Business Insight

Tuesday March 18 2014

Sellingthe new

Sellafi eld

Tomorrow’sworld againForum: pages 2-3

The renewable debatePages 10-14

Tuesday March 18 2014 | the times

Business Insight2

Inside £70bn challenge of changeSellafi eld’s exciting futurePage 4

Now let’s hear it for shale A matter of strong opinionPage 8

Where the renewables fi t inTalking heads in The Times ForumPages 10-11

The Times Business Insight reaches more senior business people in the North of England than any other quality newspaper. Indeed, with 184,000 readers* and reaching almost 20 per cent of the all c-suite executives**, there is no better place to be seen.*Source NRS July 2011 - June 2012 **Source BBS 2011

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Welcome ForumForum Regeneration

Sellafi eld is one of the most con-troversial locations in the UK. To some people, it is an environ-mental eyesore, an unwelcome reminder of the early nuclear age

when the race to develop nuclear weap-ons and nuclear power meant a huge amount of material was dumped care-lessly into storage facilities and lagoons.

To the people of West Cumbria, how-ever, it is the beating heart of the regional economy, providing tens of thousands of high-value jobs and supporting many more. And to others it is an example of Britain once again leading the world in a hugely challenging engineering discipline – nuclear decommissioning, an eminent-ly exportable skill that satisfi es demand across the globe and brings in valuable tax revenues for the Government.

It can be argued that without Sellafi eld there would be no UK nuclear industry, and the future of nuclear power genera-tion in the UK may yet depend on its expertise and hard-won experience. But this comes at a cost: around £1.7 billion is spent each year to clean up Britain’s nu-clear legacy, a fi gure that no doubt looms large on the Chancellor’s balance sheet.

In the run-up to the Budget, The Times Business Insight North travelled to West Cumbria to obtain an insider’s view of Sellafi eld from the site itself, and to bring together a panel of experts with their own ideas as to how the Government can support this vital strategic asset.

The Forum panel gathered in the training facility, where new recruits learn the safety procedures which ensure their survival in what is potentially one of the world’s most dangerous working environ-ments.

Much is made of Sellafi eld’s legacy, but Forum chairman Alasdair Nimmo want-ed to know what role the site would have to play in the UK’s energy future. It was a question that provided a perfect oppor-tunity for Tony Price, managing director

of Sellafi eld Ltd, to point out that Sella-fi eld was not just about legacy issues. It still plays an essential role in reprocess-ing nuclear fuel for the Magnox and ad-vanced gas-cooled reactors, but it is also important for building confi dence in the nuclear industry.

“Sellafi eld is the largest nuclear site in Europe,” Mr Price said, “one of the most complex in the world, and has the larg-est concentration of nuclear skills in one place, representing a vast resource of experience and expertise that has to be optimised for the future. The role of Sella-fi eld Ltd is to build credibility by demon-strating that we can deal safely with the nuclear legacy.”

Acknowledging the huge impact that Sellafi eld has in terms of the local econo-my and communities, Paul Walker, chief executive of Copeland Borough Council – which hosts the site – highlighted that the reputations of Sellafi eld and West Cumbria are inextricably linked. “When Sellafi eld is in the headlines, then Cum-bria is in the headlines,” he said.

“It is also a major player in the nuclear industry and the centre of plans to devel-op a centre of nuclear excellence. There is no other part of the nuclear industry that has got all the different aspects of the in-

dustry in one place, from new reactors to decommissioning.”

David Moore, chair of the Sellafi eld Stakeholder Group, added his thoughts. “We always said if you can’t clean up the past, nuclear does not have a future,” he said. “The good work going on here proves that clean-up can be done effi -ciently. We are also learning how to clean up the future reactors we will be building – but it is not cheap.”

As to why decommissioning is so dif-fi cult, why it takes so long and why is it so expensive, Mr Moore acknowledged that without someone having visited the site it was diffi cult to explain to them the size of the challenge being faced. He sug-gested that future understanding would be helped by fi nding a way to get back to showing people what happens on-site, perhaps through more visits and better educational resources.

Tony Price said that offering value for money was a key strategic priority for Sellafi eld Ltd, along with managing a safe and secure site and demonstrating pro-gress. “We spend a lot of taxpayers’ mon-ey,” he said, “£1.7 billion in the last year, but what makes this different is the level of uncertainty in some of the projects.

“In a conventional project, you go from concept to design to construction, then to commissioning and operation. With some of these projects, you cannot defi ne the full scope until you have almost fi n-ished the work – and many of these are one-offs, some of the most complex and challenging in the world. It is very dif-fi cult to put a cost and schedule against them.”

So what could be done to help people understand the monumental task of com-missioning? Tony Price didn’t want to turn Sellafi eld into a tourist attraction – security arrangements would not allow it anyway – but he agreed that the nuclear industry had to be as transparent as possi-ble. Adrian Thompson, chair of governors

Sellafi eld:Still set tobe part oftomorrow’snew worldTalking heads are agreed: decommissioning isa monumental task, but the challenge can powera new generation of skills, hears Chris Nelson

It’s Europe’s largestsuch facility with awealth of expertiseto be optimisedfor the future

Do they mean us?The recent BBC Two documentary Mind the Gap asserted that London generates more than a fi fth of Britain’s income and – while many of “the regions” struggle after the recession – the metropolis is pulling away from the rest of the country.

Of course we need reminding that economic rebalancing is important for the UK. But much of the problem can be attributed to perception.

It may sometimes seem as if the rest of the country, viewed from the South East, is like a dust-blown ghost townscape with balls of tumbleweed rolling down a boarded-up high street.

As this issue points out on page after page, the North is nothing like that. It, too, is resurgent. And impressively so.

Take Sellafi eld. With its original raison d’être gone, it could have crawled away and died. Instead, as our fi rst Forum (right) confi rms, it has become the beating heart of West Cumbria, booming with new projects, thousands of workers, and a job-rich future born of the great decommissioning challenge.

In the context of what’s fuelling this optimism, we also look at renewables generally (see our second Forum, on pages 10 and 11), and other unusual energy sources such as shale and even anaerobic digestion.

But it’s not just energy that can be renewable. Enterprising spirit is also in there with a shout. Up Where There Be Dragons, creative and resourceful people are working hard to correct that nationwide imbalance every day. Read about them here ... and welcome to their buoyant world.

Business Insightthe times | Tuesday March 18 2014 3

at West Lakes Academy, appreciated the difficulties in getting people beyond the North West coast to understand decom-missioning of nuclear facilities. “It has taken me a long time to understand the scale and scope of the operation,” he said, “and even members of the Government and MPs don’t always fully understand.”

Paul Walker never fails to be amazed by the level of knowledge among local

people – but he said there was an appe-tite to learn more, and that was about Sellafield showing a local face. One as-pect of this was the Albion Square pro-ject which would see Sellafield moving 1,000 office staff off-site into the centre of Whitehaven – a significant econom-ic development for the town, and one which brings the nuclear industry closer to people.

“Showing a different face is also Cope-land working with Sellafield to create a showpiece at the Beacon Museum in Whitehaven,” Mr Walker said, “to help people understand nuclear, from power generation to reprocessing and then the future plans, and using that as a place where people can learn more about en-ergy and nuclear.”

As head of stakeholder engagement and socio-economics for Nuclear Man-agement Partners, Gary McKeating spends a lot of his time telling people about the huge impact Sellafield and the nuclear industry has on West Cumbria. “The nuclear industry is one of the most open and transparent,” he said. “It is also a leap of faith – communicating the facts is challenging, but it is about past, present and future, and the Beacon will go some way to replacing the role that was played by the old Sellafield visitor centre.”

Chris Nattress, principal at Lakes Col-lege, suggested that Sellafield’s influence could go far beyond Cumbria. “As an important organisation in its own right,” he said, “Sellafield Ltd plays a leading role across the country to help promote STEM [science, technology, engineer-ing and mathematics] subjects, by dem-onstrating the creativity and innovation that is going on here.”

The discussion moved on to the huge challenge of sourcing the engineers re-quired within the UK, and bridging the gap between current engineering re-sources and the future needs of UK plc to support decommissioning as well as the nuclear renaissance. Adrian Thompson put the problem into perspective by quot-ing the figure of 100,000 new engineers which would be needed each year.

Organisations such as Sellafield Ltd would be competing for those engineers, and industry had to work in partnership with schools and colleges, starting at the youngest age possible, to encourage students to be interested in STEM sub-jects and to pursue those subjects right through their education.

Chris Nattress said the skills short-age was only going to get worse, unless there was long-term synchronisation of objectives between the many bodies in-volved in delivering STEM subjects. “We have to track that back to children who are four or five years old,” he said, “and make engineering something that is ex-citing, something that they want to do. That also means the Government provid-ing funding and resources for long-term planning.”

