How manufacturers can get a slice of the lucrative Hinkley Point C pie

Simon Howes, managing director at South West Manufacturing Advisory Service, explains how manufacturers can bid for lucrative contracts and get their slice of the Hinkley pie.

EDF Energy’s multi-billion-pound construction of two new nuclear reactors at Hinkley Point C (HPC) in Somerset, South West England, is well underway.

The HPC project has brought a welcome boost to the regional economy, with many of the local area firms – including manufacturers – winning millions in contracts to supply the site.

Even at this early stage in the project, more than £1.3bn in contracts have been awarded to businesses in the region, with lots more to come as the project grows over the coming years.

That said, it is not simply a case of registering your interest on the Hinkley Supply Chain website and waiting for the work to come flooding through.

And while there remain lots of opportunities for manufacturers to link up with HPC contractors at all levels of the supply chain, it is an increasingly crowded marketplace as firms clamour to grab a piece of the Hinkley pie.

So, what should manufacturers do to ensure they have the best possible chance of success when it comes to supplying one of Europe’s largest construction projects?

A good place to start is to investigate what’s known as the Hinkley Supply Chain Programme, delivered by the South West Manufacturing Advisory Service (SWMAS) in partnership with business support agencies the Somerset Chamber of Commerce and Business West.

SWMAS is a team of manufacturing and business development experts with a mission to help transform South West manufacturers into world-class businesses.

Using its knowledge and expertise, the SWMAS team works in partnership with ambitious manufacturers to help them improve their productivity, develop their capabilities, enter new markets and become leaders in their fields – including the potentially lucrative ‘New Nuclear’ sector.

This article first appeared in the June issue of The Manufacturer magazine. Click here to subscribe

Simon Howes, managing director at SWMAS, says: “We support programmes on behalf of government, local enterprise partnerships and other public sector funders, designing and delivering programmes to support manufacturers in a variety of ways, from targeting key supply chains like nuclear and offshore wind, to broader services, developing strategy and improving productivity.”

“In March 2017, with the new Hinkley Point C nuclear build on the doorstep, the Heart of the South West LEP [a business-led partnership between the private sector, local authorities, universities and colleges] and the West of England LEP allocated substantial funds to deliver the Hinkley Supply Chain Programme over a three-year period,” says Simon.

“Recently, the Welsh Government also invested in the programme, making it accessible to companies in South Wales, so its scope for working with local suppliers actually goes way beyond the confines of the South West,” he adds.

UK NUCLEAR ENERGY: FACTS & FIGURES

The UK currently has 15 reactors, producing just over 20% of the country’s electricity.

Construction has already started on a first wave of new nuclear plants, of which HPC is the prime example.

In the mid-1990s, nuclear power accounted for just over 25% of the UK’s total electricity generation. The recent fall can be attributed to the decommissioning of old plants and longer periods of maintenance needed for older facilities.

By 2035, nuclear energy is scheduled to provide a third of the UK’s total energy consumption.

EDF Energy owns and operates eight nuclear power stations in the UK, with a combined capacity of about 9GW.

All nuclear installations in the UK are overseen by the Office for Nuclear Regulation, which aims to provide “efficient and effective regulation of the nuclear industry, holding it to account on behalf of the public.”

Source: World-Nuclear.org/Office for Nuclear Regulation

“We’re also working with the wider cluster of Nuclear SW (a group of nuclear-related organisations), giving those companies who engage with us the opportunity to access further support from partners able to help them source a skilled local workforce or benefit from research and innovation, for example,” Simon continues.

When completed, HPC will produce almost four-times more electricity than the existing Hinkley Point B station’s two reactors.

Becoming ‘nuclear ready’

With 90 Tier 1 contractors each planning to deliver contracts worth hundreds of millions of pounds (each with multiple Tier 2 and 3 supply chain requirements), the opportunity for local and south west manufacturers to be suppliers is both large and complex.

Simon continues: “If manufacturers think they have a role to play at HPC we can help them to become ‘nuclear ready’ through intensive training, including our HPC Induction Programme.”

“Most suited to companies who are certain that supplying Hinkley Point C is right for them, this comprehensive programme was developed with the support of EDF Energy and is delivered by nuclear sector experts to help manufacturers implement and work to the strict nuclear standards demanded of HPC suppliers,” he adds.

Adopting best practice

As the first nuclear power station to be built in a generation, HPC also adopts the latest best practice techniques. Therefore, companies wishing to be involved need to understand many customer-specific requirements to support the successful delivery of the project.

“For ambitious, innovative companies who can help reduce costs and improve lead time and safety, the project offers significant contract opportunities throughout its 10-year construction and beyond,” says Simon.

“Each company has something unique to bring to the project, but needs to understand how to translate their existing capability to fit customer requirements.”

As you would expect, safety is the number one priority on site, and the expectations and standards required for achieving nuclear excellence are higher than ever on HPC.

“The HPC Supplier Induction Programme is specifically designed to help manufacturing companies bridge gaps in their knowledge and prepare to support their potential HPC customers, and so far, 80% of previous delegates are either bidding or have already won work at the site – what a tremendous result,” adds Simon.

Years of stability, platform for growth

Vessco Engineering, a Bridgend-based designer and manufacturer of stainless steel pressure vessels, columns and heat exchangers, recently won a Hinkley Point C contract, and it’s given the company a degree of economic stability for five years.

Its advice? You need to understand the culture of the nuclear sector to succeed, so seek the support and help for your business that can be provided by the Hinkley Supply Chain Programme.

Julian Vance-Daniel, managing director at Vessco, says: “We’re a Tier 2 supplier currently supplying two large pressure vessels for GE Power Systems. GE has the Tier 1 contract for the turbine hall at HPC.

“It is making the power generation part of the nuclear power station and we are making the pressure vessels for them. Probably the largest pressure vessels that have been made in this area for many decades.”

“So, for Vessco Engineering, the contract means stability for four to five years at an absolute minimum. We also expect it to be the platform for future growth in the nuclear industry,” adds Julian.

Put in the work, repeat the rewards

Julian believes its HPC experience will help the company grow in other industries as well. Customers in the oil and gas industry, for example, will notice Vessco’s achievements, placing it in a good position for years to come.

“The rewards are potentially huge,” he continues. “It will run into many, many millions of pounds. We will double or treble in size as a result of our work in the nuclear business.”

Nick Golding, Supply Chain Director at SWMAS, says: “Vessco is a perfect example of a manufacturing business that had the vision to see the potential for commercial success at HPC but, rather than sit back and wait for the work to come to them, has instead put in the hard work in terms of meeting the right people and getting itself ‘nuclear ready’ – just look at what the rewards are.”

“Not only has the business won a long-term contract that has given it stability for over five years, but winning this work puts Vessco in a great position to capitalise on the HPC project and potentially supply other nuclear projects across the UK,” says Nick.

“With market pressures and uncertainties all over the place manufacturing companies should be looking at Vessco’s success at supplying the nuclear industry and trying to follow its example.”