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EDF admits Hinkley target for amount of work awarded to UK firms is 'ambitious'

EDF Energy has admitted a target that UK companies will win 57 per cent of the work on its £14bn Hinkley Point C project is “ambitious” but insisted it is achievable.

Managing director of nuclear new build Humphrey Cadoux-Hudson accepted that 57 per cent was “an ambitious target from the get-go”, but was one EDF “hopes to achieve”.

This was despite energy secretary Ed Davey telling the House of Commons in October that it had “negotiated a deal so that 57 per cent of the value will go to UK firms”.

A report earlier this year by Oxford Economics and Atkins, commissioned by the Department for Business, Innovation and Skills, claimed UK firms were currently only capable of winning 44 per cent of the construction works, but that could rise to 63 per cent with supply chain improvements and government intervention.

EDF opened its doors to UK firms at a Hinkley supply chain conference this week.

Asked by Construction News to clarify how much work was likely to go to UK firms, Mr Cadoux-Hudson insisted that if the UK “drives hard [it] can get to the top end of that range”, but stopped short of committing to the 57 per cent figure.

A solution to this could be Anglo-French partnerships, Mr Cadoux-Hudson added. He said the Laing O’Rourke/Bouygues joint venture, which was awarded the £2bn civils works on Hinkley, was an example of “the power of partnerships” and could help both UK and French companies.  

He added: “What we hope to achieve through partnerships and developments [is that the] UK supply chain will be stronger and I would hope [that as a result] of Hinkley Point C, it is more able to compete.”

Laing O’Rourke and Bouygues will carry out the main civils works onsite, with Costain covering marine works and a Kier-Bam joint venture undertaking earthworks.

Laing O’Rourke European hub chief executive Roger Robinson told Construction News that £200m-worth of deals from the £2bn contract were still to be let, including structural steel, walkways and embedment.

He said that in addition to its established supply chain, Laing O’Rourke would look at local suppliers around Somerset for these works. “Local is absolutely critical to us. In my experience, if you embrace the local community, they are very happy that you are there.”

The government last week gave further backing to the nuclear new-build industry and agreed in principle to provide a UK Guarantee for Horizon’s Wylfa power station in Anglesey, north Wales, as it has for Hinkley Point C.

Horizon chief operating officer Alan Raymant said the guarantee and Hinkley played an “important part” in strengthening the project’s future, but added that the scheme was in the very early stages.

On the projected investment value going into the UK, Horizon head of corporate affairs Leon Flexman said: “We estimate up to 60 per cent of the value of the first unit could flow to UK companies.

“This of course depends on having capable, competitive suppliers with the capacity to deliver on time.

“We have many strong companies based here, but there is work to do. It will need focus and collaboration between ourselves, the supply chain, industry bodies and local and national governments.”

Mr Cadoux-Hudson said that on EDF’s proposed second new-build nuclear plant in the UK, Sizewell C on the coast of Suffolk, there was potential for the 57 per cent figure to rise.

Over £28m in funding for nuclear:

Energy minister Michael Fallon announced a £28m money pot for research and development in nuclear energy as part of the Nuclear Industrial Strategy, launched in March 2013.

In total, £27.5m will be made available and broken down into five pools of funding:

  • £13m towards a competition, made jointly available by the Technology Strategy Board, the Department of Energy and Climate Change and the Nuclear Decommissioning Authority, for UK companies in “key technology areas” including construction and manufacturing (opening: 17 March 2014).
  • £8m to establish a Nuclear Fuel Centre of Excellence in conjunction with the University of Manchester.
  • £5m to kick-start the commissioning of the National Nuclear Laboratory’s “high activity cells” of their central laboratory.  
  • £1.5m investment in an early nuclear R&D programme for 2013/14, approved by DECC and awaiting further details.
  • £1m for this financial year for the third phase of the National Nuclear Users Facility, used to provide equipment during nuclear activities.

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