Mike Smith, managing director of Gen2, paid tribute to the huge effort made by Sellafield in recruiting appren-tices, putting graduates into schools to talk about engineering and sponsoring colleges. “But the reality is that it is not going to be enough,” he said. “We are fac-ing a skills tsunami. We need to use the good things happening in West Cumbria as an example for the rest of the country.”

Peter Woolaghan, a director at spe-cialist engineering company REACT, be-moaned the fact that industry struggles to make engineering exciting. “If you can’t make trains, planes and rockets exciting then there is something sadly wrong,” he noted. “Skills capability is at the heart of what makes our businesses successful. We all need to talk about how we got here – tell our stories to dissolve a lot of the mys-tery and inspire our young people.”

Mr Woolaghan also argued that small innovative-smart companies needed to get closer to the “problem face”. Sellafield Ltd is solving world-class problems in the field of decommissioning and more young people had to be engaged to apply their hugely creative problem-solving skills.

“They think about things differently,” he said, “and the way they will solve these problems is the foundation for future skills and expertise we can trade around the world.

“The UK is excellent at this complex stuff and the possibilities are phenomenal. I have guys on the roof of the reactor at Fukushima who are deploying world-leading technology that was developed at Cleator Moor right here in Cumbria.”

The panel agreed that the STEM sub-jects were vital to expanding the UK’s engineering skills base – but how could young people be encouraged to see them as the keys to a rewarding career? Tony Price first put the spotlight on the future for Sellafield, which is facing the largest transition in its history. For the past 50 years it has been primarily a reprocessing facility, but now it is entering a new era where it will host a fleet of high-hazard retrieval plants, waste retrieval plants, and create new waste storage and waste man-agement facilities.

“We need to make sure that Sellafield is perceived as the place to come,” he said. “Change it from being seen as a national liability to being seen as a national asset and the backbone of the nuclear industry in the future.”

Spending more money on science and maths teaching was only part of the solu-tion, according to Peter Woolaghan. “RE-ACT’s businesses have become successful by bringing bright young people into the right environment to allow their creativity to work,” he said, “and allowing them to make a difference.

“As a nation, we are the best at science and engineering and it is about rekindling something we have forgotten about. Mon-ey is important, but without that inspira-tion and connectivity with the real world, you will not get people interested in engi-neering.”

Mike Smith pointed out that it was not just engineers who were in short supply. There needed to be more investment by the Government in teachers for those STEM subjects.

The Forum panel also wanted to see the Government doing more to encourage investment in new nuclear power genera-tion in the UK as the most sustainable en-ergy source for the future. “The Govern-ment needs to spell out how important nuclear power is to the UK,” Tony Price said, “and the turmoil in other parts of the world underlines that.”

He went on to say that the future shape of the nuclear industry was very differ-ent from what was being dealt with now at Sellafield, with comprehensive safety cases and through-life plans. Emerging technologies were also hugely exciting.

“I was lucky enough to sit on a work-ing party looking at a fusion reactor,” he added, “and if you are not excited by that you won’t get excited by anything. Some of these infrastructure programmes really need to sit above politics – they are fun-damental to the future of the nation. The Government should be standing alongside ourselves and the supply chain in getting the message across.”

Gary McKeating agreed with this. “There is an urgency about where we are now,” he said, “and if we can show that at Sellafield we are delivering it will help the reputation of the whole nuclear industry.”

Finally, Alasdair Nimmo asked whether people really understood the credit that is owed to Cumbria – and Tony Price spoke for everyone around the table. “Probably not,” he said. “Cumbria and Sellafield has been and still is a world leader in nuclear technologies. There should be more ap-preciation of what has gone on here over the last 60 years.”

Speaking out (from left): Paul Walker, Chris Nattress, Adrian Thompson, Peter Woolaghan, Gary McKeating, Mike Smith, Alasdair Nimmo (chairman), David Moore and Tony Price

Paul Walker, chief executive, Copeland Borough Council

Peter Woolaghan, director, REACT Engineering

Mike Smith, managing director, Gen2

Gary McKeating, NuclearManagement Partners

Tony Price, managing director, Sellafield Ltd

Adrian Thompson, chair of governors, West Lakes Academy

David Moore, chair, West Cumbria Sites Stakeholder Group

Chris Nattress, principal, Lakes College

Members of the Forum panel

Tuesday March 18 2014 | the times

Business Insight4

Strategy

A young would-be engineer meets Tony Price, managing director of Sellafield Ltd

Sellafield from the air: ‘A chance to be the world leader again’

The name Sellafield conjures up an image of a bygone nuclear age, and grainy black-and-white pictures of the Queen opening the world’s first com-

mercial nuclear power plant at what was then called Calder Hall in 1956.

Power generation stopped a decade ago, however, and the nuclear reprocess-ing facilities that were once the UK’s biggest yen earner are also rapidly ap-proaching the end of their working lives. Strange then, on the face of it, that Sella-field Ltd’s managing director, Tony Price, should have launched a new strategy late last year entitled “Key to Britain’s Energy Future”.

Not strange according to Mr Price, though. “Sellafield and the west coast of Cumbria have always been at the heart of the UK’s energy industry,” he says, “and it has as significant a role to play today as it ever did. The Sellafield site is the focal point of the industry in the UK, and the eyes of the world are upon us every day. It is absolutely imperative that we get things right in order to build and maintain public confidence.

“You might expect to think of board-ed-up buildings and demolition when talking about Sellafield, but the truth is we have one of the largest construction sites, if not the largest, in the country. We are managing in the region of 500 pro-jects and the clean-up mission will last long enough to see even our most recent apprentices’ grandchildren through to retirement.”

That clean-up mission – costing, at the latest estimate, £70 billion – is forecast to span at least the next 100 years. But when you start to understand the com-plexities of the site and the facilities that need to be decommissioned, the cost and the schedule become easier to appreci-ate.

“Some of the legacy plants at Sellafield are so old that it is impossible to plan exactly how you’ll clean them up to any level of detail, until you actually start,” Mr Price says. “There isn’t a blueprint for the job or an off-the-shelf solution. Our legacy plants are unique and the inter-dependencies of the different buildings only add to the factor of difficulty.

more than half of the annual budget for the Department of Energy & Climate Change. “The level of funding we receive shows that the Government recognises the scale of the challenge we face and the importance of getting the job done,” Mr Price says.

“But with such committed funding comes, understandably, a level of scruti-ny. We must ensure that we spend every pound and penny of the budget as effi-ciently as we can, and that we squeeze every drop of value from it.

“Nuclear decommissioning is expen-sive, there is no getting away from that, and it’s particularly expensive when you try to do it on a site like this one, where the hazardous plants sit cheek-by-jowl and are so interlinked – but the fact that it’s expensive doesn’t mean we can’t pro-vide good value.”

In terms of public spending, the phrase “good value” doesn’t necessarily mean getting the job done on the cheap. In fact, the localism aspect of the small and medium-sized enterprise (SME) agenda suggests that regional growth and socio-economic stimulation from taxpayer spending is almost as important as find-ing the lowest quote.

In the past five years, Sellafield Ltd has spent over £1bn in the local supply chain, and the local community will benefit fur-ther later this year when 1,000 office staff move from the remote and isolated site into the centre of Whitehaven. The com-pany’s commercial team has also linked up with London 2012 organisers, to see if they can mirror in rural West Cumbria some of the strategies used to achieve Olympic-sized benefits across the capital.

There is still much work to do around public understanding, however. Sellafield Ltd sees the value in public engagement – and, while the pre-9/11 days of free ac-cess via a tour bus will never return, the site remains an open book. In terms of openness and transparency, information about the site is readily available; the

trouble is that the public is rarely willing to access it.

An independent stakeholder group regularly meets publicly, with bosses, including Tony Price, attending to an-swer questions and offer explanations to anyone who comes along. Unfortunately the attendees are almost exclusively local councillors and workforce repre-sentatives – the man or woman on the street seldom wanders in, even though they would be most welcome if they did. (There is even the offer of free tea and biscuits.)

Similarly, the 2,000 or more subscrib-ers to the fortnightly newsletter pro-duced by the company’s communica-tions team are mainly from within the industry. The newsletter carries updates, good and bad, but unless a snippet is picked up by a journalist it rarely reach-es public consciousness.

The company hopes that will change this summer when, jointly with Cope-land Borough Council, it launches a new visitor exhibition in the council-owned Beacon Museum on the picturesque harbour-side in Whitehaven.

There remain a few i’s to dot and t’s to cross, but the plan is for the inter- active exhibition to chart the past, pre-sent and future of nuclear in West Cum-bria, warts and all. The exhibition will take up space on just one floor, with the museum retaining its independence – but, in keeping with the “added value” ethos, Sellafield Ltd’s promised invest-ment in the Beacon was all that prevent-ed the council from closing it last year, as they battled to manage their own aus-terity cuts.

The future for the nuclear indus-try looks bright, with recent Ukrainian troubles again highlighting the need for the UK to find its own solutions to the looming energy crisis. And if Tony Price and his team can deliver the strategy as he has laid it out, Sellafield will play a key role in Britain’s energy future.

