Speech by Vincent de Rivaz at the Third EDF Energy Supply Chain Event
Vincent de Rivaz
New Nuclear at Hinkley Point C – A Gathering Momentum
Opening address to the Third EDF Energy Supply Chain Event
th December 2011
I want to start by welcoming you all here today.
For the 350 companies in this room, our new nuclear build programme represents enormous economic potential.
As EDF Energy has progressed its plans, we have been encouraged as you in the supply chain have prepared for this project.
You have ramped up training so that your people have the right skills.
You have formed strategic partnerships with other companies.
And you have bid for contracts – and won them.
The progress you have made is demonstrated by the evolution of these Supplier Day events.
So today I’d like to talk about the challenging times we face as we come together here today...
What we have achieved so far…
What remains to be done…
And how we will manage this project in a timely and affordable manner. Vincent de Rivaz 13th December 2011 2
I will also make some key announcements that are a tangible demonstration that the project is moving forward.
But before that, I must pay tribute to some of our distinguished guests, who in their respective roles have had such a positive impact on the prospects for nuclear.
First, Lord Hutton
It was his stewardship of energy policy in the last Labour Government that brought nuclear back onto the agenda.
I am honoured and proud to have him here today, continuing to give his guidance and wisdom as Chair of the Nuclear Industry Association.
The broad consensus of politicians is key to our project.
We are fortunate today to also have two eminent Ministers from the Coalition Government, whose continued support for nuclear power is hugely welcome.
Lord Sassoon from the Treasury will talk shortly about the challenge to renew and reinvigorate UK infrastructure.
And later we will hear from the Minister for Energy, Charles Hendry, whose mastery of the brief and willingness to engage I have come to value greatly.
So thank you all for being here today.
At the end of 2011 we are marking a year of significant progress.
It has been achieved working side by side with our constructive and committed partner Centrica.
So I wanted to thank them for all their support, input and experience since we started together on this journey.
Economic Crisis and Fukushima
Now I’d like to turn to the challenging context of 2011.
We are in the middle of huge economic turbulence.
Here we face the prospect of years of austerity.
The Government is looking to the private sector for economic growth.
Our new build plan is a major part of these plans, something confirmed by the the publication of the National Infrastructure Plan in recent days. Vincent de Rivaz 13th December 2011 3
Separately, Fukushima earlier this year rightly raised challenging questions for the nuclear industry. And crucially has made absolutely clear the central role of the operator.
Immediately after Fukushima, Dr Mike Weightman, who will speak shortly, was asked by the Energy Secretary, Chris Huhne, to prepare a report into the safety of nuclear power stations in the UK.
He concluded that the UK’s existing nuclear power stations are safe.
As part of our response to ONR recommendations we are going to invest even more to make them even safer.
Equally, he concluded that we could move ahead with our new build plans.
He praised what we have been doing already to be open and transparent
And called for greater focus on this in the future.
We have already built further on our work in this area by:
- Launching an operational status website for our stations, updated daily.
- Initiating a forum of key stakeholders to understand their concerns and issues
- Running focus groups to hear the views of the general public.
- Developing a programme to open new visitor centres at our plants in 2012
- Launching a new website to inform and educate on energy issues
- Engaging with media and politicians at every level .
In my view, there is no doubt that Dr Weightman’s rigorous and evidence-based report helped underpin and strengthen the political consensus and support for nuclear, existing and new build.
Regarding new build, there is a clear message from Government that this project is needed to help kick-start the economy.
Year of progress
So I will say a little about the political and legislative progress made this year.
The Government’s message has been backed up by significant progress on the investment framework for new nuclear:
- DECC published its Electricity Market Reforms, encouraging low carbon generation whilst being fair to consumers. Vincent de Rivaz 13th December 2011 4
- The National Policy Statement, setting out the national need for new nuclear, was published and approved by Parliament.
- The Finance Act brought the Carbon Price Floor into law, which will underpin the cost of emitting carbon.
And whilst all of this has been happening nationally, our project has continued to progress on the ground.
In July West Somerset Council approved the planning application for Site Preparation Works which we expect to begin in the Spring.
And today I can announce that our preferred bidder for this is KIER/BAM.
This contract is worth in excess of £100m.
The work, which is subject to clearance of planning conditions, involves moving several million cubic metres of material.
In so doing we will respect our environmental obligations and the conditions of the planning consent.
On October 31st we submitted our Development Consent Order to the IPC, which has accepted it for examination on 24th November.
This was the culmination of 3 years hard work and consultation.
I am proud that we have listened to the local community, and brought them with us on our journey.
I am proud that we are placing sustainability at the heart of our project.
Shortly we will hear more on this from Alan McGoff from the Environment Agency.
The spirit of collaboration is important across the whole project.
So I am also proud that EDF Energy has been the lynchpin that has brought together so many successful companies in the spirit of collaboration.
This is further illustrated by the many French and British companies that are forming alliances as part of the revival of nuclear, embodied by our project.
Lloyds Register and APAVE have been appointed our third party inspection agency, with the ability to give us worldwide supply chain assurance.
