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How skills gaps could cripple new nuclear

With so much uncertainty surrounding the future of new nuclear, how can the industry plan for the skills these projects will require?

The country’s energy sector has been let off the hook by a relatively mild winter. In summer last year, National Grid announced that the spare capacity margin (the excess of available generation during peak demand) was only 1.2 per cent, the lowest in a decade.

Short-term measures such as paying high energy users to reduce consumption and electricity firms to keep capacity in reserve raised spare capacity to 5.1 per cent, at a cost of £36m.

Output growth total infrastructure vs electricity 2015-19_ONS and CPA

Output growth total infrastructure vs electricity 2015-19_ONS and CPA

Source: ONS and CPA

While these measures alleviated the pressures on the UK’s energy supply over the winter, it is difficult to shy away from the longer-term issue of energy supply security as coal-fired plants close and nuclear power stations reach the end of their generating life.

There is, theoretically, a pipeline of energy construction waiting in the wings. Based on the CPA’s forecast, energy is set to be the largest and fastest-growing infrastructure sub-sector, with output in 2019 forecast to be 76 per cent higher than in 2015.

Projects in the Round 3 Offshore Wind programme are now cleared to get under way, after the final investment decision was reached on Hornsea, Rampion and the Walney extension in 2015.

But the largest contribution to growth should come from nuclear energy. Decommissioning work will provide a flow of work even beyond 2015-19 as all of the UK’s nuclear power stations bar Sizewell B are taken out of service.

The decommissioning timescale has recently been stretched beyond the original plan of 2023 after EDF announced that four of its plants would remain in operation as far as 2030.

Hinkley uncertainty

However, it is nuclear new-build that has the potential to provide the largest impetus to the sector’s growth.

The biggest project factored into our forecast for the sector, and perhaps the one still shrouded in the most uncertainty due to continual delays in the final investment decision, is the £18bn Hinkley Point C.

There are serious questions as to whether we have sufficient skilled labour to deliver the rise in activity that’s expected as growth broadens beyond the traditional housing and commercial sectors. It becomes an even more pertinent question when applied to nuclear construction.

Sizewell B was the last nuclear power station to be built – a project that was completed more than 20 years ago – which means an inevitable skills gap in terms of both capacity and capability.

“Uncertainty around new nuclear projects means a reluctance to invest in the skills base”

The nuclear industry is acutely aware of these constraints and its skills strategy is based on a staggered timeline for building the five planned nuclear power stations to avoid overlaps or lengthy pauses in demand for critical resources.

This strategy was conceived soon after the nuclear new-build programme was given the go-ahead in 2008. At that time, Hinkley Point C was expected to see the first concrete poured in 2013, with enabling works beginning two or three years prior to that.

Fast-forward to 2016 and not one of the five new-build projects in the pipeline has received a final investment decision.

Skills investment hampered

This considerable uncertainty around the timing of projects – made worse by question marks over the final approvals – means a reluctance to invest in the skills base for a sector that requires long induction periods due to its specialised technical and safety requirements.

Meanwhile, the labour force left over from the last round of nuclear development 20 years ago is likely to be either approaching retirement, engaged in decommissioning work, working overseas or resettled in other industries – particularly those with the most transferrable skills, such as project managers.

In addition, graduates and school-leavers finalising the first steps in their careers may be tempted by other high-profile infrastructure projects that offer more certainty – Round 3 Offshore Wind, High Speed 2 or the Thames Tideway Tunnel spring to mind.

Even within nuclear there are other options that may be more tempting, such as the decommissioning programme or within the armed forces, for example.

Click on map to enlarge

Proportion of the GB construction workforce in 2015 by region teaser copy_ONS

Proportion of the GB construction workforce in 2015 by region teaser copy_ONS

Source: ONS

The Engineering Construction Industry Training Board estimates that 30,000 new jobs will be created over the course of the new-build programme.

Cogent Skills, which represents the science industries, says construction will account for an estimated 60 per cent of the workforce required, peaking at the equivalent of 14,000 workers in 2020/21, when work is scheduled to be under way simultaneously on Hinkley, Wylfa and Moorside.

The industry has attempted to combat the initial skills gap issue with training and recruitment programmes, a specific nuclear apprentice programme and government-funded training programmes on the engineering side.

However, even assuming the nuclear new-build programme runs to its already heavily revised schedule and there is a sustained, phased flow of work, there are still question marks over labour supply.

At its peak, the programme will account for just under 2 per cent of the total construction workforce in Great Britain, but the concentration of skills required is significant.

Work by the Nuclear Energy Skills Alliance has identified pinch-points in the available workforce, particularly scaffolders, throughout the programme. In addition, peak demand for concreters and steel fixers would represent 25 per cent of the current UK employment in these occupations.

Furthermore, with each of the new nuclear sites spread over a wide geography, these pinch-points are likely to intensify.

Wylfa worries

The same report highlights Horizon’s Wylfa plant as being a particular concern. Employment in construction is already significantly lower in Wales compared with other regions, but Anglesey and north Wales are further detached from the bulk of construction work that occurs in urban areas of south Wales.

For some roles at Wylfa, demand is forecast to stretch to as much as 50 per cent of the regional workforce.

This raises the question of worker mobility: will existing workers and new entrants move around from project to project, or will mobility be restricted by the trade-offs related to housing and family life?

“For some roles at Wylfa, demand will stretch to 50 per cent of the regional workforce”

The planned recruitment of new workers will clearly help alleviate some of the concern about capacity, but it doesn’t solve the issue of capability.

Cogent Skills has found that the nuclear workforce is typically older than the general workforce and early retirement is more common. This implies a greater loss of higher-level skillsets and managerial roles as experienced workers leave the industry over the next 20 years.

While this presents an opportunity to upskill parts of the current workforce and highlights potential career progression for new entrants, dwindling numbers of older workers leaves a jobs gap that will have to be filled on top of the new roles created by the new nuclear programme.

All of which brings an inherent circularity: the nuclear construction strategy is there, but with growing uncertainty around project start dates, there will naturally be a reluctance to invest in the labour programmes to deliver it.

A long-term plan is needed to shore up confidence and push the industry to recruit the nuclear new-build workforce while developing a strategy to tackle labour mobility and upskilling.

Rebecca Larkin is a senior economist at the Construction Products Association

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