GRJ0061

Written evidence submitted by Sizewell C Introduction and Reason for Submitting

NNB Generation Company (SZC) Ltd is proposing to build and operate a 3.2 GW new station, Sizewell C (“SZC”), comprised of two UK EPR™ units. Once operational, SZC would be able to generate enough electricity to supply approximately six million (or about 20%) of Britain’s homes. The Project is a designed to be replica of EDF’s Hinkley point C (HPC) project utilising the same above ground design and ensuring the learning and knowledge is transferred between projects by replicating the key suppliers.

SZC is currently in its developmental stage; its planning application has been accepted for examination by the UK’s Planning Inspectorate. Since the inclusion of new large nuclear as part of the recent Energy White Paper as an important component of the mix to reach Net Zero, the Project is preparing for active engagement with Government to agree an efficient funding model that secures finance at a low cost of capital and delivers value for money to consumers and taxpayers. Unlike the HPC Project, SZC will not be majority owned by EDF after FID instead and thus will be an independent company. SZC is targeting a start of construction in 2022.

The Sizewell C (SZC) Project is inherently a green infrastructure project given the low carbon electricity it will produce. It is estimated that SZC will save around 9 million tonnes of CO2 in every year of operation when compared to a gas plant of equivalent scale. The Project takes its Environmental, Social and Governance (ESG) responsibilities seriously and believe Sizewell C has a strong role to play as part of a Green Recovery from Covid-19, delivering green jobs up and down the UK supporting levelling up but also with a strong local focus. As such we are delighted take this opportunity to present evidence to the Environmental Accounts Committee (EAC) about the benefits the project can bring but also some of the challenges faced by the nuclear industry and wider energy sector in relation to skills and training.

Answers to Inquiry Questions

1. What estimates are there for the jobs required to meet the pathway to net zero emissions, by sector, and other environmental and biodiversity commitments? N/A

2. Does the UK workforce have the skills and capacity needed to deliver the green jobs required to meet our net zero target and other environmental ambitions (including in the 25-year environment plan)? New nuclear generation (as well as the existing operating power stations) is an important component of the future decarbonisation of the UK in the transition to a Net Zero energy mix, by providing low carbon firm power generation and also has potential to utilise low carbon heat from generation for further decarbonisation applications. The Sizewell C (SZC) project presents a great opportunity (if it starts construction soon) to ensure Britain’s nuclear skills and capability are maintained and enhanced. However, having not built a nuclear power station for around 20 years prior to Hinkley Point C (HPC) which is currently under construction, were SZC not to go ahead the UK faces a risk that UK nuclear skills and supply chain capacity would reduce (see answer to Question 3) and have a negative impact on the delivery of this rollout.

This skills and capacity gap (or potential future gap) is both from a technical standpoint e.g. nuclear engineers but also within the nuclear supply chain where safety measures require supplier qualification and stringent quality control which takes time and investment to ensure compliance and competency. It is also very important that understanding and experience of the specific UK nuclear regulatory regime is embedded within developers and the supply chain. Building a new nuclear power station also requires significant multidisciplinary working, requiring a highly skilled workforce from across a multitude of GRJ0061

professions. We anticipate that the significant investment required to meet Net Zero will place pressure on some of those skilled professions, many of whom will work in a variety of sectors, both in the energy sector, but also in other environments such as transportation.

HPC has worked hard to resurrect the UK’s nuclear supply chain and has a target of 64% of its contracts by value being undertaken by UK suppliers, with a variety of skills, education and training initiatives including a target of 1,000 apprenticeships. HPC has also benefitted substantially from the existing UK nuclear skills base within the operating fleet. As a follow on to HPC, Sizewell C is able to help further address the UK skills shortage, building on the work done by HPC and targeting 70% of contracts by value at UK suppliers, bringing more jobs to the UK (for example skilled engineering jobs in the form of the UK EPR Centre) and engaging 1,500 apprentices. The timing of SZC creates a natural bridge for people and companies to move from HPC to SZC. This will preserve and enhance the UK nuclear skills and capacity that is both being developed at HPC and currently in place at the existing UK fleet.

