17th December 2007

The Christmas Dinner at Boodles

This is fast becoming a tradition and what a great one it is. Thirty two of us sat down to dinner in the Boodles dining room overlooking St James - after a champagne welcome. Boodles as usual excelled themselves and produced a silver service meal where somehow we all managed to start eating more or less at the same time. Smoked Salmon was followed by Beef Wellington and a signature pear soufflé  … delicious. The wine by all accounts matched the food.

Then we were treated to a thought provoking after dinner speech by Andrew Alderson based on his book “Bankrolling Basra”, which was a fascinating story of the clash of cultures when the army tries its hand at building the peace, where it seems the only effective weapon was cash – and lots of it! After this coffee and port stimulated the conversation that went on late into the night. Many new connections were made and old ones reinforced by the end of the evening. The feedback from members and guests alike has all been great – roll on next year! We may need a bigger venue though the way things are going.

December 2007

The Nuclear Debate

Article by Tony Roulstone member of acumen7

Energy Choices

Building an Energy Policy

Almost 18 months after publishing the Energy Review of 2006, the Government has begun to act - publishing a Climate Change White Paper and concluding the nuclear consultation. This consultation provides the basis for the Government to decide whether (or not) nuclear should be part of the solution to the difficult and urgent issues of climate change and of energy security, identified in the Energy Review.

If as expected the Government decides to lift the moratorium on building nuclear power stations in the UK, some may consider that the problems of future energy supply, climate change and energy security are solved. That view is wrong. Restarting nuclear would be only the first in a series of choices the Government has to make to create a fully fledged energy policy for the 21st century.

Lifting the nuclear moratorium might be seen as avoiding defeat in the energy security and climate change battles, but what would be a strategy for victory?

Climate Change & Energy Security

The issues of climate change and energy security are not arcane and technical matters only of importance to utility companies and to energy regulators. They are vital both to our way of life and our future prosperity.

The Stern report made the economic case for international action on climate change now rather than waiting until the effects become critical or immediate. The cost of early action will be large but this would be dwarfed by the economic consequences of delaying action.

By acting positively now, the UK will both begin to solve its own energy problem and build credibility for international action that will be at the heart of any effective solution both for climate change and energy security.

Fast developing countries such as China and India have similar pressing issues of energy security and climate change.  The 2006 Energy Review demonstrated that the Government recognised the issues are urgent.

If the wrong energy choices are made in the UK, ‘energy poverty’ will increase further as electricity becomes more expensive reflecting a new scarcity of clean and secure energy.

Choices for Government

A positive outcome from the nuclear consultation would not be the end of the problem, merely the end of the beginning.  The Government has three major policy decisions to consider:

• How to encourage the private sector to invest in a way that addresses the Government’s energy security and climate change objectives?
• What shape should any future nuclear build programme have?
• How much of our future energy needs should be provided by clean electricity, including nuclear?

Investment depends on Changing the Market

The 2003 Energy Review provided the political case and the market support for subsidies for renewable energy through Renewable Obligation Certificates.

Renewables are currently only a minor part of the energy mix. The subsidies are having the expected effect with large amounts of renewable (mainly wind) energy generation being planned. The Government has set high targets for renewables – 20% by 2020. The cost of subsidy for renewables to achieve the targets set for 2020 have been estimated to rise to several billion pounds pa.

Both gas and clean coal can a positive effect on emissions but neither will deliver the Government’s objectives of both improved energy security and zero carbon emissions generation. It is simply not possible to continue to grow electricity use and cut carbon emission by the amounts required while burning gas or using existing clean coal technology.

Changes to the electricity market are needed that all capital-intensive power generating technologies – wind, wave, tidal as well as nuclear and carbon capture and storage (when this technology is shown to be feasible). It is not that subsidies are required but all of these technologies require investment on such a scale (£15bn for either Severn Barrage, or a replacement nuclear programme) that future electricity prices would need to be underpinned in some way to make their financing possible.

Economic instruments are required that both achieve the Government’s policy objectives and are efficient in maintaining low cost electricity for consumers. Carbon taxes or carbon pricing are the two main ways of change the behaviour of investors and operators of power plant.