“But we are overcoming that challenge. It’s not easy, but with every solution that we find there is an opportunity to learn and develop, and then we can apply those enhanced capabilities to other challenges – not just at Sellafield, but all over the world. As an engineer, that kind of oppor-tunity excites me, and I know it excites the workforce.

“In many ways the next five years are the most important in the site’s history, as we move from a site that has been fo-cused on power generation and then re-processing, through the transition into a site where safe storage of nuclear waste is the raison d’être.

“The nuclear pioneers of the 1940s and 1950s developed these plants, and were world leaders in their day. My team at Sellafield Ltd in 2014 has the chance to be the world leader once again, but this time in terms of decommissioning and waste storage.”

The site strategy which Tony Price launched last year has three key focus ar-eas for the 11,000-plus workforce. Theme number one – safe, secure site steward-ship – is a prerequisite for a nuclear oper-ator. Sellafield is one of the safest sites in the world, in terms of both conventional and nuclear safety, and in recent years statistics show it is becoming safer. But the potential risk remains.

Site bosses have been maligned in the past because of the rate of progress made in decommissioning, so Tony Price’s sec-

ond theme – demonstrable progress – is clear and understandable.

The final focus area outlined in the strategy – return on investment – dem-onstrates that the significance of the taxpayer-funded £1.7bn annual bill for Sellafield is not lost on Mr Price or the rest of his executive team, particularly in such austere times.

That money, routed via the Nuclear Decommissioning Authority, makes up

The new Sellafield hosts 500 building projectsand 11,000 workers enjoying the prospect oflong-term employment for several generations in super-safe conditions, reports Chris Nelson

The £70bnchallengeof change

In many ways the next five years will be the most important in the site’s history... as we move through the transition

Business Insightthe times | Tuesday March 18 2014 5

New deal

Since starting to work at one of the world’s most complex nuclear decom-missioning sites a little over a year ago, global

nuclear giant Westinghouse has proved that a lot can be achieved in a short space of time.

Westinghouse is playing an important role in supporting Sellafield Ltd’s challenging Legacy Ponds and Silos high-hazard reduction programme as it strives towards major milestones to safely remove radioactive waste sludge and place it in an interim store.

Westinghouse is working under contract to Sellafield Ltd to “de-risk” facilities built during the 1950s and which, for decades, have been accumulating waste

products generated by the nuclear facility. With a demonstrable track record in this type of risk reduction, Westinghouse is har-nessing international experience alongside innovative engineering and technical solutions to help support the acceleration of the decontamination, decommis-sioning, remediation and waste management programme.

“Working as a supplier to Sellafield Ltd, we’re helping them to deliver hazard and risk reduc-tion on site,” says Dave Unsworth, managing director of Westing-house in the UK. “We’ve ramped up our presence on the Sellafield site and brought in expertise from across the globe, in an effort to help them speed up retrieval of waste from the legacy pond and

validate potential interim storage solutions, so it can be safely removed and stored.”

Direct experience of imple-menting a system to recover fuel and associated waste from “pond to pad” is aiding development of other bespoke solutions for possible use at Sellafield Legacy Ponds and Silos areas.

“Westinghouse is providing a remote-controlled Spent Fuel Retrievals System,” Mr Unsworth says, “which provides a safe way for operators to work in a high-radiation environment, allowing minimal human intervention.”

Westinghouse has a broad scope of capabilities which it believes it can bring to the long-term Sellafield decommissioning project. “Working in difficult

environments is one of our core competences,” Dave Unsworth says, “and we look forward to opportunities to bring additional solutions to Sellafield. We believe we can bring waste management and processing solutions, effluent treatment capabilities and special-ised equipment design expertise.

“The scale of the challenge at Sellafield should not be under-estimated, and we believe that the contribution Westinghouse is making adds to the significant capabilities already in place. Working together with Sellafield Ltd and key local supply chain companies, we believe we can deliver the best solutions, faster and more cost-efficiently to ensure that, step-by-step, the challenge can be met.”

Westinghouse seeseconomic boom aheadas the foundation is built on new reactors, writes Chris Nelson

For a global company, Westing-house has a refreshingly local approach to getting a job done. The company’s stated ambitions to play a leading role in the fu-

ture development of the UK nuclear in-dustry could lead to the creation of tens of thousands of jobs, a skilled workforce and a boom in business for suppliers.

Westinghouse’s commitment to the UK – and to West Cumbria in particular – was underlined earlier this year when a major deal was agreed to move ahead with plans to build three new nuclear reactors in the region. The £102 million deal saw Westinghouse’s parent com-pany, Toshiba, agree in principle to take a 60 per cent share in the NuGenera-tion Limited Moorside Project, where a trio of Westinghouse AP1000® reactors will be built in partnership with French multinational GDF SUEZ.

The first unit is expected to be online in 2024 – and, when fully operational, the Moorside site will deliver around 7 per cent of the UK’s electricity require-ments. This project, alongside West-inghouse’s pioneering work as a part-ner in the Sellafield decommissioning programme, will ensure the company’s presence in Cumbria for many decades to come.

“Construction of the new reactors will significantly boost the local, regional and

national economies,” says Dave Uns- worth, managing director for Westing-house in the UK, “with a large portion of the project open to UK supply chains.”

Already, interest in the Moorside pro-ject is significant. On March 11, Westing-house hosted an industry event attended by around 200 people from UK supply chain companies. They came to hear the Nuclear Industry Association chair, Lord Hutton, and representatives from the Toshiba Westinghouse UK team, talk about opportunities for the UK and the local supply chain to support the AP1000 new plant build programme.

“Our ‘Buy Where We Build’ strategy means that around 60 per cent of the project will be accessible to the UK,” Mr Unsworth says. “So far, more than 500 suppliers have registered their interest in working with us.”

Simon Marshall, UK business and project development director at Westing-house, reinforces this. “Our approach is to work in partnership with our suppliers, emphasising competitiveness, efficiency, localisation and innovation,” he says.

“We recognise that small and medium-sized businesses [SMEs] have the poten-tial to play a key role in achieving eco-nomic value in the nuclear supply chain, and they need a climate in which they have the confidence to invest and the ability to develop the necessary skills to work to the required quality standards.”

Westinghouse will also build a facility to construct large modules, which could provide components from the UK and potentially for export to the rest of Eu-rope. The AP1000 reactor is a modular design that makes best use of modern construction techniques, allowing tasks traditionally performed in sequence to

The AP1000 under construction at Sanmen, China (COURTESY OF SANMEN NUCLEAR POWER COMPANY LTD)

Triple confidence votein great nuclear future

be completed in parallel – an approach which reduces the time it takes to build, and also reduces the cost and the risk.

“The project will provide thousands of UK jobs over the construction period for the three reactors,” Mr Marshall says, “including peak on-site employment of more than 6,000 people, drawing on the established nuclear skills base in the North West of England.

“These highly skilled jobs will be in construction, manufacturing and en-gineering. The Moorside project could provide opportunities for apprentice-ships and give young people the chance to develop a career in a growing sec-tor.” The project will also secure jobs at

Westinghouse’s Springfields nuclear fuel manufacturing facility, where fuel for the AP1000 in the UK and Europe will be made.

“We believe our ‘Buy Where We Build’ supply chain strategy is the best solution for our business and the communities where we do business,” Simon Marshall says. “And by creating highly skilled jobs, we are also demonstrating world-leading best practice for employment, develop-ment and learning in the nuclear indus-try.

“We have business plans that span many decades and we’re focusing on the long-term future of our business in West Cumbria.”

Westinghouse decommissioning capabilities�� Solutions for retrieving, sorting and segmenting miscellaneous wastes in remote, radioactive, underwater conditions.�� Specialised, bespoke solutions for one-of-a-kind problems in radio-active environments.�� Fit-for-purpose tooling for manu-ally moving, cutting and retrieving miscellaneous wastes from legacy ponds.�� Processing and management of low-level and intermediate-level radioactive wastes including vol-ume reduction, encapsulation and packaging technologies.�� Treatment of radioactive liquid effluents.�� Specialised inspection technolo-gies for complex geometries in remote, radioactive, underwater conditions.�� Transforming culture and behav-iours, and continuous improve-ment of processes and perfor-mance.

Helping to deliver hazard reduction

Tuesday March 18 2014 | the times

Business Insight6

The drive to get the best per-formance from new facilities, to maximise availability of ex-isting plant and production equipment, and to cut energy

costs are three customer priorities pow-ering year-on-year growth and expan-sion plans for electrical safety specialists Bender UK.

Bender UK has consistently expanded its markets for tailored applications of the technology emerging from its parent company in Germany, where research and development teams produce world-beating products to protect systems which simply cannot afford unplanned shutdowns or power failures.