This skills and capacity could subsequently move to the new nuclear projects that follow SZC (GW, SMR, Amr and fusion) helping to ensure the efficient delivery of the new nuclear capacity the UK needs. The enhanced UK capabilities also provide an opportunity to increase the UK content of future new build.

On the other hand, if SZC does not proceed a significant gap between new build projects will open (between completion of HPC and the start of the next project). If this gap arises, it is likely that UK nuclear skills and capacity will decay as people and companies leave the industry, retire or move abroad and thus the UK loses the benefits of the HPC experience over time. These negative impacts will be compounded by the gradual closure of most of the existing fleet over the 2020s. This will pose challenges to the next new build project(s) in the UK that follow HPC and represents a lost opportunity to capitalise on the momentum being built at HPC. Such a scenario would also likely mean lower UK content for the future projects.

3. What needs to be done to ensure that these skills and capacity are developed in time to meet our environmental targets? In order to ensure the skills and capability described above are developed in time to meet environmental targets, it is critical that SZC receives the relevant approvals to start construction in a timeframe that allows continuity with HPC.

The Government’s recent Energy White Paper is welcomed as a starting point towards a clear, coherent Net Zero strategy. By setting out a pipeline of projects to meet this objective developers and suppliers can have confidence to invest in the skills and capability required to deliver such projects and programmes. Replication is the key strategy for SZC to de-risk delivery, enhance efficiencies and reduce costs. This means replicating not only the core design from HPC but also the supply chain and know- how to construct it. However, to ensure these benefits are maximised it is important that the project is approved in a timely fashion.

There are also opportunities to build EPRs at other sites. By engineering the substructure to support the replicated above ground design, the UK EPR design therefore now has the potential to be replicated at further suitable licensed sites. Moorside in Cumbria has been identified as a potential site for further UK EPR project with proposals to include this as part of an integrated Clean Energy Hub.1

By providing the strategy and pipeline of projects for Net Zero and agreeing and demonstrating that supplier replication offers the best value for money, the greater certainty provides an opportunity to work with the supply chain to further enhance UK nuclear skills and capability given the time and investment required to do so. However, without a clear pipeline it is likely that

1 https://www.edfenergy.com/energy/nuclear-new-build-projects/sizewell-c/news-views/edf-joins-major-companies-unions- to-promote-moorside-clean-energy-hub GRJ0061

many jobs will be lost. Sizewell C’s proposed suppliers who have come together to form the SZC Consortium have estimated that around 10,000 permanent jobs are at risk if SZC were not to go ahead.2

According to a 2020 study undertaken by the CBI and Oxford Economics, every £1 spent on construction creates £2.92 of value to the UK economy3. Megaprojects like Sizewell C have a unique opportunity to use their purchasing power as a catalyst for change, but it is vital that the regulatory and political framework recognise that the concept of measuring value for money should take account of the broader social value created, rather than simply seeking lowest cost. Developing the UK’s USP in delivering net zero has the potential to positively impact our exporting capabilities, but if we do not capitalise on home-grown talent, we lose the ability to diversify and innovate. Industry needs a pipeline upon which it can rely and invest in its future.

Sizewell C is planning to invest in skills interventions to enhance UK capability and capacity. These will collectively provide a pipeline of young people, new entrants and talent into effective and innovative training interventions, which will lead to sustainable employment in new and emerging green jobs. They will include:

 A Jobs Service – to build a talent pool of local and UK people to fill the vacancies created by SZC supply chain  An Education Programme and a Skills Prospectus for Green Jobs – A comprehensive programme of Education and interventions designed to inspire young people and new entrants. Creating clear pathways into green jobs.  A Skills and Asset Enhancement Fund – to support FE and HE in delivering new and innovative curriculum that are essential in training for the Green Jobs of the future.  A Skills ‘Conveyor’ between our key projects – Providing apprenticeship and job progression opportunities through the integration of our projects and exploiting the ‘fleet effect’.  1500 new apprenticeships and Levy Transfer – A commitment to creating 1500 new SZC apprentices and to creating additional local apprentices through Levy Transfer into local supply chain companies  Skills Outreach Fund – increasing the number of “Work Ready” individuals within the region’s talent pool, delivering social value and bridging gaps into the labour market  Skills Bursaries – Supporting individuals to access employment pathways into green jobs by providing financial support and removing barriers to increase accessibility.  Local Supply Chain Skills Programme – increasing the competitiveness of regional businesses through supporting the up- skilling of their workers.  LEP, Regional Skills, Sector Deals and the Covid Recovery – Taking a leading role in the skills leadership of the region and integrating SZC Skills Strategies with the regional industrial strategy and key skills priorities  A Workforce Delivery Strategy (WDS) – A phased strategy for allocation and implementation of DCO commitments linked to yearly implementation plans with key external stakeholders & partners.

