Decommissioning

In the run up to the NII making its decision on which reactor will lead the UK´s new nuclear build programme, Sue Quint of Morgan Lewis´London Nuclear Energy Practice, speaks to Nuclear Energy Insider about the regulatory issues that site licence applicants will have to take on board.

Interview by Katherine Steiner-Dicks

Nuclear Energy Insider: What are the initial regulatory issues for the first wave of new build applicants in the UK making an application to the Nuclear Installations Inspectorate (NII) for a Nuclear Site Licence (NSL)?

Sue Quint: The consortia that have indicated their interest in applying for a NSL to construct new nuclear plants in the UK, are all multi nationals with business interests both inside and outside of the UK.

One of the important challenges for these applicants will be to align business arrangements with regulatory expectations to adhere to the UK’s regulatory regime. This will involve clear corporate governance processes to show the UK Regulator that the JVs created by the consortium (newcos) are posed to develop into independent organisations capable of being granted a nuclear site licence.

Nuclear Energy Insider: What are the Corporate Governance issues impacting any applicant applying to the NII for a NSL?

Sue Quint: The newcos will, like all other newcos, require the relationship with their parent to be clearly defined, with clear powers of delegation that do not infringe on the regulatory independence of the newco.

Memorandum and Articles of Association will need to be drafted together with a Company Manual, the appointment of Directors and Executives and the corresponding terms of reference for Boards and Board sub committees.

While these are normal governance arrangements for any newco, two documents that play a unique regulatory role are the Management Prospectus (MP) and the Nuclear Baseline.

The MP demonstrates that the newco is taking the necessary steps to become a compliant owner and operator of nuclear power plants.

It provides an overarching demonstration of how nuclear and environmental safety and security is managed within the organisation and shows how the management controls are appropriate and sufficient.

The Nuclear Baseline will set out the organisational framework and organisational structure that fits licensed activity, showing the Regulator the key roles that will be in place within the newco at the time the Licence is granted.

Nuclear Energy Insider: What is the key Regulatory focus of any applicant?

Sue Quint: Clearly the key focus is preparation of the NSL application, the application to the Environment Agency and the application to the IPC.

Focusing on the NSL application, this will have many component parts and it is vital that the newco integrates each part to show that there is an effective and integrated system of management and control within the organisation.

The application needs to be developed to meet the project needs as they develop over time in a controlled manner, following a procedure, to assure not only compliance but transparency, appropriate management review and verification.

Nuclear Energy Insider: What are the issues relative to the applicant and the supply chain?

Sue Quint: A vital part of the nuclear new build project, will be the engineering, procurement and construction contracts to ensure that the project is delivered on time and on budget.

There is currently a great debate on the form of these contracts. Will a traditional standard form (that the UK construction industry is comfortable with) be used or will a newly created breed of contract be developed?

I am sure the debate will continue for sometime, with parties seeking to balance the interest of the newco, its parent and the traditional suppliers of nuclear plants, components and materials.

Although the consortium players have internal capabilities, that will be used by the newco, from a regulatory perspective, it will be very important to maintain the independence of the newco and demonstrate to the Regulator that it is an intelligent customer, with contracts that will be robust enough to secure the project on time and budget but most importantly in accordance with the requirements of the Regulator and the NSL.

Nuclear Energy Insider: How important is training for any organisation interested in nuclear new build?

Sue Quint:  NSL Licence Condition 10 specifically deals with training and so training is a must. 

The purpose of the License Condition is to ensure that all people who carry out activities during design, construction and manufacture, commissioning, operation or decommissioning of a nuclear installation, which may affect safety, are adequately trained for the purpose.

The licensee is expected to ensure that the necessary training requirements are identified for each activity and that individuals, who carry out these activities, can demonstrate that they have received such training and records are kept to demonstrate that they have been trained.

Even at the early stages in the development of the newco, it is prudent to ensure that training plans are put in place so that all personnel, who maybe involved in the design and construction of the nuclear installation, are properly trained for the purpose and a record is kept of such training. This requirement includes appropriate training of senior management who will be responsible for overseeing the overall project.

About the interviewee

Sue Quint is the former General Counsel of BNFL and recetly joined as partner within the London nuclear energy practice of international law firm Morgan Lewis. She is specialising in regulatory issues that face the first wave of nuclear site licence applicants in the UK.

Morgan Lewis’ Nuclear Energy Practice represents more than 60% of existing power plants in the United States and is handling a similar percentage of the applications for new plants in the US.

More recently, they have applied this industry knowledge and experience to advise clients in international markets, and from their London office, they represent the first applicant for a new nuclear plant in the UK.