Many variants are being considered including:

• Development of the current EU Emissions Trading Scheme (ETS) in its scope and duration with auctioning a much larger proportion of carbon credits;
• Long term carbon reduction contracts;
• Extend low carbon obligations to sources in addition to renewables;
• Cap and floor to carbon pricing with government-backed contracts for differences;
• Climate change levy relief for nuclear;
• Carbon related duty on all fuels.

What structure of new build programme?

A new nuclear programme could have many different structures, from all stations being run by one utility with one design, to an array of different utilities each with its own, with or without cross ownerships of current and new utility investors. 

The barriers to re-starting nuclear build are substantial. Only the largest utilities with the strongest balance sheets and who currently operate nuclear power stations will be in the first phase of UK development.

The Government’s projections for replacement nuclear see only 2 or 3 new stations built by 2025 when seven of British Energy’s reactors will have been closed. Therefore almost 20 years after taking action the UK instead of making progress with energy security and reducing carbon emissions, have regressed on both objectives.

It is estimated that a single nuclear station would have whole-life unit costs 18% higher than those which are part of a larger programme of identical reactors.

Life-time Costs of a Nuclear Station

The market could be left to decide the number of nuclear utilities with investors trading-off the economies of scale and generation risk. However, if the Government wished to ensure that competing designs and utilities exist in the UK, it may have to ensure that electricity prices are ~15% higher.

How large a Nuclear New Build Programme?

The Energy Review took as it basis, the replacement of the current nuclear element of electricity generation. Once the market conditions for investing in nuclear are established and new nuclear stations are being built, the Government can begin to make larger steps towards its policy objectives.

The questions are how quickly does the Government wish to move towards its  objectives in respect of overall energy supply and what means should it use?

The first target might be by 2025, the combination of an enlarged renewable sector, plus the rapid replacement of nuclear to put the UK in the position that 30+% of its electricity needs would be both low carbon and more secure.

Space heating is currently the largest consumer of energy in the UK.

The choice between the types of generation that could replace space heating with gas will depend on their comparative costs, ready availability and the resolution of the different issues affecting each technology:

• Wind: developing energy storage systems and showing that it is economic without the support of Renewable Obligation Certificates
• Nuclear: proving that it is economic and dependable without market price support, and
• CCS: demonstrating it is feasible and economic.

If electricity replaces 50% of the current space heating, the requirement for new clean electricity could be in excess of 30GWe, more than three times the current nuclear plus renewable supply. There are many possible outcomes from the competition between the clean energy technologies. As an example nuclear might grow to half of the total electricity supply, and by 2040 the installed nuclear capacity would have to rise to 60GWe.

Such a programme would provide dramatic challenges. Both the size of investment required (~£75bn over 30 years), and the nature of the changes in industry to build 2 stations each year, put in sharp focus the importance of the decisions that the Government will have to make beyond the end of the current nuclear consultation.

Energy Policy for 21st century

These choices would;

• Alter the structure of electricity trading;
• Define the scale of a nuclear new build programme, and
• Address the means of investment in clean energy for decades.

Together these decisions would form an UK energy strategy to for the 21st century, preserving our economic prospects, while enabling the UK to adapt to the needs a low carbon economy.

Reversing the nuclear moratorium may turns out to be the UK’s ‘Dunkirk moment’ in its energy policy when defeat is avoided. What has been outlined here for a more ambitious energy strategy could be viewed the ‘D day’ plan for opening a beach-head to victory in the war on climate change and the effort to ensure our energy security.

Tony Roulstone                                                                                               1 December 2007

October 2007

On 15th October acumen7 held one of its regular meetings at the Arup offices in Fitzroy Street, London. On the agenda was a talk entitled

"Sustainability in The Built Environment":-

The presentation was given by Peter Head, Director of Sustainability at Arup.

He introduced us to the issues of sustainability through his involvement with the Dong Tang eco-city project near Shanghai. China was leading the way in the “ecological age of industrial growth” and showing the way for a “global model of efficient economic growth”. The drivers were resource efficiency not resource consumption.

China is the largest producer of renewable technology in the world -viz CHP and Photovoltaic.

His presentation stimulated discussion which took up the remainder of the meeting. Suggestions for further reading – Climate Change in China on the web. REAP York University. Columbia University regarding sustainability in New York.

