WIREDGOV

Government offers £80 million support to boost creation of UK civil nuclear supply chain

News Release issued by the COI News Distribution Service on 17 March 2010

Business Secretary Lord Mandelson today announced a package of measures to strengthen the UK’s civil nuclear supply chain, at the centre of which is an offer of a £80 million loan to propel a successful UK manufacturer to the forefront of world markets.

The decision to offer support to Sheffield Forgemasters is part of a strategic intervention to develop the nuclear supply chain able to meet the demand of the next generation of new nuclear power stations to be built in the UK and to compete for orders worldwide.

Today’s loan offer, together with participation in the project from Westinghouse, the nuclear power company, will enable Sheffield Forgemasters to build a major new manufacturing facility for ultra heavy forgings for civil nuclear power and other markets. This will make the company the second only in the world with necessary nuclear accreditation able to make the very largest forgings required to make the critical components required for the global civil nuclear industry.

Lord Mandelson said:

“This is not just help for one company. Today we’re announcing a willingness to invest that will make the UK a leading provider in the nuclear and the low carbon supply chain.

“Our high value manufacturing, knowledge base and highly skilled workforce mean with the right investment, like today’s, the UK can win a huge amount of business in this growth sector. This is Government and industry working together to build the success of British manufacturing. This will help to realise the potential of our industrial base to be world leading, export led, and creating jobs and value here at home.”

Today’s offer follows last year’s announcement of a Nuclear Advanced Manufacturing Research Centre in south Yorkshire, which will help UK civil nuclear manufactures develop world class manufacturing techniques and cost competitiveness, plus the creation of a Low Carbon Economic Area in civil nuclear in the North West and Yorkshire region. Together these will create an international region of excellence in the civil nuclear supply chain. Currently the UK is able to supply around 50 per cent of the plant and equipment for a new nuclear programme in the UK but with investment this could increase to 70 per cent.

Business Minister Pat McFadden said:

“We are a country that believes in making things and this investment could be very important for manufacturing in the UK. It will place Britain in a much stronger position to develop the nuclear supply chain which has benefits not just in the UK market but potentially in exports too as many countries build more nuclear power stations in the years to come. It is a strategic investment to help Britain build a lower carbon manufacturing economy.”

The Government has today also committed to co-fund the delivery of up to 1,000 apprenticeships per year in the nuclear energy sector.

Ed Miliband, Secretary of State for Energy and Climate Change said:

“Moving to a low carbon economy is crucial to tackling climate change and ensuring our energy security. And it’s a transition that provides opportunities to boost, jobs, skills and investment in Britain.

“The support we are providing for Sheffield Forgemasters, and our commitment to boosting apprenticeships in nuclear, show our determination to support the industries of the future.”

The offer announced today will enable Sheffield Forgemasters to build a 15,000 tonne press and finishing facility which can produce the ultra-large forgings such as reactor pressure vessels that are integral to modern civil nuclear reactors. Currently these can only be produced in Japan for the global market. This will create around 180 direct highly skilled jobs in the long term and many more during the construction phase. Significantly as the largest parts required by the civil nuclear industry can be purchased from the UK following this offer of a loan, the rest of the UK civil nuclear manufacturing industry also stands to gain as the global nuclear reactor design companies will start to look to the UK to purchase the other components for nuclear new build and re-fit for build in Europe and beyond. This stands to create thousands more jobs in the wider UK civil nuclear manufacturing industry.

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Notes to editors

1. Government and Sheffield Forgemasters International Limited have reached a conditional agreement in principle whereby Government will provide a £80m loan to the company for the building of a 15,000 tonne press and finishing workshop. This will be combined with private finance, including support from Westinghouse. Completion of the deal will be subject to due diligence, state aid clearance with the European Commission and satisfactory finalisation of funding arrangements with other third parties.

2. A report published by the Nuclear Industry Association estimates that the UK supply chain currently has the capability to supply around 50% of the plant and equipment for a new nuclear programme in the UK.. With some investment in facilities and training the UK could supply around 70% of the different components needed. New civil nuclear build as well as the construction of CCS power plants are going to be a growth area in the coming decades, as countries around the world look to provide low carbon energy. This investment will put the UK at the centre of the global supply chain.

3. The 15,000 tonne press and finishing workshop would enable Sheffield Forgemasters to produce the largest of the forgings needed for nuclear power stations as well as the largest components for other industries such as oil and gas, carbon capture and storage, marine and hydro-electric.

4. The new capability to produce ultra-heavy forgings for civil nuclear reactors will make Sheffield Forgemasters one of only two or three companies in the world capable of producing these forgings.

5. Currently one company has a near-monopoly on supply, and has a full order book for some years ahead. A new British company in this market will be good for British manufacturing and good for the civil nuclear market. It will create more flexibility to meet demand, and provide huge export growth potential for the UK.

6. Sheffield Forgemasters are a founder member of the Nuclear Advanced Manufacturing Centre (NAMRC), which was announced in the Low Carbon Industrial Strategy last year, and is being led by Sheffield and Manchester Universities. The Centre will help manufacturing companies swiftly acquire the skills and capability, and the accreditation required to supply components to the nuclear industry. Over time, its R&D activities will help increase reduce costs and increase the productivity of the UK supply chain.

7. Funding is coming from the £950 million Government's Strategic Investment Fund (SIF). It was created to invest in the UK's basic capabilities for industrial innovation, job creation and growth in a highly competitive global economy.

8. As part of our plans to deliver an additional 35,000 advanced and higher Apprenticeships to young adults aged 19 to 30, Government has committed to co-fund the delivery of up to 1,000 Apprenticeships per year in the Nuclear Energy sector. This is in line with the Cogent report Next Generation Skills for New Build Nuclear. There is an established Apprenticeship framework in Decommissioning, although some new higher level frameworks will be needed, and we expect to be able to provide pump-priming funding for those.

9. This commitment is contingent on employers themselves generating demand for skills in this area through Apprenticeships, developing the necessary infrastructure, including frameworks and qualifications, and the capacity of colleges, providers and universities to deliver the necessary training.

Contacts:

BIS Press Office
NDS.BIS@coi.gsi.gov.uk

Clare Keen
Phone: 020 7215 5971
Clare.Keen@bis.gsi.gov.uk