Nuclear Supply Chain Newsletter December 2010 It is now three months since the MAS ‘Nuclear supply chain opportunities for SMEs’ event, held in Manchester on the 27 September 2010, and things within the civil nuclear industry are moving forward and gathering pace. The purpose of this newsletter is to consolidate recent stories and announcements, as well as provide additional information on how to get involved with the nuclear supply chain.

Inside... Partners • Update on Nuclear New Build in the UK • News from AREVA • Statement on Energy Policy • The Nuclear Advanced Manufacturing Research Centre • Guidance from the Nuclear Industry Association • September 2010 Conference round up: ‘Nuclear supply chain opportunities for SMEs’ • The Nuclear Opportunity - Frequently Asked Questions • MAS Regional Update

Commissioned by For information and advice visit www.mas.bis.gov.uk or call 0845 658 9600 Nuclear New Build in the UK

SMEs have concerns that their efforts to enter nuclear new build On the 29 November 2010 a third utilities consortium was launched (NNB) markets could be wasted if such markets fail to materialise as NuGeneration Ltd (NuGen), a joint venture between GDF because of project implementation delays and cancellations. Suez, Iberdrola and Scottish & Southern Energy (SSE). Consequently, MAS will endeavour to advise SMEs of the current NuGen hopes to develop a new generation station national position. of up to 3.6GW on a site near in West Cumbria, for Currently there are three consortia who have expressed wishes to which it secured an option in October 2009. Construction and build new nuclear power plants in the UK. These are: commissioning is expected to start mid-2016. EDF Energy, with their investment partner, Centrica, propose to NuGen is a strong partnership with extensive experience of operating construct two European Pressurised Water Reactor (EPR) units: the nuclear power stations across Europe, as well as developing and first at Hinkley in Somerset and the second at Sizewell in Suffolk. operating thermal and renewable power stations in the UK. A new The total generation capacity is 6.6GW. management team for NuGen has been drawn from all three of the consortium partners. This team will be headed by Alfio Vidal and The Hinkley Point programme highlights are: Olivier Carret as the Executive Directors of NuGeneration Ltd. • Public consultation is now underway To understand more about NuGen please visit their website, which • Planning application for Hinkley site projected to be submitted shows timescales and site plans: in 2011 www.nugeneration.com • Tier 1 contracts will be placed in 2011 The Nuclear Industry Association (NIA) welcomed NuGen as its • First EPR concrete in 2013 250th member as it launched itself onto the UK nuclear scene. The milestone is seen as another major step for the nuclear industry and • Reactor on-line and first power in 2018 a further boost to the future of nuclear new build in the UK. • Completion of second Hinkley reactor 18 months later http://newnuclearopportunities.edfenergy.com [Note: EDF is planning to build a further EPR unit at Penly in northern France in the same timescale as the first Hinkley unit. This will impact the UK supply market]

Horizon Nuclear Power is a 50/50 joint venture formed by E.ON and RWE. They plan a total generation capacity of around 6GW by 2025 at Wylfa (Isle of Anglesey) and at Oldbury (Gloucestershire). Horizon plans to build two to three units at each site. Horizon is currently evaluating both the AREVA EPR design and the Westinghouse AP1000 design and is expected to make a technology choice in 2011. The Wylfa programme highlights are: • Public consultation is now underway • Planning applications for Wylfa site scheduled for 2012 • Final investment decision for Wylfa site anticipated 2013 • First nuclear concrete in 2015 • First power late 2019-2020 www.horizonnuclearpower.com

The EPR reactor under construction, Olkiluoto, Finland. October 2010 © AREVA / BOURDON PAIVI

