LONDON (Reuters) - The government will lend 80 million pounds to a steelworks to help it build a major new manufacturing facility for nuclear power plant components, the Business Secretary said on Wednesday.
Peter Mandelson said the loan to Sheffield Forgemasters, which will be complemented by funding from U.S.-based firm Westinghouse, was part of a strategy to equip Britain with the capacity to compete globally in innovative industries.
“This is not just help for one company. Today we’re announcing a willingness to invest that will make the UK a leading provider in the nuclear and the low carbon supply chain,” Mandelson said in a speech.
With the joint public and private funding, Sheffield Forgemasters will build a 15,000-tonne press capable of producing ultra-large forgings such as pressure vessel and steam generator components that are crucial to modern nuclear plants.
“There are just one or two other companies in the world, literally, with the kind of capability the new forge will provide ... There are no others in Europe. We would be the first,” Mandelson said.
Japan Steel Works Ltd dominates the market for ultra-large components, with 80 percent of global market share for parts used in reactor pressure vessels, pressurisers and steam generators. It is a supplier to France’s Areva, the world’s leading maker of nuclear reactors.
Korean firms, particularly Doosan Heavy Industries & Construction, have been actively building up capacity to compete with Japan Steel Works in the field.
This is seen by industry experts as an area where a supply bottleneck could build up. In recent years, a production capacity shortage has caused delays in some nuclear power projects in China.
Mandelson said this was typically the kind of sector where the government, in partnership with private companies, should be investing as these were future growth areas that would provide jobs in a sustainable, low-carbon industry.
“If we hadn’t made investments with Westinghouse in Sheffield Forgemasters, I’ll tell you where that press would have moved to and where the forging would take place: in Korea,” he said.
“I have nothing against Korea ... but if we could have it here in our country, why shouldn’t we?”
Westinghouse, a unit of Japan’s Toshiba, has not disclosed the amount of money it is investing in the project.
The Daily Telegraph, without citing sources, said the total investment in the project was 170 million pounds.
The firm said the press would “put the UK centre-stage in the global supply chain for the expected nuclear renaissance.”
But RWE npower, a utility planning to build nuclear plants in Britain, said on Tuesday multi-billion pound investments in the energy sector could be under threat if no party wins an overall majority in an election expected on May 6.
The Labour Party is trailing the Conservatives in the polls, but the gap is not wide enough to guarantee either party will have a working majority in parliament.
RWE npower’s designate chief executive, Volker Beckers, said the lack of a clear winner could delay crucial investment decisions in the nuclear sector and complicate policy-making.
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