NNL has a need to be ‘profitable’ and a commercially viable organisation. This forces the organisation to provide a service that can provide a suitable return on investment to support its operations. Whilst this is a strong basis for any business, it does mean that the unique skills and capabilities of NNL aren’t necessarily being optimised to develop the UK’s nuclear capabilities and develop a broader return on investment for UK plc. Whilst the organisation can offer the necessary capabilities to support the UK‘s future energy policies to fulfil its remit, it is unlikely to be able to deliver these through current funding arrangements as the free market is unlikely to request this service/capability.

We believe it is important to have integration across the nuclear sector to ensure a successful development of any future reactor across its lifecycle. Whilst certain bodies play a more active role at certain stages (e.g. NNL would likely play a key

294 Nuclear Institute (NI) – Written evidence (PNT0033) role in the early research and development), it is important that there is collaboration across the lifecycle of the programme(s).

We believe that there is still greater opportunity for collaboration across the public and private sector in aligning and collaborating on nuclear research. Whilst there have been positive developments and some good examples of cross-sector collaboration and innovation, this is largely by luck rather than conscious choice. We believe that there is potential for greater alignment and synergies between nuclear defence, nuclear fusion and the civil nuclear sector.

We believe NIRAB was a welcome addition and brought greater alignment across the industry with regards to research and development. We would welcome a successor body being established with a clear role and purpose, including the intent of recommendation 3 in NIRAB’s final report:

“Government should implement a transparent and effective mechanism to coordinate and, where necessary, direct, all publicly funded nuclear R&D activities in order to achieve the desired industrial impact and maximise value for money.”

22 February 2017

295 Nuclear Skills Strategy Group – Written evidence (PNT0014)

Nuclear Skills Strategy Group – Written evidence (PNT0014)

1. The consultation is welcomed and timely as the nuclear industry is crucial in meeting the drive to a low carbon economy. However, none of the specific questions in the Call for Evidence acknowledges the critical role that research plays in developing skills. In particular, R&D is heavily dependent upon higher level skills and therefore presents a golden opportunity to develop the next generation; this is the focus of this submission. It relates to Question 1 (Responsibilities) and Question 2 (Sector Deal).

2. The Nuclear Skills Strategy Group (NSSG) comprises Government and employers who have both the plans and expenditure which drive the major developments in the sector. The NSSG is positioned to be the UK’s lead strategic skills forum for the sector, working in partnership with the Nuclear Industry Council (NIC). It represents both the civil and defence nuclear sectors and has developed a nuclear skills strategic plan, addressing the skills infrastructure, processes and the training provision needed to secure the required supply of qualified and competent personnel.

3. With respect to nuclear skills the overall responsibility has to be with the employers; but Government, working with the NSSG, need to ensure that the right priorities, infrastructure and support are provided in a timely manner. Whilst development of skills lies with DfE, it is evident that they do not differentiate between industrial sectors. Therefore, it would be prudent for BEIS to lead in this area as part of the skills pillar of the industrial strategy. It is important that BEIS has access to expert and industry wide advice. The primary vehicle for this is the Nuclear Industrial Council and the NSSG for skills related matters.

4. The demographics of the nuclear sector mean that many of the current nuclear leaders and Subject Matter Experts (SMEs) are retiring or will retire before successors can be developed, and it is not practical simply to wait for the next generation. It is therefore essential to accelerate SME development in the near term to fill this gap through, for example, using research programmes to develop expertise in the next generation, or establishing mentoring schemes, possibly across different organisations, to transfer knowledge. Such arrangements would also be useful in accelerating the ‘speed to competence’ of experienced workers transferring into the nuclear sector.

5. Some skills aspects of the UK’s future nuclear programmes (Small Modular Reactors, management of uranics, management of plutonium, managing Higher Activity Waste, advanced nuclear reactors) are dependent on Government decisions. The nuclear Labour Market Intelligence model, under the direction of the NSSG, has identified potential skills gaps in these areas. The NSSG’s

296 Nuclear Skills Strategy Group – Written evidence (PNT0014)

Strategic Action Plan lays out the required actions to fill these gaps and suggests there is a role for Government in ensuring the SME population in these areas is secured.77 Government should act to meet this need.

9. The re-constructed NIC is an ideal partner to lead on any sector deal for nuclear, with the NSSG forming the skills work stream and hence, should lead the skills’ “chapter”.

10. The skills task is challenging, but achievable through engaging public and private sector partners alike. Over the past few years, we have seen successes from a number of skills groups and organisations involved in our sector, but now it is time for a step change. The NSSG’s Strategic Plan sets out the actions necessary to address the key risks, blockers and issues facing employers, training providers and partnerships. The skills chapter of a sector deal needs to be based upon this important plan.

11. During 2014 - 2016 a successful Nuclear Industrial Partnership project was in operation with a workstream focussing on developing nuclear Subject Matter Experts (SME) for the future. There were excellent results from this in accelerating speed to competence for high level (niche) skills, in a partnership involving NNL, NSAN and Dalton Institute. Although the programme ended in September 2016, it was already beginning to bear fruit, with 119 people (of which 50 were female) successfully completing the programme. We believe that a sector deal could consider a similar programme as part of the R&D initiative

12. The NSSG supports directly seven of the ten pillars of the Industrial Strategy, as follows:

77 http://www.dalton.manchester.ac.uk/engage/consultation/

297 Nuclear Skills Strategy Group – Written evidence (PNT0014)

Industrial Strategy – Ten Pillars How are NSSG supporting the Pillars? 1. Investing in science, research Supporting Small Modular Reactor and innovation development and ensuring R&D has the right high level skills 2. Developing skills Development of Skills Strategic Plan and aligning all actions into one coordinated detail delivery Plan 3. Upgrading infrastructure 4. Supporting businesses to start Providing the infrastructure, and grow process and systems are in place to allow employers to recruit, train and develop skills 5. Improving procurement 6. Encouraging trade and inward investment 7. Delivering affordable energy All actions are in support of the and clean growth Nuclear New Build Programme 8. Cultivating world-leading Supporting the ambition of a sectors world class nuclear sector 9. Driving growth across the Regional aspect considered in whole country South West. North Wales and Cumbria 10. Creating the right institutions NIC and NSSG working together to bring together sectors and with employers, providers and places skills bodies

13. The benefits of a sector deal for nuclear would be fundamental in meeting the governments’ and employers’ aspirations of being a world leading nuclear country. Whilst we are already recognised as having world class academics and facilities, we are battling with a demographic issue. As the time to competence for SMEs can, quite rightly, take years or decades to achieve, we have to start now, and the investment in R&D can be a catalyst for this.

Author: Alan Coley, Nuclear Skills Lead

22 February 2017

298 NuScale Power – written evidence (PNT0049)

NuScale Power – written evidence (PNT0049)

Executive Summary  NuScale Power offers a unique opportunity for a UK-U.S. partnership on SMR development. Working alongside British industry, NuScale will achieve multiple, near-term UK deployments, delivering jobs, growth, intellectual property (IP) and export opportunities, alongside low carbon electricity that is cost competitive with other forms of generation.

 NuScale’s SMR technology not only addresses the three fundamental challenges faced by UK energy policy – producing low carbon, secure and competitively priced electricity – it also offers other benefits not found in either large-scale nuclear plants or other SMR designs, including factory fabrication; smaller plant size; scalability; load following capability and for integration with renewables.

 The company is already at an advanced stage of bringing its technology to market in the U.S. putting it well ahead of rival developers. NuScale is the first SMR developer to submit a design certification application to the U.S. Nuclear Regulatory Commission (NRC), with regulatory approval expected in the early 2020s.

 Multiple customers are confirmed for projects in the U.S., with a first customer deployment project to be delivered in the state of Idaho for a municipal power utility, scheduled to be in operation by 2026.

 There is a narrow window for the UK to take a significant share of the global SMR market – potentially worth up to £400 billion by 2035 – through involvement in technology development programmes now, where there are still opportunities to secure substantial IP.

 The UK Government should play a key role in providing the “first-mover solution” for SMR development and deployment by taking action that will reduce risk and create an environment that will encourage and support customer interest.

 This should include establishing policy that provides long term political support for SMR deployment in the UK; market framework mechanisms to encourage, attract and incentivise potential customers; a new Strategic Siting Assessment (SSA) to identify suitable sites – specifically for SMRs – in sufficient numbers and at reasonable cost to maximise deployment opportunities; optimisation of the technology regulatory approval process; and continued support to develop and maintain UK capability.

About NuScale Power LLC 1. NuScale Power is one of the world’s leading developers of SMR technology. Based on tried and tested pressurised light water reactor (PWR) technology, the NuScale Power Module™ (NPM) is an integral reactor design surrounded by a high pressure steel containment vessel which, when coupled to its power conversion system, produces 50 MWe.

299 NuScale Power – written evidence (PNT0049)

2. The NPM is fully factory fabricated, transported to site by road, rail, or barge and installed in quantities of up to 12 at a single generating facility, resulting in a total facility output of up to 600 MWe (gross) of low carbon electrical power.

3. NuScale’s SMR design was conceived by Dr. Jose Reyes, NuScale’s Chief Technology Officer in the early 2000s. The company has invested over 3.5 million person-hours – an investment of more than $500 million into the project-life-to-date. NuScale has over 50 companies supporting its technology development, as well as a technical advisory board of industry experts.

4. NuScale has strong backing from the U.S. Department of Energy (DOE), which in 2013 awarded the company $217 million in matched funding, and is at an advanced stage of bringing an SMR to market in the U.S. NuScale also has financial support from Fluor Corporation, a global engineering, procurement and construction company, which in 2011 became NuScale’s majority investor.

5. In the U.S., through the efforts of more than 600 full-time equivalents of engineering and licensing personnel, NuScale timely completed its design certification application (DCA) in late 2016 and subsequently submitted to the Nuclear Regulatory Commission (NRC) – the first ever SMR DCA. U.S. regulatory approval is expected in the early 2020s and will support the company’s first customer project in the state of Idaho for a municipal power utility, scheduled to be in operation by 2026.

6. In the UK, NuScale has been involved in the Government’s SMR feasibility work since 2013, including participation in the Government’s SMR competition to select the ‘best value’ SMR for the UK. A feasibility study published by the National Nuclear Laboratory (NNL) in 2014 concluded that NuScale has a credible design that is viable for deployment within a 10 year timeframe.78 This view, coupled with NuScale’s programme development in the U.S., reinforces the near-term prospect of a NuScale deployment in the UK.

Advantages of NuScale Power

(a) Near-term deployment 7. The first NuScale facility is scheduled to be generating in the U.S. by 2026. The company has its first two customers confirmed and a line-of-sight to its first dozen projects, with deployments in the U.S. beginning 2026 through 2030.

8. NuScale’s first deployment is part of the Western Initiative for Nuclear, a multi-western state collaboration to deploy a series of NuScale Power projects in the western U.S. This state of development maturity, combined with an approximate 36 month nuclear construction schedule, means,

78 Small Modular Reactor (SMR) Feasibility Study, National Nuclear Laboratory, December 2014.

300 NuScale Power – written evidence (PNT0049)

conditions on the timing of the start of the UK generic design assessment (GDA) process, that a first NuScale deployment in the UK could also be achieved within a similar timeframe.

(b) Competitive economics 9. NuScale believes it is the only near-term deployable SMR technology developer to have published independently verified cost estimates. The levelised cost of electricity (LCOE) for a first-of-a-kind plant in the U.S. is in a range of $101 (~£71)/MWh for a typical investor-owned utility or $76 (~£51)/MWh for a municipal-owned developer where the range is primarily reflective of the difference in the cost of capital. This LCOE is significantly lower than the £95/MWh LCOE for large-scale nuclear most recently published by the Department for Business, Energy & Industrial Strategy.79

10.Through savings associated with repetitive factory fabrication of major engineered equipment, application of advanced manufacturing techniques, construction learning and O&M improvements, NuScale believes the LCOE can be reduced by around 10% for subsequent (“Nth”-of-a-kind) plants.

(c) UK-U.S. partnership 11.As a technology developer with no manufacturing capability of its own, for UK deployments NuScale believes that about 85% of the content could be sourced from British-based companies. Through engagement activities over several years, NuScale has become increasingly confident that the British nuclear industry has the capability to deliver on the company’s vision of a multi-billion pound manufacturing and infrastructure venture, with NuScale SMRs being built in British factories, generating power for British homes in the 2020s and transforming the UK into a hub for export into international markets.

12.NuScale has already established a number of significant relationships across the British nuclear industry. Fluor Corporation, NuScale’s majority investor, has been operating in the UK for 60 years, employs over 2,000 people at its engineering base in Farnborough, and is part of the consortium managing the decommissioning of the UK’s legacy Magnox sites.

13.Strategic partnerships have also been established with Ultra Electronics, to work on the development and deployment of the module protection system and other safety-related instrumentation and control systems, and with AREVA, which has a longstanding presence in the UK, to supply initial core and subsequent reloads for NuScale’s first U.S. project. Rolls-Royce has also provided a variety of technical services since first supporting NuScale’s U.S. design and development programme in 2013, whilst in the UK, NuScale is supporting Sheffield Forgemasters International Ltd. in a forging demonstration of an advanced reactor component involving the NuScale reactor vessel head, as part of a programme supported by Innovate UK.

79 Electricity Generation Costs, Department for Business, Energy & Industrial Strategy, November 2016.

301 NuScale Power – written evidence (PNT0049)

(d) Strong safety case 14.NuScale has developed a substantial improvement in safety over existing light water reactor technologies through simplicity of design, and use of passive safety systems. The integral design of the NPM eliminates external coolant loop piping, which eliminates large-break loss-of-coolant accident (LOCA) scenarios and the use of passive safety systems for decay heat removal and emergency core cooling results is a design with a core damage frequency that is orders of magnitude lower than the current operating light water reactor fleet.

15.The reactor in a NPM has a small radioactive source term with less than 4% of the fuel inventory of a conventional 1000 MWe nuclear reactor. Therefore, the amount of radioactive material available for release during a postulated accident is greatly reduced. NPMs are housed in a building designed to withstand a seismic spectrum with 0.5g zero period acceleration earthquake. The combined result of these design features is a nuclear technology that is extremely safe.

(e) Scalability 16.The modular nature of a NPM allows the installation of additional modules to be made as the demand for new capacity grows. Each NPM produces 50 MWe, and up to 12 modules can be installed in a single NuScale power plant. Hence, this technology is scalable in that additional capacity can be added in 50 MWe increments to meet project economics or load growth considerations.

17.Similarly, the modular design allows refuelling of individual NPMs to be carried out with minimal disruption to the operating plant. While one module is off-line for refuelling, other modules continue to produce electricity – only 8% of a 12-unit plant is offline during a NPM refuelling.

(f) Flexibility 18.The NuScale multi-module plant design permits a high degree of flexibility for deployment in support of both electrical and non-electrical applications, giving it a wide range of applications to supply low carbon energy.

19.The size of the NPM means that it can be entirely fabricated in a factory and transported to the site by rail, truck or barge. This provides a number of manufacturing cost efficiencies, and reduces total facility construction time due to the parallel fabrication of the NPMs with the generating facility structures.

20.The smaller physical and environmental footprint of the NuScale plant design, coupled with its lower output and extremely strong safety case, increases the number of sites that might be suitable for its deployment. This could potentially include sites previously discounted due to various size or infrastructure constraints.

21.The design of the NPM allows for exceptional load following capability. The electrical output of the facility can be varied at different rates depending on system needs by the use or combination of steam turbine bypass for

302 NuScale Power – written evidence (PNT0049)

rapid power changes or control rods for slower power changes. This capability enables integration with intermittent sources of generation such as wind and solar.

22.A NuScale multi-module plant provides a unique energy platform suitable for integration with diverse applications requiring process heat because of its very high level of safety and its unique ability to tailor its electric and steam power outputs. This capability, referred to as NuScale’s Diverse Energy Platform (NuDEP™), provides the means to direct the 160 MWt of heat produced in the NPM to industrial applications, such as for chemical processing, enhanced oil recovery, for use in producing synthetic fuels, or for district heating applications. As with co-generation, some modules can be dedicated to electricity production while other modules provide steam and heat to support industrial processes and desalinisation. This feature makes the NuScale design especially well-suited for hybrid energy applications in which multiple energy sources are integrated with multiple energy consuming processes to form a highly optimised and efficient system for producing multiple energy and chemical products.

23.Some energy consumers require power on a 24/7/365 basis with a high level of certainty, including defence installations, isolated communities, and some industrial processes. NuScale has examined the capability of its technology to provide highly reliable power and its analysis demonstrates that a 12-module facility can provide 100 MWe at a level of reliability of 99.99% if the NuScale plant has a microgrid connection to a dedicated service load. This unprecedented capability is extremely attractive to mission critical installations.

(g) Conventional or mixed oxide (MOX) fuel 24.The NPM has the potential to be fuelled by either conventional light water reactor fuel or mixed uranium-plutonium oxide (MOX) fuel. The findings of a study NuScale commissioned from the NNL, on a commercial basis and announced in January 2016, supported the suitability of NuScale’s technology for the disposition of plutonium.80

25.The UK has a stockpile of civil plutonium materials and the Government has committed to addressing the situation through either re-use or disposal. Re-use of plutonium for low carbon power generation via NuScale’s technology could be a valuable way of dealing with the UK’s nuclear legacy.

Global SMR market opportunity 26.Today, due partly to the high capital cost of large power reactors and due partly to the need to service small electricity grids under approximately 4 GWe, there is a global move to develop smaller units. These may be built independently or as modules in a larger complex, with capacity added incrementally as required. Economies of scale are provided by the numbers produced. There is also interest in developing small units for

80 NuScale Announces MOX Capability, 20 January 2016, http://newsroom.nuscalepower.com/press-release/company/nuscale-announces-mox- capability

303 NuScale Power – written evidence (PNT0049)

remote sites. Small units are viewed as a much more manageable investment in comparison to larger units. While the NuScale reference plant design is based on a 12-module facility, smaller size facilities can be designed for markets or locations where fewer modules are warranted (e.g. a 4 module facility).

27.The feasibility study published by the NNL in 2014 identified a potential global SMR market of 65-85 GWe by 2035, worth up to £400 billion.81 This is the equivalent of 1,100-1,500 NPMs. At 25% market share and a 10 year deployment timeframe, 28-38 NPMs would be needed to be produced per year. However, as outlined in the feasibility study, there is a narrow window of opportunity in which the UK can take value from involvement in SMR technology development that will provide substantial IP. Despite a very mature design and advanced programme development in the U.S., NuScale’s SMR still offers potential IP opportunities, particularly those associated with the need to adapt its reference design for deployment in the UK (i.e. the “UK design”) and the development of the IP associated with the manufacture of first-of-a-kind equipment and the application of advanced manufacturing techniques.

Role of UK Government in SMR development 28.NuScale shares the UK Government’s stated desire for the UK to be a global leader in innovative nuclear technology. SMRs can play a significant role in addressing the “energy trilemma” and, beyond this, offer wider economic benefits associated with growing manufacturing capability, developing IP and acquiring the rights thereto, and the potential for significant export opportunities. Generally and collectively, NuScale understands the foregoing to be the current overall objectives for the UK Government’s interest in supporting SMRs.

29.To make these objectives a reality, the UK Government needs to move clearly and decisively to ensure the opportunities offered by SMRs are realised and deliver maximum benefits for the UK. Although SMRs will be developed by the private sector, there is a key role for Government to be a part of the “first-mover solution” specifically by taking action that will reduce risk associated with SMR development and deployment, and create an environment that will encourage and support customer interest.

30.NuScale highlights four areas that it recommends the UK Government address for SMRs to become a reality:

(a) Setting the right market conditions;

(b) Identifying sites to maximise deployment opportunities;

(d) Developing and maintaining UK capability.

81 Small Modular Reactor (SMR) Feasibility Study, National Nuclear Laboratory, December 2014.

304 NuScale Power – written evidence (PNT0049)

(a) Setting the right market conditions 31.New nuclear development can present significant financial risk to the technology developer and companies that desire to own and operate new nuclear generating assets. The technology developer must incur the cost to adapt its technology specifically for UK deployment. A technology developer would expect to incur costs on the order of several hundred million pounds to adapt its home country reference design to UK codes, standards, units of measure, and country specific system requirements (e.g. 60 Hz vs. 50 Hz electrical system), and to obtain nuclear regulatory approval of the design without knowing whether the business case (i.e. the number of sales) will be sufficient to see a return on this investment.

32.Furthermore, potential owners, operators and investors in SMRs (collectively the “SMR customer”) will be reluctant to invest in SMR deployment projects unless there is clear long term political support for SMR deployment in the UK and a market framework to provide reasonable certainty of realising a suitable return on investment. Reluctance amongst potential SMR customers to own, operate and invest is also exacerbated by first-mover risk.

33.Political risk can be addressed through Government establishing policy that provides long term support of SMR deployment in the UK – support that can be sustained from one administration to the next, whether of the same or a different political complexion.

34.Market framework mechanisms to encourage, attract and incentivise potential SMR customers could also be introduced to address first-mover risk. In the U.S., the Government is currently exploring options in connection with ensuring the success of SMR deployment such as loan guarantees, production tax credits, and other forms of support such as power purchase agreements with government agencies, use of government property as locations for deployments, and cost share funding of customer licensing activities (see also, the U.S. Energy Policy Act of 2005, which provided multiple incentives to new nuclear development including regulatory risk insurance).

(b) Identifying sites to maximise deployment opportunities 35.Policy should support the achievement of multiple SMR deployments, not just a single deployment. While siting will ultimately be a commercial matter for plant developers, the Government can and should play a role in ensuring the availability of suitable sites, in sufficient numbers and at reasonable cost.

36.The UK Government’s Nuclear National Policy Statement currently identifies eight sites that would be suitable for GW-size nuclear deployment up to 2025.82 Whilst the Government has indicated that its priority remains the use of all eight sites for the development of nuclear power stations, it has also indicated that an exercise to identify further

82 National Policy Statement for Nuclear Power Generation, Department of Energy & Climate Change, July 2011.

305 NuScale Power – written evidence (PNT0049)

sites, both for new large-scale nuclear power stations and potentially for SMRs, is likely to be necessary at some stage.83

37.Given the safety case and smaller physical and environmental footprint of the NuScale plant design compared to large-scale nuclear plants, a new Strategic Siting Assessment (SSA) should identify sites specifically suitable for SMRs, allowing those sites not deemed suitable for large-scale nuclear plants previously, to be considered.

38.Based on the Government’s previous SSA and the need to obtain Parliamentary approval for any revised list of sites suitable for nuclear deployment, it is anticipated that evaluating and approving additional sites could take several years to complete. As such, NuScale supports the Government conducting a new SSA in a timely fashion in order to realise the deployment of 7 GW or more of SMR capacity in the UK, by 2035.84

(c) Licencing and regulation 39.For technology developers, risks associated with the regulatory process include uncertainty in relation to the fees and cost for obtaining regulatory approval; the time it takes to obtain regulatory approval; and the uncertainty and impacts associated with regulatory imposed design changes that are deemed necessary before regulatory approval will be granted.

40.While the integrity of the regulatory process is paramount for ensuring public confidence in nuclear energy, the Government should consider what can be done to mitigate or minimise regulatory risk associated with SMRs being approved for deployment in the UK. In the case of NuScale, prior to the submission of a design certification application to the U.S. NRC, the regulator spent considerable time preparing for receipt of NuScale’s application. The Office for Nuclear Regulation (ONR) should continue to examine opportunities to optimise the generic design assessment (GDA) review process, such as avoiding duplication of assessment work done elsewhere by other nuclear regulatory agencies and further participation in the Nuclear Energy Agency’s Multinational Design Evaluation Programme.

41.During engagement with the UK Government in 2015-16, officials advised that for planning purposes, technology developers can assume a 48 month GDA review and approval period and that the technology selected through the SMR competition would commence GDA around Q3 2017. Whether the selected SMR can achieve these tentative milestones will be reflective, amongst other things, of its design maturity. Technologies that are not well developed are unlikely to be ready to meaningfully commence GDA in the foregoing timeframe, support a review timeline that completes the review process in 48 months and therefore be in a position to achieve commercial operation in the 2020s. Clarity is needed regarding the

83 Government Response to Energy & Climate Change Select Committee report on ‘Small Nuclear Power’, March 2015. 84 Small Modular Reactor (SMR) Feasibility Study, National Nuclear Laboratory, December 2014.

306 NuScale Power – written evidence (PNT0049)

timeline to first deployment, and verifiable expectations for the design programme maturity for the selected SMR technology.

(d) Developing and maintaining UK capability 42.For the UK to be at the forefront of global SMR manufacture and deployment, the Government should continue supporting the nuclear industry’s development of the innovative techniques and skills that will drive down costs and reduce manufacturing times. This will ensure that UK supply chain companies can compete internationally and help maximise economic benefit for the UK.

43.Government should consider support for companies that (i) are not currently nuclear suppliers but desire to be so, or (ii) have allowed their nuclear quality programmes and certifications to lapse or no longer be supported because of a lack of nuclear sourcing opportunities.

44.Consideration is needed as to how the timing of SMR deployments will correlate with the timing of other significant infrastructure programmes. In addition to continuing efforts to improve the pipeline of skilled resources for the nuclear industry, Government should also address possible limitations in the ability of the workforce to meet the design, construction and operational needs of a future SMR manufacture and deployment programme.

Summary 45.NuScale Power proposes a partnership with British industry to deliver a multi-billion pound manufacturing and infrastructure venture. This will see NuScale’s technology being built in British factories, generating low- carbon, secure and competitively priced electricity in the UK and transforming the UK into a hub for export into a potentially lucrative global market. There is a narrow window of opportunity for the UK to secure a significant share of the global SMR market; however, the Government must take actions to reduce first-mover risk – for both technology developers and potential customers – and create the right environment to ensure the opportunities of SMRs are realised and deliver maximum benefit for the UK.

24 February 2017

307 NuScale Power, Sellafield Ltd and Rolls-Royce Nuclear – Oral evidence (QQ 9-19)

NuScale Power, Sellafield Ltd and Rolls-Royce Nuclear – Oral evidence (QQ 9-19)

Transcript to be found under Sellafield Ltd

308 Office for Nuclear Regulation (ONR) – Written evidence (PNT0024)

Office for Nuclear Regulation (ONR) – Written evidence (PNT0024)

Introduction 1. The Office for Nuclear Regulation is an independent regulator established as a public corporation on 1 April 2014 under the Energy Act 2013. Our mission is to provide efficient and effective regulation of the nuclear industry, holding it to account on behalf of the public. ONR is responsible for fulfilling the statutory purpose of regulating the nuclear industry within Great Britain in the areas of nuclear safety, nuclear security, conventional health and safety on nuclear sites, nuclear safeguards, and transport of radioactive materials. We ensure that nuclear site licence holders have made and are implementing adequate arrangements for complying with relevant legislation during construction, operation and decommissioning phases across all nuclear licensed sites.

2. ONR published its research strategy in August 2015 which states it will use research to support its independent regulatory decision making. The main objective of the strategy is to ensure that ONR's inspectors will form their regulatory judgements confidently and effectively using sound, up to date scientific and technical information. Licensees are required to produce safety cases to demonstrate the safety of their operations, so they are responsible for performing any research necessary to substantiate their safety claims.

General overview of ONR’s regulation of new nuclear build 3. An overview of the key stages of the current regulation of new nuclear build that are relevant to the deployment of SMRs is presented below. ONR routinely review lessons learned from application of the Generic Design Assessment (GDA) and other process. Depending on future government strategy, ONR will consider the need to review the suitability of these processes for SMRs.

4. During the current year, ONR has commissioned research in a number of areas, two examples are nuclear reactor fuel design and nuclear reactor graphite core behaviour, in particular:  The increasing demand for cheaper and safer nuclear energy has resulted in various modifications in the design, manufacturing and operation of fuel for nuclear reactors. ONR has commissioned and undertaken fuel design research in order to understand these modifications and there implications on fuel behaviour in accidents.  Graphite research has been undertaken in order that ONR can make proportionate and informed judgements relevant to the operability of the Uk’s fleet of AGRs. Thus we will be able to make a constructive challenge to the licensee’s safety case, based on a detailed understanding, supported by our own analyses.

5. Generic Design Assessment - GDA is carried out by ONR to review the safety and security implications of new reactor designs on a generic basis, in advance of site or operator specific proposals. This would permit deployment of the generic design on any site, subject to further assessment of site specific aspects not covered in the GDA (plus licensing, permitting, etc.). A

309 Office for Nuclear Regulation (ONR) – Written evidence (PNT0024)

key requirement is the demonstration that the risks have been reduced as low as reasonably practicable. In GDA ONR expects a clear conclusion that there are no further reasonably practicable improvements that could be implemented in the design. At the end of GDA, if ONR is fully content with the generic safety and security aspects of the design, a Design Acceptance Confirmation (DAC) is issued. A DAC does not guarantee that a subsequent site licensing application will be successful, as the latter phase covers wider issues.

6. Licensing under the Nuclear Installations Act 1965 - The safety of nuclear installations is secured primarily through a nuclear site licence and the conditions attached to it. Sections of the Nuclear Installations Act 1965 (NIA 65) relating to the licensing and inspection of nuclear installations are relevant statutory provisions of Energy Act 2013. Section 4 of NIA 65 requires ONR to attach conditions to a licence in the interest of safety and allows other conditions to be attached. Any organisation wanting to install or operate a prescribed installation will need a site licence.