2 GDA remains on target News from AREVA In order for a nuclear reactor to be commissioned in the UK the AREVA, manufacturer of nuclear power stations, is looking to UK UK Regulator needs to approve its design and give it permission to suppliers for the construction of new nuclear reactors both in Britain operate. To ensure swift UK civil nuclear build the UK is approving and overseas. two reactor designs through the Generic Design Assessment AREVA will construct the Nuclear Steam Supply System (NSSS) (GDA) - this means once approved the designs will be locked and for the four EPR reactors planned by EDF at Hinkley Point and acceptable for utility companies to use in the UK without having to Sizewell and is competing for the contract to build reactors for seek re-assessment. as well. The Nuclear Instillations Inspectorate in the Health and Safety Over an intensive year-long process including a suppliers’ day, a Executive (HSE) is conducting the GDA process for both the EPR dedicated website and a programme of plant visits, AREVA has now and the AP1000. identified more than sixty British companies as potential suppliers of The HSE placed a Regulatory Issue (RI) relating to the EPR design engineering equipment and services for both its UK and worldwide in April 2009. An RI is raised when the HSE judges that a particular newCourtesy build of programme. EDF Energy: ItHinkley is working Point withC – them to make sure they feature of a design might not meet UK regulatory standards. The arewww.edfconsultation.info suitably prepared to bid for forthcoming contracts. HSE expressed concerns about the design of the EPR’s control and Jean-Jacques Gautrot, President of AREVA UK, says “Britain instrumentation. The UK regulator has now said that it is satisfied is leading the way in Europe in its vision of a new generation of with efforts made by AREVA and EDF to address these concerns. nuclear reactors and we are committed to making sure that it is the This now becomes a Regulatory Observation (RO) within the GDA foundation of a revived nuclear supply industry in the UK.” process. The dedicated website for potential suppliers is: The reactor design for the Westinghouse AP1000 is the subject of http://suppliers.areva.com/UK_supply_chain_EPR an HSE RI (February 2010) concerning the civil engineering design methodology. The HSE has requested appropriate evidence to demonstrate the strength and durability of key structures within “the Nuclear Island”. Regular discussions have continued on this topic with a view to agreeing the principal design changes, though Westinghouse believe this can be easily resolved and will not cause a delay. The HSE has said that it is confident that in the next six to eighteen months these RO actions can be closed. A meaningful GDA Step 4 conclusion in June 2011 should not be threatened. This is encouraging news for those SMEs following nuclear new build progress as delays linked to this are not foreseen or predicted. Courtesy of EDF Energy: Hinkley Point C Statement on Energy Policy On the 18 October 2010 the Secretary of State for Energy and • The laying in draft of the Nuclear Decommissioning and Waste Climate Change, the Rt Hon Chris Huhne MP, made a number of Handling (Designated Technical Matters) Order 2010, which announcements which demonstrate the Government’s continued if approved, will be followed by the publication of the draft commitment to remove unnecessary barriers to nuclear new build Decommissioning and Waste Handling (Finance and Fees) in the UK. Regulations, which set out in more detail what will be required from new nuclear developers in terms of decommissioning and The day saw the launch of the consultation on the revised draft clean-up National Policy Statements (NPSs) on Energy which will provide the framework for deciding whether to grant development consent • Clarification of the Government’s policy of no subsidy for new for new nationally significant energy infrastructure projects such as nuclear power in a written ministerial statement to the House nuclear power stations. which states that “this means that there will be no levy, direct payment or market support for electricity supplied or capacity The draft Nuclear NPS lists eight sites as potentially suitable for new provided by a private sector new nuclear operator, unless nuclear power stations: Bradwell, Hartlepool, Heysham, Hinkley similar support is also made available more widely to other Point, Oldbury, Sizewell, Sellafield and Wylfa. types of generation” The consultation runs until the 24 January 2011. More information The full written ministerial statement which provides greater detail on how to respond and documents related to the consultation can on this and other issues is available from: be found at: www.decc.gov.uk/en/content/cms/news/en_statement/ www.energynpsconsultation.decc.gov.uk en_statement.aspx In addition to the consultation on the revised draft Energy NPSs UPDATE: Since this announcement the Regulatory Justification (including the draft Nuclear NPS) the Secretary of State has also decisions on the AP1000 and EPR reactor designs came into announced other actions. These are: effect on 30 November following parliamentary votes. The large • The laying in draft of statutory instruments containing majorities in the Commons are evidence of cross-party support for proposed Regulatory Justification decisions in respect of two new nuclear as part of low-carbon energy mix. The first facilitative new nuclear reactor designs - Westinghouse’s AP1000 and action under 2008 White Paper is now completed. AREVA’s EPR 3 Nuclear Manufacturing Renaissance

