Rolls-Royce and Areva strengthen nuclear co-operation

17 February 2012

Rolls-Royce and AREVA have strengthened their strategic collaboration on nuclear build projects with an agreement signed in Paris today (Friday February 17 2012) The two companies have agreed how Rolls-Royce will support the delivery of AREVA’s EPR reactor in the UK and internationally. This builds on progress made since the two companies signed an initial agreement in March last year.

Rolls-Royce will manufacture complex components and provide engineering and technical services for the first of two EPRs to be built at Hinkley Point, Somerset where AREVA is providing the Nuclear Steam system.

Once contracted, the work could be worth a total of £400 million in revenue to Rolls-Royce for the four EPRs currently planned by EDF Energy in the UK, with much of this work providing direct benefit to the UK supply chain, potentially supporting several hundred highly skilled jobs.

Lawrie Haynes, President-Nuclear, Rolls-Royce, said: “This is an important agreement and I look forward to continuing the strong partnership we have built with AREVA. Rolls-Royce has broad nuclear experience, a strong track record and an extensive nuclear certified supply chain. Together with AREVA, we will work to successfully deliver new civil nuclear projects in the UK and around the world.”

Luc Oursel, CEO AREVA, said: “Since our original commitment in March, we have widened and deepened the scope of our cooperation. Today’s agreement indicates how far we have travelled. We look forward to working with Rolls-Royce across a range of opportunities.”

The UK has today signed a deal with France to strengthen co-operation in the development of civil nuclear energy. Dr Tim Fox, head of energy at the Institution of Mechanical Engineers said in response to the announcement:

“Although it is welcome news that the UK is pressing ahead with the development of new nuclear reactors to secure affordable low-carbon electricity generation, this is not necessarily the best deal for securing UK jobs and skills.

“Although some relatively small contracts are to be awarded to Rolls-Royce and BAM Kier, it looks increasingly likely that the vast majority of the contracts involved in the manufacture and construction of the new nuclear reactors at Hinkley Point and Sizewell will go to France rather than the UK. An outcome the Institution predicted in it Nuclear New Build report two years ago.

“The construction of the nuclear power stations at Hinkley Point and Sizewell will directly and indirectly create about 10,000 jobs. The UK has the ability to undertake about 70% of the engineering and construction work of a new nuclear power plant. We must ensure that we do not miss out on an opportunity to develop UK industry, skills and jobs with the roll-out of the country’s new nuclear power stations.”

In addition to the Rolls-Royce-AREVA agreement, other deals signed in the presence of Prime Minister Cameron and President Sarkozy included:

- A new engineering contract between EdF and Kier/BAM for the UK’s first proposed new nuclear project at Hinkley Point, Somerset, meaning another £100m for companies operating in the South West and 350 jobs.
- A £15m investment in a new world class training campus in Bridgwater, Somerset for EdF employees, new starters and the local community.

At the summit, the two Governments agreed:
- A call for further studies into electricity interconnection between the UK and France.
- A deal to extend cooperation on civil nuclear security and share best practice on security at nuclear sites.
- An agreement to cooperate closely on research and development in the nuclear industry.
- A commitment to work closely to ensure that both nations’ nuclear industries have the necessary skills in place.