SZC will also build on the skills and education opportunities being delivered by HPC, these include:

 National College for Nuclear Hubs: , Cumbria. East in discussion and part of the SZC Consortium.  Welding Centres of Excellence: Somerset, West Midlands and Strathclyde. Weldability-SIF will open a new centre in East Anglia if Sizewell C goes ahead.4  Pipefitting Training: Strathclyde and Somerset (part of the welding centres).  Electrical Engineering Training: Yorkshire, Suffolk and Somerset.  Turbine and Steam Training Centre: Bedfordshire and Staffordshire.

2 https://www.sizewellcconsortium.com/news/jobsatrisk 3 https://www.cbi.org.uk/articles/fine-margins-delivering-financial-sustainability-in-uk-construction-bv/ 4 https://www.edfenergy.com/energy/nuclear-new-build-projects/sizewell-c/news-views/new-welding-centre-excellence- coming-east-england-sizewell-c GRJ0061

 Construction, Skills & Innovation Centre: Somerset. There is a plan to create a Suffolk Centre with the SZC civils alliance.  UK EPR Engineering Centre: Bristol & Somerset.

4. What measures should the Government take to ensure that its proposals to meet environmental targets do not by default lead to jobs in affected industries being exported? By building SZC, maintaining momentum from HPC, preserving and enhancing the UK’s nuclear skills base, the UK has an opportunity to create a national capability available to build and operate future new . If SZC does not proceed this UK capability will be reduced (or not in place) when future new nuclear projects come to the start of construction. These projects will then face the decision of incurring time and expense to re-building the UK supply chain (as HPC has done) or importing supply chain contracts; or may face no practical option but to import jobs because the UK capability is not available.

5. What risks are there to meeting the Government’s ambitions for green job creation in both the public and private sectors? What should the Government do to create the conditions to ensure its commitments are met by both sectors? A key aim for HMG should be to ensure UK capability is established early so that the multiple large future new projects have an established and proven UK supply chain and skills base to use. If this is not done there is a risk that it will be easier or necessary to import these jobs. Without a UK skills base in place or a clear plan to develop one it may be challenging for both sectors to ensure the level of ambition is met.

Further Education is under particular pressure as there is no revenue to develop the essential curriculum required to train for the green jobs of the future. Colleges cannot claim any reimbursement on development costs until the courses are actually delivered. This revenue gap has created significant issues at HPC. Providing more flexible forms of curriculum development funding that can be accessed 'up front' would be very helpful in ensuring that the right skills delivery platform is in place.

Increasing flexibility in how the Apprenticeship Levy can be spent or administered in the UK should also be considered. At the moment it only covers the cost of training - but if its use can be extended to inspire people into apprenticeships in the first place, keep them committed to their courses and into the development of new curriculum (point above) this will help in preparing and widening the pipeline of young people into green jobs.

Governments commitment continuing commitment to IOTs (institutes of technology) will be key in driving and delivering the skills needs at levels 4, 5 and 6. SZC and HPC are committed to being Anchor Employers to the IOTs in the West and East (if the current bid is successful). It is essential that Further and Higher Education are agile and able to adapt their curriculum to meet new and emerging needs. The long term and sustainable funding and development of IOTs, linked to the success of the T Level programme will be key to meeting the demands of the Green Jobs Agenda.