The Nuclear Advanced Manufacturing Research Centre (Nuclear • Meet and exceed quality standards and achieve nuclear- AMRC), a joint initiative between the University of Sheffield, the specific accreditation University of Manchester and a consortium of industry partners will What does this mean for SMEs who are interested in act as a focal point for the renaissance of nuclear manufacturing diversifying into the nuclear supply chain? in the UK. The Nuclear AMRC is currently setting up a Business Development The Nuclear AMRC promises to deliver the highest quality, industry- Team which will work with its member companies and registered focused R&D to improve performance and capabilities whilst driving associate member companies in helping them understand the civil down costs, and to enable consortium members to become nuclear market and gain a route to market for their products. suppliers of choice to the global nuclear industry. Working in partnership with MAS, the Nuclear AMRC will help The Nuclear AMRC, in partnership with MAS, will help the wider companies to understand the procurement timelines for domestic nuclear manufacturing supply chain and specifically its member and global nuclear new build programmes for both top level companies to: contracts issued by the utility companies and reactor designers, • Drive up the capabilities and competitiveness of the UK civil as well as the timelines for contracts subsequently issued for sub- nuclear manufacturing industry contractors. • Work with consortium members to develop world-leading This work will include efforts to ensure companies understand manufacturing processes and technologies the quality standards and accreditation processes for supply and that they are able to complete pre-qualification processes. The • Help UK manufacturing companies compete for nuclear Nuclear AMRC with MAS will deliver a Fit for Nuclear programme, contracts worldwide ensuring that companies are competitive and able to compete to The Nuclear AMRC’s founding industrial partners include the win business. nuclear reactor vendors AREVA and Westinghouse, power systems provider Rolls-Royce, specialist engineering group Sheffield Forgemasters International and steel group Tata Steel. The centre is also supported by EDF Energy, the UK’s largest power supplier, and the Nuclear Industry Association. The Nuclear AMRC will help its member companies to: • Enhance the quality, reliability and efficiency of their products and processes • Reduce production costs and complexity Contact Nuclear AMRC • Develop innovative products from proof-of-concept stage, Tel: 0114 222 9900 through validation and prototyping, to pre-commercial production Email: [email protected] www.namrc.co.uk • Build industry networks and develop a strong nuclear culture

The Nuclear Industry Association (NIA) is the trade association and representative voice of Britain’s civil nuclear industry. With backing from the Department of Energy and Climate Change, the Department for Business, Innovation and Skills, Doosan Babcock and leading nuclear companies, the NIA has developed a basic step-by-step guide to getting involved in the burgeoning civil nuclear market. ‘The Essential Guide to Nuclear Supply Chain’ is designed to give an overview of the essentials. The guide is aimed at companies new to nuclear or looking to break into the sector and provides detailed guidance on a huge range of issues including the opportunities, routes to market, technical codes and quality standards expected of new entrants into the nuclear industry. The report can be downloaded from their SC@nuclear website: www.nuclearsupplychain.com 4 “Nuclear supply chain opportunities for SMEs” Event

Over 213 delegates representing 177 companies gathered in Manchester on Monday 27 September 2010 to hear about the business opportunities available to SME manufacturers in the civil nuclear supply chain. Strong interest from attendees was born out by requests from 110 companies for a nuclear- related review from MAS.