7. Construction and Commissioning - ONR regulates construction and installations which requires a licensee or developer to demonstrate, amongst other things, that it is capable of ensuring that the structure/installation complies with the extant safety case and applicable safety, health and safety and security regulations (e.g. relevant statutory provisions of the Energy Act 2013). ONR will use its powers under the site licence to permission the commencement of key stages of construction and commissioning. ONR will take the DAC into consideration when assessing the adequacy of site specific safety case submitted by the licensee for requesting permission to proceed with construction, commissioning and operation of the facility.

8. Models being proposed for SMRs have the potential to challenge ONR’s existing approach to nuclear site licensing i.e. off-site modular construction, resource sharing between companies, separate construction and operating companies, separate ownership of modules on a single site, potential for multi-module operation by a small number of operators from a centralised facility. Depending on future government strategy, ONR will engage with potential developers to clarify their approach to deploying SMRs in GB. This will inform which proposals may be acceptable, whether or not the current approach to nuclear site licensing needs to be reviewed and amended, and which proposals are unacceptable.

ONR’s responses to the questions asked by the Committee 9. Within our regulatory scope we are able to provide responses to the Committee’s questions as detailed below. It is not appropriate for ONR to respond to Q2, Q4, Q9

310 Office for Nuclear Regulation (ONR) – Written evidence (PNT0024)

10.It is clear from our vires through the Energy Act 2013, that responsibility for UK civil nuclear research policy does not lie with the Office for Nuclear Regulation, nor would we seek legislative amendments to give ONR such vires. In our view, the sponsoring department for the UK civil nuclear industry, BEIS would be an obvious owner for this role. They could delegate the main work to an arms-length body such as a successor of NIRAB or a national lab, such as NNL, but BEIS should retain the responsibility.

Q3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

11.Upon request from government, ONR would assess specific SMR designs based on the risks arising for safety and security. In this assessment we would not make a determination on their benefits or disadvantages. We would consider these risks using relevant guidance. So far, ONR has not undertaken any assessment of SMRs.

Q4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

12.ONR is not in a position to judge the adequacy of governments R&D programmes for SMRs, but notes the following:  The BEIS innovation programme currently starting will provide further funding for a number of technology independent research programmes, such as advanced manufacturing and accident tolerant fuels as well as high performance fuels, together with outer relevant topics such as the strategic toolkit. Some of this funding is continuation funding from that originally needed to construct and commission new research facilities such as those at NAMRC (Nuclear Advanced Manufacturing Research Centre). This technology independent research will help underpin an SMR programme as well as the current new building programme.  The government has not yet made public its strategy for SMR development. ONR cannot respond further on this question regarding specific SMR design research or international engagement until a clear decision on technologies is made.

311 Office for Nuclear Regulation (ONR) – Written evidence (PNT0024)

13.ONR is not aware of any competition criteria which the government has made available. If requested by government, ONR would identify key safety, security, safeguards and transport aspects that we believe should be considered in setting such criteria.

14.ONR is not in a position to judge if the UK should develop Gen IV technology. Depending on government strategy, if GEN IV technologies are carried forward, ONR will consider the need to develop a programme for upskilling and developing regulatory capability on these technologies to ensure that regulatory processes and guidance remain suitable. As the UK independent nuclear safety and security regulator, ONR remains technology neutral and will consider any design on a case-by-case basis.

15.As the UK independent nuclear safety and security regulator, ONR is not in a position to comment on NNLs delivery against their remit. NNL are a tenant on a number of licensed sites and are a security dutyholder. We publish our views on safety and security performance across the licensed sites annually via our Chief Nuclear Inspectors annual report, NNL attracts a routine level of attention. NNL have only recently been given national lab status. In our opinion, comparing NNL with other national labs in say France or the USA, NNL’s capabilities appear narrow, and there could be benefits in expanding their remit and capability.

16. The ONRs purposes under the Energy Act do not allow regulation of the full scope of nuclear research in the UK. In our opinion, the coordination between the funding bodies appears limited. There would appear to be an opportunity to coordinate government funded nuclear R&D. In the generation sector, the commercial perspective reduces opportunities for sharing and collaborating, as organisations are effectively competing. However, the international nature of ownership opens up wider knowledge to the UK, such as EDF Generation and EDF NNB having access to the wider EDF SA programme of work. No single body has oversight of the whole landscape and

312 Office for Nuclear Regulation (ONR) – Written evidence (PNT0024)

the landscape reviews NIRAB undertook were unlikely to have captured all the parties – although it was the best work in this area in the last decade.

17.In ONRs opinion, international research is particularly poorly coordinated. There could be a limited role for ONR here. This is because a number of the international research coordination bodies are led through participation of and leadership by the nuclear regulators. Similarly, a number of international regulations have bilateral agreements with ONR, which can, and in some case such as ASN do, include discussions on potential shared research. In our opinion, a NIRAB successor body could be tasked with this role, and to coordinate international activity. This would be a significant improvement, and could result in both a better, stable, international presence and in improved efficiency in the UK.

18.ONR was represented on NIRAB by a Deputy Chief Inspector, responsible for international, policy and assurance. From our perspective, NIRAB was successful within its terms of reference. The key recommendations it developed regarding brigaded research themes have been carried forward into the BEIS/Innovate UK innovation competition. The work on knowledge and capability has seen significant improvements in training and development of the next generation of engineers through NSAN (Nuclear Advanced Manufacturing Research Centre).

19.ONR does not consider a successor body is essential, however, the current uncoordinated approach will perpetuate without some form of governance and oversight. It would seem likely that a coordination group, although itself an overhead, would be likely to realise sufficient benefits in coordination of funding and international opportunities to be able to break even, or provide a net benefit.

20.A successor body could be given roles to:  Coordinate UK government funded nuclear fission research, taking account of research for the defence sector as well, if at all possible.  Coordinate the UK approach to international research programmes, notably from IAEA, OECD/NEA, and also EU funded programmes where the UK can continue to engage with these programmes.  Review the UK skills base, and fund programmes to ensure key knowledge areas are funded to end of life – e.g. graphite, plutonium storage and disposition.

21.The form of any successor organisation would be a decision for its sponsoring body within government.

23 February 2017

313 Office for Nuclear Regulation (ONR), EDF Energy and Nuclear Decommissioning Authority (NDA) – Oral evidence (QQ 20-30)

Office for Nuclear Regulation (ONR), EDF Energy and Nuclear Decommissioning Authority (NDA) – Oral evidence (QQ 20-30)

Transcript to be found under Nuclear Decommissioning Authority (NDA)

314 Penultimate Power UK – Written evidence (PNT0013)

Penultimate Power UK – Written evidence (PNT0013)

SMR Questions:

3. What are the potential benefits, disadvantages and risks from the deployment of SMRS in the UK and more widely?

3.1 To answer in the context of assisting government policy, it is necessary to understand what the Government’s energy priorities are, which are by no means clear. It is assumed that the focus remains on externalities; energy security, reliability and flexibility (to fit in when wind and solar are unavailable), health/pollution and climate change, all costs which are undervalued by the market yet seen as essential to achieve targets and retain political and social acceptance. There is a conflict of interest between these externalities and sustainable end-user costs, crucial to economic competitiveness.

3.2 It is also assumed that the premise for this question is the fact that much of the UK’s generating capacity is closing down in the next decade. The market to build replacements is broken and any new generating capacity must not detract from achieving the UK’s unilateral, legally-binding target of reducing carbon emissions by 80% by 2050. This forthcoming gap energy equates to nearly 30GW85, the equivalent to 9½ Hinkley Cs. Then add the government’s estimate of a 20% increase in electricity demand over the next two decades because of demographic changes, economic growth and the electrification of heat and transport.86 It is a massively expensive and difficult task, not one that can be entirely rectified with energy efficiency, solar panels and batteries. In the short term, additional gas capacity using imported and indigenous fuel may be used as a bridge for the next 10 to 20 years. However, this has unacceptable environmental and balance of trade implications. Gas still produces half a kilo of carbon by kilowatt hour. As indigenous supplies diminish, the UK will need to import up to 80% of its gas requirements by 2020; UK production from fracking is still highly uncertain. Furthermore, current energy policy is reliant on up to 14GW of new GW-sized nuclear to be built by 2030. Substantial financial difficulties threaten, at best, to delay or downgrade these behemoth projects, at worst to write them off completely. As the UK struggles through the next few winters with unsustainable financial mechanisms to pay businesses to reduce production or fire up diesel generators, decisions need to be made today on how the UK will enter a new post-EU era with sufficient, affordable, reliable low- carbon generating capacity.

85 https://www.iaea.org/About/Policy/GC/GC60/GC60InfDocuments/English/gc60inf- 2_en.pdf 86 https://www.nao.org.uk/wp-content/uploads/2016/07/Nuclear-power-in-the-UK.pdf

315 Penultimate Power UK – Written evidence (PNT0013)

3.3 As with all crises, this brings opportunity. The UK represents a fertile location for a new SMR nuclear industry. Investors should note that there is: . A real demand now . An electricity market ready to reward low carbon generation . A market ready to reward embedded dispatchability . A body of expertise in small military and civil reactor design and manufacture . An internationally respected, independent nuclear regulation . A nuclear supply chain ready to perform with appropriate support

3.4 In addition, the UK offers advanced manufacturing techniques, and a world-renowned research and development capacity. From an export and financing perspective, London is at the heart of global project finance and is a truly international country trading off its long heritage and language advantage as well as its engineering, commercial and science expertise. If handled correctly, SMRs offer a unique opportunity to move towards a new era of nuclear, with UK IP input, igniting our advanced manufacturing capacity and creating and sustaining thousands of jobs for decades to come. The benefits of SMRs versus gigawatt-sized plant are routinely documented; lower capital costs, quick to build so faster return on investment, offsite modular construction mitigating onsite risks, new passive safety features and, depending on design, new applications for a low carbon economy such electric heat and transport.

3.5 The risk lies in the Government not making appropriate and timely decisions. Having placed itself in a position of judge and jury through its SMR Competition, ongoing delays and lack of clarity on how the competition is to proceed, has paralysed the market. This is an international competition, where the technology vendors are being encouraged and incentivised by their own governments, which have recognised the benefits of new supply chains, manufacturing jobs and energy security. Without urgent action, the window of opportunity for meaningful participation will soon close.

4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

4.1 There were 441 nuclear reactors operating at the end of 2015, a global capacity of 382.9GWe. Thirty countries currently use nuclear power and about the same number are considering, planning or actively working to include it in their energy mix87 Nuclear power capacity worldwide is increasing steadily, with over 60 reactors under construction in 15 countries.88 Nuclear is set to play an

87 https://www.iaea.org/About/Policy/GC/GC60/GC60InfDocuments/English/gc60inf- 2_en.pdf 88 http://www.world-nuclear.org/information-library/current-and-future- generation/plans-for-new-reactors-worldwide.aspx

316 Penultimate Power UK – Written evidence (PNT0013) important part for countries keen for energy security, lower emissions and reducing the reliance on gas from less than stable political regimes. Some countries who do not have either the resources or the grid infrastructure to cope with conventional nuclear are particularly interested in SMRs. The size of the potential SMR market is estimated at 65-85GW by 2035, valued at £250- £400bn.89 It would be prudent for the UK to partner with an international vendor to access the global market. The UK market, based on LWR technology, is estimated at 7GW, but certain advanced, intrinsically safe reactors would allow a significant increase in the number of reactors built, subject to public acceptance.

5. Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to co-ordinate UK actions, including international engagement on SMR development and future deployment?

5.1 Development costs for SMRs, as a percentage of market capitalisation and annual revenues, are similar to the aerospace industry but without the potential for large returns or the assurance of large balance sheets. Unlike pharmaceuticals, aerospace and information technologies, energy R&D is risky, with long lead times and low margins for the eventual commercialised product.90 Add in political vacillation, regulatory risk and competition against state-owned enterprises with access to cheap capital, and the difficulty for the private sector to fund SMR R&D is understood. Investors are also wary of IP vulnerability that could sharply reduce their returns.

5.2 First-of-a-kind small nuclear plant costs are clearly prohibitive. Even with support, an entirely new approach is needed; a pre-committed volume of fleet sales is a prerequisite to developing an SMR. This is new and requires a design and licensing framework capable of presenting a site-independent safety case, suitable for multiple application.

5.3 If the Government is to launch an SMR industry, it must structure a framework of coordinated, mutually supporting, subsided investments. The United States model includes:

. Executive Order 13693

Compels Federal Agencies to ensure 25% of their energy consumption comes from Clean Energy Sources by 2025. SMRs (but not conventional nuclear) are included in the definition of Clean Energy

. Second instalment of DOE’s Quadrennial Energy Review

recommends that the nuclear Production Tax Credit be extended, allowing SMRs to qualify, plus allowing federal agencies to negotiate 20-year power purchase agreements for clean energy, which would include SMR power

89 http://www.nnl.co.uk/media/1627/smr-feasibility-study-december-2014.pdf 90 http://civitas.org.uk/pdf/IEGissue11.pdf

317 Penultimate Power UK – Written evidence (PNT0013)

. Advanced Nuclear Technology Act of 2017

Requires the NRC (Nuclear Regulation Commission, equivalent to the UK’s ONR) a year from enactment to produce a technology-neutral framework for advanced reactor and SMR licensing

. Energy Innovation Portfolio Plan

The US Department of Energy has set aside $750m FY2018-2022 on a cost-sharing programme to develop and deploy SMR technologies. This is in addition to the $452m already allocated to two vendors to complete design certification and licensing.

5.4 Any such programme should extend support to the supply chain with loans and tax relief on R&D in the manufacturing sector, plus apprenticeships and skills development.

6.1 One of the chief difficulties with the SMR Competition is the lack of clarity on what role the Government intends to take. How does the Government intend to assist SMRs to market? A competition denotes that there is a process and then a prize. Neither of these two fundamental functions are available at time of writing, 15 months following the Chancellor’s announcement in November 2015. Is the Government intending to take an equity stake, offer loans or grants to take the technology through the GDA? How can the technology providers be expected to invest in the UK without such knowledge?

6.2 The second point is, what is the Government looking for? MWs on the bars as soon as possible, in other words, a tried and tested technology that can be more easily taken through the GDA process, and built relatively quickly, or bringing one of the advanced nuclear reactors to market that may bring about an era-changing for nuclear with a game-changing approach to safety and waste?

6.3 Certainly, any technology entered in to the Competition should: . Be at a minimum of TRL6 – advanced enough to judge viability yet with sufficient scope for securing IP for the UK if required . Be indisputably safe for unrestricted deployment close to population centres . Be capable of load following in support of the existing investment in non-dispatchables . Be cost competitive with similar sized low carbon technologies, e.g. offshore wind

318 Penultimate Power UK – Written evidence (PNT0013)

. Use fuels and components which can be manufactured and stored in the UK

6.4 It is highly possible that the most appropriate SMR for the UK is an international technology. If the aim is to launch a UK-based SMR industry, with UK jobs, rather than buy ‘off the shelf’ from an international vendor then there should be a demand for a minimum UK-based content for the supply chain. It is recognised that by not securing such a commitment from the wind industry an opportunity for thousands of UK jobs was lost, as international developers built the turbines overseas and brought in their own engineers to construct them. Other countries outside the EU procure in this manner.

6.5 Regarding the timetable, it is reiterated that the longer the Government takes to decide, the fewer options are on the table. There is a global race to market. Additionally, no decision is by default a decision to build more gas, the only technology that can be built fast enough to fill the gap. It is a decision that will keep the lights on but will derail any attempt to lower emissions in line with our national and international obligations.

7.1 The UK is already involved in Gen IV technology development. To what extent and whether sufficient funding is available we shall leave to those better placed in the R&D environment to answer. Suffice to say that the UK is working with the Multinational Design Evaluation Programme, where the international members are “i) cooperating on safety reviews of designs of nuclear reactors that are under construction and undergoing licensing in several countries, and ii) exploring opportunities and potential for harmonization of regulatory requirements and practices. Founder member, the NRC (United States’ equivalent of the UK Office of Nuclear Regulation), is calling for members “to develop common design requirements so that regulatory standards can be harmonized.”91 This will bring reactors in line with civil aviation, where a licence in one country covers worldwide application.

7.2 If the UK wishes to establish a world leading position in nuclear development, having the best scientists and world-class facilities is insufficient; money has to put on the table to enjoy the benefits of international collaboration.

91 https://www.oecd-nea.org/mdep/

319 Penultimate Power UK – Written evidence (PNT0013)

7.3 The Gen IV International Forum is leading R&D on revolutionary rather than the evolutionary designs of today.92 UK is a member only via Euratom.

22 February 2017

92 https://www.gen-4.org/gif/jcms/c_9260/public

320 Plaid Cymru – Written evidence (PNT0042)

Plaid Cymru – Written evidence (PNT0042)

1. Introduction

1.1 Plaid Cymru – The Party of Wales, is the Official Opposition in the National Assembly for Wales and represents the Constituencies of Arfon, Carmarthen East and Dinefwr, and Dwyfor Meirionnydd in Westminster.

1.2 Plaid Cymru MP Liz Saville Roberts represents the constituency of Dwyfor Meirionnydd, in which the Trawsfynydd nuclear site sits. The Trawsfynydd site is part of the long-standing North Wales Nuclear industry; the areas other notable nuclear site being Wylfa.

1.3 Plaid Cymru does not support the development of nuclear power in new locations. However, recognising the crucial economic role the nuclear industry plays in existing sites in Wales, Plaid Cymru does support the re- development of nuclear power station on existing Welsh sites.

1.4 The Trawsfynydd site has employed people in the constituency and the broader North Wales region since 1959. The site is now in the process of being decommissioned, which is expected to be completed by 2028.

1.5 Plaid Cymru believes there are significant opportunities for the development of SMR technology at the Trawsfynydd site. Existing infrastructure ensures that there are the necessary grid connections, infrastructure for transporting modules and other elements, and an existing skilled workforce. The site is also under public ownership, through the Nuclear Decommissioning Authority, making it accessible for developers.

1.6 There is widespread industry, political and local support for the hosting of an SMR at Trawsfynydd.

1.7 Our responses to the relevant consultation questions below outline how we believe the UK Government can best facilitate the development of the burgeoning SMR industry, with particular reference to the Trawsfynydd site.

2. Consultation questions

2.1 Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities including international collaboration and, within the UK, for cost-effective and efficient articulation of the different elements of nuclear work?

2.1.1 Plaid Cymru believes that decisions that impact most on Welsh communities should be made in Wales, with as much local engagement as possible.

2.1.2 Under the recently passed Wales Act 2017 the National Assembly for Wales has gained increased powers – primarily relating to planning –

321 Plaid Cymru – Written evidence (PNT0042)

for energy projects up to 350MW. However, all legislative and regulatory powers relating to nuclear projects are retained at a Westminster level. Although we recognise the need for a consistent regulatory framework at the highest possible level – ideally Europe wide – the National Assembly for Wales should be given the power to decide how, where and when nuclear power plants (particularly SMRs, which fall within the existing 350MW limit) should be built in Wales. This could be achieved through the devolution of powers relating to planning for nuclear energy as is consistent with other energy projects.

2.1.3 Plaid Cymru has shown long-standing support for the UK’s continued membership for European Atomic Energy Community and Euratom. The European Atomic Energy Community and Euratom have been key to developments in the nuclear industry which have improved safety, efficiency and in-turn the cost effectiveness of nuclear energy generation. We are disappointed that the UK Government has indicated that it will be seeking withdrawal from these organisations and implore them to re-consider this decision following recent political and industry pressure.

2.2 The Government’s industrial strategy green paper discusses a possible ‘sector deal’ for the nuclear sector. How might the nuclear sector benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal?

2.2.1 The benefits of the nuclear industry for the supply chain, local communities and realising its export potential could all be developed through a ‘sector deal’. However, the UK Government must undertake greater work to clearly create a framework in which any such industry driven ‘sector deal’ would function and be able to properly contribute to the legislative and regulatory process.

2.2.2 Although ensuring industry and academic expertise is utilised effectively as part of any ‘sector deal’, the UK Government must also seek to ensure other stakeholders are included in the process. The specific interests of the devolved administrations and local authorities should also play a leading role in any ‘sector deal’ to ensure the involvement of the democratically elected representatives of the communities which will be most affected by the development of any new nuclear power stations.

2.2.3 The failure of the UK Government to give adequate clarity over the SMR competition and its failure to publish its promised SMR road-map has already created frustration amongst commercial, political and public stakeholders. If the so-called ‘sector deal’ simply creates a greater administrative burden and fails to deliver clear and tangible outcomes, it could exacerbate this discontent. The Government therefore needs to outline in greater detail how they expect the ‘sector deals’ to function, and what their roles and objectives are.

SMRs

322 Plaid Cymru – Written evidence (PNT0042)

2.3 What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

2.3.1 Plaid Cymru does not support the development of new nuclear sites. However, we would support the maintenance and development of nuclear power sites that are currently in operation or in the process of decommissioning.

2.3.2 In isolation SMRs, or any other form of nuclear power stations, will not deliver the sustainable, long-term energy and environmental requirements of UK, Europe or the planet.

2.3.4 Side-by-side with renewable sources, nuclear energy has a key role in ensuring the necessary baseline energy supply is met through low- carbon generation.

2.3.5 Plaid Cymru does however recognise that in communities such as Trawsfynydd nuclear power stations have been – and continues to be throughout the decommissioning process – central to the local economy; providing jobs, investment and secondary economic benefits for the region.

2.3.6 Beyond the continued production of low-carbon electricity, the development of an SMR in Trawsfynydd would bring benefits such as:

 The continued employment of local talent who already make a valuable economic contribution.  An expansion in the number of high-skilled, high-value jobs in both the short-term through construction and through operational management of the plant in the long-term.  Increasing the area’s economic resilience, which is particularly important considering the region has one of the UKs lowest average wages, with over half its workers earning less than the Living Wage and few alternative employment opportunities.  The productive utilisation of a site unable to accommodate large scale nuclear energy facilities as identified by the last Strategic Siting Assessment in 2008. Currently the site is of almost no direct monetary value to the tax-payer.  Trawsfynydd is well placed to accommodate an initial site for SMR deployment due to the site’s public ownership, through the Nuclear Decommissioning Authority, as well as the existing infrastructure surrounding the site. Comparative to other potential sites there would be fewer planning and infrastructural barriers and/or costs to its development.

2.4 What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

2.4.1 At a time when the UK’s position in international trade is increasingly uncertain, the development of, and investment in, pathfinder SMR

323 Plaid Cymru – Written evidence (PNT0042)

projects offers a clear opportunity to build on a potential high-value and internationally significant technology.

2.4.2 The National Nuclear Laboratory has estimated that the development of a UK SMR industry could be worth £100 billion to the UK economy between 2030 and 2050 and would open up an international exports market worth £400 billion by 203593.

2.4.3 These statistics are inherently based on a number of assumptions and long-term projections, however they do give an indication of the international appetite for SMRs and its ramifications for the domestic economy.

2.5 Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to coordinate UK actions including international engagement on SMR development and future deployment?

2.5.1 The UK Government is clearly failing to invest and create long-term certainty for companies looking to undertake research and development into SMR technology.

2.5.2 The UK Government’s recent announcement that it will seek to extricate the UK from Euratom signals its willingness to sacrifice key research and development opportunities for political reasons. Plaid Cymru will continue to call for the Government to re-assess this decision to ensure continued international collaboration on research and development in the nuclear industry.

2.5.3 Although the announcement of an SMR competition has re-focused some stakeholders, the failure of the Government to publish its SMR roadmap (scheduled for publication in autumn 2016) and techno- economic assessment of SMRs is causing concern about its capacity and focus to the development of the industry at this pivotal time.

2.5.4 Nuclear energy production has a long history in North Wales and resultantly a significant amount of expertise is rooted in the region. The Welsh Affairs Committee recognised this and has shown support for the expansion of the National Nuclear College to the area in order to harness the existing expertise and create the skills and research base that the North Wales nuclear industry will need if it is to be successful going forward94.

2.6 Are the criteria set out by the Government for the SMR competition appropriate? If not, what should the criteria be? What timescale should the Government be working to in choosing an appropriate SMR design for the UK?

93 http://www.nnl.co.uk/media/1627/smr-feasibility-study-december-2014.pdf 94 https://www.publications.parliament.uk/pa/cm201617/cmselect/cmwelaf/129/129.pdf

324 Plaid Cymru – Written evidence (PNT0042)

2.6.1 Plaid Cymru would have liked to have seen a great focus on how any developer expects to encourage investment in the local economy in the Government’s SMR competition. This would include how many jobs would be created by the SMR, what local links they already have and their efforts to involve local businesses in the project.

2.6.2 Plaid Cymru also believe that the identification of preferred potential sites should also be included as part of the criteria. We would recommend that the Government moves imminently to announce their preferred first SMR site so that investors and developers have clarity on the issue.

2.6.3 Any SMR project should of course address the energy trilemma of producing (1) a secure supply of energy (2) through low-carbon technologies (3) at the lowest possible cost to the consumer. We recognise that early projects may incur an initial higher cost. However, we believe the long-term benefits (such as the IP value and export potential) of such a projects will mean that this cost will be offset in the long-term.

2.6.4 However, we also believe that any SMR design must also take into account its socio-economic impact. For example, whether it can be deployed on existing sites (such as Trawsfynydd) and whether it will be able to be manufactured as locally as possible.

2.6.5 It also must be noted that Phase I of the Government’s SMR competition closed in May 2016. There is increasing frustration that there is not yet any indication from the Government regarding developments around Phase I or the potential launch of Phase 2. The Government needs to urgently reassure stakeholders that they are making progress on this work stream.

2.7 Should the UK be involved in the development of Gen IV technology? If so, what funding and support should be put in place to place to help the UK establish a world leading position? Should our activity include development of one or more test reactors?

2.7.1 Plaid Cymru believe the opportunity to develop Gen IV technology should be taken by the UK Government. Key to this will be the allocation of a potential development site and we see Trawsfynydd with its existing infrastructure as an excellent candidate for this.

24 February 2017

325 Prospect – Written evidence (PNT0019)

Prospect – Written evidence (PNT0019)

Introduction

1. Prospect represents 12,000 members who work in the nuclear industry and nuclear-related research. This brief submission reflects the concerns of our members about the proposed exit from the European Atomic Energy Community (Euratom) as part of the process of leaving the EU. Prospect believes that this decision is ill-informed, irresponsible and unnecessary. It will have significant implications for the nuclear industry and the research and technology that supports it, and therefore sets the context for the Select Committee’s interest in the need for coherent and consistent long-term policy for civil nuclear activities including international collaboration.

2. Prospect members requested clarity as to whether the referendum applied to Euratom prior to it taking place. However the Government failed to reply until November 2016, and at that point acknowledged that leaving Euratom was only a consideration, not a conclusion. Although the Government has presented exit from Euratom as a legal consequence of leaving the EU, this is a contested view and that is why Prospect believes it must be challenged.

Importance of continued UK membership

3. Euratom performs valuable functions for the nuclear industry in the UK:  It enables a single market of goods and services for new nuclear build. The nuclear supply chain is international. Experts have warned that the movement of nuclear fuel, equipment and trained staff will become more complicated outside Euratom and the single market. There will also be further potential delays and cost increases to the nuclear new build programme.  It provides funding for nuclear fusion research being undertaken by the Culham Centre for Fusion Energy and it provides access to the European R&D community. Exiting from Euratom will remove the basis for the UK hosting the Joint European Torus (JET) project. JET is the largest Tokamak in the world and the only operational fusion experiment capable of working with tritium, the fuel necessary for fusion energy. More than 40 laboratories and more than 350 scientists and engineers from all over Europe currently contribute to the JET programme, which is funded by the European Commission. This funding also provides a significant benefit to the local economy and there are industrial partners to fusion that would also be affected, particularly through ITER contracts.  It ensures UK compliance with the non-proliferation treaty including inspection, reporting and accounting, and it manages and develops the Nuclear Co-operation Agreements with non-EU countries on behalf of Euratom members. Outside Euratom the UK will need to conclude new bilateral co-operation agreements with the US and approximately 20 other countries to maintain access to intellectual property and nuclear technologies.

326 Prospect – Written evidence (PNT0019)

4. As Dr Paul Dorfman has commented ‘The UK has current bilateral nuclear cooperation agreements in place that are predicated on Euratom safety regimes – and all of this has taken a long time to put in place. You’re talking about key safeguards and assurances that might have serious implications for UK new-build installations, the nuclear fuel cycle and the UK’s enormous waste and decommissioning liabilities’.

Concerns of Prospect members

5. From the large volume of concerns raised by Prospect members, we have selected three that span a range of operational and aspects. The first two are from members currently working in the industry and the third is from the son of a Prospect member, currently studying maths and physics at university:

‘Having worked for a number of years on the fuel route for Sizewell B, I am aware of the benefits of using the Euratom standards and processes for safeguarding the design, procurement, transport, use, storage and disposal of nuclear fuel. International standards of quality and safety are necessary for the safeguarding of nuclear fuel, and the transfer between organisations and countries, but also for the economic delivery of fuel procurement for power stations to tight timescales due to the limited fuel storage facilities available for new fuel’.