Atkins and Assystem have come together to provide consultancy and engineering services for the development of nuclear power capability.
I know AREVA and Rolls-Royce have made significant progress in this area after having signed an MOU in March. Vincent de Rivaz 13th December 2011 5
And beyond this is the collaboration between Areva and EDF Energy, which has been ongoing for many years.
I would like to take the opportunity to welcome AREVA’s UK CEO Alain-Pierre Raynaud, who will speak later.
And I would like to make my second announcement of today. This is a new agreement with AREVA, also worth about 100 million euros.
This relates to the early design work for the main reactor systems for Hinkley Point C, which will allow AREVA to begin the work in January.
The agreement comes as AREVA has, in the last two weeks, started production of the heavy forgings required for critical reactor components following a contract signed between the companies in July.
On the subject of collaboration, I should mention the work between Government and industry to complete the Nuclear Advanced Manufacturing and Research Centre in Sheffield.
It is a tremendous contribution by the government, as well as others such as Rolls Royce and AREVA, in establishing an institution to support UK manufacturers and suppliers in the nuclear industry.
So at the end of 2011, the project is stronger.
There are tangible benefits.
Momentum is gathering pace.
What still needs to be done?
But there is still a lot to be done.
The next steps are clear.
1. I expect that we will receive from ONR the Interim Design Approval Certificate for the EPR tomorrow. I believe this is a major milestone in our journey.
I expect that simultaneously tomorrow we will have the Interim Statement of Design Acceptability from the Environment Agency.
2. We hope the ONR will issue our Nuclear Site Licence in the second half of 2012.
3. The IPC is beginning examination of our application so a recommendation can be made in one year, to be followed by a decision from the Secretary of State.
Alongside these next steps are those that relate to you; our supply chain partners. Vincent de Rivaz 13th December 2011 6
What must we do together?
It is important that you hear what next steps means from the ONR’s perspective.
It is just as important that you hear next steps from us.
So that there are no surprises.
So that we all have clear expectations.
So that together we have a co-ordinated plan.
Our engagement with you at an early stage, including at these supplier days, is to help you be partners in our success.
We are only as strong as our weakest link.
The more you know about the project and our expectations, the more accurately you can model the work.
The outcome will be less risk for you with no surprises for us
Now let me say a little about the affordability of the project.
Hinkley Point C will be a success only if it is affordable to investors and affordable to customers.
Let me say a word about why that is important.
It is because at the end of it all, we must always keep customers in mind.
Bills are a big issue for business and the public alike.
We have the cheapest standard residential bills among the big suppliers.
We have been able to do this because of investment in nuclear power.
We must help customers by keeping bills affordable.
New nuclear will help to do that if it is delivered affordably.
To illustrate my point, one key element of that affordability is productivity.
Productivity is a measurement of the effectiveness of management.
It is about management working better.
The fact is we have a productivity challenge. Vincent de Rivaz 13th December 2011 7
And the link between productivity and quality is clear.
Too often in the construction industry there have been entrenched positions.
Management on one side and unions on the other.
Therefore we want to create a new social covenant between us, our contractors and unions.
We want to have better training for our people and improved long term career opportunities for our workforce.
We must treat our people as skilled, valued workers, and create an environment in which they can be high performers meeting high standards.
That includes the 20,000 people who will work on the site.
These principles will help us to retain workers and give them pride in their work.
If we get it right, we will create the legacy of a highly skilled workforce.
To achieve that we will invest in training.
Skills and the Supply Chain
In January 2011, Chris Huhne and I launched the Energy Skills Centre at Bridgwater College.
It is part of a £6m commitment EDF Energy has made to local colleges
And my third announcement of today is a further £15m investment to extend EDF Energy’s partnership with Bridgwater College to establish a new World Class Training Centre.
Building on existing work with the college, this facility will address potential skills shortages in the energy sector.
Investing in skills is vital not only to new build but in providing a legacy for the country for generations to come.
So, in conclusion, all of us together are creating more than a nuclear power plant.
It is a project with a sustainable legacy – for skills, communities and the country.
And it also addresses one of the biggest issues of our age – climate change.
And let me make this clear: Vincent de Rivaz 13th December 2011 8
I have never wavered in this
EDF Energy has a strong and proud history of supporting climate change targets.
That’s why I am hopeful that the tireless progress made in the global climate change negotiations in Durban – and the efforts of Secretary of State Chris Huhne – can be built upon.
One thing we can be sure of:
Our project will be a major contribution to help the UK reach its carbon emission reduction targets.
Finally I’d like to finish by saying that you in the supply chain must continue to mobilise.
On skills, on bidding for contracts and on forming partnerships
I have set out here what still needs to be achieved to deliver new nuclear in a timely manner, and the help we need from you to do that.
And new nuclear will be on time.
We will deliver the energy that Britain needs, when the country needs it, in line with the National Policy Statement.
In doing so we will boost the economy.
We will be part of the Government’s ambition to rebalance the economy and build up manufacturing and construction.
We have clear signals that we must now act.
2012 will be another year of action.
Let’s make it a productive and successful year together.