Conference Summary Keith Parker, Chief Executive of the Nuclear Industry Association (NIA) opened the conference to outline the nuclear landscape and the proposed nuclear new build schedule for the UK. Keith explained that the UK is at the forefront of the nuclear renaissance in Europe. He stated that the UK is well-placed to offer a world- The UK lacks the capability to manufacture the larger class supply chain that can contribute across the nuclear life cycle, components within the EPR reactor such as the Reactor including new builds, waste management, decommissioning and Pressure Vessel. However, it is AREVA’s opinion that perhaps disposal, financial, commercial and legal consultancy and education 60% of the scope is within the capability of UK suppliers. and training. Ian Holcroft, Head of Procurement at Laing O’Rourke, outlined Alan Cumming, EDF’s Procurement Director, suggested to a perspective on supply chain opportunities from Nuclear Power delegates that ‘boring is good’ - in a most positive way. EDF Delivery UK – the team of Westinghouse, Shaw, Laing O’Rourke relentlessly seeks reliability from their supply chain, with and – which is set to build the AP1000 plant in the UK. manufacturers that get things right first time, every time. He outlined the “Buy Where We Build” approach of the team, For non-reactor engineering and construction, usual British which aims to use local suppliers wherever this is cost effective, and European standards, codes and practices are all that and explained that this could lead to 70% or more of the scope are required. coming from UK companies in time. He highlighted a number of UK companies who are already supplying to the global AP1000 Ron Gorham, Head of Supply Chain Operation at the Nuclear programme. Decommissioning Authority (NDA) presented an overview of the public sector nuclear decommissioning landscape and current opportunities for the supply chain. Order your FREE He explained the complex activities covered by the NDA’s mission, conference DVD now: adding: “Manufacturers must bear in mind the diverse range of products bought by sites throughout the country from large and small companies alike and know their own strengths and exploit call 0800 458 9585 any experience they may have in other markets.” John Griffin, Operations Director for nuclear and defence at Jacobs presented a core message to delegates - that quality is the one word to guarantee SMEs’ success in the nuclear supply chain, and is inseparable from safety. NEXT MAS EVENT Dr Glen Little, Director of Nuclear New Build at Doosan Babcock presented on a typical journey to deliver quality products to the Winning business in the nuclear nuclear new build market for Tier 3 and Tier 4 contractors. He renaissance: stressed that now is the time for SMEs to prepare and participate. Preparing SMEs to enter the nuclear supply chain Nuclear supply chain opportunities for SMEs were explained to delegates by Robert Davies, Vice President New Builds, Delivered in partnership with the NIA & Nuclear AREVA UK. AMRC

SMEs keen to progress their nuclear ambitions are encouraged to attend MAS’ follow-up event to the September conference. The event will consist of in-depth workshops.

Thursday 17 February 2011 Doncaster Racecourse, South Yorkshire DN2 6BB FREE for UK SMEs

If you’re interested in further information or would like to book please call 0800 458 9585. The Nuclear Opportunity - FAQs Following on from September’s Conference the most Nuclear Decommissioning Authority (NDA) has produced a Supply frequently asked questions from SMEs were: Chain Charter which provides a fair playing field to all businesses; the supply chain is definitely not a closed shop, provided that you • What do we need to do next? are a viable and competitive business with high quality products • The big key Tier 1 businesses don’t listen to us, and an excellent safety record. MAS and the Nuclear AMRC can help you get Fit for Nuclear. so why bother registering? 3. Where do we go – who has these contracts? • Where do we go – who has these contracts? This is where the expertise and support network provided by MAS The key to making a success of the nuclear opportunity out there can help and assist you. If you understand where your products is to be proactive in your approach to the market. fit, with MAS guidance you will know which contracts are being This means understanding the marketplace requirements, the awarded to which Tier 2 and when these are open for tendering. different sectors within it, knowing where your business and product For NNB this is still a little uncertain as the industry is still somewhat fit into this complex industry and setting a plan of action by which in its infancy and some key decisions on the Generic Design to qualify and compete effectively – and this is where MAS and the Assessment (GDA) and the Infrastructure Planning Commission Nuclear AMRC can and will support your company’s needs. (IPC) will not be finalised until next year. However, now is the perfect 1. What do we need to do next? opportunity to utilise the MAS service to bring your business up to the standards necessary to meet the expected requirements. Get to know the nuclear industry! For Decommissioning and Waste Management the NDA run If you need some assistance then MAS has professional and transparent websites that identify both contracts that are planned expert help to guide and assist you through the complexities. If and those that have been awarded. Your business will need to you don’t know your NSSS from your SLC or your EPR from the have an effective strategy in place for following the developments NDA then you need to make this knowledge building a priority. of projects and for keeping an eye on them as they progress. MAS Understanding the nuclear industry and opportunities for you, in will also be able to support and assist in this field, to ensure that “all both nuclear new build (NNB) or in Decommissioning and Waste the boxes are ticked” for an effective tender bid to be submitted. Management, will save you time and effort in the long term. Book a nuclear manufacturing review through your local MAS team, read Nuclear Decommissioning Authority’s website: the literature and target your markets and areas. www.nda.gov.uk Some of the key businesses in the nuclear industry have provided MAS cannot stress enough that now is the time to act to understand, MAS with their vendor / supplier questionnaires; these can be used prepare, and set strategies for a future in the civil nuclear power to assess your business and to understand the readiness gap, and industry. Take advantage of the expertise and service that MAS and consequently the work required to make your business viable for its partners has to offer and become a serious competitor within diversification into the nuclear market. this dynamic market place. Use the MAS service to your advantage and grow your business knowledge. For additional information on the nuclear supply chain, use the NIA’s SC@nuclear website: www.nuclearsupplychain.com