September 2007

September 16th/17th members of acumen7 met in Dorchester on Thames at the White Hart Inn for the first annual stakeholder meeting. This was an opportunity for all members to contribute to the future direction of acumen7. Dinner on Sunday was followed by a workshop style meeting on Monday ably facilitated by Leo Murray and the unanimous view was that much had been achieved and that more meetings of this sort should be incorporated in the next years meeting schedule.

June 2007

On the 22nd of June 2007 18 members and partners made their way to Hampton Court for the annual Summer social event. It was with some apprehension that most of us set out for an evening in the open air. Monsoon-like rain on the M4 did not encourage those of us approaching from the West. However, a watery blue sky appeared above South West London at about 6.30pm, nevertheless we were feeling slightly smug about booking an undercover picnic spot.

Apart from the gathering of the members, we were to enjoy a remarkable evening entertained by the Buena Vista Social Club – a loose association of mainly elderly Cubans who shot to fame a few years ago with a multimillion selling album.

After having our picnics, courtesy Waitrose Plc, which were voted to be just right for the circumstances – although the jury was still out on the wine – we made our way to the courtyard in the palace where the stage was set. A little bit of Cuban magic then transformed the Tudor quadrangle with a slightly damp feel into a bit of downtown Havana for a couple of hours. It wasn’t long before dancing in the aisles overcame the natural reserve of the audience. Verdict – a fun evening despite the weather.

July 2006

On the 10th July acumen7 organised a seminar to discuss the future for nuclear power in the UK and to consider how to deliver new power stations in time to avoid a power generation shortage as a result of the decommissioning programme. The following is a press release issued after the event which was well attended by key people in the industry.

Nuclear Power Equation

Modular Design + Off-site Construction  =  On-time Delivery

The acumen7 network of consultants, engineers and scientists mounted a fascinating “off the record” seminar on the eve of the publication of the Government’s energy review on “The Nuclear Power Equation” looking at the logistics, costs, benefits, and time lines for the prospective replacement of Britain’s ageing nuclear energy facilities.

The key question for the seminar was not “should we replace nuclear facilities” but ”could the time to build and commission nuclear power stations be halved by employing the latest thinking in modular design and off-site/factory construction methods?”

The panel of speakers was impressive, chaired by Philip Dewhurst, Chairman Nuclear Industry Association and the thought provoking evening was kicked off by Tony Roulstone, former MD of Rolls Royce Nuclear, and now an acumen7 member, who outlined the scale of the nuclear power replacement challenge facing the UK which, was first into nuclear power after the war and now the majority of these pioneering stations are reaching the end of their natural life.

                                                                                           What are the Pros and Cons?

Tony illustrated the size of the problem facing legislators and the private nuclear power industry in responding to public concerns. He saw the inhibitors as concerns about:

• Waste disposal;
• Capital cost uncertainties;
• Nuclear safety;
• Threat of terrorism.

All of these issues, though difficult, are being addressed so that the positive arguments for nuclear power can be heard.

On the other hand the drivers for the replacement of nuclear capability were:

• Carbon emissions
• Energy security, and
• Ability to deliver both stable & competitive electricity.

Have we a choice of who to use?

Whilst development of new nuclear plants had ceased in the UK in the early 1990’s with Sizewell B, other countries, notably the US, France & Canada had progressed to “Generation III” plants that now had a growing success story of build and operation. We will build any new plants using these designs that have the latest safety features and much lower cost of construction.

Westinghouse AP 1000

Clearly, a new generation plant is expensive – of the order of £1-2bn. Other countries are beginning to build new nuclear stations based on a commercial business model. Examples such as Finland, Far East or US show the way for the UK.

Tony argued the crucial issue for industry will be the speed of build. A two year delay in build could mean a 10% increase in cost for the rest of the station’s operating life.

For HMG, the issue will be replacing the current nuclear capacity within the timeframe of their retirement – largely by 2020.

The Challenge of Time

In the Government’s own estimates it will take 10 years from now to replace the first station through to completion of commissioning, and 20/25 years to replace the current capacity.

This clearly is too long with the accelerating ageing of nuclear capability, the challenge of decommissioning and the need to fill the generating gap. The acumen7 solution was to look radically at the construction methods, whichever supplier was favoured.

Modular Design and Off-site Construction

Tony Roulstone illustrated that with the techniques of modular design and off-site construction the total replacement program of all existing nuclear capacity could be halved from 25 years to 13, with a potential reduction in overall cost by:

• Effective and concurrent design
• Best practice methods from manufacturing ie supply chain, and
• Learning from major projects worldwide.