Its residual current monitoring equip-ment is widely used to safeguard electri-cal infrastructure and supply systems in the offshore, renewable energy, power distribution, rail, marine, processing and industrial sectors. Bender has also devel-oped a leading expertise in power system security for specialist sectors such as healthcare and data processing.

The company, based in Ulverston in south Cumbria, has expanded its markets through the provision of power quality management equipment to cut energy costs and provide more resilience for

power supplies. Bender UK is also rapidly gaining market share for the turnkey in-stallation of operating theatres for new-build and refurbishment projects, along with the supply and installation of high-performance surgical lighting.

On a recent visit to the Cumbrian headquarters, chief executive of the Bender Group in Germany, Dr Dirk Pieler, discussed expansion plans with UK managing director Steve Mason and also talked about the inward investment which will create new jobs and business opportunities.

“Bender UK has enjoyed outstand-ing success,” Dr Pieler says, “and I am working closely with Steve Mason on planning to ensure that the company has the resources to continue to expand, in-cluding the expansion of our premises in Ulverston.

“That will mean more jobs for local people in Cumbria, but will also include recruiting in other parts of the UK to strengthen our service network, so that we can continue to provide the highest levels of support which our customers ex-pect from Bender, alongside cutting-edge electrical safety technology.”

Bender UK is now one of the key op-erations outside Germany. Dr Pieler has

huge respect for the dedication of the Cumbrian workforce and believes that to be one of the reasons why companies choose to locate in the area. “South Cum-bria has its challenges because of the lo-cal transport infrastructure,” he says, “but it also offers quite beautiful surroundings and an excellent quality of life.

“People who are recruited from this area are very reluctant to leave it, while people who come to the area and learn to love it are also likely to stay. That helps to create a very loyal and stable workforce, which is important for a highly technical company like ours.

“We invest a considerable amount in training and development of the people we employ, and it is important to be able to reap the benefits of that investment through their longer-term commitment to the company.”

Dr Pieler also recognises the advan-tages of Ulverston being in proximity to BAE Systems in Barrow-in-Furness, and to companies involved in offshore wind energy and the nuclear and renewables sectors on West Cumbria’s Energy Coast. The central location of Cumbria means it can also support both the North Sea oil and gas companies and investment in medical facilities in the South of England

Technology

For both offshore and onshore applications, Bender offers extensive know-how and solu-tions for every aspect

of resilient power supplies for maritime applications – from ships and submarines in the civilian and military sectors, to offshore facilities and crane and container systems.

Bender UK has long been an approved supplier to the BAE Systems shipyard at Barrow-in-Furness in Cumbria, and protects electrical systems on the Royal Navy’s Astute-class nuclear-powered attack submarines manufactured there.

The company’s systems are also specified on the Royal Navy’s new aircraft carri-ers, HMS Queen Elizabeth and HMS Prince of Wales, currently being assembled at Rosyth in Fife. Ministry of Defence officials describe the 65,000-tonne ships as “the most complex warships ever built in the UK”. Bender products meet the require-ments of NATO, as well as those of many other countries around the world.

A key capability offered by Bender is equipment that can effectively monitor the insula-tion performance of systems even when they are switched off and using no power.

This capability can play a decisive role in ensuring availability of crane systems, lifeboat winches, fire-fighting pumps and many other types of equipment which are switched on only occasionally or in an emergency, but which need to function without problems whenever they are required.

Bender offline systems provide constant monitoring of equipment and signal insu-lation faults at an early stage, to protect lives and equipment in critical situations.

The refurbishment and upgrad-ing of operating theatres in NHS and private hospital facilities is proving a significant growth area for Bender UK,

which now offers a totally integrated turnkey service.

Bender can provide proven project management capability and experi-ence with the supply and installation of advanced laminar clean air flow canopies, service pendants and hygienic touchscreen control panels. The company is also the main UK supplier for Steris high-performance LED (light-emitting diode) surgical lighting.

This capability perfectly complements Bender UK’s expertise in the supply, installation and commissioning of life-saving isolated power supplies (IPS) and uninterruptible power supplies (UPS), to ensure the safety and security of electri-cal networks and to protect patients and staff in healthcare facilities.

Bender UK is also able to demonstrate to customers the advantages of provid-ing full service support throughout the life of the equipment or installation, to ensure maximum return on the invest-ment in terms of availability and safe performance.

“Clean air flow canopies are now recognised as a key element in reducing infection from surgical procedures and ensuring speedy recovery for patients,”

says Bender UK managing director Steve Mason.

“In a recent installation at a new-build private facility in the North West, we worked with the world-leading clean air specialist ADMECO to overcome a significant challenge because of the restricted space, and the installation of their advanced performance canopy enabled the operating theatre to optimise clean air flow to achieve the highest clinical standards.”

ADMECO canopies are characterised by high performance and low noise levels from the integral fans, and the model chosen incorporated a media bridge which replaced conventional services pendants. Bender UK consulted with the main construction contractor and with the facility’s owners in the choice of equipment, arranging for partners to visit medical facilities in France to see Steris systems installed and operating, before the final specification was agreed.

Business growth powersBender expansion plans

Making life-saving advancesin hospital operating theatres

The advanced ADMECO canopy installed and commissioned by Bender UK optimises clean air flow to achieve the highest clinical standards

HMS Queen Elizabeth

All systems are ‘go’ evenwhen they’re switched off

– two important areas of business for the company.

Bender is currently introducing new in-novative products, including the most ad-vanced insulation monitoring devices and power quality analysers, and Dr Pieler is confident that the UK operation will suc-cessfully introduce such innovations to ex-isting and new customers – which in turn will drive further growth. �� For more information on Bender UK capabilities and products, visit www.bender-uk.com

Promising more jobs:Dr Dirk Pieler, chief executive of the Bender Group based in Germany

the times | Tuesday March 18 2014 7

National Nuclear Laboratory RadBall radiation detection device in action

Growing the Energy Supply ChainWest Cumbria is poised to become an even greater place to do

business by capitalising on a potential £90 billion worth of investment

in the nuclear industry and seizing new opportunities in renewable

technologies. A global reputation in energy, in particular the nuclear

sector, combined with world-class research facilities, a manufacturing

capability second to none and abundant natural resources make the

West Cumbrian investment proposition compelling.

Britain’s Energy Coast is committed to helping the West Cumbria supply

chain to grow and prosper. We provide a comprehensive package of

support to companies already based in the region and those looking to

invest or relocate. From access to funding, expert advice and high quality

property and development sites, including our own Westlakes Science &

Technology Park, through to integration into a local business landscape

with a rich heritage of innovation, we are here to help.

To learn more about our work visit

www.britainsenergycoast.co.uk or call 01946 595285

ENERGY INNOVATIONBUSINESS SUPPORT & PROJECTS PROPERTY & MANAGED WORKSPACE

Picture courtesy of the National Nuclear Laboratory

Acting Locally, Thinking GloballyTM

Tuesday March 18 2014 | the times

Business Insight8

Opinion

At a time defined by the South East, by the City of London and by Whitehall over-spend-ing, it is easy to hark back to the days when industry in the

North West of England was flourishing. Around 200 years ago, the spinning mills of Lancashire were supplying the major-ity of the world’s cotton, Northwich in Cheshire was producing a million tons of salt per year and the world’s first intercity rail link was being constructed not in the South, but between Liverpool and Man-chester.

Fuelled by a proud coal industry, our region epitomised business innovation and productivity: jobs, creativity and wealth flowed from the North.

Fast-forward to 2014 and who would have thought that in the face of high un-employment, stagnant house prices and limited infrastructure funding, the region would once again be a future frontier for industrial growth and prosperity in the global economy?

In recent years, growth opportuni-ties have been limited. A development has occurred, however, that could create thousands of jobs, generate sustainable economic growth and boost regional and national revenues for much-needed in-vestment in our public services. And in order for these benefits to be fully real-ised, we all need to put our support be-hind this new resource: natural gas from shale.

According to British geologists, shale gas is more plentiful in Lancashire than in any other part of the UK – but trying to make sense of the many conflicting messages can be a difficult task. That is why we set up the North West Energy Task Force (NWETF), a coalition of in-dustry and regional job creators, busi-ness experts and leading economists. The NWETF aims to bring a sense of understanding on how the responsible development of natural gas from shale can best benefit our region economically, while also strengthening national energy security.

More jobsA TUC report published this year shows that the current UK economic recovery

has failed to reach our region. In sharp contrast to London and the South East, the likelihood of someone finding a job in the North West has fallen by 0.7 per cent since 2010.

A thriving onshore natural gas indus-try in the North West could therefore bring significant job opportunities to local communities, as roles open up for construction workers, truck drivers, ce-ment manufacturers, water treatment ex-perts and all the jobs which service these trades..

Numbers vary, but most economic ex-perts believe that natural gas from shale will create thousands of jobs. The Insti-tute of Directors states that shale gas production could potentially create up to 74,000 much-needed jobs – a boost to our national and local labour markets which cannot be overlooked.