Without clear structures and requirements and alignment of these in the delivery of infrastructure by the public and private sectors there is a risk that commitments are not met as there may be disparity in approach. The recent publication of the Regulated Asset Base (RAB) consultation response for nuclear and commitment to engage in discussion over its implementation is welcomed. As part of the Net Zero Strategy, clearly defined funding models for the pipeline of technologies is required as this provides greater certainty for developers and private sector investors. Additional support may also be required in the development phase to bring projects to market given the time and cost of setting up certain programmes and the risks around bringing new unproven technologies to market. Within such funding models, requirements for supply chains and the appraisal of these should be aligned, for example Contracts for Difference (CfDs) have clear supply chain guidance and reporting requirements which are assessed. It should be ensured that such requirements are appraised in HMG Businesses Cases including Green Book appraisal to ensure alignment and mirrored in implementation and appraisal of other private sector funding models. For example, ensuring that mandatory requirements for UK content are aligned with how projects are viewed in terms of value. GRJ0061

6. Are the Government’s ambitions for green job creation in the public and private sectors sufficient for the scale of the challenges? What changes should be made? The Government’s proposals for creation of 2 million green jobs by 2030 are ambitious as is required to meet the challenge of delivering Net Zero by 2050 and meeting the carbon budgets along the way. Within the energy sector, National Grid have estimated the industry needs to recruit around 400,000 jobs by 2050.5 Key to creating and sustaining jobs will be ensuring that opportunities created are lasting so that they are viewed as viable career opportunities for those training for them, or those transitioning into them.

The SZC Project will support around 70,000 jobs up and down the country with around 40,000 jobs onsite in construction and 900 permanent jobs in the operations phase. Many of these roles are of value to projects in the general construction and energy sectors. SZC also has the potential for further uses as part of an energy hub to support further decarbonisation by utilising the excess low carbon heat produced that isn’t used in electricity generation. This heat could be used for example to increase the efficiency of electrolysis to produce green hydrogen amongst other possible applications. It is therefore important to consider how one form of green energy may enable opportunities for support and partnering with other forms of generation and businesses to create growth of skills.

7. How can the UK ensure jobs are created in areas most impacted by the transition to a low-carbon economy? N/A

8. What additional interventions should be undertaken to aid in a ‘just transition’? Key to a just transition will be ensuring that green jobs created are spread across the UK and align with the Government’s levelling up agenda. This is especially key as many jobs that may be affected by the transition to Net Zero e.g. oil and gas or manufacturing are often located in more deprived areas of the country.

As mentioned above SZC will support around 70,000 jobs up and down the country supporting levelling up whilst also supporting the local area and people of Suffolk. HPC has already had a large positive impact on the local area of Somerset spending around £2.2bn with companies in the South West against an initial target of £1.5bn in construction. The SZC Consortium has recently committed to investing around £2.5bn to the North of England creating around 13,000 jobs in a Memorandum of Understanding (MoU).6

Another key aspect in a just transition is the cost to consumers of the energy system. National Grid ESO have estimated that the cost to the energy system of reaching Net Zero could total around £3 trillion.7 To ensure this provides Value for Money to consumers, focus must be placed on the cost of the energy mix as a whole rather than just looking at individual technologies which may offer different services and options to the grid e.g. intermittent vs firm power options. Where private sector investment is to be leveraged, which will be needed to deliver the amount of the investment required, HMG should continue to explore innovative funding frameworks to deliver best value to consumers. It will unlikely be a one size fits all in this respect, thus options should remain open as new technologies come through to determine the best value option for consumers.

9. What impact can green jobs have on the wider UK economy? In establishing the new requirements and skills enhancements that are required to meet the green jobs of the present and the future, HPC has played a fundamental role in setting new standards and delivering curriculum that the rest of the industry can

5 Building the Net Zero Energy Workforce, National Grid, Jan 2020, https://www.nationalgrid.com/stories/journey-to-net- zero/net-zero-energy-workforce 6 https://www.sizewellcconsortium.com/news/northernpledge 7 https://www.nationalgrideso.com/news/analysing-costs-our-future-energy-scenarios GRJ0061

adopt. In some cases, such as steel fixing and cabling, there was a complete lack of adequate or common industry standards to follow.