Case Studies

The seminar was then enlightened by a series of best practice case studies - led by Richard Ogden, Chairman of BuildOffsite and a director of acumen7. Offsite construction gives certainty in:

• Cost;
• Quality, leading to
• Snag free assembly, and
• Reliable completion times.

RAD Modular Assembly

Offsite build examples and module factories were graphically illustrated the practicability of the concept covering compressed construction times for nuclear stations through modularisation.

 Examples

• Martin Bruce of Westinghouse Electric Co. with their AP1000 reactor - a leading competitor for UK new build which has included modular concepts from the start of design.
• Collapsing time to build in radiation treatment units detailed by David Naylor of RAD Technology.
• “Just in time” Logistics for construction, Gary Sullivan of Wilson James and an acumen7 member looked at the Gatwick expansion and Heathrow Terminal 5 experience and Olympic Stadia planning.

Pier 6 Gatwick

Concluding Discussion

Seminar members were clearly impressed by the challenge and attracted by the acumen7 concept. It was recognised that to achieve this there had to be a major culture change throughout the whole process – from Government, through Nuclear watchdogs and regulators, the private sector, both design and build, and through to electricity supply.

Above all the theme has to be effective communication to assuage the very real public concern that exists and to achieve engagement and buy-in.

Also, communication is key to successful integration of the supply chain that is fundamental to delivering the extraordinary timescale compression possible with -                    

Modular Design + Offsite Construction

June 2006

Royal Ascot 2006

The members of acumen7 and their wives met for a day at the races on June 23rd and where better to do that than at Royal Ascot. We had all heard so much about the new development and we were not disappointed – it is a truly impressive building. After a traditional British picnic in the car park (where else?) we all made our way leisurely to see some of the racing. No record was kept of the betting success or otherwise but if anyone was in profit at the end of the day they were keeping quiet about it. It was a most enjoyable day everyone agreed and the search is on for an equally enjoyable day out next Summer.

April 2006

Microhydroelectric Project Visit

On Wednesday 19th April 2006 a group of acumen7 members and some guests assembled for dinner at the Mill at Rode in the village of Rode on the river Frome near Bath. By 8pm our full compliment of eleven sat down to an excellent meal in the main restaurant and this was enjoyed by all.

Although excellent food in congenial surroundings is always worth travelling for, there was a serious purpose for being where we were. The river Frome we discovered is the fastest flowing river in England and it is for this reason that there are old mills at regular intervals along its length. One of these is just downstream from the Mill at Rode in the village of Tellisford and here over the last few years something quite remarkable has happened. Under the ownership of Anthony Battersby,  the old mill is being transformed beyond its former glory to something fit for the 21st Century. He told us a little about it over dinner but as with many things seeing is believing.

After a good night’s rest and by all accounts very good breakfasts in various B&Bs in the area we all assembled in the car park of The George in Norton St Philip, before heading towards Tellisford. Anthony met us on site and provided us all with an enthusiastically commentated site visit and suddenly the reality of micro-hydroelectric power became real and tangible. Concrete was being poured in the generator room as we visited and a visit several hundred metres upstream to the weir and an explanation of what had been achieved to date gave us all food for thought and an admiration of Anthony’s tenacity to get this project completed.

Later back at the Mill at Rode in the meeting room and despite a technology glitch which proves that ‘a flat screen does not a conference room make’, Anthony gave us his presentation which took us from planning application through to approval to sell electricity into the national grid. This included a detailed explanation of the finances which put the whole project into perspective. Unsurprisingly, although Anthony is part of the Mendip Power Group, his project will be the first to go on line sometime in the next few months. His approach to the project has been unconstrained by unrealistic programming and it would be fair to say that financially he has taken the long term view.

Nevertheless given that there are potentially 30,000 plus sites of a similar nature in Britain and these sites are easily identifiable due to our predecessors search for water power in different eras, we all agreed that we ignore this resource at our peril. However, it is pretty clear that there are not 30,000 Anthony Battersbys out there waiting to repeat the Tellisford experience. Maybe acumen7 can help with this.

