An "ethical barrier" could be put in place at the UK's National Nuclear Laboratory (NNL) to ensure policy makers can draw on its world-class expertise whilst avoiding a conflict of interest with commercial customers, its CEO Paul Howarth told peers this week. NNL's operating model thus requires "refinement, rather than wholehearted change", he said.
Established in July 2008, NNL is a government owned and operated nuclear services technology provider covering the whole of the nuclear fuel cycle. It is fully customer-funded and operates at six locations in the UK. Its annual turnover is around £100 million ($125 million), of which more than 40% comes from Sellafield Ltd - a nuclear decommissioning Site Licence Company controlled by the state-owned Nuclear Decommissioning Authority. NNL also has major contracts with EDF Energy and Rolls Royce to carry out post-irradiation examination work.
"Other countries are extremely interested in the fact we run a national nuclear laboratory that doesn't rely on grants from government, but on sources of funding from industry," Howarth told the House of Lords Science and Technology Committee on 7 March as part of its inquiry into nuclear research and technologies.
NNL and the Department for Business, Energy and Industrial Strategy (BEIS) have been discussing ways the government can work together with NNL's experts and secondees on the country's nuclear power program, as part of a national industrial strategy, Howarth said. BEIS was formed in July last year from the merger of the Department for Business, Innovation and Skills and the Department of Energy and Climate Change.
"BEIS has been looking at how it can interface with this capability, such that there isn't a perception in any way that there's a conflict of interest. So, we've been working with the department for the past 12 months to address this and I believe there is a solution: We can put an ethical barrier within the organisation. I can have a team of people separate to delivery of customer work on a day-to-day basis, directly providing advice to the government, that sits on the other side of the ethical barrier," Howarth said.
The committee's inquiry is of "great benefit" in terms of its timing, he said, with the creation of a Nuclear Industry Council to support the development of a national industrial strategy, the prospect of having a nuclear 'sector deal' with government, and the fact the Nuclear Innovation and Research Advisory Board (Nirab) completed its term in December.
"It's a once-in-a-generation opportunity for us to align an industry strategy with a sector deal, with a strong partnership between government and industry, and we can see research and technology at the forefront of that," he said.
Nirab was established in January 2014 to advise government on the level, approach and coordination of nuclear innovation and R&D that will keep future energy options open and enable both domestic and international commercial opportunities to be realised by the UK. Nirab was supported in its preparation of recommendations by the Nuclear Innovation and Research Office (NIRO), which is hosted within NNL and is currently staffed by secondees from NNL and industry.
Asked what steps the government needs to take now that Nirab has completed its term, Howarth said personnel from other organisations could be brought into NIRO to have a single body advising the government.
"We are a country that has all the right components as far as a major nuclear nation is concerned to be at the top table, but we haven't played our cards very well to date. But I think it's not lost. We are still recognised internationally as a leading country and I think that can support our domestic program as well as our international activities, both as thought leadership and export opportunities for UK industry."
He added: "What needs to happen now is we have to set out a long-term vision and this requires a partnership between industry and government. We had the first Nuclear Industry Council meeting a fortnight ago and I was quite keen to see that we set that vision out for about 30 to 40 years, and we clearly articulate what that looks like across the nuclear fuel cycle as far as fission is concerned.
"The second thing is we need to look at the organisation and structure that we have in place with various bodies that have responsibility in this area. Have we got the landscape right, have we got all the organisations doing exactly what they should be doing, are any organisations constrained, are we missing anything?
"The third aspect is developing a public-private partnership and asking what needs to be put in place between industry and academia. This isn't just about an ask to industry regarding financing, but it's about the mechanisms, the infrastructure, the supporting skills base, and getting the climate right for delivering that long-term vision."
The formation of BEIS as a single government department is helpful in setting the nuclear agenda, Howarth said. It is important, he added, that "up-to-date practitioners" are advising government on policy. "In the UK we have some capability within the civil service that can interface with the partner organisations," such as NNL, the UK Atomic Energy Agency, the Office for Nuclear Regulation and the Nuclear Decommissioning Authority.
"There has been perhaps a reluctance to fully engage us and use the full competency that exists within our organisation to be able to advise the government on the right way forward. That however is changing and over the past year or so we've been working much more closely with the department and there's a strong team in there now."
The "great advantage" of the model in these partner organisations, he said, is that "we're practitioners" and as such a "valuable asset" that can advise government.
Revenue, margin, value
NNL's operating model has to balance three things, he said. These are revenue, margin and value.
"Revenue is about the size of the organisation. We need to be a certain size because we operate absolutely state-of-the-art critical assets, the value of which to rebuild tomorrow would be a few billion pounds. They are recognised as world-leading facilities for nuclear research. We also have within the organisation subject matter experts across the nuclear fuel cycle and we maintain and develop that expertise and capability. That makes us a high fixed cost base industry. We retain the experts; we don't just cycle them up and down as a consultancy depending on the volume of work that we do. We retain and develop them on behalf of the UK when they are needed to support the programs of research.
"The second aspect is we deliver this in a way that is efficient and effective. We deliver to time, cost and quality. We do the research that the industry absolutely needs to deliver its programs. We always look at what we do in terms of value to support the industry and, typically, over the past 12 months we probably added circa £1 billion worth of value by reducing costs to various programs at Sellafield or for EDF Energy, or other generators, or for the Ministry of Defence programs, to name some of our main customers.
"The third aspect is margin and running a commercial model keeps us lean, efficient and effective. We do make a surplus, but all of that goes straight back into the business and none is taken out as a dividend by government. We put that back into developing our facility's platform or by reinvesting in our staff in terms of science, technology and engineering."
Asked about the impact of politics on the nuclear industry, Howarth said "nuclear moves on a very long time cycle, much longer than politics, and political positions will come and go".
"Ten years ago, we weren't clear over the direction of travel within the UK; we didn't know whether we were phasing out or building new nuclear reactors and in 2007 a government consultation was launched for new nuclear build. So not only have the organisations changed, but the trajectory has changed in terms of the nuclear programs within the UK. But this is where we have a real opportunity. We've got all the right bits of the jigsaw, we just need to build the right picture appropriately."
Asked about the involvement of experts from outside the UK in NNL's work, Howarth said he is developing a technical advisory board, in which NNL might include expertise from abroad.
NNL already has long-established connections with nuclear laboratories around the world, he said. For example, its scientists have shared models based on the Fukushima-Daiichi accident with their counterparts at the French Alternative Energies and Atomic Energy Commission and the Idaho National Laboratory in the USA.
Researched and written
by World Nuclear News