Regional growthOver the last decade, successful Western economies such as Germany have been those that have rebalanced themselves away from central Government spend-ing and over-reliance on the banking and services sectors. In order to create a stable and functioning system, it is important that we develop a country-wide, competi-tive private sector capable of reacting to internal and external economic shocks.

Evidence from abroad suggests that North West shale exploration could be vital in achieving this aim, as it will at-tract high levels of inward investment and boost the manufacturing sector in our re-gion.

If business rates similar to those applied to renewable energy schemes were ap-

plied to shale, then local authorities and communities would further benefit too. According to Deloitte, Bowland shale could generate tax revenues in the range of £580 million per annum by 2020.

Furthermore, the shale industry itself has proposed that local communities hosting sites will receive £100,000 for each exploration well that is hydrauli-cally fractured – and a further 1 per cent of all revenues if shale gas is discovered.

Enhanced energy securityAs Winston Churchill, then First Lord of the Admiralty, said in the House of Com-mons in 1913: “On no one quality, on no one process, on no one country, on no one route, and on no one field must we be dependent. Safety and certainty in oil lie in variety and variety alone.”

If there is one thing to be said about energy security, this precept has proved itself again and again – and it was pre-cisely these concerns about energy secu-rity that led Churchill to heavily develop the Nottinghamshire oil fields during the Second World War, as these were vital for fuel supplies.

Almost a third of Britain’s electricity generation comes from natural gas. In November 2013, energy minister Mi-chael Fallon said the UK could be im-porting three-quarters of its natural gas needs by 2030.

The UK desperately needs to find a new and secure supply of natural gas if it wants to remain in the top flight of economies and not beholden to foreign governments. In the US, renewables development has taken place alongside shale gas production, with generation

from wind increasing by 435 per cent in the shale gas-producing states in the pe-riod 2005-11.

In 2013, the British Geological Sur-vey estimated there could be 1,300 tril-lion cubic feet of shale gas present in the North of England – double previ-ous estimates. Extracting only a small portion of this – as well as harnessing renewable energy technologies such as wind and solar – would provide greater energy sustainability and security in the medium- and long-term.

Lower carbon emissionsEconomic and security considerations are one thing, but what is also unavoid-able is that man-made climate change poses the single biggest long-term hu-manitarian threat facing us today. It de-mands an urgent response.

As the 2006 Review Report on the Economics of Climate Change by Lord Stern concluded: “Climate change will affect the basic elements of life for peo-ple around the world – access to water, food production, health, and the envi-ronment. Hundreds of millions of people could suffer hunger, water shortages and coastal flooding as the world warms.”

The UK alone cannot fight this global challenge, but we can reduce our con-tribution to total worldwide emissions. Natural gas and renewable energy tech-nologies are the best strategy for achiev-ing our carbon reduction commitments in the most economically viable way.

According to the International En-ergy Agency, the US shale revolution has meant it has – accidentally – found itself as one of the few nations around the world to have seen its carbon diox-ide emissions from electricity generation fall in recent years. According to the US Environmental Protection Agency, com-pared to the average air emissions from coal-fired generation, natural gas pro-duces half as much of the greenhouse gas carbon dioxide and less than a third as much nitrogen oxides.

A 2010 report by the energy consult-ing firm Pöyry found natural gas is the only low-risk option facing the UK if we are to be realistic about meeting our 2020 targets. These comments were re-cently backed up by Christiana Figueres, executive secretary of the UN Frame-work Convention on Climate Change. Shale gas, she said, “can help countries move towards green energy”.

Future vision The environmental, security and eco-nomic stakes are too high to allow poli-tics to get in the way of this future vi-sion for a prosperous North West. As a region, we have the skills and expertise to make a success of this. So let us put aside the politics, come together and get behind the Bowland Basin.

�� For more information on NWETF, visit http://nwenergy.org.uk/the-task-force/

Shale we just get backto jobs and prosperity?For the sake of the North West’s economy, energy security and environment, let’s put aside politics and get behind Lancashire shale, writes John Kersey

The UK needs to find a new and secure supply of natural gas if it wants to stay on top

Exploring new possibilities

John Kersey, local spokesperson for the North West Energy Task Force

enquiries@zenith.co.uk www.zenith.co.uk 0844 417 6026

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Tuesday March 18 2014 | the times

Business Insight10

New ways

The North of England is enjoying a mini boom in renewable en-ergy and low-carbon projects, despite the lack of a clear and coherent energy policy from

the Government – and, oddly enough, partly because of the unintended conse-quences of this issue.

According to Darren Walsh – the part-ner heading the energy team at the Man-chester offi ce of DLA Piper, the world’s largest business law fi rm – a signifi cant number of previously stalled schemes are now under way again.

Of some 25 projects that DLA Piper Manchester – a centre of excellence for the renewables and low-carbon sector – was aware of having been stuck, 15 to 20 of these are reported to have recently secured equity and are moving forward to debt funding.

While part of this is due to improved economic conditions, some of the activ-ity is thought to have been the result of what various critics see as a series of fl ip-fl op energy announcements from the Coalition. Such is the degree of un-certainty surrounding proposed new legislation that a number of companies are believed to be seeking to get projects up and running before changes are made to the “green” support provision, mostnotably in 2017.

That was certainly the view of a num-ber of industry players on the panel at a specially convened Forum from The Times on renewable energy and low carbon in the North, held at the offi ces of DLA Piper in central Manchester. It was the Contracts for Difference (CfD) legislation initiative, a key plank in the Government’s Electricity Market Re-form programme, which came under fi re in a lively debate chaired by AlasdairNimmo, from the The Times Business Insight North.

Such is the complexity of CfD that panel member Maf Smith, deputy chief executive of RenewableUK, the trade body known as the voice of wind and

marine energy, described it as “Like be-ing on a walk and you see a hill in the distance then you think you are at the top – and then there’s another valley to walk down and go up – and there’s no way of predicting when you will hit that last peak until you get there.”

CfD is in fact one of two mechanisms designed to facilitate the vital investment needed to replace the UK’s ageing elec-tricity infrastructure with a more diverse and low-carbon energy mix. What it is meant to do is reduce the risk faced by low-carbon generators by paying a vari-able top-up between the market price and a fi xed-level price, known as the “strike price”.

As well as reducing the exposure to volatile fossil fuel prices, CfD protects customers by ensuring that generators pay back when the price of electricity goes above the strike price. CfD will take the form of a contract between the gen-erator and a new Government-owned “counterparty”, and will provide the gen-erator with clear contractual rights and therefore increase investor certainty.

Understand all that? If you don’t, you are not alone, as all the details have yet to be announced – which is what has left the sector both confused and concerned and has created a climate of uncertainty.

“We are really struggling to get some of the important details out of the Govern-ment,” Maf Smith said. “There is no sign of the Government sending out a signal, then staying the course. There are a lot of short-term decisions. It has become a case of watching your back in case the rules change. Politics seem to be stopping us from moving to the next stage.”

Andrew S Davies, one of two partners from DLA Piper on the panel, succinctly summed up the concern for his clients. “We have a number of clients asking us where this is all going,” he said, “but we have no capability to say defi nitively yet. This creates a culture of thinking that the Government doesn’t really know where it intends to go with this.

“There is a lack of certainty about key areas of policy. We know that in projects we advise on, key aspects are fundamen-tally not understood, such as the need to close down a contract as quickly as you can. And there are some bits of it which we can’t contractualise as you don’t know where the Government is going to land. So you end up with delays and projects do stall – so it’s a vicious cycle.”

However, Mr Davies’s DLA Piper colleague and fellow panellist Darren Walsh was more circumspect about CfD, noting that there is more certainty now than there has been for a number of years. “Part of the challenge in recent years has been the perception of a lack of a clear and coherent policy from cen-tral Government,” he said.

“But we are starting to see movement, with the Energy Act having been passed, greater clarity on things like CfD and the Renewable Energy Support system. While there is still uncertainty, you can say things are clearer than they were before.”

Mr Walsh did however add a rider – that, while there is light at the end of the tunnel, the current energy policy “is still having a perverse effect on investment”.

He went on: “We are seeing an acute desire by sponsors and developers to get fi nancial closure as quickly as possible. This is because they have got certainty under the current green support re-gime – which, while not perfect by any stretch, provides a degree of certainty they don’t get yet from moving to CfD.

“There are fi ve or six of our devel-oper clients who are very keen to bring their projects to fi nancial closure before 2017 because it gives them certainty in the form of investment return. While it is great to see an element of movement in the market, it also explains an uplift in investment and why they want to bring projects forward before the regime changes.”