2. The key Tier 1 businesses don’t listen to us, so why bother registering? A positive and proactive approach is needed here. The key players are always searching for new leads for their supply chain as projects evolve and problems arise - SMEs and their skill base can support and provide the required answers. Although it is unlikely that any of the Tier 1 companies will approach SMEs directly for contracts, their websites offer brokering services to provide leads to lower tier companies e.g. to the Tier 2s in order to provide information on possible and relevant lower Tier 3 and 4 To access information on the UK suppliers. This is why it is essential that you register your business. civil nuclear landscape, the nuclear Do not miss out! decommissioning supply chain and Realistically the NNB programme should be a long-term aim for your business, but starting the journey now is the key to future the MAS offering please visit successes. The nuclear industry is not just about NNB: Decommissioning and www.mas.bis.gov.uk Waste Management spend is circa £2.5bn per year and it is not a closed market, as competition for efficiencies and quality is high. The

6 MAS Nuclear Specialist Team

Evan Wright John Bissell Taylor-Jayne Fox Decommissioning and Waste Nuclear New Build Specialist, Process Improvement Management Specialist, MAS NW MAS NW Practitioner, Nuclear, MAS NW Evan has over thirty years experience in John Bissell has worked in all aspects of Taylor-Jayne Fox joined MAS from the the UK nuclear fuel reprocessing, waste the nuclear power industry from nuclear nuclear industry where she focused on management and decommissioning design to nuclear plant construction. He process improvements within nuclear sectors. He is a professional nuclear is a Chartered Engineer with a degree fuel manufacturing at the Sellafield Mixed engineer and has held senior engineering in Mechanical Engineering. John has at Oxide Plant (SMP) where the priority was and management roles within the nuclear various times worked for the UKAEA, quality and Right First Time production. industry. Before joining MAS he headed nuclear consultants, manufacturing Taylor-Jayne also has aerospace the former British Nuclear Groups industry, the former UK Nuclear Consortia experience from BAE Systems, helping business on UKAEA sites and won and and NNC. He was Purchasing Manager to implement Lean principles across the implemented large nuclear contracts such for Westinghouse on Sizewell B, has Warton site; her lean journey started when as the decommissioning of the Windscale carried out a Peer Review on the AP1000 she worked as a Group Leader at Toyota Advanced Gas Cooled Reactor (AGR) and worked with EDF on the EPR. He UK assembling Avensis cars, where she and the Windscale Pile 1 Reactor. has worked in Russia on their pressurised also spent valuable time in Japan at their water reactors. Global Training School. To access MAS support and expertise please contact the nuclear champion in your region:

Region Nuclear Champion Email Address Contact Number East of England Graeme Leighton [email protected] 07920 284242 East Midlands John Ransford [email protected] 07900 911568 London Paolo Fazzi [email protected] 07825 115171 North East Alan Hewett [email protected] 07834 307914 North West Taylor-Jayne Fox [email protected] 07816 671410 Scotland Nick Shields [email protected] 07795 811965 South East Dominic (Nik) Brown [email protected] 07920 040531 South West Charles Hill [email protected] 07870 251690 Wales Stephen Bibby [email protected] 07967 541513 West Midlands Chris Butlin [email protected] 07919 168341 Yorkshire & Humber Peter Rooney [email protected] 07827 890526

• Nuclear associates assist businesses on a national • A Tier 2 has linked their procurement department scale with MAS on a national scale and has invited businesses to tender for modular accommodation • With support and guidance from MAS businesses initiatives for project work in Scotland new to the nuclear marketplace can attend Sellafield/WCDA Meet the Buyer events for face-to- • Key Tier 2s have provided vendor questionnaire face time with key industry operators guidelines to MAS for SMEs to assess themselves against, to understand the requirements for • Proactive businesses are exploiting the entering into, and competing effectively within the opportunities available to them by using MAS marketplace to access the right contacts in the site licence company (SLC) procurement chain