Following Anthony’s presentation we had the usual acumen7 meeting where we discussed in detail the up and coming seminar we are due to hold regarding nuclear power – this seemed quite appropriate, if slightly ironic, in the circumstances.

We all agreed that we would like to return to Tellisford, and take advantage of Anthony’s hospitality again, in about a year when the project should be complete. I think we all left considerably the wiser for what we had seen and some resolve to see if there was a commercial opportunity waiting to be harnessed along with the power of water.

With costs of between £200,000 and £600,000 per plant and an income of circa £30,000 per annum there could be an attractive business proposition with a reasonable rate of return while saving the planet at the same time. Must be worth a shot.

March 2006

On Wednesday March 22nd acumen7 members met at the IOD for the first time. This proved to be an excellent venue and we had a good group of members assembled by 4pm. The meeting welcomed John Setra who gave us an introduction to his primary project which is hoped to become a revolution in modular construction. PAD, as it is known, is a high tech volumetric housing system with the rooms being developed in conjunction with high quality manufacturers such as Sony, Siemens, Bose. Pohl etc., all of whom have a reputation for high manufacturing quality. The rooms can plug in and out and be sent away for refurbishment or updating to be immediately replaced by the latest and best solution for the owners’ current needs. See the website for more information at www.padlife.co.uk.

The meeting then discussed the issues surrounding the launch of this type of housing and some of the historical reasons why this was a tough market in the UK particularly. John demonstrated his enthusiasm and determination that should give this project the best chance of success. There had already been some significant achievements including the construction of the first prototype and the planned launch with a complete house at Grand Designs at ExCel in June (June 2nd to 4th).

Those of you who take the Times may have noticed the competition that has just been launched in conjunction with Times Newspapers where it will be possible to win a PAD house worth £100,000.   

The general view of the meeting was that there was definitely a market for the ‘right first time’ manufacturing approach, and PAD would have an opportunity to create this in a selected sector of the market. This approach had been pioneered in the car industry in recent years, but the building industry still lagged behind and quality was still poor in comparison to other industries.

February 2006

We are well into a New Year now and it is good to look back on the successes of the last year and to look forward to some of the plans for this year.

Olympics - up for discussion
The year 2005 ended on a high point with an excellent meeting at the Institution of Civil Engineers where the Olympics was the topic for discussion. We had an excellent presentation from Mark Bostock to most of the members and a good number of guests. It was a thought provoking afternoon and we all left feeling that we knew a little more of the inside story of the Olympics so far.

We all felt that we could return to this subject again in the near future and that there were opportunities for all members to get involved in the delivery process at some stage over the next few years. The meeting also concluded that at present the Olympics was missing a ‘champion’ - someone who was seen as personally responsible for the whole event. At present there were individuals responsible for specific areas of the event and the process leading up to the event. Previously the successful Olympics had all had a person whose job it was to look at the overall experience. We all agreed that a politician was unlikely to fulfil this role successfully.

acumen7 Christmas dinner
acumen7’s Christmas dinner was once again held at Boodles and was an enjoyable evening, where members and potential members rubbed shoulders over an excellent meal and other festive fare and a good night was had by all. The night time closure of the M4 was annoying for those who headed West after the meal but this at least avoided any chance of an anniversary visit to the hard shoulder at Heston by some.

Looking forward
The New Year so far has been characterised by most of the members being extremely busy, which has enabled some of the vital ‘housework’ to be done. This has resulted in the accounts for 2004/2005 being completed and the website has been given a spring clean. What we need now is plenty of newsworthy contributions from members so that this page can be updated regularly.

New Members
At the back end of last year we welcomed Charles Burch as a full member and he has already taken an active part in the network. In early 2006 we also welcomed Sean Westrope as a full member and we look forward to him taking part in the coming meetings.

…And finally

Away day
Clive Arup is arranging an away day to visit a micro-hydroelectric plant near Bath as the central part of a meeting to look at renewable energy, more on this shortly. Tony Roulstone and Simon Pratt are setting up a seminar which will probably be held in London on the subject of The Nuclear Industry, more on this also in the near future.

Members area
All being well our “members area” will be up and running shortly and information about these two events will be held there for all to access.

The “members area” will also include:

• members CVs in brief with Photo
• meeting dates in the form of an annual schedule
• a chat/discussion area which will enable topics of discussion to be aired regarding possible meetings etc.