Mark Cumbo, director of renewable energy at Santander UK, could also see some benefi t in the initiative. “There has been a positive move forward with CfD despite some lack of clarity,” he said, “a move in the right direction.” He added, however, that “there really needs to be a genuine long-term low-carbon energy

Pictured from left...��Mark Atherton, director of environment for Greater Manchester��Maf Smith, deputy chief executive of RenewableUK�� Andrew S Davies, partner with DLA Piper��Mark Cumbo, director, renewable energy at Santander UK��Darren Walsh, partner with DLA Piper and leader of the Manchester Energy team�� Alasdair Nimmo, chairman�� Chris Sharkey, regional director, Santander UK�� Sam Almozaffar, chief executive, Basalt Global

Home team isswitching the‘green’ lighton renewablesExperts agree that the ‘alternatives’ ball is in the Government’s court for decisive action to sparkmeaningful programmes, Mike Cowley reports

strategy put in place which politicians stick to.

“Yet evidence suggests that no Gov-ernment is willing to give the public the bad news of the scale of the investment needed in renewables and low carbon and the negative short-term impact this will have on energy pricing, albeit deliv-ering much needed long-term security and stabilisation of pricing. Everything is too short-term – and, with renewables having a long gestation period, as an in-vestor this is damaging, you need that certainty.”

Under the pointed questioning of Forum chair Alasdair Nimmo, another problem then came to light – which Mark Cumbo summed up in one word: “complexity”.

“It is becoming a full-time job for any professional involved to keep abreast of the evolving UK energy policy,” Mr Cumbo said, “and then you have the investment community trying to keep pace as well. There are simply unin-tended consequences of policies com-ing together. At the smaller end of the renewables market, you see developers downgrading projects to fi t in with sub-sidies.

The panel

While there is still uncertainty you can say things are clearer than before

ForumForum

Business Insightthe times | Tuesday March 18 2014 11

Mancunians, it seems, are warming to renewables and low carbon. That

was the message from Mark Atherton, director of environ-ment for Greater Manchester, when he took his seat on The Times Forum panel to discuss the challenges faced by the Association of Greater Man-chester Authorities (AGMA).

“Local schemes tend not to be major schemes,” Mr Atherton said, “they are smaller in nature but more diverse. We are promoting a series of heat networks across Manchester, supporting energy efficiency schemes in public buildings, transferring street lighting to energy efficient LED [light-emitting diode] – and, through our engagement with the public, energy efficiency in homes.”

Each of these projects, he admitted, presented its own challenges – but he didn’t see planning as a problem, nor, somewhat surprisingly, was it down to lack of capital.

“It is a question of lack of capacity,” he said, “having the

right people with the right technical skills to be able to bring novel schemes to market, potentially using innovative finance mechanisms which might be loans or payback schemes.

“There is the lack of experi-ence in investing in renewable energy. So there is a nervous-ness about rates of return, the security of return, and other risks such as the political view of the electorate in which elected officials are interested.”

Mark Atherton also tackled the subject of a skills gap for the sector raised during the Forum. “The answer depends on your perspective,” he said. “If you speak to local colleges, they would say there is good capacity training in renewables at domestic level such as installation of fuel-efficient boilers. They are not seeing a market sufficient enough to drive demand for other courses.

“On a different level, talk to our specialist energy companies and they say they are having difficulty recruiting graduates – which is not easy to understand, as the combined

universities in Manchester turn out 100,000 graduates a year.

“My suggestion here is that there should be a greater interlink between energy companies and graduates and postgraduates who come out of our institutions, to resolve the skills gap at the high-end level where you find the demand from innovative technologies.”

Meanwhile, Greater Man-chester is facing up to the problem that 75 per cent of direct emissions are due to space and water heating, so considerable emphasis is going into work on the fabric of buildings and the way water is heated. “Tackling to these two issues is fundamental for us,” Mr Atherton said.

That is why he is convinced the energy efficiency route is the proven way forward for local authorities. “We have to try and balance the amount of time and effort put into energy gen-eration with energy efficiency, which is a no-brainer,” he said.

“The question is why energy efficiency is not taken up more, because it is far more cost-effective than trying to generate energy in the first place.”

A call for energy efficiency to have greater recognition within the renewable energy and low-carbon sector came from an unsurprising source during The Times Forum

debate. It was made by Sam Almozaffar, recognised

by many in the sector as the father of “embed-ded generation”. His pioneering work at the University of Manchester some 20 years ago led to combined heat and power (CHP) plants – which, when co-existing with a national grid supply, can improve efficiency from 40 to 90 per cent (see Clarke Energy on page 13).

The Iranian-born physicist entered the market in 1984 when he founded Combined Power Systems (CPS), which designed and

manufactured an innovative small-scale power plant, going on to install 600 of these in the UK and Ireland in the next decade. CPS was subsequently sold and is now part of ENER-G.

Mr Almozaffar went on to develop major solar schemes in Spain and Italy and has now returned to head Basalt Global in the UK, one of a number of investment vehicles in the sector. During his time working abroad, he lost none of his forthright views – as The Times Forum was to discover.

He insisted – and was supported in this view by other members of the panel – that energy efficiency is not getting as much attention as it deserves in the renewables and low-carbon market. “It should be known as

Renewables and Energy Efficiency, because they are both important,” he said.

“The reality is that energy efficiency will contribute more than renewables. The problem with energy efficiency is that it is not sexy enough, it is not something the politicians can switch on and get people excited about.”

Mr Almozaffar also voiced strong views on subsidies. “Any technology that relies on subsidies to survive is doomed from the start,” he said. “Technology has to be made independ-ent of Government policy.”

Neither does he agree with the current approach to solving fuel poverty – a category into which 4.5 million UK residents fall – by price reductions, arguing instead for price hikes and increased education. “The cheaper you

make the energy, the more it will be used,” he said. “Educating people about energy efficiency is the way forward. Simple things like unplug-ging your television set at night – rather than leaving it on standby – will make a real differ-ence. Everyone know that, but nobody does it.

“David Cameron reduced electricity costs by £50 – that is peanuts. Unplugging your TV will save far more than that. What should be involved are higher energy prices. In the long term, that will benefit everybody – the industry and the consumer.”

Nor does Sam Almozaffar believe that the sector is being held back by a shortage of money. “All my life, I have been short of money for projects,” he said. “Now I have plenty of money and not enough good projects.”

Power pioneer urges more efficiency awareness

Progressing... in cautious steps

“The current UK energy policy has actually created an incentive for inves-tors to reduce the level of renewable electricity generated, as lower produc-tion equates to a larger investment re-turn. This is obviously a disappointing outcome driven by the current policy. We are also having peaks and troughs of project activity that are policy-driven – not project-driven – so that makes it harder for every aspect of the low-car-bon supply chain.

“At the moment, every solar devel-oper is going hell for leather to meet a subsidy deadline of March 31. Con-nections will be five times what they normally are this month, but that will drop back to zero at the first of April. So policy at the moment is driving an unnatural curve.”

The panel also turned its attention to an issue destined to impact on the fu-ture growth of the sector in the North – the skills gap. This is likely to intensify, with demands from new nuclear plants causing a skills-drain effect. This con-cern was flagged up by Darren Walsh, who acts for one of the major investors in Hinkley Point C.

“There will be 10,000 people needed on-site there at the height of the con-struction phase,” Mr Walsh said. “So, assuming that there are estimated to be around 18,000 people directly engaged in the wind and tidal renewables sec-tor at present, more than half of the electrical, mechanical and other engi-neers utilised on these schemes would be needed to build and commission one new nuclear power station in the UK.

“Our practice looks at renewable en-ergy round the world, and the question I would raise is how confident do we feel that we can attract and retain those skilled individuals to remain in the UK when you compare perhaps a job in Manchester with a tax-free lifestyle in the Emirates?”

Although Mr Walsh went on to tell the Forum that he had complete con-fidence in the ongoing success of the renewable and low-carbon sector in the North, he did call for a “seismic change” in thinking within the sector itself. “We are simply paying lip service to green credentials and being environmentally friendly at this moment in time,” said.

He went on to point to an initiative supported by the Department of Ener-gy & Climate Change for a greater em-

phasis on energy performance linked to an accreditation scheme, where lo-cal authorities can demand from their suppliers true energy performance sta-tistics.

“Whereas we are very much focused on the supply side and legislation to provide new generation capacity,” Mr Walsh said, “we need to focus on be-havioural change throughout the sec-tor including the supply chain. Today we should be looking at renewables in the way we started to look at health and safety in the 1960s.

“There should be a need for all of us to demonstrate our green credentials. Getting that behavioural change should be part of all our organisations, making sure that we are all aware of our obliga-tions.”

We need to focus on behavioural change throughout the sector

Tuesday March 18 2014 | the times

Business Insight12

Energy law

We in Manchesterare very much the front door to the rest of the world in legal terms

Darren Walsh, a leading inter-national energy lawyer at the world’s largest business law firm DLA Piper, like his peer group around the world knows

only too well what it is like to be on call 24 hours a day. It goes with the territory when you hold down a job where the de-mands of global clients transcend the trad- itional niceties of time zones.