‘With our privatised energy market the entire nuclear generation fleet is owned by EDF, so clearly some sort of framework is needed for international cooperation. None of the current new build projects in the UK is a British design and we are reliant on foreign technology: Hinckley C (EDF, France); Moorside (Toshiba, Japan) and Westinghouse, USA); Wylfa (Hitachi, Japan); Bradwell (China). I don’t see how it can be a good idea to sever ties without alternative arrangements in place. These are sure to be complex and time consuming to set up, and hard to see how we would be better for it’.

‘Euratom was formed well before the European Union and includes members outside of the EU, so it does not make sense for this to be a condition of us leaving the EU. As we are current members of Euratom this means we already have operations within the UK dependent on this treaty. For this reason leaving the treaty can damage current academic endeavours. For example Euratom provides funding for the Joint European Torus (JET) and will enable us to take part in the research at the successor ITER. Euratom also enables access to the Joint Research Centre and by extension a strong link to European nuclear research. Losing these privileges would damage scientific research in the UK, a great shame for a country that has always been one of the leaders of scientific achievement’.

6. The concerns of Prospect members are further illustrated by case studies in our upcoming publication ‘The implications of Brexit for STEM: Experiences from the frontline’, including experiences from Sellafield and the Culham Centre for Fusion Energy’95.

95 Available from Prospect from 7 March.

327 Prospect – Written evidence (PNT0019)

7. The Institution of Mechanical Engineering (IMechE) has drawn attention to concerns about the implications for the nuclear skills base96, which Prospect shares, particularly if restrictions on the free movement of people are enforced:  Construction – There is a heavy reliance on skilled workers from Europe and the regulation of skills for working on nuclear licensed sites is very specific.  Manufacturing – Euratom creates the European single market for goods and services for the nuclear industry. Nuclear manufacturing ranges across Europe, so new tariffs and procurement procedures could make this more costly.  Technical expertise – URENCO’s Technical Authority for uranium enrichment services is located in Germany. Skills such as centrifuge technology require on input from outside the UK.  Research – Euratom funding maintains Culham as a centre of excellence for fusion research and is vital for continued leadership in this field.

As IMechE also correctly points out: ‘The good research base in nuclear technologies at UK universities also attracts STEM graduates and undergraduates. Traditionally these have been sourced from a variety of countries, with a significant number coming from across Europe. The business model that makes these UK universities’ nuclear programmes financially sustainable clearly relies on the current arrangements to access these students’.

Conclusions

8. Prospect believes that it is essential that the serious and wide-ranging ramifications of leaving Euratom are properly debated and understood. Euratom is a separate entity from the treaty that created the European Economic Community and it is managed by the EU institutions on this basis. There is no exit clause in the Euratom treaty. Our understanding therefore is that Article 50 does not apply to Euratom, but that the UK would need to extricate itself using the treaty of treaties. Our key contention is that there is no inevitability about this course of action, but there are clear political choices to be made.

9. Although we recognise that every option will be difficult in the current environment, we would urge taking unnecessary risks in this regard. At the absolute minimum, the UK should not take any steps to leave Euratom until an equivalent framework and safeguards are put in place. In our view this is likely to be a lengthy and complex process and, if this is the path taken, should only be progressed in close consultation with key stakeholder groups including representatives of the nuclear workforce.

23 February 2017

96 ‘Leaving the EU: The Euratom Treaty’.

328 Mr Chris Rogers – Written evidence (PNT0009)

Mr Chris Rogers – Written evidence (PNT0009)

I have been involved in the Nuclear industry for over 30 years in various positions and sites ranging from running nuclear plant, through novel reactor repair methodologies, to decommissioning. The proposal of a new phase of commercial reactor technology greatly interests and excites me at the same time; we have an ideal opportunity to make an investment in this, and export it to the rest of the world. The commercial opportunities for this, if we can design, approve and manufacture within the UK, are global, and would be a massive boost and a re-start for a multitude of manufacturing industries ranging from steel, assembly plants, fuel manufacture, and the entire infrastructure that supports these businesses.

The most promising site for the construction of a new SMR would be at the decommissioning site at Trawsfynydd in North Wales; it already has the ancillaries in place. These are the 400Kv grid sub-station, a nuclear site license, a lake for cooling water that has the thermal capacity required, a trained and experienced workforce, and local community support.

20 February 2017

329 Rolls-Royce plc – Written evidence (PNT0006)

Rolls-Royce plc – Written evidence (PNT0006)

Introduction Rolls-Royce designs, develops, manufactures and services integrated power systems for use in the air, on land and at sea. We are one of the world’s leading producers of aero engines for large civil aircraft and corporate jets and the second largest provider of defence aero engines and services in the world. For land and sea markets, reciprocating engines and systems from Rolls-Royce are in marine, distributed energy, oil and gas, rail and off-highway vehicle applications. In nuclear, we have a strong instrumentation, product and service capability in both civil power and submarine propulsion and have delivered the nuclear reactor design, manufacture, operation and support for over 60 years to the UK’s submarine fleet. Rolls-Royce has developed three generations of reactor design; produced 32 plants and over 100 reactor cores delivered; we have operated the Vulcan test reactor in Scotland for over 50 years; and we manage three nuclear licensed sites in the UK. Rolls-Royce is the only existing UK nuclear island systems designer, supply chain integrator and manager.

In the UK Rolls-Royce employs c24,000 people, including 9,000 engineers - more than half of our global engineering resource - and 95%+ of our people are based outside London and the South East. Recent investments in the UK include new manufacturing facilities at Washington, Tyne & Wear and Rotherham; a new facility in Solihull; and substantial investment in new facilities and manufacturing at our nuclear site at Raynesway, Derby.

1. Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities including international collaboration and, within the UK, for cost-effective and efficient articulation of the different elements of nuclear work? The Department for Business, Energy and Industrial Strategy has responsibility for energy policy and as part of that should have the responsibility for the long- term policy for civil nuclear as part of the UK’s energy mix. However, energy and civil nuclear policy should not, and cannot, be made in isolation of other Government departments that have interfaces into civil nuclear policy, for example the Ministry of Defence which is interested in nuclear supply chains and nuclear skills; the Department for International Trade which is responsible for the promotion of exports for the UK’s nuclear industry; the Foreign and Commonwealth Office that manages non-proliferation issues; as well as HM Treasury and the Department for Exiting the European Union also have a deep interest in nuclear policy. The Government’s new industrial strategy, and the Government’s energy policy, should incorporate the UK’s major industrial interests in civil nuclear both independently, and through, bodies such as the soon to be re-formed Nuclear Industry Council.

International collaboration, including inward investment and exports, should jointly be the responsibility of the Department for Business, Energy and Industrial Strategy, and the Department for International Trade.

330 Rolls-Royce plc – Written evidence (PNT0006)

2. The Government’s industrial strategy green paper discusses a possible ‘sector deal’ for the nuclear sector. How might the nuclear sector benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal? A ‘sector deal’ for nuclear could be transformational to the UK’s long-term nuclear projects, and to the UK’s nuclear industry. We have seen the benefit of sector deals in aerospace and believe a nuclear sector deal is essential for all of the nuclear eco-system in the UK: large and small companies, universities, laboratories and manufacturing research centres. It should also incorporate road maps and timelines to ensure all are working to one clear coherent plan.

The UK will be a nuclear energy and defence nuclear systems owner and provider for the next 70-80 years following the Government’s approval of the Hinkley Point C Gen III Iarge civil reactor, and the Royal Navy’s Dreadnought Class submarine programme. In this context the sector deal needs to define the role that the UK wishes to have in the nuclear life cycle; national control and capability retention for pure research through design; service; and decommissioning, i.e. the entire nuclear life cycle. This will define the future choices on research and development (R&D) funding; academic research; laboratory and manufacturing development; Intellectual Property (IP) and design capability; whether to have a civil UK nuclear power station offering i.e. Small Modular Reactors (SMRs); supply chain options and viability (whether socioeconomics will be involved); through life operational and technical ownership; and safe decommissioning and disposal.

We have seen the aerospace ‘sector deal’ succeed through joint UK Government and industry working governed by the Aerospace Growth Partnership (AGP) which is jointly chaired by a Government Minister and a senior representative from industry. The AGP was able to agree and approve a set of clear objectives that were translated into the Aerospace Industrial Strategy and shaped the formation of the Aerospace Technology Institute that manages aerospace Research and Technology funding. A nuclear sector deal could learn from this successful, joined-up, model of collaboration. This could see the creation of a UK national nuclear strategy.

SMRs

3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely? A Small Modular Reactor (SMR) programme represents a once in a lifetime opportunity for UK nuclear companies to design, manufacture and build next generation reactors to meet the UK’s energy needs. Rolls-Royce is strongly placed to deliver the design and, together with a consortium of UK companies, the supply of almost all aspects of a new nuclear SMR plant, re-establishing the UK supply chain to a position of global recognition. MRs could be made in centralised manufacturing facilities and then transported to anywhere in the country or overseas, producing benefits of scale which would drive down costs. Rolls-Royce is developing a patented modular concept which is designed specifically for factory manufacture and commissioning, speed of installation and reduced onsite construction work. SMRs therefore represent an exciting and transformational opportunity for the UK to recapture global nuclear leadership and build world class IP, advance the

331 Rolls-Royce plc – Written evidence (PNT0006)

UK supply chain, and create a product capable for the UK market that is also capable of accessing a large global market.

We welcome recent announcements on Hinkley Point C and the further Gen III large reactor future programmes. We see SMRs as complementary to the Gen III programme as it has the ability to give diversity to the UK’s energy mix and further flexibility and security for the UK grid in the future.

The UK is set to be one of the few advanced industrial countries where new nuclear build takes place in the near future. The construction of these new next generation large nuclear plants will bring the UK significant benefits in energy security and de-carbonisation. However, currently the nuclear industrial and technology benefits to the UK are more limited.

Today, the UK owns little or no IP on any of the large reactor designs being proposed for the UK market. As such, UK participation in proposed new-build projects at Hinkley Point, Sizewell, Moorside, Wylfa and Bradwell appears increasingly limited to civil construction and lower complexity items. SMRs represent an opportunity for the UK to reverse this trend and re-establish a technology ownership position within the UK. The opportunity for the UK nuclear supply-chain could be truly transformational.

With the right policy enablers and support, the development of SMRs for the UK market has the prospect of not only bringing more industrial and technology benefits to the UK, but also delivering significant cost reductions compared with current large-scale reactors through offsite factory assembly and advanced manufacturing techniques; compact safety systems; digitisation; quicker construction time scales and easier financing.

Given the absence of any established global SMR supplier, there are substantial benefits of being the first to market. The immaturity of most current designs represents a commercial opportunity for the UK, should it choose to engage in the commercialisation of SMRs. Rolls-Royce is the leading UK-based business with over fifty years of experience in nuclear power design and manufacturing expertise for both civil and defence applications. As the Government seeks to build the UK's presence in SMRs, with the right level of Government principal commitments, Rolls-Royce is prepared to invest and take the lead in the Nuclear Island design and bring together UK industrial partners to develop a UK SMR power station solution, drawing on its experience as the supplier of nuclear propulsion systems for submarines, and as the supplier of safety critical systems, components and services for civil nuclear programmes globally.

Rolls-Royce has conducted a baseline design exercise that has established the key design parameters that impact most on the technology choices available to a reactor vendor against the requirements of the end-user/other stakeholders. These requirements and objectives of UK stakeholders (governmental, industrial, and operational) have driven the characteristics of the UK SMR design developed and proposed by Rolls-Royce. While Rolls-Royce continues to develop the design it cannot do so in isolation and will require Government backing.

332 Rolls-Royce plc – Written evidence (PNT0006)

Financing the development programme for a SMR is challenging. In the pre- Critical Design Review (CDR) stage, any initial industrial partner investment will be by way of engineering, IP, technology, market contribution and possibly investment. This will be driven by the SMR developers’ business strategy i.e. a business case based on a long-term sustainable market for SMRs or a desire to create a technology demonstrator before licensing their technology to other market participants and receiving royalties. The post-CDR phase – the point at which the baseline technology has been de-risked from a design and licensing perspective – is considered to be the first realistic milestone at which point it is possible to maximise the ability to attract private sector investment.

Sources of partner equity willing to take development and nuclear risk before licensing completion are scarce; therefore Government support is the only means to fill the funding gap to deliver a UK SMR. This is reinforced by the fact that all existing SMR programmes at varying degrees of maturity have been heavily backed by sponsoring governments.

A partnership with Government is essential to enable and commercialise SMRs in the UK. To establish a successful UK SMR programme, the Government will need to provide the robust, transparent and long-term policy that is required to make an investable business case. Alongside early-stage development funding, the Government can and will need to act to reduce hurdles to provide sufficient confidence for industry to take the lead in a UK SMR development. Rolls-Royce considers the principal commitments needed from UK Government are:

 Choosing one preferred technology preferably with input from a selected UK team to deploy and maximise local content  A UK industrial policy that supports IP, advanced manufacturing and long-term high value jobs  Match funding (at a minimum) up to the end of the licensing phase  A Generic Design Assessment (GDA) slot  A suitable site to develop a First of a Kind (FOAK)  A guaranteed UK electricity market of 7 GWe  Sustainment of a national nuclear supply chain capability across both Defence and Civil Nuclear  If a UK-only technology is selected for the UK SMR programme, assistance identifying and developing export markets; and  If a non-UK technology is selected for the UK SMR programme, assistance dealing with the relevant partner government(s) in order to secure IP and a role for the UK nuclear supply chain.

For SMRs, and the commercial interests of the UK (UK plc), to be successful the technology and the plant design need to fit the needs of the target market(s) and must be consistent with the requirements of those customers it wishes to serve. It is crucial that the design implements modern manufacturing methodologies to prevent cost challenges which will be significant for a purely ‘scaled down’ large reactor.

Subject to Government policy, a UK SMR can provide significant UK skills, knowledge generation and advanced manufacturing techniques that will generate considerable gross value added for the UK.

333 Rolls-Royce plc – Written evidence (PNT0006)

To help ensure the greatest value for the UK, Rolls-Royce should be considered as Government’s industrial partner of choice in a UK SMR programme. Rolls- Royce is ready to enter dialogue with Government to discuss topics including:

 A UK SMR solution that brings value to UK IP, academia, R&D, engineering and advanced manufacturing;  UK Government’s requirements and key success criteria for a UK SMR programme in order to down select the most appropriate technology;  How Government can enable a UK SMR programme via long-term policy considerations and encourage a sustainable UK SMR market whilst maintaining a competition and optimising value for money for the taxpayer and consumer;  How Government can partner with UK plc via a UK based SMR approach and help deliver and benefit from UK and global SMR programmes;  Brokering an agreement with a utility to become the project sponsor of the UK’s FOAK SMR and domestic market and secure a partner market including a local utility and funding partners.

The UK nuclear sector, supplemented by SMRs, should be viewed as a strategic national asset. UK plc stands to benefit from a SMR programme through maximising the UK commercial opportunities and delivering growth, sharing innovations in production and modern manufacturing methodologies to provide cost effective programmes both civil and military, and de-risking future defence programmes by sustaining UK engineering and design skills and jobs. Consumers could enjoy lower cost base load electricity, have a more flexible energy system, and reduce the UK reliance on foreign gas, intermittent generation technologies and de-risk any delays in the Gen III nuclear programme.

4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs? The National Nuclear Laboratory’s (NNL) feasibility study of December 2014 concluded that the size of the potential global SMR market is approximately 65 - 85 GWe of base load electricity by 2035. SMRs will need to be competitive alongside other low-carbon energy sources and have to be sufficiently commercially attractive in terms of power output and cost per MWh to be deployed to this scale97.

A visible and committed initial market is needed in order to underpin a SMR development programme. It is envisaged that the UK will have a near term (next 20 years) ~7 GWe electricity market for SMRs. Rolls-Royce estimates that this would be of sufficient scale to provide a commercial return on investment from a UK-developed SMR, but it would not be sufficient to create a long-term, sustainable business for UK plc.

97 Note: SMRs are more flexible than large scale reactors, opening up additional potential applications including load following and Combined Heat and Power (CHP) applications, opening the UK market significantly. The Energy Technologies Institute (ETI) Power Plant Siting Study (2015) estimates that there is potential whitespace in the UK alone for SMRs to deliver ~67 GWe of new nuclear capacity, representing ~ 134 of the 500 MWe plant to ~335 of the 200 MWe plants.

334 Rolls-Royce plc – Written evidence (PNT0006)

A partner market will be required in order to provide the greatest value from an SMR programme for UK plc. Selecting an international partner will need to be considered carefully as it is important that partner markets ensure sufficient volume to deliver the greatest value for the UK. The choice of partner is important for the UK. An international partner where the interest in SMR technology is high, but design capability is low, would likely result in a minimum (if any) dilution of UK plc IP potential.

Given the absence of any established global SMR supplier, there exist substantial benefits of being the first to market. A UK SMR programme will create many highly skilled jobs in both the near and longer term and also re-establish the UK as a leading global nuclear nation. Rolls-Royce estimates that a regular production schedule of one SMR per annum would generate >10,000 jobs within the supply chain, which could increase to c.40,000 jobs on the basis of two UK plants per annum and secured export opportunities of c.9GWe. This equates to up to £100bn of socio-economic benefit between 2030 and 2050, using the Government’s economic evaluation tool. It would also aid sustainment of the UK nuclear defence supply chain.

In addition, nuclear is an essential part of the UK’s energy mix and will be needed to deliver on other public policy objectives (‘Electric cars mean UK could need 20 new nuclear plants’, The Times, 11 February 2017).

5. Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to coordinate UK actions including international engagement on SMR development and future deployment? In the November 2015 Autumn Statement the Government announced £250m for nuclear research, including SMRs. This funding was encouraging as it recognised the need for initial funding to mature the design. To commercialise SMRs would require private sector investment. At the moment there is currently no published programme for UK SMR deployment and no SMR specific policies that would encourage the private sector to develop such a programme. It is essential the Government develops its proposals to a level of maturity and certainty to attract private investment.

Recently £20m of funding was released over five years from the Nuclear Innovation and Research Office (NIRO) and controlled by Nuclear Innovation and Research Advisory Board (NIRAB) for companies to compete for related enablers of advanced nuclear fuel; safety; digital reactor design; material advanced manufacturing and modularisation; and fuel re-cycling. This was welcomed, although there is no guarantee that the output of these studies will align with a full SMR power station development programme.

We believe the key enablers for SMR development are a clear nuclear industrial policy and energy policy covering the major targets of academic investment and laboratory and institution funding via the NNL and Nuclear Advanced Manufacturing Research Centre (NAMRC). It is understood that Innovate UK and the High Value Manufacturing Catapult programme contribute significantly to the NAMRC.

335 Rolls-Royce plc – Written evidence (PNT0006)

To motivate industry and private equity investment into a SMR programme a number of market conditions are required,  Selection of one preferred technology  A UK Industrial policy that supports UK Intellectual property, advanced manufacturing, and long term high value jobs in the UK  Match funding with Industry for the design development until the end of the licensing process  A Generic Design Assessment (GDA) slot to ensure the process of licensing  A suitable site to develop a First of a Kind(FOAK) power station  The future energy policy supporting a UK market mix of at least 7GWe for SMRs  Export support to reach International markets

The chosen SMR design must still be viable for commercial selection by a utility in terms of power produced and cost per MWh. Timing of commitments is critical to maintain momentum towards a first market mover advantage.

The Department for International Trade would be required to advise and assist with exports of SMRs should a UK programme be selected.

6. Are the criteria set out by the Government for the SMR competition appropriate? If not, what should the criteria be? What timescale should the Government be working to in choosing an appropriate SMR design for the UK? The Government announced a competition for SMRs in November 2015. The deadline for submissions into the competition was May 2016. The Government commissioned a Techno-Economic Appraisal (TEA) to run from June 2015 to March 2016 to gather information to support policy decisions on SMRs for the UK. We understand the TEA has been completed, but it has not been shared with companies taking part in the SMR competition and it could include useful information for consideration by potential vendors. The Government said it would produce a commercial road map for release in the autumn of 2016 for the SMR selection process, but the road map has not been published yet.

Any competition framework design needs to carefully factor that SMRs shift the paradigm of economies of scale to one of economies of volume in order to drive the cost of electricity down. SMR module facilities will be designed specifically around the construction of a single SMR type in order to extract the required benefits of modular, volume, and production line approaches. Therefore, any competition will need to select a single technology to ensure the required volume to create and maintain a sustainable business case for UK plc. It is also necessary to consider carefully whether UK socio-economics should be criteria in selection. Without UK IP ownership it is very difficult to create and sustain long- term skill sets, a vibrant supply chain, or UK economic benefit.

Although the Government needs to enable the environment for SMR selection, the choice of technology still needs to be competitive for commercial selection by a utility/operator. SMRs need to be at least competitive with the large Gen III reactor cost for FOAK and then improve on volume to target as near as possible the Combined Cycle Gas Turbine plant (CCGT) cost per MWh for the volume production Next of a Kind (NOAK). It is anticipated that at least 10 units of

336 Rolls-Royce plc – Written evidence (PNT0006)

440MWe would be required to achieve the NOAK cost targets and this significantly increases as the power level on units reduces.

For the UK to be able to market a UK SMR, we believe that global interest will significantly reduce or be overtaken by other vendors or energy solutions if the UK selection process is not completed as soon as possible to allow solutions that can generate electricity by the late 2020s. The opportunity for SMRs is now and there is no need for delay; bidders have been primed for a year and the longer the competition runs the less appetite there might be to continue investing.

The choice of SMR development and technology will be critical for any review of the options to develop Gen IV technology. The Government needs to select a commercially viable SMR design and match fund to the end of the licensing process and selectively invest in the supply chain development phase to at least match the industrial contribution. This should still leave the ability to fund Gen IV technology development in the earlier phases of the research cycle. The success of a UK SMR programme could give industry the impetus to invest in Gen IV technology development.

Governance

8. Is the NNL fulfilling its remit appropriately? Can it deliver the required research to support the UK’s future nuclear energy policies? How does it compare to equivalent organisations in other countries? The NNL is again Government owned and operated and is expected to act both as an advisory body for Government and operate a commercial business. The NNL is still maturing into this role. Whilst its commercial operations have been in place for many years, the skills and capabilities necessary to operate as a government adviser across the full range of UK nuclear activities is not fully in place.

The key competencies of the NNL are theoretical research; fuel cycle (including advanced and accident tolerant fuels; post irradiation examination); and decommissioning. The NNL does not get involved with whole plant systems design; reactor component design; or design for manufacture and this is an example where the NNL does not hold all of the competencies necessary to advise across the breadth and depth of the nuclear life cycle. The NNL recognises this limitation, and has recruited industrial secondees to broaden its capabilities. This is welcome, but does not compensate for an inherent skill gap.

337 Rolls-Royce plc – Written evidence (PNT0006)

Please refer to the response in question 8. The NNL remit and nuclear life cycle skills would need to be augmented either directly, or with additional industrial and academic support, to be the custodian of the intelligent customer role. Facilities such as laboratories, test sites and research are geographically distributed in the UK and not wholly owned by NNL. To do the total nuclear life cycle role funding would need to be reviewed. The governance model is a matter for the Government.

10. Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved? Who has oversight of the whole nuclear R&D landscape, including international activities? Several bodies oversee elements of UK public nuclear R&D expenditure, notably the Nuclear Decommissioning Authority; NIRO; Chief Scientific Advisers in Government Departments; NNL; Innovate UK and the Catapult Centres, including the NAMRC. They have minimal awareness of private expenditure on nuclear from companies such as EDF and Rolls-Royce. The UK’s nuclear defence budgets and associated programmes are again independent.

There is no overall architect or controlling mind shaping this expenditure in alignment with an overall National Nuclear Strategy. This is an issue that can dilute the effectiveness of already limited budgets.

The majority of nuclear nations retain nuclear expertise within a state enterprise and all of the activities either nationally, or for export, are state sponsored; this is not the case in the UK. Major nuclear nations such as France, the US, China, Russia and India have state organisations which employ more than 1000 people each to act as intelligent customers for their nuclear programmes. The characteristics of these nations are the very close links between the development of their energy infrastructure and industrial policy.

11. Was the Nuclear Innovation and Research Advisor Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be? NIRAB has performed a useful function in defining a sensible suite of priorities for UK nuclear R&D, and has defined appropriate programmes of work to enhance the research programmes for advanced fuels; advanced manufacturing; reactor engineering and waste management. In addition, it has defined the need for evaluation tools which will aid objective decision making.

However, the level of funding available to these programmes, and the lack of urgency in commencing the tasks, means that the impact to date on national competitiveness is limited. By comparison with other nuclear nations, the level of funding under discussion is very small, and despite the innovative spirit in British academia and industry, its impact will be limited.

A successor to NIRAB should be established. As with any research programme, once the activities are being progressed much will be learned and it is likely that the current proposed programme will need to evolve. This will need some oversight to ensure that good value for money is achieved, and that the programme remains relevant against emerging challenges.

338 Rolls-Royce plc – Written evidence (PNT0006)

16 February 2017

339 Rolls-Royce Nuclear, NuScale Power and Sellafield Ltd – Oral evidence (QQ 9-19)

Rolls-Royce Nuclear, NuScale Power and Sellafield Ltd – Oral evidence (QQ 9-19)

Transcript to be found under Sellafield Ltd

340 Sellafield Limited – Written evidence (PNT0052)

Sellafield Limited – Written evidence (PNT0052)

Introduction

Sellafield Ltd (SL) is the company responsible for safely delivering decommissioning of the UK’s nuclear legacy as well as fuel recycling and the management of low, high and intermediate level nuclear waste activities at the Sellafield site in Cumbria. Sellafield Ltd is a subsidiary of the Nuclear Decommissioning Authority. Sellafield Ltd has sites at Sellafield in West Cumbria and at Risley, near Warrington, where some engineering, design and functional support capabilities are provided.

Sellafield Ltd became a wholly owned subsidiary of the Nuclear Decommissioning Authority on 1 April 2016. Sellafield Ltd is committed to safely delivering nuclear decommissioning, waste management and commercial operations and to continually raising performance.

Sellafield Ltd’s mission is underpinned by significant nuclear research and development activities. Whilst SL does self-perform some research and development, the National Nuclear Laboratory is, by far, Sellafield’s largest supplier of these services. The breadth and depth of research and development supporting SL has built a significant nuclear skill base and infrastructure in Cumbria and more generally the UK that is respected worldwide.

Questions

Sellafield Ltd believes overall responsibility for the long term policy for civil nuclear activities sits with HMG departments. Coordination will be required between the appropriate government departments such as BEIS, UKGI and the Treasury.

The ‘nuclear sector’ is a broad church encompassing research (e.g. SMR), new build (e.g. Nu-Gen et al), operation, fuel cycle and waste management & decommissioning. Whilst there are synergies both within the sector (e.g. skills) and indeed with other sectors (e.g. advanced manufacturing) it may be that there are complementary sector deals, under a nuclear umbrella, for research, new build and waste management and decommissioning aligned to Culham, the South-West and the North-West clusters.

341 Sellafield Limited – Written evidence (PNT0052)

A North-West waste management and decommissioning ‘sector deal’, anchored by Sellafield Ltd, would look to leverage the maximum benefit from the same investment in the Sellafield mission. The optimisation of the decommissioning programme through delivery of technical innovation has the potential to yield significant cost reductions. The site represents a world-class challenge and demands world-class solutions which in turn are capable of being commercially exploited for the benefit of ‘Team UK.’

SMRs 3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

No comment from Sellafield Ltd

4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

No comment from Sellafield Ltd

Is the NNL fulfilling its remit appropriately?

Sellafield Ltd works extensively with the NNL and for the majority of those activities the NNL fulfils its remit appropriately. This work is carried out under

342 Sellafield Limited – Written evidence (PNT0052) commercial arrangements between the two organisations. Both organisations are working to further enhance collaborative working.

More generally SL has observed issues with NNL acting as a National Laboratory (acting in the interests of the Nation) and running as a self-sustaining commercial business making a profit. The NNL needs to be in a position to balance ‘doing the right thing for the UK’ as opposed to trying to maximise its revenue and profits.

Can it deliver the required research to support the UK’s future nuclear energy policies?

Yes for SL. Sellafield Ltd’s main activities are to manage the legacy of historic operations on the Sellafield site, which is an important activity with respect to the “future nuclear energy policies”, in that the SL mission stretches for over 100 years. NNL are well equipped to support SL in completing this mission. The challenge of decommissioning Sellafield is significant and will require a sustained programme of technical innovation to meet this challenge. A key element of the collaboration between SL and NNL is to ensure that a programme of innovation is enacted to integrate into the nuclear environment the best technology options available from the broader supply chain.

In addition to the management of the legacy, SL is the custodian of the majority of the UK’s civil plutonium stocks. Under the potential scenarios proposed by HMG, significant research and development will be required and NNL is the only UK organisation with both the skills and access to the facilities needed to provide the R&D laboratory based services able to underpin this programme.

How does it compare to equivalent organisations in other countries?

