Statement made at the Nuclear Development Programme
Vincent de Rivaz
Statement at the Nuclear Development Forum
27 October 2011
Secretary of State, this is an important moment.
We have achieved a lot this year - together. As we look back on 2011 we will see it as a significant year.
What we have done has been achieved collaboratively. We need to continue to work together.
It is my duty to update the NDF because it gathers all those who have a role to play.
I will say how we deliver and I will be specific on what we deliver. But first I want to emphasise why we do it.
We all do it because we have a great sense of purpose. Our project is uniquely vital because Britain needs new nuclear…
…not just to keep the lights on, keep prices affordable and reduce emissions.
But also for a legacy of growth for Britain.
Our motto in Somerset is: "A new power station is not the only thing we will create".
The project’s legacy will:
Restart Britain’s nuclear construction industry after a gap of nearly twenty years…
Generate billions of pounds for public finances through rates and taxes, and…billions of pounds for public finances through rates and taxes, and…
Create long term jobs and business opportunities
This project already employs hundreds of people - and that is just the beginning.
We will begin significant work to prepare the site in the spring. This will provide major contracts for local and national businesses as well as 500 jobs on site and many more in support. V de Rivaz 27 October 2011
The preparatory work will also unlock almost £30 million of mitigation and contributions to local authorities.
The big moment will be when we start construction of the plant itself.
By then we will have let contracts to hundreds of companies and will be mobilising thousands of people.
Then the project will boost the local economy by £100 million per year during construction and £40 million per year during operation.
All of this is doubly welcome in the current economic climate.
Having talked about this great legacy for Britain, I will talk about HOW we will do it.
The answer is: together.
Our company’s sign may hang over the gate at Hinkley Point C – but it is a project that will be delivered by everyone playing their part.
That is particularly true in this phase, leading first to our Final Investment Decision and second to the start of main construction.
To get there
we share a collective responsibility.
Government, industry, regulators, local authorities, trade unions, the supply chain, skills bodies, us and our partner Centrica - we must all deliver our part, so that ultimately, our shareholders can make the Final Investment Decision.
WHAT HAVE WE DONE?
That is how we do it. Now I will tell what we have done and what remains to be done.
First, what have we done so far.
I insist on what I said at the beginning - we have achieved a lot this year in a context which was made more challenging by the events at Fukushima. It is what I said on Monday in China in front of 500 people from the World Association of Nuclear Operators, where the British resilience and determination to go ahead with new nuclear was remarked upon.
1) The Government has set out how it is reforming the electricity market. The carbon price floor is in place and we are working with Government on the practical details of the Contracts for Difference. I know the determination of the Government to press ahead with that.
2) The National Policy Statement was set in stone in July by a Parliamentary vote of 267 to 14.
3) Shortly after, also in July, the local authorities in Somerset took a major decision to approve site preparation. I commend them on their farsighted decision.
4) We have consulted the local community, allowing us to finalise the 30,000-page planning application for the IPC. The application will be made before the end of October.
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5) We have made major progress on the Generic Design Assessment (GDA) as we enter its final stage.
6) And by the way, we have completed today the sale of our land at Wylfa to Horizon.
All of this – delivered by so many people working hard – would not have been possible without the positive conclusions of the comprehensive, transparent and evidence-based report of Dr Mike Weightman on the implications of the incident at Fukushima.
This report provided the sound basis for the safety authority to conclude that ‘UK nuclear facilities have no fundamental safety weaknesses’ and that there is no need to change the siting strategies for new nuclear.
WHAT REMAINS TO BE DONE?
Now, what remains to be done?
I can say head on: A lot.
So what is the timetable for the next steps?
I said to this Nuclear Development Forum in March, one week after Japan’s tsunami hit Fukushima: the events there would require us to adjust our timetable.
There has been a direct impact on the Government’s facilitative actions. The National Policy Statement was validated later than originally expected.
The Generic Design Assessment has been amended so that the lessons from Fukushima can be incorporated.
But there are other factors to take into account when we talk about an adjusted timetable.
Namely, the basic Flamanville design is being adapted to the UK context, taking account of the changes requested by the UK safety authority.
Furthermore - as I said we would in June - we are taking on board what we are learning from new build projects in France, China and Finland. And by the way I was at Taishan, China, on Sunday to witness, with pleasure, the lifting of the reactor dome of the first of two EPRs being built there by a Franco-Chinese joint venture of which EDF is a part.
But an adjusted timetable has never meant a suspended timetable.
The proof is what I have already said we have done and what we are now doing.
It needs to be said, very clearly, that there is good news: the project continues. It is on track. The next steps are clear:
1: We will still begin site preparation in spring.
2: We have applied for the Nuclear Site Licence, which deals with the site-specific issues. The ONR has a big role to play in this and we need to continue to be engaged with them and them with us, with appropriate resources.
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3: Soon the IPC will begin its assessment of our application. It will be a massive task - to assess the first new nuclear project in order to deliver authorisation in one year.
4: We are developing with our unions a new a deal on industrial relations in order to build an engaged and productive workforce. It will be a new covenant covering health and safety, quality, work continuity, skills development and career paths.
5. We continue to work to bring the public with us. We are absolutely aligned on the need for openness and transparency, which is one of the recommendations of Dr Weightman.
We have put online our energy challenges and the daily status of our plants.
We will harness the wider power of social media through forum groups.
My senior team and I have attended focus groups with the public and panels of experts and we continue to do so.
FINAL INVESTMENT DECISION
My major target for now is the Final Investment Decision at the end of next year.
To take that decision there are three key elements required, which are that:
transitional arrangements for the Contract for Difference are in place
arrangements for the funded decommissioning plan are set , and
we have a high level of confidence in the cost and timetable for construction. For this we continue to engage with the supply chain. We will have our third National Supplier Day in December.
Beyond the Final Investment Decision there will be the question of when we can start main construction, and beyond that, of when we can expect to complete construction.
For all that, my priority is to have a viable project. That means having confidence in the costs and construction timetable high enough that we can say we are ready.
This question of readiness is crucial.
I will not give a firm and final completion date at this stage. At the moment of the FID I expect to be able to do so. Our development consent application will include an indicative timetable. This provides the basis for our planning assessments. It will be published soon when the DCO application is validated by the IPC. In due course, we will move from an indicative timetable to a firm and final construction timetable. In doing so I will take account of readiness and also timeliness.
It is a fact that there is an economic slowdown. Growth in the UK is lower and so is electricity demand. In addition, the existing plants are performing well. We should remember the role that safe life
TIMELINESS It is a fact that there is an economic slowdown. Growth in the UK is lower and so is electricity demand. In addition, the existing plants are performing well. We should remember the role that safe life
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extension can have in helping to ease any energy gap. Today, we make an assumption of an average five years’ extension across the AGR fleet. New nuclear will be timely. We will deliver the energy that Britain needs from new nuclear, when the country needs it, in line with the National Policy Statement. For that to be the case, we absolutely must maintain determination and progress – and we are doing so.
In conclusion, what is important is:
We will start main construction when we are ready.
We will deliver it in a timely fashion - on time according to the construction timetable we will set when we begin – and in time according to Britain’s needs.
We will create a legacy of growth, which has already started and which will ramp up next year, which has already started and which will ramp up next year
And that all this depends on a collective responsibility that all of us to play our parts.
It is a huge responsibility. It is one we will deliver together.