With a client base stretching from Manchester to New Delhi, this entails be-ing on permanent standby to resolve is-sues connected with developing, funding and operating low-carbon energy genera-tion technology. A partner in the Finance and Projects team based in Manchester, Mr Walsh is just one of 4,200 DLA Piper lawyers in 30 countries, each offering a similar level of global service that suc-cessfully produces a combined turnover of around £2.4 billion.

Built through a merger of unprecedent-ed scope in the legal sector, DLA Piper has grown to become the largest busi-ness law firm, providing advice to clients across a number of international hubs including Washington, Dubai and Hong Kong. But the firm, which was founded by Sir Charles Lupton in Leeds in the 1880s, retains its Northern roots with offices in Manchester, Leeds, Liverpool and Shef-field.

While his area of responsibility is the North West, the very nature of DLA Pip-er means Darren Walsh can be on call to help resolve issues anywhere in the world – hence Punj Lloyd, based in New Delhi, being on his client list. Despite the inter-national demands of his work, however, the majority of his time is still spent deal-ing with clients who have interests across the North West region.

Brought into the firm in 2010 to look after the renewable energy sector, Mr Walsh has overseen a threefold growth in related business – due in part to having some 19 years of experience in the domes-tic and international nuclear and energy sectors. He decided to enter nuclear – an industry he knew well, as his father was a nuclear engineer – because he was of-fered the opportunity to train with BNFL (British Nuclear Fuels Ltd) rather than go down the traditional articles route.

“I wanted to understand the business issues of being a legal advisor,” Mr Walsh recalls, “sitting with the client, to give me a better understanding of client needs.”

A low-carbonexpertise... inhigh demand

His track record in nuclear speaks for it-self: previously in-house counsel to BNFL, head of legal to the British Nuclear Group and legal director of BNG Project Services.

Since his arrival at DLA Piper – the firm he had instructed while at BNFL – his work on low-carbon energy projects has been all-encompassing, acting for devel-opers, ESCOs (energy service companies), funders and technology companies. He has advised on renewable schemes such as solar PV (photovoltaics), good qual-ity CHP (combined heat and power) and carbon energy funds, as well as energy efficiency and long-term energy service arrangements for companies ranging from ENER-G in the UK to, as mentioned above, the Punj Lloyd Group in India.

Darren Walsh’s recognised expertise in the field of biomass has seen him support Stobart Biomass, which has just received planning permission for a 20 megawatt CHP plant at its distribution centre by Runcorn Bridge, part of 3MG Mersey Multimodal Gateway, and he is on hand to ensure this happens with the minimum of hitches.

His role is to help bring in equity invest-ment and the debt to service it – which means he has to ensure everything is in place to satisfy the lender that this is a robust deal. Absolute certainty on third-party delivery from contractors in areas such as energy performance is key.

“When developers say they want a 20MW plant that will operate 365 days,” Mr Walsh says, “using a specified amount of heat and electricity, my job is to ensure the agreements we have with contractors ensure delivery.”

The Manchester Energy team is com-posed of Mr Walsh and his co-partners, Ian Wood – who has a market-leading practice supporting the nuclear sector – and Andrew S Davies, who is a leader in his field of energy from waste projects. The team’s in-depth knowledge of the sec-tor has recently seen them appointed to act for H2Energy, a Liverpool-based start-up company which is producing the next generation of anaerobic digestion (AD) plants to convert food waste into a source of energy.

Instead of building huge AD plants – such as the one recently commissioned to handle Manchester’s waste – H2Energy is providing what are in comparison mini-plants on sites where the waste is located, essentially those belonging to supermar-ket food suppliers.

Typically, where customers had been paying between £60 and £100 a tonne to take their waste to landfill – which was thus a financial liability – H2Energy has turned it into an asset by providing the means to convert the waste into renew-

Nuclear to biomass: this North Westlawyer is vital to a service for a worldof energy firms, writes Mike Cowley

Darren Walsh can be on call to help resolve issues wherever they might emerge

able energy such as biogas to power their facility.

Such is the concern generated by over-stretched and limited traditional sources of energy that Liverpool, for one, has drawn up a masterplan showing where they expect to see business growth mapped against the existing distribution network run by Scottish Power Energy Networks.

Mr Walsh, who sits on Liverpool City Region’s low-carbon committee, explains the reason. “The further away you are from the main distribution network of the National Grid,” he says, “the weaker the system is – after all, it is over 60 years old. Yet out on the periphery is where you might find new or existing businesses who have a need for more power.

“And the network operators have a legal duty to offer connection to anyone who asks for it. What happens then is it will be offered – but at a cost. They may say the infrastructure needs to be reinforced and that might involve a bill of £500,000 upwards. Now that’s a barrier to locating any business that renewables can help get over.”

That is why the renewable energy sector is increasingly being looked on as a good business, both by those working in the sector and those called upon to finance it. With significant interest by the Green Investment Bank – and with other banks such as Santander establishing a signifi-cant presence – more and more funding is being made available, with DLA Piper assisting to reach financial closure.

The sector has the added advantage of enhancing the CSR (corporate social re-sponsibility) profile of participants, so re-dressing image issues. Darren Walsh and his colleagues are also active in pro bono

work for the Co-operative Enterprise Hub, which exists to help communities get the benefit of renewable energy.

In all, they have supported 10 schemes to date, ranging from a windfarm on the Hebridean island of Islay to providing solar panels for a Manchester church. The church in question is St John’s in Old Traf-ford, where the vicar, the Reverend John Hughes, is now reaping lower energy bills both for the church building itself and the linked community centre.

Meanwhile, in nearby Bury, Bee Sus-tainable – a local group – is pushing ahead with both a hydro scheme and a wind tur-bine with a little help from DLA Piper.

“Whereas DLA Piper in Manchester is very much the front door to the rest of the world in legal terms,” Mr Walsh says, “in that we have experts in every sector in our international network on which to call, when it comes to specific advice in rela-tion to low-carbon and renewable energy in the North of England we are practising in this sector, day in, day out.

“We understand the regulatory frame-work, we understand what the bankers are looking for, plus all the issues relevant to developers. This sees us actively involved in advising and supporting clients develop, build and operate low-carbon generating assets.

“Our low-carbon and energy team is part of an award-winning Projects and In-frastructure Group. Our renowned pres-ence, our dedication to delivering the best results for our clients and our sector ex-pertise is why we believe our clients con-tinue to instruct us – and why we continue to support the development of low-carbon energy projects in the North, nationally and internationally.”

Business Insightthe times | Tuesday March 18 2014 13

Innovation

As the threat of environmental damage caused by the use of fossil fuels continues to hang overhead like the sword of Da-mocles, the fate of the world

may well rest not only on the ingenuity of man but also, in part, on the bacteria that can be found in all our guts.

Munching away inside us are micro- organisms known as anaerobes – metha-nogens and acetogens being the best known – which thrive in air-free environ-ments. These anaerobes have now been successfully harnessed and put to work for us.

Of all the potential answers in the hunt for renewable sources, biogas created in anaerobic digestion plants – where billions of these bugs are used to devour our waste and convert it into energy – may well prove to be one of the most effective.

This is, however, just one of a range of cutting-edge solutions to have played a significant part in the runaway success of a family-run, Liverpool-based global com-pany – Clarke Energy – which supplies, in-stalls and maintains the gas engine power plants at the heart of energy projects in around a dozen-and-a-half countries.

With a year-on-year turnover increase since 1999 which has just topped £224 mil-lion, the company is currently generat-ing sufficient power in a variety of forms to supply 10 million homes worldwide, including 3.4 million in the UK – a track record that has seen it appointed as an export champion for UKTI (UK Trade & Investment) in the North West.

Having cut its corporate teeth by con-verting gas from the rotting food content of landfill sites into power some 20 years ago, when anaerobic digestion first came into the waste management toolkit, Clarke Energy today controls more than 70 per cent of this sector in the UK. Food waste remains the fuel of choice in the anaero-bic sector, although some farmers in the North of England are now growing crops specifically to feed into digesters.

One of the most recent flagship anaero-bic digestion plants – known in the trade as “concrete cows”, because they replicate what happens in the animal’s stomach – can be found in Manchester Waste’s giant Davyhulme sewage works. This uses Clarke Energy-installed engines to gener-ate cost-effective energy from the gases emanating from millions of tonnes of household food waste – which not many years ago would have ended up in landfills.

Clarke Energy has also moved up several gears to provide increasingly so-phisticated ways of tapping into a range of unconventional gases, such as those found in coal mines or associated with crude oil. There have even been special-ist applications developed for some of the most challenging gaseous fuels, in-cluding syngas from biomass and gases originating as a byproduct of steel pro-duction.

Here, then, is low-carbon energy at its best – power generation while avoiding greenhouse gas emissions. Waste not, want not is back in vogue.

The conversion of unusual gases is only one part of the ongoing Clarke Energy story, however. Another area in which the company is challenging the pack is known as embedded generation. This is where power is generated close to the site of use, making the most of the energy within the fuel while also avoid-ing transmission losses.