To the best of our knowledge, international National Laboratories are supported by direct government funding in addition to funding provided by end users. This contrasts with the NNL model where all funding is provided by end users and any direct research programmes are funded through profits made on the work for end users. In fact, this contrasts with other UK government supported laboratories such as the National Physical Laboratory, where a significant proportion of funding is provided directly to the laboratory by the UK government.

Sellafield Ltd works extensively with the NNL to deliver technical services including the majority of Sellafield’s Research and Development requirements. This is currently carried out under a contract for services arrangement with Sellafield being the client and NNL being the supplier. Whilst both parties are looking to obtain more value/greater benefits out of this business relationship by entering into a collaborative agreement, we believe that the work required by SL can be carried out with minor modifications to the current arrangements. Any

343 Sellafield Limited – Written evidence (PNT0052) proposed modifications to the current NNL model need to carefully consider the impact upon the SL mission to which NNL make an important contribution.

More generally, where the end user of the technology is not clear, then funding models based on business support will be very limited as there are no end users to provide funding and programme guidance.

Sellafield Ltd would recommend that any consideration of model changes

Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved?

Yes. There are multiple group’s that carryout coordination of nuclear research in the UK, including NIRAB, the NDA Research Board and the nuclear champion network covering academic research. Whilst these bodies connect the key parties, none of them are particularly empowered to do anything other than guide programmes of work. They are not funding bodies and the link to funding is, in some cases, indirect with the result that the time response between recommendations of these bodies and any action being taken can be significantly delayed.

Who has oversight of the whole nuclear R&D landscape, including international activities?

An extensive review of nuclear research activities was carried out by NIRAB. Whilst there are multiple groups to coordinate nuclear research, it could be improved by nominating one organisation as accountable for maintaining the high level landscape picture of UK nuclear research and how that meets the needs of the high level UK strategic nuclear programme (held by HMG as noted above). We would recommend that NNL should take on this role.

Was the Nuclear Innovation and Research Advisor Board successful in carrying out its role?

The majority of the work of NIRAB was outside of the main focus of Sellafield Ltd. A Sellafield Ltd employee was a member of the NIRAB and other colleagues engaged periodically with the committee and some general observations are: NIRAB was successful to a degree but the ability of NIRAB to succeed was potentially inhibited by the nuclear industry strategy itself, which left open a broad range of potential options for future nuclear scenarios (open and closed fuel cycles, multiple reactor designs etc). To underpin these nuclear options

344 Sellafield Limited – Written evidence (PNT0052) requires a major research and development undertaking that appears to have been unaffordable.

Is a permanent successor body to NIRAB required?

Yes but HMG should consider how such a body can ensure that the identified research and development programmes are supported including what role the NNL should play.

Other Issues: Leaving Euratom and its impact on the UK Nuclear Industry? Sellafield Ltd is committed to maintaining the highest standards of safety and security following the UK’s exit from Euratom.

We are confident the UK’s robust framework of regulation will ensure our industry remains among the safest in the world. However, there are significant issues that would need to be addressed following the UK’s exit from Euratom in relation to nuclear materials accountancy and nuclear proliferation safeguards.

There is a requirement for third party assurance to overseas customers of appropriate handling and storage of materials. In the absence of independent verification by Euratom, we would have to use the IAEA system, which would require significant work to put in place.

24 February 2017

345 Sellafield Ltd, Rolls-Royce Nuclear and NuScale Power – Oral evidence (QQ 9-19)

Sellafield Ltd, Rolls-Royce Nuclear and NuScale Power – Oral evidence (QQ 9-19)

Tuesday 21 February 2017

Watch the meeting

Members present: Earl of Selborne (The Chairman); Lord Borwick; Lord Broers; Lord Hennessy of Nympsfield; Lord Mair; Lord Maxton; Baroness Neville-Jones; Lord Oxburgh; Viscount Ridley; Baroness Young of Old Scone.

Evidence Session No. 2 Heard in Public Questions 9 - 19

Examination of witnesses

Dr Rebecca Weston, Technical Director, Sellafield Ltd; David Orr, Senior Vice- President, Future Programmes and Technology, Rolls-Royce Nuclear; Tom Mundy, Executive Vice-President Program Development, Managing Director UK & Europe, NuScale Power.

Q9 The Chairman: May I welcome our witnesses to the second session? As before, I alert you to the fact that we are being broadcast. Would you like to introduce yourselves for the record? If you would like to make an introductory statement, feel free to do so. Perhaps Mr Orr would like to start. David Orr: I have been in the nuclear industry for over 30 years. I was in various senior positions in our submarines business, which I think you all know has provided 32 nuclear steam-raising plants and over 100 cores over the industrial collaboration with government, and operates three licensed sites and an operational prototype in the north of Scotland, so I have quite a lot of background experience there. I ended up leading the business for a period as president and then transferred over to the nuclear sector. I now lead technology programmes for us for the future. Dr Rebecca Weston: Good morning. I am delighted to have been called to give evidence. I am strategy and technical director at Sellafield Limited, which is a business of some 11,000 employees with a £2 billion annual spend in the realms of cleaning up our nuclear legacy and our waste treatment and storage. It is a changing business and a remote environment. We are closing down reprocessing in the next four years and trying to become more efficient while we do that. My specific responsibilities are the development of technical and business strategy and leading 600 technical staff with a budget of circa £100 million, equivalent to that of the National Nuclear Laboratory, supporting the facilities on one of the most complex industrial sites in Europe and, indeed, the innovation and the R&D that supports a 100-year mission. Sellafield is very much an anchor business, if you like, as described in the Green Paper. My experience in the nuclear sector spans some 15 years, particularly in fuel manufacturing and operation, plutonium reuse and

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other commercial and operational activities in decommissioning and waste management. Tom Mundy: My name is Tom Mundy. I am the managing director for NuScale Power for operations here in the UK and Europe and chief commercial officer for the company. I will say a bit about NuScale and who we are. We are a small modular reactor development company. We are developing an SMR based on tried and tested pressurised light-water reactor technology that has been around for many, many years. Our programme in the US is at an advanced stage of bringing our technology to market with the financial backing of the US Department of Energy and our primary investor, Fluor Corporation. We are the first SMR vendor to submit a design certification application to the US NRC, the Nuclear Regulatory Commission. That was finished at the end of last year and submitted at the beginning of this year. That supports our first deployment project, which will see our first unit deployed in the state of Idaho for our first customer, a municipal power company known as UAMPS, with that facility generating electricity in 2026. In terms of our participation in this market, we have been actively engaged in the SMR feasibility work here in the UK since 2013. We offer an opportunity for the UK in a UK-US partnership on SMR development. For example, as a technology development company we have no manufacturing capability and we are looking to partner, and have been partnering with, British companies to achieve multiple long-term deployments here in the UK.

Q10 The Chairman: Thank you very much. If I may I will start the questioning, and refer to the recent industrial strategy Green Paper, which held out the possibility of a sector deal for the nuclear sector rather along the lines of the aerospace sector, which seems to have been very much welcomed. Thank you to Rolls-Royce for the written evidence we have received, where you say that a sector deal for nuclear could be transformational to the UK’s long-term nuclear projects. Starting with Mr Orr, could you elaborate on that? How might the nuclear sector benefit from such a sector deal, and what might a deal usefully involve? Would you like to start, Mr Orr? David Orr: Yes, certainly. As Professor Tynan said, the first thing to say is that we are a nuclear nation and we are going to be with the decisions that we have made as government now for the next 70 to 80 years. We have committed to Hinkley Point C in civil nuclear and to the successor programme in defence, so we are definitively a nuclear nation. The big thing is that we think that transferring the aerospace strategy for research and technology to the Aerospace Technology Institute, and the co-ordination of such, has worked very well, as you said. It has developed road maps and plans that go towards developing products that are competitive globally. That is co-invested in programmes such as Sharing in Growth so that we get the socioeconomics for the UK: the skillsets, the supply chain and academia involvement. The entire lifecycle skillsets that we get there are exactly what we are going to need for nuclear. It is a generational opportunity for us in SMRs, and it will be terribly difficult for us to regain the capability to produce intellectual property if

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we do not have a national programme or have significant involvement as a nation in the programme. In relation to the earlier questions, for example on generation IV, it would be very difficult, apart from research, to get any real tangible involvement at that time if we have not done this interim programme on light-water reactor technology. The Aerospace Growth Partnership pulled together a model for collaboration that worked extremely well. Over and above what Professor Tynan said, I would suggest that something like an aerospace technology partnership also needs to be formed. You could say that the re-formation of the Nuclear Industry Council could take the APG’s role, but we would need a subset of that body chaired by a Minister and a senior industrial participant, to look at where the deployment of that research and development should go for the best for the country, industry and academia in the entire lifecycle. The Chairman: Would anyone else like to comment on the nuclear sector? Dr Rebecca Weston: Absolutely. I would very much welcome a sector deal, given the long-term challenges in the nuclear industry. I believe that a sector deal would support realising those opportunities. It would certainly be an opportunity for the industry to collaborate to increase exports and commercialise the UK nuclear expertise. I very much support David’s position. I would also say, however, that it would be good to recognise the different segments of the industry, for which I believe there are many complementary aspects, particularly in skills, innovation, and research and development. But we are focusing very heavily on new nuclear build at the moment and in waste management and decommissioning there is very much an opportunity to turn what is currently largely a cost to the taxpayer into an ability to return that in exports or indeed the development of the UK supply chain and commercialisation opportunities. The UK has leading capability in the decommissioning and waste management areas. I see leverage perhaps in the model that we have already undertaken with the likes of the National College for Nuclear, which has a south-west and a north-west base that are complementary to each other. The north-west national college is based up in Cumbria, using Sellafield in effect as a baseload for that, and there is value in clustering or having hubs of innovation expertise around those centres that are complementary to each other. Indeed, not only across the nuclear fission sector but perhaps in fusion and other sectors such as defence and oil and gas, if you are looking for complementarity between what we use in robotics, remote systems and the like, a sector deal has a lot to offer in that regard. Tom Mundy: Some very good points have been made. I would just like to reinforce the importance of government and industry working together in a sector deal to ensure that there is the right business environment and market conditions to encourage new nuclear development, and that there is clarity on the siting, licensing and regulatory processes, as well as ensuring that UK nuclear skills and capabilities are developed and continue to be maintained for that success.

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The Chairman: I take that as a positive response to the idea that there should be a sector deal. Thank you.

Q11 Lord Mair: We heard in the earlier session some very interesting views on how long-term energy policy is co-ordinated in the UK. Who do you think should take that responsibility? How is that best ensured? David Orr: For me it has to be the Department for Business, Energy and Industrial Strategy. Necessarily, it cannot be on its own. There are so many other departments that have a big say in how it should go. Any developments, which I am sure we will come on to, have to be commercially selectable as well as investable by government or government assisting in the early stages. The Treasury would necessarily have to be involved. We need to have the Ministry of Defence involved, because with an SMR programme there is the ability to help to sustain both skills and supply chain across a national nuclear programme, as opposed to just benefiting the civil nuclear programme, which is a key point. For me, it would also involve the Department for International Trade, because we would need to look at exports and the export targets for any national SMR development that we did, as was said in the earlier session. In the submission of our design to BEIS, we said that we would expect the UK market to return only the cost for the design development programme, and on that basis our consortium would take the risk for the export market. That is how we have gone about it, but we would need assistance from them. It would also involve the Foreign and Commonwealth Office, of course, for non-proliferation and export control issues and the Department for Exiting the European Union. You have already asked about Euratom question, and things of that nature. Lord Mair: What do you think the role of the new Nuclear Industry Council should be in this? David Orr: I am looking forward to the re-formation of the Nuclear Industry Council. It is very important, though, that that is the committee that assists BEIS in getting a coherent industrial strategy and a research and development committee that delivers it appropriately through road maps and plans, as well as an energy policy that looks at the forward mix. Again, as was alluded to earlier, as well as the elements that Tom mentioned, in order to get return of costs for government in a consortium we believe that there is a minimum market size for SMRs in the UK, which would be true for any set of consortia that deliver an SMR power station. There has to be agreement on that and all the other conditions, including whether we have socioeconomics as part of the requirements for the competitive process when it goes through. All those issues will be hugely important for the Nuclear Industry Council to deal with. It might not have worked last time because the objectives were not agreed and we did not have a cohesive strategy between government and industry, and we must this time. Lord Maxton: You missed out one element, which is the political one. The problem in this country is that there is political opposition to nuclear

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energy of any sort, including, I am afraid, unfortunately on the part of the leader of my own political party and certainly on the part of the Scottish National Party. How does that fit in? This is a long-term strategy that you are talking about, and the political element could come into that at some point or other. David Orr: I agree entirely. Our belief is that there has been that position in the past. It would be nice to reopen the debate for SMRs for Scotland, if we could. On your earlier question, just so that you are aware, Strathclyde University is supporting our development, and we are using a number of our university technology centres to support it in the development. We have always said that we see SMRs as part of the energy mix, so we supported the selection of large generation III reactors to get the nuclear programme restarted in the UK. Our issue is with the skillsets. With the vendors being predominantly foreign of course, the high-end skills will not be sustained, nor the supply chain through that. Certainly we are getting packages of supply to it, and we are very grateful for that in the interim, but we need to have a long-term sustainable, healthy and vibrant sector through the lifecycle. I am sorry that I missed that last time. I agree that in decommissioning we are one of the leads, but we need it through the lifecycle. To keep feeding the reactor designers in, we need a vibrant programme.

Q12 Lord Oxburgh: I wanted to ask the same question that I asked the previous group. Roughly from the Rolls-Royce point of view, what would you regard as a plausible and reasonable domestic scale of deployment of SMRs, both for our own purposes and, indeed, as a base on which one could build an export programme? David Orr: You have to remember here that this answer is based on the design that we have proposed. Lord Oxburgh: Sure. David Orr: It will be different for different designs and different megawatt electrical sizes of SMR. For the one we have proposed, we believe that the Energy Technologies Institute was tasked by the Government to look at SMRs as part of the energy mix. The minimum level that it said was available for electricity generation was 7 gigawatts electric for SMRs. We believe that would be adequate to return the costs for the development, so one of our asks of government is that we should only have a singular technology choice and that the market should be enabled to 7 gigawatts electric. If you are asking about a sustainable business with exports, we are saying that we want to target at least 9 gigawatts electric over a 20-year period to make it a sustainable business, on top of the UK. Lord Oxburgh: Are you thinking of roughly 300 megawatts electric per unit? David Orr: The maximum for ours is a range between 220 and 440 gigawatts electric. We looked at a commercially investable unit, and when we looked at the whole grid balance, the sweet spot was between about 300 megawatts to 500 megawatts electric for a station.

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Lord Hennessy of Nympsfield: Can I ask David a specific Rolls-Royce related question? You have 55-plus years’ experience of pressurised water reactors, but does the 1958 mutual defence agreement with the United States get in the way of technology crossover? There is a lot of American knowhow and exchange of knowledge in our PWRs which you have manufactured for the Royal Navy. Is that a difficulty for you? David Orr: No, not at all. We have been very careful in what we have done. As you can imagine, we asked permission from the Ministry of Defence before we entered into the civil nuclear market, which was a number of years ago now. We are also very, very careful that we have completely separate systems for civil development. It is not based on the same technology. Although we are fully aware and we understand that the sizings might be comparable, the fuel and designs for them are in effect completely different. We keep it absolutely separate so there is no impact on the bilateral relationship. We would do nothing in our civil nuclear ambitions to affect the primary bit of the business, which is the defence delivery, nor to affect the US bilateral relationship. Lord Hennessy of Nympsfield: Thank you very much.

Q13 Viscount Ridley: Mr Mundy, first, what is the realistic prospect of a NuScale SMR deployed in the UK? What is the date, scale and size and at roughly what cost in terms of electricity production? Tom Mundy: As I mentioned, our technology is well advanced in comparison to most of the competition. At this point, we have already invested over $600 million in the development of our technology. We are now into a major licensing review with the US Nuclear Regulatory Commission. All that supports a first plant deployment in the US and seeing that technology online generating electricity in 2026. We believe that we are well positioned to enter this market. We have a customer-client interest in seeing our technology deployed in the first instance here. Our intentions were to continue with that interest and see our technology deployed in the first instance. However, we have had to follow the competitive activities that the Government has set out in order for the chosen technology to enter the regulatory process here, and then continue with its further development. To some extent, we have been constrained by needing to follow that process. If you were to line up all the activities that you need to do for a technology to—in our case—adapt our US design to meet UK codes and standards and to see our technology licensed here by the nuclear regulator, as well as the other approvals needed for site licensing and the work that our clients would need in order to ready themselves for deployment, we can see our technology conceivably generating electricity in this market in the 2026-27 timeframe, certainly a few years sooner than the Energy Technologies Institute’s estimate of before 2030. The institute had some conservatisms in its analysis that led to that 2030 estimate, but we have a shorter construction timetable than what was assumed in that analysis. If we start the regulatory process soon—originally BEIS told us to assume that a selected SMR technology would enter the GDA process here in

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3Q17—and you line all that up, we are looking at a 2027 timeframe to see our technology deployed in this market. Viscount Ridley: You specifically mentioned in your introduction that you were looking to partner with a UK manufacturer, at the very least. Is that realistic? Are there people out there who could do it for you? Tom Mundy: It is not only realistic, it is our desire to do that. I have spent the last two years while I have been over in this market identifying and working with the UK supply chain to confirm that they have the capability to manufacture the equipment that is needed for our facility. As I mentioned, we are only a technology development company; we have no manufacturing base, so for our technology to be deployed we have to identify the companies that are going to source all the equipment needed for our deployments. Our objective for this market has been clear: that we will utilise to the maximum extent we can the UK supply chain to provide the equipment needed not only for the deployments in this market but for exports beyond the borders of this market. Viscount Ridley: Would there be any R&D benefits for the UK as well? Tom Mundy: There is still a lot to do, particularly in figuring out how to effectively and efficiently manufacture the equipment that we have developed a safety case for at this point. We are already starting to work with UK companies to develop the IP associated with the manufacture of that equipment. For example, we are currently working with Sheffield Forgemasters for them to forge our reactor vessel head. It is a fairly complicated forging, and we are working with them under an Innovate UK cost-sharing programme in which they are performing a demonstration of the forging of that component and developing the special toolings and knowhow associated with how to develop effectively and economically that component that is needed for our technology. Viscount Ridley: Thank you. Mr Orr, what date would you see your technology getting into the market? David Orr: We have looked at 2028 to 2030, depending on when government makes a commitment, basically. We have asked for a set of enablers from government as assumptions before we do that. This aligns with what I said about the enabled market size, because we are necessarily talking about economy of volume as opposed to scale here. Part of your question is also about the cost. With these as the first of a kind, you would be looking for them to be in the order of those of a large reactor. I am not talking about one of the mega-gigawatt large reactors but about that sort of cost per megawatt hour. You would then look at your next of a kind to go towards competitive and drive towards a combined cycle gas turbine. I am not saying that you would get there, but it is an ambitious target and you would be driving through manufacturing, investment, material technology, factory flow, build sequencing, timeframe and certainty of regulation. The two big things that affect your delivery to grid are the regulatory process itself and certainty of regulation, as well as your build timeframe. Those are the two significant risk areas. Lord Oxburgh: A quick question for Mr Mundy. What size of unit have you gone for licensing approval for?

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Tom Mundy: Our technology is quite a bit different from what you would find in other SMR technologies, which I would generally characterise as a smaller version of a large plant. We have gone a completely different route in which we have created what is called a NuScale Power Module. That is the entirety of the nuclear steam supply system and containment all in one factory-fabricated component. Each of those modules, when connected to a power conversion system, a turbine generator essentially, produces 50 megawatts of electricity. The facility design is scalable and can house up to 12 of those modules, so the total facility output could be as high as 600 megawatts. Lord Oxburgh: Thank you.

Q14 Lord Broers: Related to timescale, et cetera, are the criteria set out by the Government for the SMR competition appropriate? What should the criteria be? Perhaps you know exactly where they are with this competition, or do you? David Orr: I can probably answer the last part of the question first. I am unsure where we are at the moment. We are seeking clarity, because we had all understood that the competitive process was starting in November 2015. We all submitted proposals in May 2016, and we were told that a road map would be released in autumn 2016, which has not occurred yet. So we are seeking clarity at the moment from BEIS. We understand that the Government have an awful lot of loading at the moment and that a lot has changed since we all submitted our bids in May 2016 as well. Quite a broad expression of interest was put out then, so by criteria they were not that clear about the specification. Going back to what I said before, I can tell you the Rolls-Royce view of that. Because of the economies of volume, we believe we have to select one preferred technology as a country. If we do not, we will not get the volumes to make it economical. In our view, again we have to have a UK industrial policy that supports intellectual property development in the UK and that promotes advanced manufacturing, high-value job skillsets and academia. We asked the Government for match funding up to the point of licensing the programme. Commenting on what Tom said, we would like the delivery of the GDA, the licensing slot, the future energy market mix to give the volumes—the 7 gigawatts electric that I mentioned before for our particular design—and export support to the markets from the Department for International Trade. We understand that as the competition progresses, the Government would quite rightly want to do due diligence on the technical maturity and on the vendors’ business cases. I am sure you appreciate that we had to submit two business cases, because we needed ours to be commercially selectable in the UK. So as well as a consortium of power station provider business case for the cost per megawatt electric, we have had to do an operator utility case to see how selectable it is by an operator. Lord Broers: You have submitted already to the competition. Tom Mundy, have you submitted also?

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Tom Mundy: We have submitted quite a bit over the last few years. We made a substantial submission to the 2014 SMR feasibility study. There was a very extensive submission for the techno-economic assessment, it had hundreds of pages of information, and the maximum submission allowed under the current SMR competition Phase One, expression of interest. We have made numerous submissions and given the Government quite a bit of information to assess our technology over time.

Q15 Baroness Young of Old Scone: This leads neatly on to my question. Do you think the Government have given you enough confidence that they have a framework for this? It sounds as though it is in the weeds somewhere, or am I being overcritical? Tom Mundy: As I mentioned, not only us but many vendors have given them quite a bit of information to develop the policies. We understand that the road map they are going to set forth will take the information that they have received to date and set the overarching policy of what they ultimately want to achieve for their support of SMRs and technology, and provide additional information about how the selection process will continue. We are still optimistic that the SMR road map, once it is issued, will provide that information and will continue to advance the programme. Baroness Young of Old Scone: Is there any white smoke on when the road map might appear? David Orr: No, not yet. Tom Mundy: No, not yet. Lord Broers: I can declare that I asked a supplementary question on this and had a letter back from Lord Prior, which said that phase one of the competition remains open and plans for the future of the competition will be shared with the House in due course. Baroness Neville-Jones: So no road map and no timetable. The Chairman: That is not very helpful, Lord Broers, if I may say so. It is rather like saying the results will be known in the spring. “In due course” is even more elastic. Shall we move on?

Q16 Baroness Neville-Jones: I must declare an interest in membership of one of the research councils, the EPSRC. The question I wanted to ask you follows on the whole question of SMR development. Have you made any assessment of the effects of SMR generation on the flexibility and stability of the national grid? Has anybody? What view do you take of the pros and cons? David Orr: We did quite a bit of work again with the Energy Technologies Institute. It has a model called the energy systems modelling environment—ESME—which you may be aware of, which again is used by government to look at the kind of scale that can be done. They also did a significant amount of siting studies on a variety of power levels that the SMRs could be used for on the grid, from the 7 gigawatts electric I mentioned up to a significant figure of greater than 60, with combined heat and power and things of that nature, also taking into account grid conditions for the 2050 decarbonisation targets, and potential things such

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as the electrification of automobiles for transport carbon emissions reduction. There has been quite a lot on the demand model, on the power levels and on potential sites. If you include the ex-licensed sites, which obviously would be the preference for both speed and public acceptance— the ex-Magnox and the AGR sites are starting to decline now—they would have to be released through a phase two, of course, from the nuclear site studies. The Government have so far released phase one for the generation IIIs, and we would need another release, which is why we would all need a first-of-a-kind site identified. You can definitely have some variability of power on an SMR; it is not necessarily significant if you want to be efficient with your fuel production and cost over a protracted period, but for short periods it is absolutely doable, and it is much more responsive than the large reactors, as was said by the professors earlier, so there is a bit more flexibility in them. In relation to siting and losses, when you get outside larger populated areas, it makes far more sense for transmission losses to have low power levels at times. An example may be whether you would put a large generation III reactor at Heysham or Hartlepool, which are currently AGR sites. I would say probably not. So there are those sites. They would also go well on ex-Magnox sites such as Trawsfynydd in Wales. We know that the sizing of these fits well with the existing licence infrastructure in the UK and in terms of balance for the grid. At the kind of power level we have been talking about today, whichever system is used for the provision of optimum power, it also aligns very much with coal station generation levels, should we want to do that.

Q17 Lord Oxburgh: Looking at the future here, we have to consider the whole energy system. To what extent would either of you say that your designs were suitable or unsuitable for incorporation in district heating or indeed hydrogen generation, both of which are possibly interesting in the longer term in the UK? Tom Mundy: As I mentioned, our technology is premised on these individual power modules, and it gives us quite a bit of flexibility to be able to provide for applications other than just electricity production. In fact, we have studied and issued a number of technical papers examining the use of our technology for combined heat and power applications and process heat applications, having the capability for extensive load following, and a design to be able to cycle the individual modules up and down at various rates depending on the need for matching existing capacity. All that can be done quite easily, because the heat that is produced in these individual modules can be directed to these other applications, which allows for very more deliberate and specific direction of that process heat for these things. We specifically build that capability into the design. David Orr: SMRs are generically capable of doing combined heat and power. Again, a lot of SMR developers are looking at these as additional, should a customer want them, almost as a plug and play, and making sure that they can do it. You can also put in things such as battery packs, so if you are not generating fully you can be charging for the grid at peak times. There is hydrogen production; we are looking at a probability study

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at the moment on hydrogen generation. All of them are entirely possible in order to improve the economics. Lord Oxburgh: What do you mean by “a probability study for hydrogen”? David Orr: The viability economically. That is the best way of putting it. Lord Oxburgh: Thank you.

Q18 The Chairman: In the previous session you may have heard us touch on the National Nuclear Laboratory, with its range of functions, acting as strategic technical adviser to government and industry, leading the civil nuclear fission energy national programme, and relying largely on commercial funding—a company wholly owned by government. Do you think this is a suitable remit to provide research and development support for the UK nuclear sector? Dr Rebecca Weston: I will take a stab at that one. I think it is a suitable remit for serving the nuclear industry. It is a broad-ranging remit from independent advice to government to the role the National Nuclear Lab plays with us at Sellafield, which is very much about technical support and development more than co-ordinating R&D. We are looking to establish a greater strategic relationship so that we get more co- ordination across the technology readiness scale, with NNL playing a part between early innovations and Sellafield acting as the active deployment and testbed for those technologies. NNL is the only wholly commercially funded national lab in the world, I think. Most other labs have some form of grant funding, even others in the UK. There are a lot of strengths to that commercially funded model, in that it drives efficiency and a commercial outlook, and it puts the NNL very close to its key customers, not least us at Sellafield but also EDF and the Ministry of Defence. However, the model creates some conflict when it has to compete in the marketplace for funding through the research councils with supply chain innovators and academia. So I would certainly welcome looking at how we manage that remit. Through the new technical services contract, a long-term agreement between Sellafield and NNL, we are looking to drive the development of the supply chain and try to manage the conflict that arises with the model as it is. There are pros and cons with any model, and it depends what support to the industry the Government want of the National Nuclear Laboratory at the moment and on a longer-term approach. The market will not drive that long-term research and development. The Chairman: Both Sellafield Limited and the NNL have been through a transition to GoGo. How do you feel that the relationship has developed? Dr Rebecca Weston: I feel that the relationship is developing. It is a very long-standing relationship in that both organisations came out of BNFL back in 2005 and went through the GoCo experience and have now made that transition into GoGo. It has, I think, enabled a more strategic outlook over the last year. It is early days as to how some of the challenges that I have outlined will develop. The Chairman: Unless either of you would like to comment on the NNL, we will move on to Euratom.

