Megaprojects - KPMG

Lessons from
the UK’s nuclear
program
By Tim Stone and Dominic Holt, KPMG in the UK
As governments around the world
look to dramatically revise their
power generation mix, many are
closely watching the UK’s new
nuclear program to learn important lessons
and best practices.
The complexities are enormous. Putting
aside all of the construction and development
risks that come with building a highly
regulated and technical megaproject in
the energy sector (and those risks are
considerable on their own), the UK is still
left with a herculean – yet not insurmountable
– task if it hopes to entice private investors
into constructing and operating eight new
nuclear reactors over the next two decades.
An industry resurrected
The problem is that the UK has, for all intents
and purposes, been out of the new nuclear build
game for almost a quarter of a century (the last
time ground was broken for a reactor in the
UK was 1988). While there is a large body of
operational, maintenance and decommissioning
skill in the UK, one of the most obvious
repercussions of this long absence from the
sector is a lack of experienced professionals
capable of executing not just one, but eight
or more of these projects over the coming
years. And while the UK is feverishly trying
to up-skill workers to fill the looming gap, it
is fairly clear that some expertise will need to
be imported or externally recruited if targets
are to be met.
While talent can easily be imported, the
creation of a supportive regulatory and policy
environment for new nuclear development
is a decidedly home-grown proposition.
The reality is that nuclear builds transcend
the remit of any individual government
department or agency, and therefore requires
significant collaboration and a clear vision
in order to succeed in encouraging private
investors and developers to participate.
The authority to act
Better still would be the creation of a
single ‘Infrastructure Authority’ that could
maintain a unified and strategic plan for
the country and coordinate government
activities across the board. Had this been
in place in the UK some 10 years ago, it is
most likely that the Authority – if properly
empowered – would have noted the sea
change that was coming, been able to
respond appropriately by advocating for
new regulations and policies on a timely
basis, and been alive to the skills issue as
it emerged over time.
Without this – or the experience in
structuring and tendering new nuclear build
programs – the government has been forced
to develop a regulatory and policy regime
that would meet the needs of the nation
while also appealing to developers and
investors (in part by dramatically reducing
the wide array of perceived regulatory and
political risk).
66 | INSIGHT | Megaprojects