Effectively what happens here is that Clarke Energy links a combined heat and power (CHP) facility to a customer on an existing natural gas supply (which enjoys the lowest carbon emissions of all fossil fuels), to ensure the main supply works more efficiently – up to 90 per cent as opposed to an average of 40 per cent.

By co-existing in this way, the previous heat loss is captured and converted back to a usable power source, with the money factor alone – including the opportunity to sell any surplus electricity back to the national grid – making this a no-brainer decision.

In the UK, most of these CHP plants are used in parallel with the grid sup-ply, but in African and other third world countries – where the grid is at best some-what shaky and the lights can go out sev-eral times a day – Clarke Energy provides them as standalone power sources.

Leading UK hospitals have been quick to see the benefits of embedded genera-tion, with the Christie in Manchester and Broadgreen in Liverpool – as well as their peers in Ormskirk and Preston – now enjoying the benefits of cheaper and im-proved power supplies while substantially reducing carbon emissions.

So the appeal of CHP plants – with their money-saving and potentially money-making attributes – has seen demand come full circle. All of which is light years from when the company start-ed trading in the mid-1980s, providing spare parts worldwide to users of marine, industrial and locomotive diesel engines.

When Helensburgh man, Jim Clarke, now the chairman, joined the company in 1989, it was in financial difficulties. But things didn’t stay that way for long. Along with taking a controlling inter-est and changing the company name to Clarke Energy, he instilled service into the very DNA of the day-to-day opera-tion.

It was due to this growing reputation for going the extra mile that Clarke En-ergy was eventually approached by Jen-bacher, an Austrian manufacturer of gas-powered engines, to become its exclusive UK distributor. This was the start of a partnership which propelled them both

Working well – with cheaper and improved power supplies

A gut feeling that saysyou might be a bit fuelLiverpool’s ClarkeEnergy has found new sophisticated ways of tapping in to unusual gases, says Mike Cowley

into the forefront of global suppliers, with Jenbacher providing the engines and Clarke Energy the technology for the vital installation and support service.

The fact that Jenbacher was eventu-ally bought by the General Electric (GE) conglomerate – which was keen to ex-pand the business – did not do the rela-tionship any harm either, with GE being quick to recognise that Clarke Energy was the key to making it all happen.

On the back of the Clarke Energy/Jenbacher axis, the Liverpool company began to expand overseas, initially by being awarded more Jenbacher distribu-torships. First stop was Australia, where the opportunities offered by an over-stretched national grid abounded, then New Zealand where there was a simi-lar situation, followed soon by Nigeria where the grid was highly undeveloped by Western standards.

The next stage of development was the acquisition of Cogen India in 2003, then Jenbacher France the following year. Completing the current global picture for Clarke Energy are Ireland (opened in 2005), Tunisia (2008), Al-geria (2011), Tanzania (2012) and last year the acquisition of Orient Energy’s Bangladesh operations, GE’s Jenbacher service business and Agaricus Trading in South Africa.

All of these overseas acquisitions have been consolidated by having local people run a 24/7 operation, with the support of expats ensuring the local ethos is in tune with that of Clarke Energy. Many of the major initiatives have been conducted under the watchful eye of the energy team at the Manchester office of DLA Piper, the world’s largest law firm, which acts as advisor to Clarke Energy.

Jim Clarke’s son Jamie – who joined the group straight from university to set up a telecom infrastructure division – was appointed chief executive in 2010, the same year the business completed the buyback of shares owned by 3i, which had acquired a minority interest in 1999.

With his Glaswegian accent still prominent even after many years living away from his home city, Jamie Clarke is seen as being cut from the same cloth as his father. Not one for personal promo-tion, he prefers to get on with the job in hand.

“We take a long-term view,” he says. “The business is in constant transition, customers are changing, customer de-mands are changing, the health and safety requirement is much more com-plex.

“We remain committed to our over-seas expansion ambitions and recently welcomed ECI as a minority investor – which has proved to be very constructive in assisting with our aggressive expan-sion plans. But the core DNA we started with – putting the customer first and en-suring quality in everything we do – will see us well placed to handle the future.”

The DNA we started with – putting customers first and ensuring quality – will see us well placed to handle the future

Tuesday March 18 2014 | the times14

Growing its reputation as agateway to offshore andrenewable energy, Port ofSunderland is making waves asan economic driving force for itscity and the wider North EastEngland region. With businessbooming, and a commitment fromleaders in the city to ensure thatthe port establishes itself as aprosperous, progressive andburgeoning waterfront,Sunderland appears to be on thebrink of creating somethingspecial.

Located on the North Eastcoast of England, the municipalport is looking forward tobuilding on a successful fewyears, having completed anumber of infrastructureimprovement programmes andinvested in a heavy-lift crane, toattract further custom nationallyand internationally.

Matthew Hunt, director atPort of Sunderland, believesthat the port is in a strongposition to attract significantcontract wins and inwardinvestment projects, after a raftof developments designed tomake the most of the port’snatural assets have freed upswathes of land ready to be

utilised. The strategic acquisition of

areas of the port previouslyowned by independentbusinesses, demolition ofdisused buildings that wereoccupying space, resurfacing ofboth roads and yards adjacentto deep water quays, heavy dutycrane pads and ro-ro facilitiesthat make better use of space atthe port, are just some of theprojects completed that Mr Huntbelieves position Port ofSunderland well for investors.

Mr Hunt said: “The port hasalways had significant potential,and the projects we haveundertaken have been aboutunlocking that, making somerelatively small changes that willdeliver big benefits.

“There are a number of veryvisible changes to infrastructureat the port like the purchase of a120 tonne capacity harbourmobile crane – along with somemore subtle changes that peoplemay barely notice like a newsecurity gatehouse, but the sumof the parts is significant. Thethings we have done mean thatthe port is a blank canvas that isready for businesses to comeand put their stamp on.”

The port has also added to itshandling capabilities with thepurchase of a LHM 420 HarbourMobile Crane via internationalcrane manufacturer Liebherr toadd to the Liebherr A944C HDmaterials handling cranepurchased in 2013.

Owned by Sunderland CityCouncil, the port has alreadystarted to see the commercialbenefits of offshore energy, witha number of businesses startingto regularly use the port, andothers making long-termcommitments to the port bysetting up operations on site.

In October last year, Port ofSunderland signed a significantstorage and offshore cable basecontract with E.ON, takingdelivery of two 600 tonnesubstations in November and itrecently delivered its secondphase of the deal which saw thecable-lay vessel, Atlantic Carrierarrive onto Greenwells Quay.

Mr Hunt added: “The arrivalof E.ON’s substations made foran exciting couple of days forPort of Sunderland. We havebeen working for a number ofyears to build its reputation as acentre for renewable andoffshore energy and subsea

engineering projects, and it isfantastic that we areincreasingly seeing that hardwork come to fruition.

“While the Atlantic Carriervessel was mobilised at Port ofSunderland, the team utilisedtheir LHM 420 heavy lift crane tolift a 95 tonne, 14.5 metrecarousel onto the back deck ofthe vessel. The project was avery visible and exciting projectand I’m delighted we were ableto assist such a globallyrespected company with vesselmobilisation and cable layingrequirements.”

And it is clear Port ofSunderland is seeing thebenefits of its strategicdevelopments and excellentlocation.

“We’re very clear about whatour assets are at Port ofSunderland, and what makes usspecial and distinct from ourcompetitors and we areabsolutely committed toleveraging these strengths toensure that we tap into what weknow could be a significantopportunity for us at Port ofSunderland and for the wider

regional supply chain in both theoffshore renewable energy andsubsea engineering sectors.

“We’ve already seen a realsea-change at the port – morevessels are passing through thewaters of the Wear than everbefore, we’re starting to work ina host of new sectors, and wehave a number of excitingprojects in the pipeline thatreally do show the progress wehave made.

“The changes are about muchmore than just infrastructure –they’re changing the face of theport and in time, we believe, willbring real economic benefits tothe city and the region.”

But the port does not have allof its eggs in one basket. Amongthe port’s current areas ofbusiness are bulk cargoes,project and unitised cargohandling, ship repair and marineengineering, North Sea oil andgas and offshore renewableenergy and subsea engineeringindustry support. And withimmediate access to the opensea and three kilometres of riverand dock berths, Sunderlandhas a number of advantages thatare helping its cause inattracting a growing client basein these sectors.

Port of Sunderland is set to establish itself nationally after a buoyantperiod of trading and a host of major new development projects.

Burgeoning port set for growth

For more information about Sunderland and the Port of

Sunderland visit www.makeitsunderland.com, email

info@makeitsunderland.com or call +44 (0)191 305 1194.

Sunderland’s coastal location has alwaysplayed a huge part in its economy. The city’s port is ideally situated,

with immediate access to open

sea and three kilometres of river

and dock berths. Add to that a

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management and a ‘can-do’

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the times | Tuesday March 18 2014 15

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