356 Sellafield Ltd, Rolls-Royce Nuclear and NuScale Power – Oral evidence (QQ 9-19)

Q19 Lord Broers: Finally—we discussed this with the previous group—how will leaving Euratom affect the UK nuclear industry? David Orr: There are two things, which were both mentioned earlier. There are fuel movements, which is a potential issue. There is also fusion in particular but also research and development money in those arrangements. The Nuclear Industry Association has already put out a statement that the preferred position is clearly to maintain that relationship, but failing that that we have negotiated positions on the key parts of the industry before exiting the Euratom relationship. Our understanding is that that would be through export control arrangements again, or even having collaborative agreements on research and design understood, at least in formative use, before we exit that arrangement. Dr Rebecca Weston: I would add that at the Sellafield site there would be a significant impact on leaving Euratom with regard to nuclear materials accountancy and, indeed, nuclear proliferation safeguards. There is very much a requirement for the third-party assurance to overseas customers that we currently discharge through Euratom, and the independent verification of our special nuclear materials in particular. In its absence there is the IAEA. Significant time would be likely to be required to put an appropriate system in place. It would not be without cost—of equipment—Euratom has an on-site laboratory, for instance, at the Sellafield site—and time, effort and dose in re-verification of such an inventory. Clearly, there are hugely significant impacts on the likes of the fusion programme at Culham, as has already been mentioned. Obviously, once clarity is obtained, we are very happy to support work to understand and develop the UK position. The Chairman: Clarity is definitely needed on this one. If there is nothing else on Euratom, I would like to go back to the NNL, for a moment. You reminded us that it is quite unique for a national laboratory to rely entirely on commercial funding. Would it help if there was seed funding, platform funding, from government? Would it give it a greater degree of stability, and might some of the inhibitions be reduced? David Orr: I agree. I think clarity and objectives are the two roles that it should be given, to be honest. I do not think it should lose its commercial position, as was said earlier, because it has been hard fought and hard won, and it is a great mentality to have anyway for an organisation structure. I do not think that should be lost. It does tremendous work, as I said before, particularly in fuel cycle decommissioning and accident- tolerant fuel for civil nuclear, so that is all a great positive. If the Government wish it to play a role as the formal adviser, I am sure the National Nuclear Laboratory, which we all work with strongly, knows that it does not have the capability across the lifecycle to be able to do that. It understands that and has tried to support and augment it through secondees from other industrial players—in new reactor design, as an example. So there is the clarity of the two roles, and once you have an understanding of what the government adviser role is, they will have some funding, as you have mentioned, to cope with and cover that role properly. The Chairman: Thank you. Lord Hennessy is looking as if he wants to

357 Sellafield Ltd, Rolls-Royce Nuclear and NuScale Power – Oral evidence (QQ 9-19)

ask a question. Lord Hennessy of Nympsfield: I think you were in on the earlier session when I asked the question about dawnism. Are you optimistic? Is this a new dawn for all this? Dr Rebecca Weston: I am certainly optimistic about the future of the industry. Lord Hennessy of Nympsfield: That is a cautious answer. Dr Rebecca Weston: Not at all. “A new dawn” is also fairly dramatic, in that sense. There is absolutely the opportunity. However, there are always thorny questions, and I come back to the political dimension and not least key strategic decisions coming up, about geological disposal for example, and once and for all solving the issue of radioactive waste management. Not just for the UK but for the broader industry across the world. For many nations, it is a timely moment in that regard. In some ways, making policy and strategic decisions in some of those areas and demonstrating that we have cleaned up the legacy of the past starts to enable the future. Lord Hennessy of Nympsfield: Is this the “R” of the SMR, Tom? Tom Mundy: I have a much more optimistic view about a new dawn of the technology. The days of the gigawatt-size nuclear facilities are limited; there is just not the customer base with the financial means to deal with the costs associated with those facilities and the complexity in constructing those facilities. There is clearly movement now to advanced technologies, whether small and modular, which are based on light-water technology or the Gen IVs, which are based on non-light-water technology. That is where I see this industry is moving to. I see great opportunity over the next 20, 30, 40, 50 years to see these kinds of technologies being deployed all over the world to satisfy all kinds of objectives that the world has, both financial and in relation to the low- carbon and environmental needs. Lord Hennessy of Nympsfield: David, are you an evangelist? David Orr: I am. As I said at the start, we have a once-in-a-generation opportunity, and if we miss it we will regret it. It is going to decline the skill base in the UK, to an extent, on portions of the lifecycle that I think we will struggle to regain, to be honest. Viscount Ridley: As a footnote to Tom’s point, even a toaster would be extremely expensive if you made every one from scratch. Lord Hennessy of Nympsfield: That is a very profound remark. Tom Mundy: Probably so. I have heard numbers talked about particularly in relation to the learning on the technology: how many will it take to get down that nth-of-a-kind curve? For some of the technologies you need multiple units to be constructed. In our technology, 7 gigawatts of generation in this market is 140 or 150 NuScale Power Modules, and in our view we need 12 to 14 of those modules to be made to get down that learning curve from first-of-a-kind to nth-of-a-kind. That is the number of modules in the first unit or first facility. After that, we are well down that curve and the savings associated with repetitive factory manufacture of

358 Sellafield Ltd, Rolls-Royce Nuclear and NuScale Power – Oral evidence (QQ 9-19)

those pieces of equipment. When you start making 140 or 150 or more, by that point in the process you understand how to make that toaster. Viscount Ridley: I was not being entirely flippant, but that was the point that I thought had not come out strongly. Baroness Young of Old Scone: In that context, if you were to operate at that scale, where do you think the costs per unit of electricity would come in the hierarchy of different forms of generation? I have only ever seen it compared with the big-scale nuclear costs rather than any of the others. Tom Mundy: Most importantly, the customers want to know that they are buying an economic technology. It is not enough to get behind the technology on safety performance; it has to be economic. Over two years ago, we put out first-of-a-kind economic figures for our technology that are competitive with gigawatt-size advanced technologies and a number of other forms of generation on a levelised basis, even with combined- cycle gas when gas is around $5 per million BTUs or higher. We are talking about a levelised cost, on a first-of-a-kind basis, of £65 to £70 per megawatt hour for our technology, with significant opportunity to improve upon that for nth-of-a-kind deployments, so it is certainly competitive with DECC’s own number for advanced nuclear. Its assessment was that it should be better than £90 per megawatt hour. We believe that on first-of- a-kind we are below that, and we certainly have the opportunity to improve upon it with multiple unit deployments. Lord Maxton: Can I say to Viscount Ridley that I am old enough to remember the days before we had electric toasters? To some extent, the point is that the technology is moving so fast. Is there another technology that will overtake the nuclear technology that a lot of money has been invested in? Dr Rebecca Weston: You talked in the earlier session about having to have that long-term view. Clearly, in that vein, fast reactors and fusion come into the picture. Going back to the point about the toaster, if we could improve some of the collaboration and leverage in some of the research and development that we (with perhaps some committee as part of the Nuclear Industry Council, as a successor to the likes of NIRAB) are doing, there might be more opportunity, with that in mind, to look to bridge and to make better benefit of the investment in the likes of advanced materials. For instance, we are developing boxes to store radioactive waste that are pretty complex advanced manufacturing that really do develop the skills and capabilities that would play into SMRs, generation IV and fusion development. The Chairman: We have come to the end of our session. We rely on Lord Hennessy to give us proposals for titles of our reports, and I can see “dawn” featuring, possibly with a question mark. We will see. Thank you to David Orr, Dr Rebecca Weston and Tom Mundy. As I said earlier, a written record will be sent to you. Please make any minor amendments that you feel appropriate. If there is anything that we have not covered and that you feel you would like to add, for the record, please send them to the clerk, who will be happy to receive them. Thank you again for giving us very helpful advice and information.

359 Snowdonia Enterprise Zone (SEZ) Advisory Board – Written evidence (PNT0055)

Snowdonia Enterprise Zone (SEZ) Advisory Board – Written evidence (PNT0055)

Introduction

1. Snowdonia Enterprise Zone (SEZ) was set up by Welsh Government in 2012. It consists of two sites – the Llanbedr airfield (which is now part of the Snowdonia Aerospace Centre) and the Nuclear Decommissioning Authority’s Trawsfynydd Decommissioning Site. These locations are in the county of Gwynedd in North West Wales.

2. The SEZ Advisory Board has had work done to see what potential uses there are for the Trawsfynydd site and concluded that it was best suited to low carbon energy developments and any associated research and development opportunity.

3. The Board is proactively working with stakeholders at a local and national level to see what development opportunities could be attracted to Trawsfynydd in the medium term.

4. The Welsh Government and local councils in North Wales are supportive of potential future developments at Trawsfynydd. Indeed, there is positive encouragement being given to a holistic approach in North Wales regarding potential future nuclear development and associated research and development. Much work is already being done across North Wales in supporting the development of a skills base for Horizon’s Wylfa Newydd project. Bangor University are developing capability in nuclear research and development – including partnerships with organisations such as Hitachi and Imperial College and working with universities in the north of England. Welsh Government are looking at supporting the siting of research facilities in the area and the Deeside Enterprise Zone in North East Wales has been identified as the site of an advanced manufacturing development facility which will complement and work closely with the Nuclear Advanced Manufacturing Research Facility in Sheffield. Trawsfynydd is a part of this holistic approach – with the potential for it to be the site of the UK’s first small modular reactor (SMR)

5. Trawsfynydd is part of a crescent of nuclear activities stretching from North West Wales to Cumbria and including all facets associated with the civil nuclear industry. It is well situated for access to centres of nuclear excellence in North West England such as the Nuclear Advanced Manufacturing Centre at Sheffield, URENCO in Cheshire, Springfields near Preston and the National Nuclear Laboratory as well as major supply chain organisations. It is ideally placed to be part of any nuclear deal which is developed between Government and industry.

Responses to Questions:

1. Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long term policy

360 Snowdonia Enterprise Zone (SEZ) Advisory Board – Written evidence (PNT0055)

for civil nuclear activities including international collaboration and, within the UK, for cost-effective and efficient articulation of the different elements of nuclear work?

1.1 The responsibility for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities should lie with the UK Government and with a department charged with that responsibility.

1.2 In the present arrangements, that Department should be the Department for Business, Energy and Industrial Strategy supported by an organisation with sufficient resource that can give it holistic , unbiased advise. Such an external organisation supporting BEIS on nuclear matters should be the National Nuclear Laboratory - NNL. This is a government owned body which carries out research and analysis for the public and private sector on nuclear related matters. Its remit could include the requirement to provide holistic and unbiased advice to BEIS and it should be resourced appropriately.

2.1 The nuclear sector would benefit from a clear joined up approach between the public and private sector

2.2 . Such a deal could involve for example clear facilitation actions by government (including local government) and commitment to cost effective delivery in a regional manner by the private sector. It could involve skills development and effective research and development to support new technology which would be of advantage to the country

2.3 The leadership organisation could be the recently re-formed Nuclear Industry Council

3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

3.1 The potential benefits of deploying SMR in the UK are :- - economic (increasing opportunities for the Manufacturing sector in UK in areas that might currently be suffering economically, - increased employment both in Manufacturing and in electricity production, - the generation of low carbon electricity, the opportunity for UK to have first mover advantage in a field which has world wide potential opportunities - Potential export opportunity by developing expertise in UK - Intellectual property developed in UK 4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

361 Snowdonia Enterprise Zone (SEZ) Advisory Board – Written evidence (PNT0055)

4.1 Studies by NNL indicate a market worth billions of pounds. (see http://www.nnl.co.uk/media/1627/smr-feasibility-study-december- 2014.pdf ) 4.2 By not being involved, UK could lose opportunity in a lucrative market and end up having to import technology from other countries. This would weaken the R&D and intellectual base of the UK in the global nuclear arena.

5.1 Government is not doing enough to fund research and development on SMRs and to fund and encourage others to do so. Clear signals are needed that the Government is serious.

5.2 For example, it could be doing more in the UK regarding identifying a site for the UK’s first SMR (and also identify possible follow on sites). Doing so would reduce risk for potential developers and investors.

5.3 The SEZ Board believe that the UK Government should designate land at Trawsfynydd Decommissioning site as the site for developing the UK’s first SMR: - Land at Trawsfynydd (both within the current nuclear licensed site boundary and also external to it) is in public ownership – being owned by the Nuclear Decommissioning Authority. It has not been designated for any other use once the current phase of decommissioning comes to an end. - The site did not meet the criteria to be included in the 2009 Strategic Siting Assessment list of sites for large new nuclear reactors because of the lack of adequate cooling capacity for multi GW reactors - The land is adjacent to a 1000 acre lake (Llyn Trawsfynydd) which was used as the heat sink for the 2 magnox reactors which previously operated at the site. Initial calculations carried out for Welsh Government indicate that the lake has the cooling capacity to allow the production of 600-700 MW of electricity. - The site has excellent Electrical Connectivity into the National Grid – being adjacent to a major Electrical sub-station and connected directly into the ‘North Wales ring’. Grid connections in North Wales are being reinforced as part of the Wylfa Newydd connection. This would allow the despatch of a 1000 MW of electricity from Trawsfynydd - The site has good road connections and a disused rail connection adjacent to it which could be brought back into sevice if needed. - Initial results of studies being carried out indicate that very large loads (which would be required for large modules manufactured elsewhere) could be transported to site via sea access and then onward road Transport

362 Snowdonia Enterprise Zone (SEZ) Advisory Board – Written evidence (PNT0055)

- There is a workforce in the locality which is ‘nuclear savvy’ and is used to working on nuclear sites - The site is in reasonable proximity to Bangor University (and its nuclear research aspirations) and to the Deeside Enterprise Zone (with its Advanced Manufacturing expertise) and to centres of nuclear excellence in the North of England - There is strong support for new nuclear development at Trawsfynydd from the local population, local council, Welsh Government and other organisations in North Wales

6.1 The Government should make it clear what it expects from the competition and how it sees the SMR being developed in the UK

6.2 It should identify what it would make available to a potential SMR developer. These could include o Identifying a site for the first build (see above – reply to Q5) and supporting facilitative action to make such a site available. Trawsfynydd is considered ideal for this. Arrangements could be made such that a developer does not have to pay for the site until electricity is generated; o Supporting the timeliness of response of the work of any planning enquiries and regulatory assessments; o Identifying possible follow on sites. o Identifying / ensuring sufficient ONR Resource so that ONR could respond quickly to any potential SMR developer regarding the first step of a Generic Design Assessment. Having the Government identify which organisation should be awarded a GDA slot feels like Government ‘picking a winner’ rather than letting potential investors come forward and work through a graded ONR gate to demonstrate that the technology is potentially licensable. o Government should consider identifying what it thinks is an appropriate cost to pay for electricity from such new developments (perhaps offering a set sum for the first of a kind development)

6.3 Work done by ETI identifies that an SMR could be operating un UK by 2030. (http://www.eti.co.uk/insights/preparing-for-deployment-of-a-uk- small-modular-reactor-by-2030) That work identified a number of key steps that need to be taken early on if that date is to be achieved including having a policy framework in place which encourages smr deployment and gives potential investors confidence.

363 Snowdonia Enterprise Zone (SEZ) Advisory Board – Written evidence (PNT0055)

7.1 The UK should be involved in developing Gen IV technology. Nuclear power is a recognised part of the future energy mix. It is important to retain expertise for the future and to develop reactors which are even safer than the current generation. A materials test reactor is a need for any new technology being developed.

7.2 Acceptability is a key issue with such developments. New facilities should be located in areas where there is support for nuclear – Trawsfynydd would be an ideal site for locating such facilities.

24 February 2017

364 Mr Gary Swift – Written evidence (PNT0001)

Mr Gary Swift – Written evidence (PNT0001)

SMR

The UK has always been a world leader in the safe use of nuclear energy and has had a site at Trwasfynnd for many years. It has operated safely, with highly trained and motivated staff, the skills required for the operation and maintenance of nuclear systems can be easily transferred to operate the new breed of reactors

To locate the proposed Small Modula Reactor (SMR) at Trawsfynnd lake makes economic sense, the infrastructure, distribution and staff are currently in place, it would also have a massive socio-econmic effect on an area that has already seen closures of major employers in the area.

The de-commissioning of the current power station will ensure any future developments will have little or no impact on the environment, but will have a huge positive effect on the area and the prosperity of the local community.

12 February 2017

365 Terrestrial Energy Inc. – Written evidence (PNT0057)

Terrestrial Energy Inc. – Written evidence (PNT0057)

(a) Prior to answering this and to put our answers in context, we think it would be helpful for us to establish our credentials as a leading private sector Advanced Reactor (i.e. Generation IV) vendor with a technology that has won, on its merits, sovereign support in the USA and Canada.

(b) Terrestrial Energy is a private company and a vendor of an Advanced Reactor power plant, the Integral Molten Salt Reactor (IMSR™) power plant. It has a leading position in its sector globally. The Company’s central commercial claim is that IMSR™ power plants can compete in global energy markets on price and convenience with fossil fuels. IMSR™ produces 600oC heat in a convenient hot salt form. This can be pumped simply over considerable distances to drive industrial heat processes or generate power, at a Levelised Cost of $5 to $6 per MMBTU and Levelised Cost of electricity of $40 to $50 per MWh(e) respectively. IMSR™ power plants are deployable in the 2020’s. A single unit IMSR™ power plant generates 400MWth/190MWe. This is currently in the regulatory process in Canada and under U.S. DOE Loan Guarantee office due diligence for a $1Bn loan guarantee, the first for an Advanced Reactor vendor, and the U.S. NRC has been informed of IMSR™ regulatory intention. The U.S. DOE is also supporting U.S. IMSR™ development and deployment under its GAIN (Gateway for Accelerated Innovation in Nuclear) program, which is firmly directed at Advanced Reactor technologies, not Conventional Reactor technologies as exemplified by PWR technologies.

(c) In North America, the credibility of IMSR™ deployment in the 2020s is defined by Terrestrial Energy’s market position: (i) its engagements with operators such as Southern Power, Duke, PSEG, OPG, Energy North West, and NB Power; (ii) the finalisation of Phase I of the Vendor Design Review (VDR) process with the Canadian Nuclear Safety Commission (CNSC) (the VDR is analogous to the UK Generic Design Assessment (GDA)), a first for an Advanced Reactor vendor; (iii) Terrestrial Energy Inc. has sovereign support through the Sustainable Development Technology Canada grant program, and is in the process of conducting site assessments in Canada; (iv) in the US, Terrestrial Energy USA Ltd., an affiliated company, is currently progressing, with its consortium partners, a Loan Guarantee application in the amount of US$1 Bn with the US Department of Energy to construct and license the first IMSR™ Commercial Plant in the US at one of 4 US sites, with that publically announced to date being Idaho National Laboratories. NRC engagement is due to commence in October 2019. The US DOE loan program is similarly directed at Advanced Reactor technologies with federal loan guarantees worth up to $12.5 billion. In the UK, Terrestrial Energy is a participant with its consortium partner in the SMR Competition, and it has used the UK supply chain in its engagement with the CNSC.

366 Terrestrial Energy Inc. – Written evidence (PNT0057)

(d) We are not of the view that it is for developers, vendors or operators to advise on which UK body should set policy. Rather, we are of the view that the Government should set a “level playing field” for nuclear innovation. A level playing field in this context should embody equality of treatment between innovative Advanced Reactor vendors which are new entrants to the market and incumbent Conventional Reactor vendors. It should also allow nuclear technology, including Advanced Reactor vendors, to benefit from explicit or implicit subsidies offered to other energy technologies such as renewables and fossil fuel technologies, and similar timescales for decision making. Such a “level playing field” approach should be driven by evidence based policy, should make regulation reasonably priced, and offer predictability in terms of timeframes for deployment and negotiation of offtake. In addition, practical policy will offer clarity on which bodies to approach for project or program initiation and deployment, and clear accountability and timescales for response.

(e) With such policy, nuclear innovation in the UK can prosper and be led by the private sector as is the case in North America. We define nuclear innovation as the true innovation undertaken by Advanced Reactor vendors committed to much better and more cost competitive product, and not the incremental changes offered by vendors of Conventional Reactor technologies at whatever size. A commitment to innovation will deliver the cost-effective nuclear solutions that the UK desires and active participation in a global market, and lack of commitment will result in cost-effective nuclear solutions being imported. We state this driven by our firmly held view that only nuclear innovation will be able to deliver a cost competitive product with the enhanced market opportunities of high temperature Advanced Reactor technologies.

(f) Drawing on our experience, the North American opportunities with which we are fully engaged stand in contrast to the UK. Here there is no policy framework at all to support Advanced Reactor innovation that we have been able to identify, although much distracting discussion and policy prevarication. Our engagement in the UK is further constrained by the structure of the UK power market. There are no UK private sector operators of nuclear power plants, apart from EDF, which has its own native technology and a huge historical commitment to Conventional Reactor technology. There are also no available sites owned by nuclear power plant operators with whom it is possible to open a commercial dialogue, and it is therefore not possible to press development opportunities.

(f) We would also draw attention to an absence of available policy mechanisms to support private capital formation around innovative private sector vendors of Advanced Reactors - of which there are over 50 in North America - since there is no equivalent of the US Loan Guarantee program or the GAIN program, which are respectively and clearly aimed at supporting Advanced Reactor deployment and development. Furthermore, the UK suffers from considerable opacity as to how to enter into negotiations regarding offtake prices or secure a GDA assessment slot. Finally, regulation is prohibitively expensive and there are not clear support mechanisms to defray this expense. Together these characteristics of the UK market mean that the

367 Terrestrial Energy Inc. – Written evidence (PNT0057) commitment of substantial capital to the UK opportunity is presently impractical for the innovative Advanced Reactor vendor.

(g) We would like to draw the Committee’s attention to the number of Advanced Reactor vendors that are moving to Canada as direct result of the transparent and unpoliticised nature of the Canadian regulatory process. We believe on good authority that there will be 5 Advanced Reactor vendors in the Canadian Vendor Design Review process by the end of the year, and most are foreign vendors. We are not aware that there are any in the UK GDA.

(h) We would further like to advise of the dangers of the UK’s excessively conservative attitudes to nuclear innovation at a time of change in global attitudes to Advanced Nuclear. In our opinion greater risk can accrue from a failure to recognise change than embracing it. By embracing it, the UK can play a full part in the upcoming Advanced Reactor market.

2. The Government's industrial strategy green paper discusses a possible 'sector deal' for the nuclear sector. How might the nuclear sector benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal?

(a) We are of the view that if the Government can open up available sites, provide responsive pathways, for example, to offtake arrangements, to loan guarantee or similar support, the deployment of nuclear new build in the UK can be market driven, and permit the virtues of favourable Advanced Reactor economics to be realised for the UK economy, including job creation, manufacturing facilities and the other associated benefits.

(b) In short, any sector deal should involve the removal of barriers to conducting feasibility assessments on new projects, and establish clear and committed programs to encourage private sector capital formation around the most innovative nuclear projects; the US has in place such programs. This should be the focus of government intervention and will lead to UK silos of expertise and UK supply chain integration in global Advanced Reactor companies which will choose “best of breed” suppliers.

(c) The ongoing and already announced initiatives to support the nuclear in the UK should be continued – in particular, the NAMRC and its “Fit4Nuclear” program, and National Nuclear College initiatives seem very constructive to us.

(d) As programs progress, support at the supply chain or manufacturing level may be appropriate to capture UK participation.

(e) We are not able to advise on which organisations should lead these efforts, but sufficient attention to the industrial as opposed to the academic is required, as is an independent perspective with an international perspective. This is required to avoid a rejection of innovation and support for incumbent technologies that will lock out innovation in Advanced Reactors.

SMRs

368 Terrestrial Energy Inc. – Written evidence (PNT0057)

3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

(a) We share the consensus view of the advantages of SMR’s in a more distributed grid system where reactive, load following SMR’s offer complementarity to renewables and can be situated on a wide range of sites. We caution that an SMR is not a technology but a commercial formulation of a technology. Advanced Reactors, rather than Conventional Reactors, are far more capable of securing the full advantage of the SMR commercial formulation.

(b) We add that Advanced Reactor SMR’s have a far greater potential than just power provision. An IMSR™ power plant uses an Advanced Reactor and is illustrative of the opportunity of its class. An IMSR™ power plant (i) can generate high quality heat (temperature) and is dispatchable, and so offers a fossil fuel combustion substitute for industrial process heat applications, (ii) be economically competitive with fossil fuels, (iii) is deployable in the 2020’s and (iv) is capable of serving as a driver for deep decarbonisation and can be the corner stone of a hydrogen economy, where SMR’s and nuclear hydrogen can address many industrial processes, e.g. chlorine, ammonia, plastics, petrochemical production and base metal refining through Direct Reduction of Iron (DRI) methods, e.g. Midrex DRI plant in Corpus Christi, Texas, US.

(c) We are of the view that that major risks arise from the adoption of uneconomic Gen III+ SMR technologies which are not capable of securing the cost reduction necessary to support export sales and discredit the SMR idea by locking into “tried and tested” PWR technology. This technology may be familiar to many, but is also likely to be incapable of offering a product that will be adopted broadly by industry, which cannot be expected to shoulder the economic inadequacies of such SMRs.

4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

(a) We consider that the better question is: What is the scale of the opportunity for Advanced Reactors? That is the far larger opportunity for nuclear innovation and the market that Terrestrial Energy is seeking to exploit. This market is the market for heat and includes many of the varied needs of industry for process heat. Advanced Reactors produce high grade heat which is not offered by Conventional Reactors. Hence the market for Advanced Reactors should be viewed as heat and electric power.

(b) The scale of this market is considerable in each of two possible scenarios for the 2050 energy mix.

(i) Scenario one, broadly represents the base case energy mix anticipated by the major energy companies, for example BP’s recent 2035 Energy Outlook report, which anticipate no meaningful climate change mitigation, i.e. fossil fuels will remain dominant at about 74% of the energy mix, temperatures will increase by more than 2oC, renewables will progress to about 14% of the

369 Terrestrial Energy Inc. – Written evidence (PNT0057) energy mix. In these circumstances, and if capable of competing on price, in 2050 Advanced Reactors (which we use in these circumstances as a proxy for SMRs as that is an attractive commercial formulation for Advanced Reactors given market needs) will represent about 4.5% of the energy mix, representing a global market opportunity of some $120bn per year on energy services with 10,500TWh of primary energy production.

(ii) Scenario two envisages that there is a policy move to carbon mitigation i.e. seeking to keep temperature increases <2oC. In this case, only advanced reactors can credibly offer a pathway to such deep decarbonisation and effect the massive substitution required to rapidly reduce fossil fuel use. This is particularly true as regards the industrial process third of the energy basket (a broad model being the other “thirds” being power and transport fuel), and in this case the respective figures are on our projections:

In Scenario two and in 2050, fossil fuels are 20% of the global energy basket, renewables 14%, advanced reactors 54% (substituting fossil fuels to bring fossil fuels down to the 20% of the energy mix required for fossil fuels in order to realistically achieve the desired climate change mitigation), leading to a market opportunity defined by $1.4 Trillion in energy services per year, with 126,000 TWh of primary energy production.

(c) Note that SMR power Levelised Cost of Electricity of some $50 / MWh is necessary in our opinion to achieve these results. This will probably not be possible without deploying Advanced Reactors as opposed to smaller Conventional Reactors, such as PWRs.

(d) If the UK does not take full advantage of the opportunities of Advanced Reactors, it will leave the field to North American and Chinese companies which are pressing ahead of the UK in developing and deploying Advanced Reactor technologies, and the opportunity to participate will be lost to UK industry which will be importing these new commercially competitive reactor systems from foreign suppliers.

(a) Again we believe that the more relevant question, concerns Advanced Reactors and not SMRs.

(b) The efforts of the UK Government in holding the SMR Competition were promising, but appear to have stalled and are failing to fully engage and explore with participants in the “dialogue” promised by the nomenclature of the “Dialogue” Phase, and the financial commitments made in November 2015 do not appear to have resulted in action.

(c) It was particularly disappointing that no experts have engaged with companies such as Terrestrial Energy, as far as we know, to on an expert basis test and assess the credibility of claims with respect to cost estimates

370 Terrestrial Energy Inc. – Written evidence (PNT0057) and deployment timetables, as is being done through practical engagement with industry, regulators and national laboratories in North America.

(d) Accordingly, the answer to the first question is “no”. In particular, we think that the factors identified in Q1 mean that the UK does not present as a jurisdiction which is scoping available technologies in a way that is globally competitive. Together, this makes the UK’s ambitions to be a manufacturing centre for SMRs seem to be aspirational rather than responsive to industry need.

(e) In relation to the second question, the answer is “yes”. Our recommendation is that the UK Government review policies in North America that support private sector led nuclear innovation, and companies such as Terrestrial Energy.

(a) Again we consider that more relevant question, concerns Advanced Reactors and not SMRs.

(b) The SMR Competition was structured to be a useful information gathering exercise for the UK Government, and we hope that it has achieved this end. However, there has been little or no “follow through” or expert constructive engagement with participants, and to the extent that it was structured as a “competition”, participants still have no clarity on what “prizes” are on offer, what criteria are to be applied to winning them, and whether the “prizes” and timescale for their award merits any investment in time and money in the UK by reactor vendors and developers, as opposed to other countries with clearly defined programs and more responsive regulators, site owners, and industrial environments.

(c) The criteria should be to focus on supporting technologies that are likely to be cost competitive and therefore capable of competing with fossil fuels in the heat and power market, and which have the team, international support and industrial engagement to deploy in the 2020s and 2030s and access the global market opportunity.

(d) It is Terrestrial Energy’s view that the Government should not be in the business of “choosing a winner” or “down-selecting” but rather set in place structures addressing the deficiencies in policy identified in the answer to Q1.

(e) We believe that the UK has much to offer in terms of nuclear academic and supply chain expertise, but without focus and decision making capacity, and addressing the issues identified above, it is not internationally attractive to Advanced Reactor developers.

(e) To address the “timescale” question directly, we are of the view that programs should be put in place now to permit proposals for structuring projects and programmatic deployment to be expertly assessed and

371 Terrestrial Energy Inc. – Written evidence (PNT0057) resourced, enabling private capital formation around credible projects. This requires mobilising site, national laboratory, and industry in a practical, rather than purely consultative, manner. Advanced Reactor SME’s in particular need clear timetables and gates as they do not have the legacy businesses to support lengthy consultations with no results for expenditure of capital. Companies which have such legacy businesses are unlikely to drive innovation. Note that programs such as the US Loan Guarantee Program require many months’ due diligence and evolution both on the business and technical side, but that detailed sovereign engagement allows private activity to progress.