Our supply chain, working in partnership with FE/HE Providers, Industry Training bodies, LEPs and industry networks have played a fundamental role in 'raising the bar' of UK skills through the development of entirely new UK standards and apprenticeships. To date these have included new standards and qualifications in welding, steel fixing, concreting, cabling, engineering supervision and engineering support. By solving skills issues for our own projects, we are committed to solving them for UK PLC through the effective transfer and dissemination of good practice to other projects and skills providers across the UK.

By creating green jobs in the UK and taking the lead in developing technologies such as the UK EPR, there is also potential growth of an export market for the related skills which would benefit the wider UK economy. The UK EPR could potentially be suitable for export to countries with a developed electricity grid, being a detailed design approved by ONR, and with a developing track record of successful construction. HPC has already acted as a springboard for many UK companies both in terms of supply chain and professional services to help increase their international footprint in the new nuclear sector. Examples of this include:  Jacobs have recently been selected by Moltex Energy to support its development of the Stable Salt Reactor (SSR) design;  Darchem Engineering employ more than 800 people in the UK from their bases in Teesside and Gloucester. They export 60% of their products, with 190 nuclear plants around the world containing Darchem products.  Doosan Babcock have developed ultrasonic non-destructive examination techniques in the nuclear industry, and have provided these services to leading utilities in countries such as Argentina, France, Russia, Sweden, Switzerland and the Ukraine;  Ovivo’s current overseas projects include providing equipment and solutions to Ningde nuclear power plant in in China, Olkiluoto 3 in Finland and Lungmen in Taiwan;  Flowserve products have been supplied to a number of recent nuclear power projects in Europe and southeast Asia;  Weir Group is currently supplying and maintaining a number of projects with critical safety and conventional plant on Pressurised Water Reactors (PWRs) and Boiling Water Reactors (BWRs) in Europe, South Korea, China, North America and elsewhere;  Nuvia, who employ around 1,000 at their seven UK sites, have had a number of overseas mandates, including the design and supply of equipment at Ignalina Nuclear Power Station in Lithuania; the establishment of a training centre at Bruce Power Station in Canada; the development of facilities at Kozloduy plant in Bulgaria and design safety, licensing and Civil support for the New Safe Confinement Shelter at Chernobyl.

Beyond the supply chain, professional services firms have also benefitted from increased export opportunities following their experience at HPC. For example:  Following their appointment to advise on HPC in 2006, Herbert Smith Freehills have advised the Jordan Atomic Energy Commission on a nuclear project in Jordan, the Regulation and Supervision Bureau (RSB, the energy regulator) on the Barakah project in Abu Dhabi, SNN (Nuclearelectrica) on Cernavoda in Romania, VAE on Visaginas in Lithuania, Atomstroyexport on Paks in Hungary a project in Finland, on nuclear opportunities in Poland and on various projects in France, India, Russia and Turkey;  Allen & Overy were appointed on Kozloduy 7 following their work for IUK on HPC.

There are also opportunities for collaboration with other countries within the UK – for example UK/US collaboration in relation to UK EPR fuel for Sizewell C, which could potentially be made at the Westinghouse factory in Preston, Lancashire (and potentially using existing UK uranium stocks re-processed by Urenco). As we explore green heat assisted hydrogen electrolysis and direct air capture there are opportunities for UK/US and other international collaborations in technology development. GRJ0061

10. What contribution can green jobs make to the UK’s economic recovery from Covid-19? The speed and size of action required to meet the UK’s upcoming carbon budgets and to be on track to hit Net Zero by 2050 means that green jobs can have a huge part to play in the economic recovery post Covid. Sizewell C estimates creating around 6,000 onsite jobs in the first 3 years of construction. With a timely positive decision on the project it could provide a large economic stimulus that supports the recovery. Many areas within Suffolk suffer from social and economic deprivation which will only have been exacerbated by the recent pandemic and reflected across the country. With a strong focus on local and regional UK jobs SZC is well placed to provide opportunities that have a lasting impact both locally and at a national level supporting the levelling up agenda and aiding the recovery.

11. How can the UK ensure high emissions are not locked-in when tackling unemployment? N/A

January 2021