7 Round the Regions MAS South West addition they are working with the expertise provided by the MAS national programme to support businesses. Eleven companies have been visited by EDF Energy and MAS SW as part of a pilot engagement programme aimed at introducing businesses who’ve registered an interest in supplying the nuclear new build programme to the local procurement team at EDF. These visits to SME steel fabrication and precision engineering businesses in the Somerset area each included a tour of capabilities, a discussion regarding project timescales and views from EDF on their requirements from new suppliers, with particular regard to safety and quality. The visits raised awareness of the need to develop additional capacity in the form of skilled fabricators and welders. There is a strong belief that the region will not have enough capacity to supply the increased demand and/or will suffer from a skills drain into the nuclear new build site causing risk of interruption to other businesses. Intelligence gained from the Somerset pilot visits was used to inform EDF and local delivery partners of the state of readiness Courtesy of MAS SE of local suppliers and shaped further workshops aimed at helping businesses engage. A workshop on “Making the leap” took place MAS Wales on the 8 November 2010 and this was followed by a “Safety & Quality” workshop on the 17 November where presentations Head of MAS Wales Stephen Bibby and nuclear expert John Bissell were given by MAS SW on the practical implications of ISO9001, met with Welsh Assembly Government Energy Island personnel 14001 and 18001, with EDF providing additional information on in Llandudno in October 2010 to discuss the Wylfa site and how their supplier assessment processes and approach to safety critical the two organisations can work in partnership to support local elements of the build. businesses - this will be explored further. Following this last event, MAS SW has received eight requests for in- Interest in nuclear opportunities in Wales is beginning to build and company visits to help individual companies assess their readiness so far two businesses have sought help and advice from MAS and to help create action plans to prepare for accreditation. Wales on how to enter the nuclear supply chain – the Wylfa site could offer huge opportunities to manufacturers in the local area. “Hinkley Point is an exciting opportunity that Taunton MAS North West Fabrications is keen to be involved with. However, the word ‘nuclear’ can be rather daunting to a business MAS NW have been proactive in building links with both Tier 1 like ours, who primarily deal with conventional & 2s within the region in order to understand the opportunities construction related projects. available for SMEs. Over thirty businesses have been visited in the past three months to advise them on their business readiness for It’s therefore been a great help to us to have MAS SW the nuclear supply chain. These visits were followed up with a free so involved in organising a series of meetings between manufacturing review to benchmark their current standards. EDF Energy, Tier 1 contractors and local businesses. In addition, MAS NW have linked in with Lancashire LEP, the West MAS SW has also enabled us to meet some senior Cumbria Development Agency (WCDA) and The Dalton Institute figures who will be involved in the procurement of this at the University of Manchester to share knowledge and signpost multi-million pound contract. the correct support to those SMEs that have shown an interest in diversifying into the nuclear marketplace. The result of this early involvement between all parties means that we are now a lot more comfortable with The demand within the North West is gathering pace and the what is required from us and are confident that we competence of many businesses is high, as quality standards from can make a significant contribution towards one of the other sectors (aerospace, pharmaceutical, oil and gas etc) signify biggest construction projects that the South West has the calibre of many SMEs within the North West. ever seen.” “The current economic climate, coupled with thinking

David Phelps, Commercial & Production Director on energy supply and the environment indicate to me Taunton Fabrications that supplying the nuclear industry will be quite long- term.

Manufacturers should focus on networking and exhibi- MAS South East tion opportunities, attend ‘Meet the Buyer’ events. We propose to stay in touch with MAS to monitor potential The response from South East companies following the ‘Nuclear future developments. And importantly, manufacturers supply chain opportunities for SMEs’ conference in Manchester should focus on one area where their manufacturing in September has been positive, leading to a meeting with LPA specialism can most noticeably shine through.” Channel to explore further opportunities with MAS support; the company are already supplying EDF in France. Graham Balshaw, Managing Director, Assembly MAS SE is exploring an opportunity to offer a lean benchmarking Solutions Ltd tool to Nuclear Industry Association members in their region. In