(f) Once such programs are underway, it is likely that “winners” will quickly emerge based on objective criteria, and uncompetitive programs can be quickly “off-ramped” so that resources can be concentrated on companies that will be able to compete in the global energy market on their merits.

(a) “Yes”, since Gen III+ technologies do not offer the promise of cost competitiveness required to make SMRs commercially attractive.

(b) In order for the UK to establish a position, let alone a “world leading” one, it should be prepared to offer clarity on the matters adverted to in earlier answers and demonstrate an appetite and an unwavering commitment to assessing evidence of deployment timetables and economics of new technologies.

(d) We very strongly advise the Committee of the dangers of the UK Government seeking to play a role in “down-selection”. There are expert voices that advocate for government leadership in the form of a committee approach of experts to “down-select”, and “pick a winner”. This approach rejects the role of the market in technology selection and perpetuates the paradigm that nuclear is a special case where innovation should not be driven by market participants. Such a paradigm is without parallel in the modern industrial age, and in our opinion it has failed over 50 years to deliver a nuclear technology that can compete with fossil fuels. We strongly advocate policy to put in place programs which aggressively support private sector leadership with a technology agnostic position, which is the case today in the US concerning Advanced Reactor innovation.

Governance

8. Is the NNL fulfilling its remit appropriately? Can it deliver the required research to support the UK's future nuclear energy policies? How does it compare to equivalent organisations in other countries?

372 Terrestrial Energy Inc. – Written evidence (PNT0057)

(a) We do not venture to offer an opinion on whether the NNL is fulfilling its remit. We have no doubt that with suitable funding and direction it can deliver the required research for any policies that are ultimately developed, but we would observe that in comparison with the equivalent National Laboratories in North America there is a lack of emphasis on supporting the private sector with its development of Advanced Reactors. The US Department of Energy with its “GAIN” program creates a mechanism for and requires its National Laboratories to support private sector led nuclear innovation. This policy of directing its US National Laboratories to support Advanced Reactor innovation can be seen in 2017 legislative action by both Houses of the US Government, a policy that has recent strong bipartisan support.

(b) We note a general attitude of UK establishment scepticism in relation to Advanced Reactor (Gen IV) technologies that appears to us to be at odds with developments elsewhere in the world. In particular, views on timelines for deployability are unrealistically long and fail to take account of the capital and resource that can be marshalled to address a very large market opportunity at a time of market change.

(c) We caution that unfamiliarity should not be confused with a lack of deployability, but unfortunately that has been our UK experience. We would venture that a close examination of developments internationally might be productive, and that creation of a “new build assessment and support” unit supported by international links might be helpful to UK Government in assessing the merits of different technology paths forward and their commercial prospects.

No comments beyond those implicit in other answers.

I0. Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved? Who has oversight of the whole nuclear R&D landscape, including international activities?

No comments beyond those implicit in other answers.

II. Was the Nuclear Innovation and Research Advisor Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be?

(a) NIRAB has been successful in defining a number of issues, but as regards Advanced Reactors and identifying the huge market deployment and industrial potential of Advanced Reactors (Gen IV technologies) we believe that much more attention was needed. NIRAB’s activities were unduly constrained by the over commitment to Gen III technologies, excessive conservatism, and a

373 Terrestrial Energy Inc. – Written evidence (PNT0057) failure to examine the prospects for 2020s and 2030s deployment of Advanced Reactors.

(b) Again, UK Government should continue to retain expert advice, but should in our view cast its net more broadly, perhaps internationally, to ensure that the UK is abreast of the latest international developments so it can be more responsive to requests for engagement by leading Advanced Reactor vendors.

(c) We would not venture to advise the UK Government on how to structure this, but it should be alive to the need for independence to avoid capture by incumbents with vested interests in Conventional Nuclear.

(d) In this regard, we see clear advantages in the in-house expertise of the Department of Energy in the US, which is well equipped to assess the merits of upcoming Advanced Reactor technologies and teams. Such evaluative expertise in the UK Government would allow a matching of political will to achieve Advanced Reactor development with the expertise to bring about UK evaluation and hence participation in the enormous industry opportunity represented by Advanced Nuclear development.

24 February 2017

374 Rory Trappe, Prospect Union Representative, Trawsfynydd site – Written evidence (PNT0008)

Rory Trappe, Prospect Union Representative, Trawsfynydd site – Written evidence (PNT0008)

1.0 Background 1.1 Trawsfynydd Site is located in North Wales and is within the Snowdonia National Park. The power station generated electricity from 1965 - 1991. The mission for us now is to achieve the safe and compliant delivery of the site into Care and Maintenance (C&M) by December 2028.

The height reduction of both reactor buildings will take place between 2020 - 2026, with final site clearance commencing in 2078.

There has been significant decommissioning progress at the site, including:  Retrieval and packaging of ILW for storage in the sites operational ILW Store  Major structural modifications to the reactor buildings in preparation for height reduction  Bulk retrievals and solidification of resins  Significant progress on the retrieval of ILW from various vaults and tanks

The focus now is to safely retrieve and package the remaining ILW on site.

1.2 There are no current plans to have any form of power generation or industry at the site post decommissioning. The site is of strategic value and should be seen as a valuable asset to the local and UK economy.

1.3 I have worked in the nuclear industry for forty years both on generation and decommissioning. In addition to my working role I am also a Prospect union representative. As a representative it has also included involvement in the Socio economic impact for the area and any future opportunities for the Trawsfynydd site. During the process it became apparent that the obvious choice for the site would be future power generation on the form of an SMR. I welcome the opportunity that you have provided to present written evidence in support of a Small Modular Reactor (SMR) at the Trawsfynydd site.

Questions:

2.0 What are the potential benefits and risks from the deployment of SMR’s in the UK and more widely? 2.1 We have an opportunity to place SMR’s on previously used Magnox sites such as Trawsfynydd where there is an existing grid connection, a nuclear site licence and established services such as cooling water from a large lake adjacent to the site. The workforce is highly experienced and adaptable. They have seen the site go from generation to defueling and are now in the process of decommissioning.

2.2 Deploying SMR’s would be beneficial to the communities surrounding the existing Magnox sites. The early Magnox reactors were constructed in sparsely populated remote areas of the UK. As a result of this the local communities expanded and became dependent on the nuclear power stations as major employers. As they are closing and being decommissioned it is evident that the

375 Rory Trappe, Prospect Union Representative, Trawsfynydd site – Written evidence (PNT0008) communities are suffering in terms of good quality skilled and well paid jobs. By deploying SMR’s at these locations it would prove to be a huge boost for the communities and secure long term jobs for decades to come. An SMR would benefit local schools, technical colleges and universities with generations to come having an opportunity to take up apprenticeship’s or engineering degrees to work at the sites. For the staff and contractors at Trawsfynydd there may be an opportuities to utilise the training facilities set up for the Wylfa Newydd Nuclear power station. These facilities are geographically close to each site.

2.3 The risk of not doing this would be to rely on the large scale projects to provide power to the UK on base load and having to rely on other less reliable sources of power such as wind. SMR’s would complement and provide the UK with another diverse source of energy and if constructed across the country would help maintain grid stability and balance.

2.4 Initial studies have indicated that the Trawsfynydd site is capable of supporting an SMR with an output estimated at 720 MWe compared to the Magnox reactor on the site which had an output of 480 MWe with no significant modification to the existing infrastructure. It is estimated that an SMR has a forty to fifty year lifecycle with potential for going beyond that. One benefit of that would be stability in the local economy.

3.0 What is the scale of the global market opportunities for SMR’s? What would the cost be if the UK does not take full advantage of the opportunities of SMR’s? 3.1 If a UK designed and built SMR’s were chosen then it would prove to be a unique opportunity and boost for the long term future for the nuclear industry. Post Brexit, where we have to rely on exporting our products globally it would put the country back on the industrial map. The demand for a proven, reliable and affordable SMR is the key to the export market. Do not consider SMR’s just for power generation for domestic and industrial use, they can also be utilised on desalination plants across the globe.

3.2 Globally there is a lot of interest in SMR’s as they can be constructed with a short lead time where the majority of the work is carried out in a controlled environment in a factory. They require less up-front capital investment therefore making them more affordable compared to the larger reactors which have to be constructed on site. This makes them affordable to utility companies where a return on investment is key to any strategic infrastructure investment.

3.3 The cost to the UK in not being involved in an SMR programme are huge in terms of the impact on industry and more importantly the skills required to manufacture them would be lost. It is not just a case of building one or two but an opportunity to have a solid long term secure manufacturing base in terms of capability and the expertise needed to build them. Confidence in UK manufacturing and the belief in the capability of the workforce would become part of the way back into a manufacturing rather than a service based economy.

4.0 Summary

4.1 The UK must consider Small Modular Reactor for the UK and as an exporting opportunity for the UK to grow and develop in a competitive

376 Rory Trappe, Prospect Union Representative, Trawsfynydd site – Written evidence (PNT0008) global market. It would be a unique opportunity to have a large section of the workforce trained and skilled in a complex manufacturing process which would then have the confidence and ability to take on other opportunities which may arise in the future.

4.2 There is an opportunity to have, Trawsfynydd site in North Wales, designated as the first UK site to have an SMR. As I keep saying “If you can build one at the Trawsfynydd site, you can build them anywhere”

18 February 2017

377 TUV SUD Nuclear Technologies – Written evidence (PNT0021)

TUV SUD Nuclear Technologies – Written evidence (PNT0021)

In response to the question of NNL is fulfilling its remit appropriately and whether it can deliver the required research to support the UK’s future nuclear energy policies:

 NNL can appear to be an organisation with an identity crisis. On one hand it is a government owned laboratory that is in possession of publicly owned assets, awarded funding, support and packages of work; but it is also trying to be a commercial organisation, competing with many private companies. This can lead to tension and also stifle the cost effectiveness and quality of work that is undertaken and indeed innovation. Within the industry, NNL are perceived as having an unfair commercial advantage compared to the private sector.  Whilst NNL does have recognised competencies, the wider supply chain equally holds these and in some cases even more capable people; NNL acting as a quasi-governmental department, is stifling the level of competition that will breed a strong supply chain for the future. Unless it is the UK Government’s wish that NNL should act as the primary provider of nuclear R&D, then a more open market should be encouraged in order to foster a strong, vibrant & innovative UK capability.  NNL’s staff comprise many long term career academics & scientists who by definition have fairly limited industrial or commercial experience. Work packages can veer towards technically interesting challenges rather than deployable solutions or commercially exploitable opportunities.  Some members of NNL staff can exhibit arrogance and an unwillingness to share problem solving with the wider supply chain. This leads to stifled collaboration, innovation and a slower, more expensive way of bringing solutions to the nuclear sites.  The organisation is highly bureaucratic and difficult to work alongside. Again a “turn off” for those in the supply chain trying to work collaboratively with NNL.  All of the above said, NNL does have some excellent scientists and engineers, but they are not being accessed to solve the real problems that the sites face in a cost effective and efficient manner.

So in answering the question as to whether NNL is fulfilling its remit appropriately and whether it can deliver the required research to support the UK’s future nuclear energy policies, the answer at this time is a definite NO. A root and branch review of the form of NNL’s operation, remit, commercial position and indeed its internal culture is required to ensure that it not only meets its goal, but that it operates in a cost effective manner for the UK tax payer.

Author: Steve Browning

23 February 2017

378 U-Battery – Written evidence (PNT0047)

U-Battery – Written evidence (PNT0047)

Introduction

1. The U-Battery Consortium welcomes this opportunity to respond to the Science and Technology Committee’s call for evidence. U-Battery is a British consortium of four UK-headquartered nuclear and engineering companies: Amec Foster Wheeler, Cammell Laird, Laing O’Rourke and URENCO.

2. U-Battery is a Micro-Modular Nuclear Reactor which will be able to produce local power and heat for a range of energy needs and which is an embedded local source of power. It is an export-focused technology that could provide secure, low-carbon and embedded power for energy intensive industry and remote locations. U-Battery is a simple design, utilising existing, proven technology and components and inherently safe ‘TRISO’ fuel. It is being developed by a consortium of British companies, utilising UK expertise and capabilities.

3. The project was initiated by URENCO, the UK-headquartered uranium enrichment services company. The concept design was developed by the Universities of Manchester (UK) and Delft (Netherlands). U-Battery is thus a clear example of a technology that is seeking to take UK R&D through to commercialisation in the UK for the global market.

4. It is important to explain that U-Battery is a technology specifically designed to address identified market needs for micro-modular off-grid power and heat. This makes U-Battery distinct from larger Small Modular Reactors (SMRs), due to its smaller size and output (4MWe / 10 MWt) and because it addresses different ‘off-grid’ end user needs.

5. U-Battery is a technology which should match with the Government’s current approach to high-tech industry and an example of how Government R&D support can play a key role in ensuring development of new technology in the UK. It is a British technology, with British-developed IP, that meets UK policy needs while being primarily targeted at global export markets, that could deliver significant potential value for the UK in terms of IP, advanced manufacturing jobs and exports to strategically important markets.

6. Should it be developed in the UK, U-Battery would enhance R&D activity, increase the chances of establishing a significant new and valuable manufacturing operation in the UK and provide substantial opportunities for the supply chain. U-Battery is also a project that should fit with the Government’s approach to encouraging innovation and development that supports high-tech exports and the potential for advanced manufacturing jobs.

Responses to Questions

Q3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

379 U-Battery – Written evidence (PNT0047)

7. Micro-modular nuclear reactor technologies such as U-Battery, distinct from larger SMRs due to their smaller size and output and because they are primarily targeted at global export markets for ‘off-grid’ end user needs, offer substantial potential benefits. As an export-focused technology, micro-modular reactors such as U-Battery primarily offer UK potential for high-value exports to strategically important global markets seeking secure, low carbon, embedded technologies to decarbonise energy intensive industries and provide low carbon power for remote communities. U-Battery could also provide a new decarbonisation option for energy intensive industry in the UK.

8. As a British technology currently being developed in the UK by a consortium of four UK-headquartered companies, U-Battery has the potential to deliver UK IP and a new high-value, export-focused advanced manufacturing operation for the UK, with high-hundreds of high-skilled and advanced manufacturing jobs building U-Battery and many more supported throughout the supply chain. An independent estimate has found that U-Battery could create 1000s of jobs and create more than £5bn in export revenue for the UK economy.

9. The potential supply chain opportunity for the UK from micro modular and other SMR technologies beyond the technology development itself is significant. The UK can already deliver the vast majority of SMR content. A prime example is the UK’s existing global expertise in, and facility for, enrichment (at Capenhurst). The development and supply of indigenous fuels offers significant opportunity and the Government should be aiming for all UK deployed SMRs to utilise fuels enriched by a UK business. Maximising the UK’s fuel manufacturing capacity will not only help supply UK needs but offer additional opportunities in global markets.

10. In terms of risks, as with the development of any new technology, there is always a risk in terms of market development. However, the potential benefits for the UK from exploiting a leadership position in the development of micro modular, and other SMR, technologies are significant. Well informed Government investment in new technologies, in partnership with industry, has been proven successful in other high-tech advanced manufacturing sectors, such as aerospace and automotive.

Q4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

11. The global opportunity for micro-modular nuclear reactors, distinct from SMRs due to their smaller size and target markets for ‘off-grid’ uses, is substantial. U-Battery commissioned Collinson Grant in 2014 to undertake an international market analysis. It concluded that, on a levelised cost basis, micro-nuclear generation could compete with diesel or gas powered package plants, with build-up of deployment of U-Battery in the UK and on a global basis reaching approximately 240 per annum by the mid 2030s. The potential major markets for micro-modular technologies are in countries such as Canada, Poland, USA, India, and other Eastern European markets. These are strategically important markets for the UK in terms of trade.

380 U-Battery – Written evidence (PNT0047)

12. U-Battery has already received significant additional international interest from several strategic early markets, in particular Canada and Poland. For example, Canadian Federal and Provincial Governments have proactively engaged us to explore the potential for deployment in the hundreds of remote communities and industrial sites in the country. Discussions have now moved forward to include potential technology development and ‘first of a kind’ build in the country. Initial regulatory discussions have also begun. In Poland, ministers have established a taskforce for the deployment of high temperature reactors, with U-Battery in the lead. Both countries are proactively exploring with us the potential for IP and supply chain development.

13. The cost to the UK of not taking full advantage of this opportunity, or of taking too long to exploit the opportunity in comparison to other countries, could be significant. Technology developers and vendors, such as U-Battery, are globally mobile and will naturally seek to establish and develop in those markets that are most practically supportive. For the UK, the risk is to lose out on establishing itself as a global centre for the development and deployment of what would be a new, high-value nuclear and advanced manufacturing technology sector, potentially losing out on the economic value from the associated IP, jobs, manufacturing facilities, supply chain opportunities and exports.

14. Other countries’ governments are already building a positive business environment for the development and deployment of small-scale nuclear technologies. For the UK to prosper and become a centre of the global SMR industry, the UK Government needs to be engaging with the industry at least at the same pace and equivalent way as other competitor markets. We are concerned that the UK is at risk of being significantly outpaced at present.

15. Most, if not all, countries with a thriving nuclear sector have a Government that plays a key role in supporting nuclear innovation. Additionally, given the highly regulated nature of the nuclear sector, Government backing for new technologies helps build acceptance in other regulated markets. U-Battery has welcomed the Government’s interest in supporting the development of SMR and Micro-Modular technologies since 2014. However, as stated in response to Question 4, UK Government needs to be engaging with the industry at least at the same pace and equivalent way as other competitor markets if it wants to maximise the economic opportunity for the UK. We are concerned that the UK is at risk of being significantly outpaced by other countries at present.

16. Government support has a significant role to play in underpinning private sector investor confidence and unlocking the potential of new technologies. This is exemplified by the relationship that exists between Government and other high-tech advanced manufacturing sectors, such as aerospace and automotive. We believe that Government needs an appropriately flexible and strategic approach to supporting new micro modular and/or SMR technologies which allows decision making to be taken on the basis of the nature of specific

381 U-Battery – Written evidence (PNT0047)

projects, the footprint of their potential markets and recognises the differential role of government support (e.g. to support technologies that are not solely reliant on the UK market). U-Battery has previously highlighted to the Government how such an approach to support R&D and regulatory engagement would deliver the business environment needed to maximise the benefit of U-Battery in the UK. We hope to receive a positive response given potential jobs, manufacturing, export potential and U-Battery.

17. Alongside UK Government engagement, U-Battery has also progressed significant discussions with authorities in strategic international markets, including government and regulatory bodies in Canada and Poland. Authorities in both countries are interested in the potential for international collaboration with the UK on the development and licensing of U-Battery.

18. U-Battery recognises the potential of the SMR Competition to stimulate the development of the sector in the UK. However, Government should also be allowed to act quickly to support high export potential SMRs and related supply chain and technology investment and not be hidebound by the process to choose technologies for the UK market. For example, it could allow for rapid use of strategic funds to support technologies with significant potential, so as to not be outcompeted by other countries. In this respect Government should look to support the nuclear sector as it does advanced manufacturing in aerospace or automotive.

19. Government should also prioritise support for the development and commercialisation of UK technology in order to maximise the value of SMR deployment for the UK. It could do this by highlighting how Government will help support routes to market for UK technology, especially through enabling ONR engagement with technology vendors as early as feasibly possible.

20. The Government should recognise through the SMR Competition, Roadmap and/or other policy measures, where, through UK actions, UK IP can be created, thereby giving a route to market which then supports export potential. They should also recognise how a leading position in the global market for SMRs supports UK energy and low-carbon diplomacy, particularly in a post-Brexit world.

21. It is our perception the UK SMR process thus far has primarily focused on projects/investments that could result in ‘on-grid’ power for the UK, whereas the market potential in the UK, and internationally, is wider, including in the UK potential ‘off-grid’ industrial power and/or heat applications.

22. In this respect, Government needs to recognise the different market potential of micro modular reactors and SMRs, in terms of size/scale, uses, and global export markets, and that this requires different kinds of potential Government support in order to maximise the UK benefits from technology development and export to global markets.

382 U-Battery – Written evidence (PNT0047)

23. Promptly addressing these issues will help provide a better long-term investment environment for UK investors and foreign direct investment into the UK. Making the UK an attractive place to invest in SMR development and related technology and supply chains is a critical first-step to maximising UK value.

24 February 2017

383 UK Atomic Energy Authority (UKAEA) – Written evidence (PNT0035)

UK Atomic Energy Authority (UKAEA) – Written evidence (PNT0035)

Introductory Remarks

1. UKAEA’s mission is to enable the commercial development of fusion power and related technology, and help position the UK as a leader in sustainable nuclear energy. As well as the UK’s own fusion R&D programme (funded mainly by EPSRC), UKAEA is paid by Euratom to operate JET – the largest fusion facility in the world – on behalf of a collective European R&D programme. It also has major roles in ITER, the next generation fusion experiment which aims to demonstrate ten times more fusion power out than heating power in. UKAEA has partnered successfully with UK industry to secure contracts from ITER, worth over €500M so far.

2. The capabilities UKAEA has developed for fusion R&D mean that UKAEA is well-placed to support a number of aspects of fission development. This is increasingly the case with developing programmes in technologies needed for fusion where there is strong synergy with fission research, especially for next generation fission plants. For instance, UKAEA has recently opened nuclear materials (the Materials Research Facility, http://www.ccfe.ac.uk/mrf.aspx) and robotics (Remote Applications in Challenging Environments, http://www.race-ukaea.uk/) facilities at our Culham site, with fission being one of their applications. In addition, UKAEA has leading-edge nuclear data and neutronics codes. Significantly we have capability in reactor engineering design, which is expanding as we prepare to design a demonstration fusion reactor.

3. We have a number of links with NNL and were represented on NIRAB, so are well placed to provide evidence to this inquiry.

4. In UKAEA’s view the Committee’s 2011 report Nuclear Research and Development Capabilities was particularly timely. The subsequent “Beddington review” by the Government led to plans for the revitalisation of nuclear fission R&D, with a relatively modest injection of funds for new facilities via the NNUF (National Nuclear User Facility) initiative, and the creation of NIRAB. The business case for Phase II of NNUF (£60M capital funding, £18M operational funding) is presently nearing completion of its passage through Government, and if funded in full will, together with the £250M of extra fission R&D funding, address priorities identified by NIRAB, and be a good basis for a UK R&D programme, coming not a moment too soon given the imminent nuclear rebuild. We note, however, that public funding of nuclear research will still be small compared to other countries with major nuclear power programmes.

Responsibility for Civil Nuclear Activities

Q1: Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long term policy for civil nuclear

384 UK Atomic Energy Authority (UKAEA) – Written evidence (PNT0035) activities including international collaboration and, within the UK, for cost- effective and efficient articulation of the different elements of nuclear work?

5. The essential role nuclear will play in baseload electricity generation for decades, its high up-front costs and the many special aspects of nuclear technologies including the fuel cycle, waste disposal, public acceptability and the links to military systems, all argue for this responsibility being firmly with Government. Government should be supported in this by expert advice from a body like NIRAB, by organisations like the NDA, and by national laboratories like UKAEA and NNL. Dedicated funding should be earmarked for the provision of this advice and the maintenance of the expertise required to underpin this.

6. Within Government, the responsibility for nuclear activities should clearly be led by BEIS. However, they will need support from other parts of Government, notably HMT, DIT, DfE and MoD.

Q2: The Government’s industrial strategy green paper discusses a possible ‘sector deal’ for the nuclear sector. How might the nuclear sector benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal?

7. A major nuclear sector deal would be an important contribution to the UK returning to a position of world eminence in nuclear power. Until the 1980’s, the UK had a world-class civil nuclear fission reactor research, design and manufacturing capability. Subsequently, this was dissipated as short-term economics prevailed over longer term energy portfolio considerations. Accordingly, we now depend on other nations for energy derived from fission technology. (As an aside, in contrast the UK has persevered with nuclear fusion research in this period, notably by hosting JET, and UK plc is now presented with a great opportunity to take the next step towards commercialisation, creating new high technology jobs in the short-term and re-assuming a position at the nuclear “top-table” in the medium term). The industrial strategy sector deal has the potential to help restore the UK’s prominent position and enable the sector to present an ambitious vision for growth. It is too late for the UK to establish a strong position in design of Gen III reactors, but an optimistic and forward-looking vision underpinned by sufficient funding for cutting-edge R&D, could facilitate a world-leading position in Gen IV and fusion reactors and possibly in SMRs.

8. For a coherent nuclear strategy to be formed for a sector deal, the leadership should represent the complete picture: Reactor design, operations, skills, industrial supply chain, waste disposal, decommissioning and regulation for both fission and fusion. This could be covered by 8 nuclear organisations: National Nuclear Laboratory (NNL), National Skills Academy Nuclear (NSAN), Nuclear Advanced Manufacturing Research Centre (NAMRC), Nuclear Decommissioning Authority (NDA), Nuclear Industry Association (NIA), Nuclear Institute (NI), Office for Nuclear Regulation (ONR) and the UK Atomic Energy Authority (UKAEA).

9. The repeated mentions of the needs of nuclear in the Green Paper, especially growth of the skills base, are welcome, given that it is widely recognised that the present base is far too small to support a greatly expanded UK nuclear

385 UK Atomic Energy Authority (UKAEA) – Written evidence (PNT0035)

power sector (even one largely provided by overseas suppliers). There are a number of skills initiatives in nuclear, and while UKAEA is not intimately involved in all of these it is our view that an increasingly joined-up approach with planning spanning all levels, from technicians to post-docs, is required. An effective way to expand skills in high-tech fields like nuclear is through funding challenging projects, and we therefore would like to see nuclear energy generation feature in the “Clean Energy” part of the Industrial Strategy Challenge Fund. These projects could be more applied than those covered by the £250M mentioned above, with strong industrial participation as well as specialist support from national laboratories and universities.

SMRs

10.Since UKAEA are not currently engaged in the SMR programme, we do not pass comment on these questions, except to make two points: (i) Before progressing the SMR programme, it is our opinion that the UK government should establish a position on whether its primary motivation is to produce a product for the UK, or to sell to a global market. (ii) Government should use the expertise within its publicly funded bodies to make an informed decision about which technologies to progress following the expression of interest. The afore-mentioned N-group provides significant expertise in this regard. From our point of view, UKAEA has expertise in aspects of nuclear design but has played no role in the SMR programme thus far so is willing to provide impartial input should this be requested by Government.

Governance

Q8: Is the NNL fulfilling its remit appropriately? Can it deliver the required research to support the UK’s future nuclear energy policies? How does it compare to equivalent organisations in other countries?

11. UKAEA’s interactions with NNL have led us to have great respect for NNL staff, many of whom are clearly world experts in their specialisms; Government is lucky to have this level of expertise to call when the unexpected happens (e.g. Fukushima - the role of national laboratories in responding to the unexpected is important and should be recognised, maintained and adequately funded). NNL should be commended on having schemes designed to preserve this expertise and “pass the baton” to younger staff; for example, their Senior Fellows and graduate schemes appear to be innovative and effective.

12. However, NNL is presently structured with no consistent R&D funding on significant scale, and so is focussed on making a profit from commercial contracts in order to provide income to reinvest in a modest R&D programme. NNL consequently performs well-regarded commercially-focussed work commensurate with this remit, but is unable to sustain a truly world-leading fission R&D programme to compete with the US, Japan or France.

386 UK Atomic Energy Authority (UKAEA) – Written evidence (PNT0035)

Q9: Is the remit of the National Nuclear Laboratory (NNL) suitable to provide research and development support to the UK nuclear sector? Is the current funding and governance model for the NNL appropriate to its role and remit?

13. In our view NNL has managed to maintain its expertise in spite of, not because of, its mission. To be effective, a national laboratory needs flexibility and funds at its disposal - it needs sufficient “oxygen” to breathe. In contrast, NNL has by necessity focussed on profits and commercial work, a significant proportion of which is not innovative, with less emphasis on maintaining expertise and keeping it at the forefront of nuclear R&D world-wide. That said, it should be pointed out that despite the lack of emphasis on R&D, there are aspects in which NNL is world leading. In contrast, UKAEA has sustained global R&D leadership by having a programme grant from EPSRC and major EU support that gives us sufficient flexibility and an ability to attract the very best scientists, technologists and engineers. Indeed, since our funding is awarded competitively by the research councils, this competition forces us to sustain exceptional R&D quality in order to win our funding.

14. The merger into BEIS of DECC and BIS (which was used to managing and funding large scale research including national laboratories), is a timely opportunity for Government to review NNL’s role, business model and funding. The Nuclear Innovation funding provides a key resource which could sustain a meaningful fission R&D programme, and this will hopefully provide the mechanism to sustain an internationally-competitive fission R&D programme within the national laboratories. The nascent partnerships between UKAEA and NNL in areas with strong complementarity between fusion and fission can help both labs.

15. We often hear from universities that they have challenges in working as closely as they would like with NNL. In our view, there are two reasons for this: (a) its limited room for manoeuvre in more basic R&D, given its strong emphasis on commercial work mentioned above; and (b) the difficulties operating on a nuclear licensed site, with all the overheads and bureaucracy that this necessarily entails (including the need for the agreement of Sellafield Ltd on many operational matters). This is a necessary constraint for anyone working on a nuclear licensed site, but it should be recognised that consequently NNL will probably never be as responsive and agile as other organisations which do not have these constraints.

16. Finally, we would like to comment on whether NNL should be merged with UKAEA. This has been considered on a number of occasions and a need to consider it again was flagged up by the 2015 UKAEA triennial review. UKAEA’s view is that the two organisations’ present missions are substantially separate such that merger would not be beneficial, at least in the short/medium term. UKAEA is very much focussed on R&D, while still supporting the industrial supply chain to win and deliver commercial work in fusion. NNL in contrast is far more commercially-oriented, with a much smaller R&D programme. Furthermore, NNL is focussed on fission technologies, largely focussed in near-term operations and decommissioning. UKAEA meanwhile, is focussed on fusion and looking to a future reactor market. There are some strong synergies, notably in materials and robotics, and these should be exploited, and increasingly are. Finally, it would be unwise to seek to implement a

387 UK Atomic Energy Authority (UKAEA) – Written evidence (PNT0035)

change of status at present given the very large perturbations that exiting Euratom will incur for UKAEA (and to a lesser extent NNL) - around two thirds of UKAEA’s income is from Euratom. That said, how the two organisations interact with each other and UKRI, while not urgent, should be considered again in due course.

17. We note that there are examples of good collaboration between NNL and other organisations. For example, UKAEA has a number of links with NNL, ranging from occasional joint board meetings down to the working level. NNL transferred a small team to Culham nearly 2 years ago, consisting of around 20 experts in nuclear metallurgy and related skills. More generally, collaboration with our scientists is working well and growing. We also note that key companies in the UK supply chain work with both UKAEA and NNL and that there is scope for synergies when presenting UK nuclear capability overseas as we seek international trade opportunities beyond the EU.

Q10: Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved? Who has oversight of the whole nuclear R&D landscape, including international activities?

18. We consider that co-ordination of nuclear R&D, whilst improving, still needs to be further enhanced. In recent years BIS has largely been responsible for funding new nuclear R&D Facilities (DECC was a minor funder of NNUF, the funds for which have been routed through EPSRC, which of course was answerable to BIS), while NIRAB reported on nuclear R&D priorities to DECC, which in response formulated the initial phase of the £250M programme. The logic behind this split of responsibilities is unclear. The merger into BEIS enables a more joined up approach across the various components of nuclear R&D and consideration of the best way to do this is in our view urgent. The components include: (a) investment in R&D facilities (presently funded via EPSRC), (b) bottom-up responsive mode bids for funding from universities (EPSRC), (c) allocation of the additional £250M (first tranche is being handled directly by Government, except for materials manufacture via Innovate UK); (d) research commissioned by NDPBs - this is mainly by NDA (answerable to BEIS); and (e) Industrial Strategy Challenge Fund (mechanisms not yet announced, but expected through UKRI in future).

Q11: Was the Nuclear Innovation and Research Advisory Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be?

19. A successor to NIRAB is needed that can monitor and digest the outputs from these various strands of nuclear R&D and adapt publicly funded R&D accordingly. NIRAB as previously constituted was relatively effective in fulfilling its mission, having an appropriate wide range of public sector, university and industry experts.

20. A follow-on to NIRAB is needed that has similarly wide expertise, but somewhat smaller (and possibly with international participation) and with a rather different remit. It should develop and advise Government on nuclear R&D strategy but also provide, e.g. via sub-committees, expert assessment of bids and outcomes, and advice on revising the R&D programme in the light of

388 UK Atomic Energy Authority (UKAEA) – Written evidence (PNT0035)

these. It will, of course, be important to avoid conflicts of interest making the new body harder to form than NIRAB.

Other issues

21. The questions posed for this inquiry are focussed firmly on the fission R&D landscape. UKAEA firmly feel that “the future priorities for nuclear research and technologies” must include a strong fusion programme as well.

22.The UK is genuinely world-leading in fusion R&D as acknowledged by many reviews, most recently by EPSRC: https://www.epsrc.ac.uk/newsevents/pubs/indrevfissionfusion. With the advent of ITER – the global collaboration proof-of-principle project now under construction – fusion is entering the delivery era. Through hosting the world’s premier fusion experiment – JET – on behalf of Euratom, combined with unique capabilities in fusion technologies (tritium, beryllium, robotics, etc), the UK is currently positioned to lead the world in delivery of fusion power plants. As an example, UK industry coupled to a national lab (UKAEA) have secured over €500M of contracts for ITER construction. Together this leadership in R&D, and well-coordinated links to a supply chain with requisite skills and capacity, offer a unique opportunity to be a vendor of fusion power plants to a rapidly growing global market which could be worth £Tns in the future.

23. As well as hosting the world’s premier fusion experiment, UKAEA has also pioneered the spherical tokamak concept, which holds the promise of smaller and cheaper fusion reactors in the future. A novel scheme to exhaust heat from fusion reactors will be tested in a new device, MAST Upgrade at Culham, which is due to begin operation this year. This will be one of the world’s leading spherical tokamaks, and in collaboration with our sister machine, NSTX-U in the US, will test the physics basis for a spherical tokamak power plant.

24. It is important that the UK does not repeat the mistakes made in the fission sector in the past, where we had a world R&D lead, but lost competitiveness and are now reliant on foreign vendors for our civil fission plants. We will target €1Bn into UK industry from ITER. UK industry is well placed for this. The fusion reactor design market is rapidly growing and will be many £Bns by 2030. The UK is capable of significant market share. Supporting, and indeed strengthening, the fusion programme should constitute a key part of the nuclear research programme. This will have large knock-on benefits for the wider industrial strategy for the UK nuclear sector, not least through increased generic reactor design capabilities.

24 February 2017

389 UK Atomic Energy Authority (UKAEA) and National Nuclear Laboratory (NNL) – Oral evidence (QQ 38-49)

UK Atomic Energy Authority (UKAEA) and National Nuclear Laboratory (NNL) – Oral evidence (QQ 38-49)

Transcript to be found under National Nuclear Laboratory (NNL)

390 UK Boiling Water Reactor (BWR) Research Hub and Network – Written evidence (PNT0020)

UK Boiling Water Reactor (BWR) Research Hub and Network – Written evidence (PNT0020)

The BWR Research Hub and Network is a joint research forum of Bangor University and Imperial College London.

We welcome the committee’s decision to revisit some of the conclusions and recommendations of the 2011 report on this matter. What’s more, we believe this is timely given changes in the UK technology landscape over the intervening 5 years.

Significant amongst these is the entrance of Boiling Water Reactor (BWR) technology to the UK. Boiling Water Reactors are the second most common reactor design globally, and Horizon Nuclear Power’s plans to build two UK Advanced Boiling Water Reactors (UK ABWRs) at Wylfa Newydd - which should begin generating low carbon, sustainable electricity in the mid-2020s- represent their first deployment in the UK.

This major change materially affects the UK research environment, and we outline this further below, for the committee’s reference:

. BWR technology offers significant opportunities for industry and the research community in the UK to become involved in the evolution and use of these technologies, in the UK and around the world.

. Deepening and widening our pool of domestic expertise on BWR technology will not only boost UK capability to lead the deployment, enhancement and regulation of these technologies here. By taking this sense of ownership, we will help place the UK back at the top-table of the global nuclear industry, as BWRs continue to play a leading role worldwide.

. The opportunity for the UK to take a lead is particularly significant, given the Wylfa Newydd project is at the leading edge of a potential worldwide nuclear renaissance. This poses a one-off opportunity to reposition the UK as a global leader in research and deployment of BWR technology, with globally unique contemporary experience.

. The Centre for Nuclear Engineering at Imperial College has collaborated with Bangor University with support from the Welsh Government and Hitachi-GE Nuclear Energy, Ltd. to create a BWR Hub and Research Forum, with the specific aim of developing that deeper and wider pool of UK expertise.

. A conference was held at Bangor University (the nearest UK University to Wylfa Newydd) in October 2016 to identify key BWR research needs, around improving efficiency and contributing to future evolution of the technology. Research projects to improve the understanding of thermal hydraulics and higher yield and longer life fuels are being formulated.

391 UK Boiling Water Reactor (BWR) Research Hub and Network – Written evidence (PNT0020)

. In response to recommendation’s from the hub, creation of a National Nuclear Thermal Hydraulic Research Facility, to serve the needs of all reactor types has been recommended by NIRAB. We welcome BEIS’ recent call for tenders for a scoping study, to define and then potentially design this facility.

. This state of the art research and test centre - combined with the UKs existing excellent computer modelling skills - can ensure the UK becomes a world leader in thermal hydraulic research. If successful, we hope to see this facility located on Bangor University’s Menai Science Park, where it will add to a cluster of high value nuclear employment in North Wales. This is entirely consistent with the UK Government’s Industrial Strategy (currently out for consultation) which recognises the need to support regional industrial growth, including in Wales.

. Our creation of the BWR Research Hub and Network - and the case for a National Thermal Hydraulic Research Facility - was endorsed by NIRAB in January 2016. As well as building BWR expertise, these steps will be supportive of the nuclear industry’s link with Japan, analogous to that with China enabled by £25M of UK Government funds leading to the JRIC (Joint Research Institute with China).

. We believe that with the right long-term focus, and targeted strategic investment – the UK can develop a deeper and wider pool of BWR expertise, taking a sense of ownership of the technology and placing us at the top–table of the global nuclear industry. The longer term opportunity is significant, as the UK will be enabled to more greatly participate in the development, design and construction of similar reactors to be built in other countries investing in nuclear power, worldwide.

. We urge the committee to support the vital work underway to enhance the UKs domestic expertise around Boiling Water reactor technology.

23 February 2017

392 UK Nuclear Data Network (UKNDN) – Written evidence (PNT0016)

UK Nuclear Data Network (UKNDN) – Written evidence (PNT0016)

This response, which is being submitted formally through UKNDN, incorporates the views of the Leadership Team of the Network, although some network members may also choose to submit personal responses. This submission responds to the committee question “Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved?”

Background

1. ‘Nuclear Data’ is the term used for the multi-disciplinary science that studies the fundamental properties and radioactive decay of atomic nuclei. The information is needed for the design of nuclear power reactors and reprocessing facilities, and for their safe and cost-effective operation. It is also needed for the production and safe use of radiopharmaceuticals for cancer therapy. 2. Nuclear data research is a worldwide endeavour involving academia and national/international laboratories. No single country has the necessary funding and expertise to produce the full gamut of data required and participation in international evaluation projects is essential. 3. In November 2011, the House of Lords Select Committee on Science and Technology published the report of their Inquiry into Nuclear Research and Development (R&D) Capabilities in the UK. This report did not cover the essential underpinning work in nuclear data. By the time of the publication of the NIRAB Final Report 2014-2016, the necessity to manage the UK’s approach to nuclear data was recognized under Recommendation 38. 4. In addition to the direct outputs from research in the field, the work enables STEM graduates to gain experience relevant to the nuclear industry, maintaining a pipeline of highly skilled scientists and engineers.

Present position

The UK Nuclear Data Network (UKNDN) is funded by the Science and Technologies Facilities Council (STFC) to engender a strong connection between academia, industrial partners, national labs, regulators and UK representatives on international nuclear data committees (IAEA, NEA, etc.) in order to facilitate the measurement, analysis and dissemination of industrial nuclear data.

1. The UK Nuclear Science Forum (UKNSF) coordinates the UK’s international engagement and nuclear data needs. UKNSF is an open forum of members from Industry, UK National Laboratories, Regulators and the Universities. UKNSF provides the UK subject experts who attend meetings of the key international bodies such as the NEA Nuclear Science Committee, the NEA Working Party on International Evaluation Cooperation, IAEA Nuclear Data Section, and international nuclear data library projects such as the Joint Evaluated Fission and Fusion File project and the Cross Section Evaluation Working Group, which produce the international standard nuclear data libraries of JEFF and ENDF/B respectively. The UKNSF forum is funded by UKNDN until April 2020.

393 UK Nuclear Data Network (UKNDN) – Written evidence (PNT0016)

2. It is difficult to identify sources of funding for nuclear data research as academic priorities have been much more centred on basic science. Limited progress has been achieved through the recent funding of UKNDN by STFC and through some work at the National Physical Laboratory.

Priorities

1. The UK has particular problems with regard to decommissioning and reprocessing as a result of its unique industrial nuclear history. Nuclear data requirements need to be addressed on a national level while at the same time ensuring the UK participates actively in the worldwide nuclear data endeavour. 2. The Government should ensure that the UK has a formally-constituted body to manage UK nuclear data interests and international engagement, perhaps along the lines of UKNSF. A mechanism needs to be found to ensure sustained funding for this management body so that it can suggest UK priorities as well as recommending suitable technical experts to BEIS for appointment to represent the UK on international nuclear data committees. 3. Nuclear energy will provide a key component of the UK’s future energy mix. Expertise in all aspects of the nuclear fuel cycle is necessary for the UK to be a leader as new technologies are developed. The number of UK researchers active in nuclear data has been allowed to decline to below sustainable levels. Efforts to reinvigorate the UK effort need to be nurtured through sustained R&D funding. Clarity on funding sources for nuclear data research needs to be established.

Author: Dr A.G. Smith (on behalf of the UKNDN Leadership Team), Nuclear Physics Group, School of Physics and Astronomy, The University of Manchester

22 February 2017

394 University College London (UCL) Nuclear Centre – Written evidence (PNT0025)

University College London (UCL) Nuclear Centre – Written evidence (PNT0025)

1. The UCL Nuclear Centre is an umbrella organisation that brings together a range of nuclear expertise from across UCL. It embraces different aspects of nuclear science, encompassing nuclear power, high energy physics and medical physics. Research areas include advanced separation and fluidization technologies for the spent nuclear fuel reprocessing cycle and whole process modelling, radiation effects on materials, and materials design to help deal with our nuclear legacy, innovative x-ray imaging for testing of nuclear materials and waste containers.

2. We would like to make a number of points that we feel the Committee should consider during the course of their inquiry and would be pleased to discuss any of these further.

Nuclear research funding 3. There is at present a lack of targeted Research Council funding for nuclear research. While in the past there were managed nuclear calls, now proposals are submitted to the general pool of responsive mode and evaluated by general panels. This is important not only for the continued health and vibrancy of UK nuclear research, but also to ensure that the UK is able to respond to the current challenges around nuclear research, including those issues we raise below, which will require a focused multi-science, multi-agency effort and appropriate underpinning funds.

4. We also consider there to be a lack of sufficient number of nuclear experts on funding panels to evaluate proposals appropriately.

5. There is also an imbalance in the current nuclear research portfolio, with significant focus on research in materials and decommissioning and less on reprocessing and reactors. We note that in these latter two areas, there is significant expertise in other sectors (e.g. chemical processing on unit operations, process modeling, life cycle analysis) but current funding structures (compounded by lack of funding) do not encourage expertise or technology transfer.

6. We note that the formation of UKRI and the parallel development of the Industrial Strategy Challenge Fund may provide an opportunity to address these points and encourage the Committee to consider possible measures that could be developed by UKRI during the course of this inquiry.

Restrictions on handling active materials. 7. It is highly difficult to access facilities at the National Nuclear Laboratory, which proves restrictive for many researchers working in nuclear. Although the laboratories can handle active materials, additional funding is required to run experiments, usually from research grants which as noted above are currently significantly constrained. We encourage the Committee to consider how wider access to the NNL can be enabled

395 University College London (UCL) Nuclear Centre – Written evidence (PNT0025)

Nuclear security 8. We are highly concerned at the current situation around nuclear security and the temporary storage of radioactive waste. This is highly vulnerable to terrorist exploitation or other damaging incidents. The current arrangement for storage operated by RCUK (primarily between NERC and STFC) is lethargic and operating on a fifty-year timeframe. We urge the Committee to explore a fast track solution to placing dangerous materials in the subsurface and to thus safeguard the safety aspects of our national nuclear heritage.

Public perception of nuclear 9. We strongly advocate further research into the UK’s nuclear policy alongside a programme of outreach activities to evaluate the public acceptability of nuclear power, what influences public perceptions of nuclear power, and how public opinion affects decision making. This should in turn feed back into the future development of policy.

10. We also note that successive Governments have presided over confusing messages on UK nuclear policy, which affect students who want to study the subject or take up research projects and develop careers in the area. This risks affecting the future pipeline of skilled researchers in nuclear. We would encourage the Committee to recommend greater clarity in Government policy on nuclear going forward.

Progress since the Committee’s previous report 11. We note that some of the recommendations made by the Committee in their previous report remain unaddressed: there has not been an independent nuclear R&D board, nor a long term nuclear energy strategy. We consider these recommendations to be still highly relevant and suggest these should be a priority for Government.

Implications of the UK leaving the EU 12. Finally, UCL strongly urges the Committee to examine the implications for nuclear research of the UK leaving the European Union, and in particular the withdrawal from the European Atomic Energy Community (Eurotom) indicated in the Explanatory Notes of the European Union (Notification of Withdrawal) Bill, which is highly concerning to many in the community.

13. Withdrawal from Eurotom would have profound implications for future international research collaboration in nuclear, as well as for the future of the Joint European Torus research facility.

14. Furthermore, it rises significant concerns over the future regulation of nuclear and the UK’s capacity to manage repatriated regulatory responsibilities, as well as for the safeguarding inspections of nuclear power stations currently conducted through Eurotom. We urge the Government to seek to ensure continued UK membership of Eurotom, as negotiations for the UK’s withdrawal from the EU proceed.

23 February 2017

396 University of Leicester – Written evidence (PNT0022)

University of Leicester – Written evidence (PNT0022)

Authors: Richard Ambrosi and Hugo Williams, University of Leicester

General Questions

The responsibility should lie within a government department or agency. An example of a government department that can be used to illustrate this is the US Department of Energy (US DOE), which deals with the development of a coherent policy for civil nuclear activities. Although US DOE deals with all aspects of domestic and international US energy policy, the civil nuclear element has a dedicated team of people that deal with different aspects of the civil nuclear sector. A second model is to create a government agency that brings together the different facets of the nuclear sector. An agency that would provide coordination, lead on policy, help to build capability both scientific and industrial, help to develop skills, international cooperation, coordinate strategic investment, work with stakeholders.

It is important that subject matter expertise is embedded within a department or agency. This expertise would range from technical experts to experts in regulation and safety. This expertise would create better links with an independent national regulator, nuclear sector industry, research and development community and international partners, international agencies e.g. International Atomic Energy Agency (IAEA) and would better support the development of a long-term policy for civil nuclear activities. Such a department or agency would need to be able to implement policy decisions that transcend parliamentary cycles so that long-term policy decisions that would benefit the UK are implemented through to completion. Advisory committees would be set up to provide additional expertise and advice and would be formed from a combination of academia, industry and the regulator.

If a ‘sector deal’ is aimed at innovation, improving productivity and boosting growth it would benefit from a structured collaboration between industry and academia. This will create balance between the interests of business and research communities. The sector deal should enable new entrants to participate in growing the UK’s nuclear sector and reduce barriers to entry. Reducing barriers to entry will boost competition which should maximise value for money from public funding. A model, that is similar to that used by aerospace or oil and gas sectors, where competitors work together to solve common technical, technological and engineering challenges, is one that the nuclear sector would

397 University of Leicester – Written evidence (PNT0022) benefit from as part of this ‘sector deal’. This model would require investment from public and private sources. Businesses, regulator, health and safety experts, national labs and academia would work together to solve technical challenges associated with key strategic projects of long-term benefit to the UK’s nuclear sector e.g. SMRs, advanced nuclear fuels, Generation IV reactors, decommissioning and waste management, power generation in extreme or challenging environments. A “sector deal” would see a greater coordination of different aspects of nuclear sector at national level around key strategic projects with tangible outputs that would have a positive impact the following: greater energy independence, sector growth, exports, competitiveness (technological and scientific), skills, climate change targets. The involvement of academia would enable the development of targeted teaching and training programmes to support the growing sector.

SMRs

3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

A number of studies have been carried out to address the questions outlined in this section on SMRs9899 and their conclusions are still applicable. Small modular reactor technologies can provide a degree of flexibility as to how the heat generated by the reactor is utilized. Large nuclear reactors are ideal for a constant baseload supply of electricity. SMR systems could be used to switch between energy delivery modes: deliver useful heat when needed or electricity during periods where there is increased demand from the grid or when complementary sources of energy (e.g. renewables) are producing less power. Heat can be stored more easily than electricity therefore SMRs could provide a stored source of heat that can be used when required. The direct use of heat from SMR technology could aid in reducing carbon emissions. The UK has the domestic capability to develop SMR technology; however, there would need to be investment in technologies and infrastructure that could utilize the heat generated by a fleet of small modular reactors. The heat that is generated by a reactor can be split into two categories high grade primary heat and low grade heat produced after the primary heat is converted to electricity. Low grade heat can also be utilized if the working fluid after the conversion to electricity step is at a sufficiently high temperature. Applications for utilizing the heat from SMRs include: district heating, industrial processes that require large amounts of heat currently supplied from carbon generating sources e.g. steel and heavy metal industry, cement, hydrogen production. Hydrogen can be used as an alternative fuel for motor vehicles. The decision and commitment to move ahead with the development of these types of reactors, whether they are advanced systems that operate at higher temperatures or light water systems, is the most critical that needs to be made within the next decade to capitalize on the benefits in terms of decarbonizing the UK economy. There also needs to be an early decision as to

98 National Nuclear Laboratory Report, Small Modular Reactors (SMR) Feasibility Study, December 2014, http://www.nnl.co.uk/media/1627/smr-feasibility-study-december- 2014.pdf 99 Energy Technology Institute, Nuclear: The role for nuclear within a low carbon energy system, 2015, https://s3-eu-west- 1.amazonaws.com/assets.eti.co.uk/legacyUploads/2015/09/3511-ETI-Nuclear-Insights- Lores-AW.pdf

398 University of Leicester – Written evidence (PNT0022) which SMR solution will be adopted focusing on what can be achievable in the near term which is at least a decade when targeting new reactor technologies. The IAEA states: “The factory-built small modular reactors aim to reduce lengthy construction times while simultaneously increasing quality, thereby minimizing the costs associated with the current time for construction that span 5 to 8 years.”100. The IAEA goes on to state that there are currently 45 different SMR technology solutions being investigated worldwide.

4. What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

A number of studies carried out in the UK and by other countries and agencies suggest an overall market size in the few hundreds of billions of GBP1. In the IAEA study highlighted above3 a map has been produced of the 45 SMR reactor technology solutions being investigated or developed world wide. This map was produced in 2014 and at that time the UK did not feature. The decision of the UK government to address this by issuing a competitive call for SMR technologies was an appropriate first step. There are UK based companies with the expertise and experience to develop SMR technologies. One example is the work that Rolls Royce has done on this topic101. If SMR solutions are licensed and operated within the next decade and if the UK is neither leading nor involved in SMR development projects the opportunity to capitalize on the predicted market size will be reduced. Furthermore, the experience and capability-development benefits of having a leading role in such a programme would be a necessary foundation for longer-term investment in Gen IV and the wider nuclear technology base. Not investing in SMRs carries the risk of limiting the scope of future UK civil nuclear capabilities and activities.

The IAEA study also suggests that SMR technologies highlighted in their report could be deployable between 2025 and 2030. The implications are that the UK should decide fairly soon to move forward either in partnership with companies already developing SMR technologies or to develop a completely independent capability. The NNL report1 highlighted above suggests that there is a narrow window of opportunity to partner with companies developing SMRs. The cost implications of the latter would need to be evaluated. The next steps would require selecting appropriate solutions for the UK and create sustainable partnerships between government and industry to share cost and risk. UK industry alone is unlikely to take on all of the development and licensing risks associated with SMR technologies. In order to turn viable solutions submitted in response to the recent Government SMR competition into licensable SMRs a

100https://www.iaea.org/NuclearPower/SMR/ accessed February 2017. IAEA Report, Advances in Small Modular Reactor Technology Developments, A Supplement to: IAEA Advanced Reactors Information System (ARIS), 2014. 101 “Small Modular Reactors - once in a lifetime opportunity for the UK”, Rolls Royce SMR Booklet, 2016, https://www.rolls-royce.com/~/media/Files/R/Rolls- Royce/documents/customers/nuclear/smr-booklet-28-sep.pdf

399 University of Leicester – Written evidence (PNT0022) significant uplift in investment in the nuclear sector will be required to develop, build, license, fuel and operate an initial test unit at an existing licensed nuclear site.

Criteria were appropriate. The period 2017-2020 is an appropriate timeframe to choose a design, build partnerships and take appropriate steps to capitalize on the existing domestic skills to design, develop manufacture and build SMRs in the next decade. However, a number of plant concepts were identified in the NNL feasibility report, and real care must be taken in defining the technical criteria to ensure that these do not unconsciously favour the results of a feasibility study over more conservative and proven approaches in which the UK has signifciant heritage. In particular, the concepts were mostly Integral PWR types, whereas a more conventional dispersed architecture PWR could have advantages.

The UK should be involved in the development of Gen IV technology as part of a strategy of long-term investment in a competitive UK nuclear sector. Gen IV technology will require investment in advanced nuclear fuels, reactor design, test beds, new materials and skills to support a growing UK sector. The barriers to entry for Gen IV reactor technology would benefit from investment in the development of test reactors. The UK has more than 100 tons of reprocessed nuclear fuel that could be used to power Gen IV reactors. In addition, advanced reactors could be used to burn and reduce the amount of high level waste that the UK would need to deal with in the future.

Governance

400 University of Leicester – Written evidence (PNT0022)

The following is a response to Questions 10 and 11 above. NIRAB was successful in carrying out its role and a successor is required. As described in the answer to Question 1, the establishment of an agency or a dedicated division within a government department with embedded technical expertise is required to coordinate and provide oversight over the R&D landscape including strategic international partners. The regulator, nuclear decommissioning authority, industry and academia would work with the agency to deal with policy, research, technology development and the skills gap that is emerging as the sector grows.

The recent white paper entitled “The United Kingdom’s exit from and new partnership with the European Union”, section 8.29 focuses on the Euratom treaty, which currently provides the legal framework for Europe’s nuclear sector and deals with all aspects of safety, waste management, non-proliferation, standards and supports research activities. Developing an independent framework that incorporates such regulations, laws, directives and other statutes into UK law could make the ambitions for the nuclear sector more challenging to achieve. It is therefore advisable to engage with the UK nuclear sector i.e. industry, academia, regulator to determine what the implications are of the UK’s withdrawal from Euratom and whether there are options that could allow the UK to remain within the Euratom community but outside of the EU. This might be facilitated by the fact that the Euratom treaty was established as a separate treaty to other EU treaties.

23 February 2017

401 University of Oxford – Written evidence (PNT0034)

University of Oxford – Written evidence (PNT0034)

3. What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely? Benefit: it's a project that can sustain and develop UK skills and manufacturing in nuclear sector. There is a possible market, and opportunities in process heat and not just electricity.

Disadvantage/risk: it’s a possible distraction and closes us off from larger scale international collaborative projects.

5. Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to coordinate UK actions including international engagement on SMR development and future deployment? There are at least 30 designs for SMRs actively being pursued worldwide, so it is too late for the UK to be starting independent research in this field. Many of the SMR designs are mature (including the Rolls-Royce one) and could be deployed quickly if the political will was there. The UK should be deciding if SMRs offer an attractive and cost effective contribution to the future energy mix, and if so choosing as a matter of urgency a delivery partner team – preferably involving as much UK engineering as possible.

7. Should the UK be involved in the development of Gen IV technology? If so, what funding and support should be put in place to place to help the UK establish a world leading position? Should our activity include development of one or more test reactors? If the UK continues the stance of sitting out the development of GENIV technologies, maintaining a position as a major nuclear nation will become progressively less tenable. However, establishing a world-leading position for the UK in GENIV technologies from the current run down situation will be neither quick nor cheap. Without at least one test reactor, the UK will simply have no

402 University of Oxford – Written evidence (PNT0034) international credibility. Active participation is needed in at least one GenIV project, such as ASTRID in Europe.

8. Is the NNL fulfilling its remit appropriately? Can it deliver the required research to support the UK’s future nuclear energy policies? How does it compare to equivalent organisations in other countries? The NNL is not able to compete with similar organisations (i.e. national laboratories with a nuclear remit) in competitor nations for the simple reason that they are not funded to undertake the full range of activities one would normally associate with an organisation called the National Nuclear Laboratory.

9. Is the remit of the National Nuclear Laboratory (NNL) suitable to provide research and development support to the UK nuclear sector? Is the current funding and governance model for the NNL appropriate to its role and remit? The answer to both questions is no, unless the remit is largely focussed on fuel and decommissioning. As currently constituted the NNL can operate neither as an independent advisor to the government on nuclear strategy nor as the leader of research to support the UK’s future energy policies. This is because the current funding (or more properly lack of funding) model means (a) that it has to generate most of its income from contract research, so it is beholden to those funders and cannot generate a truly independent view, and (b) that a world- leading research culture cannot be built when the priority is servicing short term, low level research contracts to earn a living.

10. Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved? Who has oversight of the whole nuclear R&D landscape, including international activities? There is no oversight of the full range of UK nuclear research, especially that carried out under the banner of MOD or AWE, although the engineering and scientific challenges can strongly overlap. The academic community is quite well co-ordinated (and competitive), and EPSRC has a good grasp of the range and impact of this work and the international activities that they have started to support in the past 5 years. Recent activities at the traditionally impermeable fission/fusion interface are generating excellent science, and should be encouraged, as they are crucial in training the scientists and engineers that will be needed in coming decades.

11. Was the Nuclear Innovation and Research Advisor Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be? NIRAB has provided a space within which it was possible to examine UK nuclear strengths and possible strategies. With the demise of NIRAB, there is now no effective oversight or sufficient coordination of the whole UK activity in nuclear science and technology, and a replacement should be instituted as a matter of urgency. There is an opportunity to broaden the remit of a NIRAB(2) to move away from a model where the majority of members represent the current fission community (all of whose plant is >25 years old) and include more experts in GENIV and fusion technologies. Opportunities for research on new build are inherently limited, but this does provide a catalyst for longer term research.

403 University of Oxford – Written evidence (PNT0034)

With particular thanks to Professor Chris Grovenor, FIMMM, FIP, Professor of Materials

24 February 2017

404 Weinberg Next Nuclear – Written evidence (PNT0045)

Weinberg Next Nuclear – Written evidence (PNT0045)

Weinberg Next Nuclear102 is a charity promoting advanced nuclear technologies: fast reactors, molten salt reactors, small modular reactors. We therefore very much welcome this Committee enquiry.

Since the Committee’s 2011 report on the UK’s nuclear R&D capacity, Weinberg Next Nuclear has published two short reports on the need for the UK government to support nuclear innovation – financially and through public policy.

Our 2015 report Why Nuclear Innovation is Needed (http://www.the-weinberg- foundation.org/2015/11/23/why-nuclear-innovation-is-needed/) outlined the advantages of next-generation nuclear technology:

 They can use liquid fuel, so the core cannot melt down;  They can re-use the spent fuel – which still contains over 90% of the energy that was in the original uranium;  Advanced reactors could reduce the amount of nuclear waste which has to be managed by future generations (and which already exists so cannot be wished away) by around 95%;  They can use plutonium as fuel. The UK has the largest stockpile of plutonium in the world;  They can be built as small modules and then assembled on site to reach the scale desired. This could reduce construction costs. They could be installed where the heat could be used as well as the power.

We called on the then-Chancellor George Osborne to fund prototype demonstrations of advanced nuclear reactors. He did allocate £250 million to nuclear R&D in the 2015 Autumn Statement, and the Government launched the SMR competition.

In April 2016 we published a follow-up report Next Steps for Nuclear Innovation in the UK (http://www.the-weinberg-foundation.org/2016/04/27/report-launch- next-steps-for-nuclear-in-the-uk/) This report:

 outlines criteria which government should use in selecting reactor designs to support (but does not say which designs should be chosen);  recommends that at least one of the reactors supported should be a Generation IV design, because this could re-use spent nuclear fuel, and also use plutonium as fuel. The UK has the largest plutonium stockpile in the world;  suggests that SMRs and micro-reactors (less than 20 megawatts) will be cheaper to construct than large reactors because they can be made on production lines then transported to site. Generation IV reactors may also be considerably cheaper than existing nuclear designs due to less complex designs – though this will not be known until one has been constructed;  supports the Office for Nuclear Regulation’s proposal to increase its capacity by expanding staff numbers. Lack of regulatory capacity is currently the major barrier to nuclear innovation in the UK;

102 This is the operating name of the Alvin Weinberg Foundation.

405 Weinberg Next Nuclear – Written evidence (PNT0045)

 proposes that UK nuclear regulators should work closely with their Canadian and US counterparts, with the aim of developing a regulatory approval mechanism that would cover all three countries.

Weinberg Next Nuclear believes that responsibility for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities lies firmly with the Government. The Government is not doing enough to fund research and development on SMRs, or on motivating others to do so. The results of the SMR competition need to be announced as soon as possible. The Government then needs to do more to fund research, development and demonstration of fast reactors and molten salt reactors.

Author: Stephen Tindale, Director

24 February 2017

406 Westinghouse UK – Written evidence (PNT0027)

Westinghouse UK – Written evidence (PNT0027)

Executive Summary With the approval of both Hinkley C and the Dreadnought naval propulsion programme, the UK has determined it will have a nuclear industry for the next 80 years. As a result, the UK would be advised to carefully consider what role it wishes to play in the global nuclear market. The UK has an opportunity to once again be recognised as a leading nuclear country. Past policy decisions have resulted in the fact that the UK forfeited the option to develop large-scale reactor designs, and is consequently dependent on purchasing large nuclear reactor technology from overseas. The next generation of nuclear reactors are most likely small and modular designs with application into a substantial global market. Therefore the UK Government, in partnership with its nuclear industry, has a window of opportunity to consider if it wants to remain a purchaser of technology or align itself with a reactor vendor to ensure long-term UK intellectual property (IP) in design development, and consequently be recognised as a technology supplier into a global market once again. This global industrial leadership will be afforded to those countries and companies that have a strategic vison for the future and develop this new generation of reactors in time to capture a global market with innovative, secure and non-proliferation safe technology.

Westinghouse is committed to delivering this future opportunity for the UK and seeks to partner with UK industry and Government to deliver an indigenous industry that maintains capability, vision and the prospect to substantially contribute to UK prosperity and science and engineering leadership. Westinghouse recognises that the Government needs to systematically assess which technology and business model will best achieve its objectives. However, as a company we believe that we have made an offer of unrivalled opportunity for the UK via the BEIS competitive process. The views put forward in the responses below are of a more generic and strategic nature and, in the main, are not technology-specific.

Q1 Where if anywhere do you believe that responsibility should lie for ensuring that the UK has a coherent and consistent long term policy for civil nuclear activities including international collaboration and, within the UK, for cost-effective and efficient articulation of the different elements of nuclear work?

Westinghouse Response:

1.1 The responsibility has to sit with the UK Government for putting in place an effective, stable, long-term policy framework which has the support of the main political parties to ensure longevity. There is a need for stability of policy across successive parliaments for nuclear projects to secure the investments needed. Building new nuclear power stations takes longer than a five-year parliamentary window, and even longer to generate returns on the substantial initial investment, and so a stable policy environment is needed to secure investor confidence in particularly at the R&D and early commercialisation period. To do this the current government needs an effective advisory board, similar to NIRAB, which

407 Westinghouse UK – Written evidence (PNT0027)

would bring together experts from UK universities, the UK’s National Nuclear Laboratory (NNL), its centre for fusion technology at Culham, nuclear skills bodies and a comprehensive cross section of industry representatives. The remit would be to review the existing nuclear policy landscape and existing UK capabilities, with a view of building on existing policies which have proven effective and making recommendations where changes should be made to allow for the Government, in partnership with industry, to bring forward new technology offers. Industry alone cannot do this, and the current policy framework is very much designed to reward investment from the point of generation, i.e. through the contract for differences (CFD) mechanism. What is missing is the Government support to de-risk new technologies to come to market. It is worth noting that the time horizon for reactor developments can be 10 years or more (depending on reactor type), with an average development cost of up to a billion pounds. Countries that are successful and are currently leading in developing global solutions are notably those where their respective Government is supporting its industry in de-risking these early investment challenges, i.e. Russia, South Korea and China. The input from industry is essential and needs a strong voice in the process to ensure, from the outset, that the voice of the customer is clearly heard and therefore maximise the marketability of future collaboration.

1.2 It is important that policy continues to be led by one department, and for civil nuclear energy activities this should be BEIS – the merging of BIS and DECC has helped to eradicate areas of potential economic and energy policy conflict, and ensures all major funding bodies of civil nuclear research are within the same department (NDA, Research Councils, Innovate UK). The UK energy sector is market-led, and so it will be important for Government to proactively and coherently engage with its industry to settle policy. The revised Nuclear Industry Council could be an effective vehicle to achieve this engagement and to agree a direction and delivery approach into which the whole industry can support and align itself.

Q2 The Government’s industrial strategy green paper discusses a possible ‘sector deal’ for the nuclear sector. How might the nuclear sector benefit from such a sector deal? What might a deal involve and who would be the leadership organisations within the sector for such a deal?

Westinghouse Response:

2.1 A nuclear “sector deal” should involve Government and industry working together to ensure successful delivery of near- and long-term nuclear projects. Government and the NDA should lead on setting out plans for major infrastructure projects, i.e. building new power stations and waste/decommissioning projects. In this respect, it is important to articulate timescales and procurement strategies as early as possible to ensure that the UK supply chain can develop its own capacity accordingly. Government should provide facilitative measures to ensure this can happen. This could include initiatives relating to tax credits; targeted, time-limited, and proportionate subsidies; and certainty of revenue through private law contracts governing instruments such as the existing

408 Westinghouse UK – Written evidence (PNT0027)

CFD mechanism. Furthermore, it is imperative to build long-term nuclear and engineering capability and capacity and ultimately ensuring the UK supply chain is competitive. In this respect, it is important to identify high- value manufacturing and engineering opportunities.

2.2 The Nuclear Industry Council can be an effective body (with the right membership) to lead on delivering the sector deal as a whole. Existing or new bodies should focus on specific aspects of the deal and report into the Council, e.g., the Nuclear Skills Strategy Group to lead on skills, a new research and innovation institution(s), and others as appropriate.

2.3 The primary benefit to the sector, if the right deal is secured, is for the current and future Governments to give an unequivocal backing to the nuclear industry through a stable, long-term policy and delivery framework which in turn is complemented with targeted and time-limited development funding. This approach will give the right mix of incentives and market signals for UK companies to have the confidence to invest in capacity building, and also to attract new companies to locate their manufacturing or engineering centres into the UK. It should allow industry to focus and invest in the necessary activities needed to develop a skilled workforce, develop and implement efficiencies to deliver major infrastructure projects to time and cost, and increase competitiveness of UK companies in a global market place, whilst increasing UK energy security.

Q3 What are the potential benefits, disadvantages and risks from the deployment of SMRs in the UK and more widely?

Westinghouse Response:

3.1 The Government has previously identified the potential benefit of SMR deployment in the UK, as part of a balanced low-carbon energy policy, and to be at the forefront of a global revival of nuclear interest. This provides a strong position to develop and sustain economic growth in the UK. Westinghouse has been an early advocate for UK leadership and fully supports this intent.

3.2 Benefits - Numerous SMRs are being proposed or are under development globally. The technologies are varied in their innovation and to an extent application, and therefore also range from a near- to longer-term deployment horizon. The closest designs to market are those based on proven PWR technology, with developers estimating a 10 year timeframe to commercial deployment. Advanced SMRs, such as Gen IV type fast reactors, high temperature reactors or molten salt reactors are at a less well developed stage, but could be designed with certain functionality such as remote operation. The potential benefits therefore will be heavily dependent on the specific reactor design in question. However, there are some generic benefits which have made SMRs an attractive proposition and are highlighted here: a. As with large nuclear reactors, SMRs can produce safe, secure and affordable low-carbon baseload electricity. By targeting SMRs with high

409 Westinghouse UK – Written evidence (PNT0027)

power density, the cost per MWe is optimised and competitive with other energy sources. (The Westinghouse SMR at 225MWe has the highest power density of any similar proposed SMR, as a higher output is needed to cover investment and operating costs). b. In terms of financing, SMRs will have a lower total capital cost and shorter construction times. The result will be a product which is likely to provide financial returns in a shorter time period, widening the pool of potential private investors. c. The smaller size means they can fit on brown-field former nuclear, coal and oil sites that already have suitable cooling and grid access, thus increasing the number of potential siting opportunities and the placement closer to load centres. d. Since the detailed design is not finalised, SMRs have the potential to introduce innovation to reduce the cost of electricity through, for example, advanced manufacturing techniques, quality control and repeatability in a factory setting. e. From an economic benefit perspective, there is the potential for significant numbers of sustained science and engineering jobs, and for a large proportion of the high-value components to be designed and manufactured in the UK for the domestic and export market. f. The benefit of global deployment of a fleet of smaller reactors includes: i. Nth of a kind costs can be achieved. ii. Ensures against bust-and-boom order book scenarios through steady and level loaded manufacturing. iii. Allows for a greater number of companies to invest in long-term capabilities to support the manufacturing and employment. iv. The projected manpower impact of a fleet of ten Westinghouse SMRs, built one per year commencing in 2027, with a conservative 70 percent UK content share would account for sustaining and creating thousands of high value long-term direct jobs, and tens of thousands of indirect induced jobs. This highlights the significant direct, indirect and induced man-years of employment that such a programme would generate. v. The initial, first-of-a-kind costs of PWR based SMR reactors may not be significantly lower than many of the large-scale reactors currently in the market, but accounting for UK content and job creation means that the overall benefit to the UK is of significant greater value. Therefore, both factors should be assessed to determine an overall value proposition to the UK economy and the energy paying consumer.

However, the extent to which all of the above benefits are realised will be dependent on the reactor in question, a realistic and certain UK market for its deployment, and a realistic and credible assessment of the overseas market. Such a deployment certainty would build the confidence of UK companies to harness maximum economic benefits and ensure these companies commit to and invest in the detailed design and manufacture of an SMR.

3.3 Disadvantages – These will vary depending on the technology and size of the SMR. However, an SMR programme will require the Government to ensure availability of appropriate sites. Small nuclear reactors should not

410 Westinghouse UK – Written evidence (PNT0027)

be seen as an alternative to large-scale reactors but be considered as complementary as these large reactors provide the bulk of baseload requirements. A change of policy in favour of SMRs over large scale reactors would not only destabilise existing investment decisions but would place an uncertainty over past commitments and could lead to investors regarding the UK as unpredictable and therefore risky.

3.1 Risks - As with any new technology, SMR development is subject to various risks: a. The key risk to the deployment of SMRs in the UK is the failure of Government to establish a strategic framework that supports the down-selection decision process to opt for a single or maximum two designs which ultimately secures fleet production levels and Nth of a kind cost savings. Delivering economic value for the UK should be a key driver for the UK SMR strategy. Often the cost of nuclear has risen whilst costs for other low-carbon technologies are coming down. The nuclear industry has to address this challenge. A possible SMR programme could help over time in achieving greater cost reduction; however, the first unit may not be significantly cheaper in MW/H terms than existing large-scale reactors. When considering the likely costs of SMRs in comparison with other nuclear reactors and low- carbon technologies, it is important to take into account the total economic value, including the industrial benefit of sustaining and creating a new industry, including new manufacturing opportunities. Furthermore, significant savings can be achieved in opting for a fleet of a single standardised design and applying continuous improvement techniques to reduce overhead whilst achieving the highest standards of safety, hence achieving an nth of kind cost profile. b. A risk, applicable to all of nuclear, is that in response to an event such as Fukushima we add in additional safety measures which are more due to appeasing the critics or public than are based on actual need and often do not improve safety to such an extent that the expenditure is justified or sensible. Hence, additional cost is incurred. c. The risk of high cost of capital and or lack of available debt financing also impacts the overall economic value. Where there is a strong and stable policy framework in which the government takes some of the development risk, the cost of capital is generally lower and the option of debt financing is more appealing and possible. d. It will be necessary to secure public acceptance in order to deploy an increased number of reactor units at a variety of sites, particularly should these be located near urban conurbations. e. If the UK does not mobilise quickly, it will lose the first-mover advantage and therefore remain a purchaser of technology. There is clearly a global race underway to have the first SMR designs licensed and deployed. The companies and Governments who achieve this will dominate the global nuclear market for the next two decades. Therefore, from a global market perspective, there is a risk the UK misses out on the opportunity to secure valuable design IP as international vendors develop their designs outside the UK. This in turn would reduce the opportunity for the UK to access the high-value engineering and manufacturing jobs.

411 Westinghouse UK – Written evidence (PNT0027)

f. Designs which are still only a “paper design” may appear to meet all needs, however theoretical designs are just that, and in practice may take another 15 years or more to develop and prove. Selection of a Gen III+ PWR design with proven functionality and systems mitigates this risk. That is not to say that Government shouldn’t drive innovation, far the opposite (see later response to question 7).

Q4 What is the scale of the global market opportunity for SMRs? What would the cost be if the UK does not take full advantage of the opportunities of SMRs?

Westinghouse Response:

4.1 Without revealing commercial market knowledge, analysis based on the four most critical factors for success: 1) anticipated energy growth, 2) political stability, 3) nuclear capability, and 4) can manage economic growth, revealed 38 countries that represent the greatest opportunity for nuclear energy growth. Twelve of the 38 were found to be strong in all four categories and represent the greatest potential for export of SMR plants in the future. Twenty‐six other countries were identified as strong in three of the four categories.

Q5 Is the Government doing enough to fund research and development on SMRs, and to stimulate others to do so? Should it be doing more to coordinate UK actions including international engagement on SMR development and future deployment?

Westinghouse Response:

5.1 We believe there is considerable room for more targeted and policy driven Government intervention. Whilst the Government has funded SMR feasibility studies (~£5M), this is insignificant compared with the funding offered by USDOE for example, and insufficient to create a strong enough signal that a UK market might emerge. As a result, the lack of a strategic policy framework for SMRs and the lack of progress in respect of technology criteria, indication of market share and indication of desired outcome from any SMR programme have meant vendors, whilst keen to join the UK, are increasingly less respondent. Therefore, as well as increasing the level for research and development for SMRs, any such development requires an overall strategic vision and development plan, with a rationale to justify targeted expenditure, for example, of one design over another. The long-awaited Government SMR roadmap must provide a foundation which identifies clearly the desired output, timescales and opportunity, thus focusing UK spend and stimulating new investment.

5.2 The Government can also strengthen its representation at international SMR policy financing and non-proliferation fora to shape the global markets of the future, but it needs to ensure this is not at the expense of developing clear domestic market signals.

Q6 Are the criteria set out by the Government for the SMR competition appropriate? If not, what should the criteria be? What timescale should the Government be working to in choosing an appropriate SMR design for the UK?

412 Westinghouse UK – Written evidence (PNT0027)

Westinghouse Response:

6.1 The assessment criteria defined by Government in table 2-1 of Guidance Document for the SMR Techno-Economic Assessment issued by DECC on 21 October 2015 are broadly appropriate. However, there are 19 such criteria and it is not clear how these are weighted. A simpler set of criteria would be:  Design maturity - Technology readiness level  Licensing confidence - Ability to achieve GDA within 5 years  Delivery confidence - Ability to deliver a FOAK unit before 2030  Pricing certainty - Modular construction, schedule risk, nth of kind cost, CFD price  UK intellectual property - Percentage of IP located in the UK  UK jobs - Design, construction, operation and fuel supply

6.2 The timescale for Government to make decisions on SMRs depends on its aims/objectives. If it wants to be first to market to gain first-mover benefits, then it should target a FOAK unit prior to 2030. If it wishes to develop indigenous capability from current existing industry, then this also drives early timescales as failure to do so would mean the UK supply chain would have declined to the point where it could not step up to deliver an SMR programme. (It takes significant time to build the capacity and to ensure development costs are not exclusively being recouped from the first reactors to be deployed which, as we have seen with the current large-scale new build programme, resulted in UK firms often being up to 40% more expensive over their nearest international competitors.) These considerations suggests the UK should opt for a Gen III+ PWR based design, as Gen IV technologies will take significantly longer to develop and commercialise and will in the absence of more immediate commercial opportunities be too risky for companies to invest.

Q7 Should the UK be involved in the development of Gen IV technology? If so, what funding and support should be put in place to place to help the UK establish a world leading position? Should our activity include development of one or more test reactors?

Westinghouse Response:

7.1 If nuclear is to continue to play a significant role in the UK’s future energy mix, then the UK needs to be actively engaged in both the deployment of Gen III+ SMR technology and the longer term research and development of future nuclear energy technologies, including some of the Gen IV technologies currently under development worldwide. The risk versus reward of investing in longer-term Gen IV reactors should be carefully considered. Westinghouse has invested considerable funds to take their Gen III+ SMR mature concept design to a suitable technology readiness level (TRL). In addition, Westinghouse is backed by over 60 years of reactor design and licensing experience, thus the risk of the UK not realising the benefit of investing in such a design for commercialisation in the 2020s is significantly reduced. For future development of Gen IV

413 Westinghouse UK – Written evidence (PNT0027)

reactors, the investment to take a design to a similar TRL (for example, with fuel manufacture and operation proven, and waste routes and decommissioning plans developed) is considerable, and the risk of investing in a design that ultimately proves unworkable cannot be underestimated. Hence Westinghouse does not see Gen IVs as a viable solution to electricity production within the next 10 years. Westinghouse recommends the following two-step approach.

7.2 Step 1 – The initial Government funding of £250m R&D budget over the next few years should be focused on supporting a design that delivers UK IP and security of supply with the opportunity to harness the benefits within a foreseeable timeframe. A first-to-market approach increases successful access to the global marketplace and supports the creation of high-value jobs in the UK. It is not clear what level of support the Government may afford to any design development. If it is assumed that 50% of the above R&D budget is allocated to SMR development and the Government were to pick two designs in the initial development phase, which would leave approximately £60m per design. US industry is currently estimating an overall budget of $1bn to develop a new design through to successful licensing. Therefore, whilst the existing UK government budget is hugely welcome and sets the right signal, it is most likely not sufficient to attract the full commitment of vendors and industry, particularly for the early stages of development. This is the reason that the US DoE made initial funding in the order of $225m available per design.

7.3 Step 2 – To be successful in this strategy, the Government needs to lay down specific requirements for developers to design against, with realistic time-to-market requirements. Government contribution in the early stages is required to de-risk the development and required investment portfolio to attract the best of industry as development partners; such support should gradually decline as industry investment is more likely to be forthcoming as technologies approach commercialisation. A contribution, via the industrial strategy funding stream, would enable this development by seeding several ideas at relative low funding levels. Government would check progress against its requirements and down-select based on increasing technology readiness levels and hence continued viability.

Q8 Is the NNL fulfilling its remit appropriately? Can it deliver the required research to support the UK’s future nuclear energy policies? How does it compare to equivalent organisations in other countries?

Westinghouse Response:

8.1 NNL is fulfilling its remit as best it can within the constraints it operates under, i.e. operating as a wholly commercially funded organisation, aiming at the same time to act in the national interest, for example by maintaining at-risk high-level skills. NNL funding levels to deliver the R&D to support UK future nuclear energy policy needs is constrained. It receives no direct public funding and competes for research funding opportunities like any other commercial organisation. It is only able to reinvest low £millions per year in research from its operational profits or from securing grants associated with Innovation funding. NNL does not

414 Westinghouse UK – Written evidence (PNT0027)

have capability or capacity across all areas of the fuel cycle required to deliver the extent of UK R&D needs. For example, it has no experience in reactor design or advanced manufacturing.

8.2 However, NNL does have a range of R&D capabilities in the areas of fuel manufacture and fuel reprocessing compared, for example, to any single laboratory in the US, e.g. INL, ANL. LANL etc. The NNL facilities at Springfields are relatively modern and recent funding has seen state-of- the-art analytical equipment available to conduct a broad spectrum of tests. With respect to other facilities, if the hot cell at the Sellafield Central Laboratory was fully commissioned it would increase the UK’s ability to lead or collaborate in a wider scope of irradiated material programmes.

8.3 NNL appears to be able to fulfil its remit from a technology perspective and can compete with similar organisations in other countries, but it needs to do more with respect to improved project productivity in order to support commercial business opportunities and realise best value for the tax payer. Industry develops new products to maintain or extend market share relative to its competitors, therefore time constraints are always prevalent and this has to be recognised as an important aspect of R&D projects.

8.4 Based on Westinghouse’s involvement with NIRAB, it is of the belief that NNL has a role to play in delivering the research required to support the future nuclear energy policy, but that there are also key aspects of research that may be better fulfilled through greater involvement of the universities that have nuclear research capabilities, e.g. Manchester, Imperial College, etc.

Q9 Is the remit of the National Nuclear Laboratory (NNL) suitable to provide research and development support to the UK nuclear sector? Is the current funding and governance model for the NNL appropriate to its role and remit?

Westinghouse Response:

9.1 Further to Q8, the NNL at Springfields is considered suitable for undertaking the research, however NNL’s present commercial funding and governance model prevent it from fully acting to support future national energy policy. 9.2 Westinghouse is planning to participate in the next phases of accident tolerant fuel (ATF) research. With the NNL facility being located on the same site as Westinghouse’s UK fuel manufacturing plant it greatly simplifies the logistics of research projects compared to the work being undertaken at an overseas laboratory. Performing ATF research at Springfields may also increase the likelihood that should the new manufacturing be successful, an industrial size facility for making ATF will be constructed in the UK and hence strengthen the long-term future of the site. Therefore, although it was welcome news that nuclear research would benefit by up to £250M in the 2015 spending review and that a reasonable proportion was targeted at advanced fuels (including ATF), it is not evident that having NNL competitively bid for this work is the most effective funding strategy to ensure that important research continues to takes

415 Westinghouse UK – Written evidence (PNT0027)

place in the UK at Springfields and help to secure the long-term future of the site.

Q10 Is there sufficient co-ordination between the bodies involved in nuclear research and, if not, how should it be improved? Who has oversight of the whole nuclear R&D landscape, including international activities?

Westinghouse Response:

10.1 It is not apparent that oversight of a global nuclear landscape is currently taking place, but the Horizon 2020 Research and Innovation programme, which is providing nearly €80 billion of funding over a seven year period (2014 to 2020), is evidence of collaboration taking place in Europe. There is also evidence that more international collaborative ventures are being initiated, e.g. UK/China, but again it is not clear that the outcomes of such agreements sit within a global R&D landscape.

10.2 It is not evident how practical it would be co-ordinate nuclear R&D on a global scale, therefore it may be more appropriate for the UK at this time to focus on the effective delivery and execution of the new five year programme. The £250M that is now available for various streams of R&D plus SMRs is a relatively big programme to deliver, and will have to be undertaken with a high level of co-ordination to ensure that best use is made of the funding.

10.3 NIRAB has proved useful, in part, to foster cooperation and coordination by providing a forum at which Government Departments and Agencies have been able to discuss priorities and share plans for funding research. The Nuclear Innovation and Research Office (NIRO) has also supported NIRAB in attending other coordinating bodies such as the NDA Research Board, the National Nuclear User Facility (NNUF) steering group and the Nuclear Waste and Decommissioning Research Forum (NWDRF). Unfortunately, NIRAB ceased its term in December 2016 and potentially opens up a gap which, if not carefully managed, may yet again lead to a fragmented and confused nuclear R&D and innovation offer not only within the UK, but also globally where the UK could have a much stronger leadership role were it to remain cohesive and coherent in its offer for excellence to address the next generation’s nuclear innovation and science challenges.

Q11 Was the Nuclear Innovation and Research Advisor Board successful in carrying out its role? Is a permanent successor body to NIRAB required? If yes, what form should this body take and what should its role and remit be?

Westinghouse Response:

11.1 NIRAB was valuable to both HMG and industry in a number of ways. a. Positive leadership and a very knowledgeable team of experts from academia, national laboratories and industry ensured that NIRAB fulfilled its role in providing government with a clearly defined programme of research and innovation spanning the period of the Spending Review.

416 Westinghouse UK – Written evidence (PNT0027)

b. In the initial year of NIRAB’s term, additional Working Groups were set up comprising subject matter experts to ensure that robust objective evidence was compiled to underpin the recommendations for the R&D required in support of the UK nuclear energy policy. The need for a permanent successor to NIRAB may only become apparent in the fullness of time, but there is a need for a strong steering committee during the next five years when NIRAB’s programme is executed and the £250M funding made available to various R&D projects. c. For the first time, the government was provided with a consensus on UK nuclear innovation, research and deployment priorities supported by most of the industry, relevant nuclear focused higher education establishments and NNL. NIRAB had the opportunity to better understand the government’s thinking and was able to communicate these to industry whilst at the same time they were close enough to industry to better understand its capability, concerns and future ambitions, which NIRAB was able to communicate back to Government. As a result, NIRAB not only developed important evidentiary-led thinking, but became an important integrator of policy perspectives whereby they were able to twin commercial near term opportunities with longer-term energy supply and security considerations and communicate these synergies in an effective and contextual relevant manner.

This type of engagement has led to an improvement in communication and sharing of information over the past three years. It will be beneficial to retain such a forum for communication post-NIRAB.

11.2 It is important that new arrangements are put in place to ensure Government continues to have access to independent expert advice post- NIRAB. Such advice is a valuable resource and will support key policy decisions as the global nuclear sector landscape evolves. There is more than one mechanism that could be used to deliver the necessary functionality – for credibility the mechanism needs to ensure independence and to have the right calibre of experts giving advice.

11.3 A smaller sub-set of the existing NIRAB team may suffice and could continue to support/advise BEIS. Working Groups may again be useful, who would be responsible for actively overseeing projects (“go look see”) and contextualising progress and likelihood of success. During the bidding process for the initial £20M of funding, BEIS made use of “assessors” to review and make recommendations as to which bids offered, amongst other, the greatest chance of success whilst securing value for money. A Working Group comprising the same assessors may prove beneficial for the governance process.

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