TECHNICAL ANNEX. Power People: The Civil Nuclear Workforce

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1 TECHNICAL ANNEX Power People: The Civil Nuclear Workforce Prepared by Cogent September of 13

2 PREFACE AND ACKNOWLEDGEMENTS Cogent is grateful to the organisations that participated in the development of this report by supplying their data. Participant Organisations - British Energy - Dounreay Site Restoration Ltd - Low Level Waste Repository Ltd - Magnox North Ltd - Magnox South Ltd - The Nuclear Decommissioning Authority - Research Sites Restoration Limited - Sellafield Ltd - Springfields Fuels Ltd - Urenco UK Ltd Special thanks are also due to the peer review group for their input. The contents of the report are the responsibility of Cogent SSC and should not be viewed as representing any other organisation s interest, nor does organisational participation indicate endorsement. 2 of 13

3 1. INTRODUCTION This Technical Annex provides a description of the sources and methods used in the Power People; Civil Nuclear Workforce report. In particular, it explains the background to the working assumptions adopted and the limitations of the estimates produced. The various demand forecasts presented in the main body of the report have been validated by industry experts, and the final text of the main report has been assessed by an external peer review panel. 2. BACKGROUND In September 2008, Cogent was prompted by the publication of the Government s nuclear energy white paper to undertake an assessment of skills in the civil nuclear industry. The data, collected over six months, was combined with earlier work by Cogent and others to provide a reliable picture of the workforce in the UK through to Power People is the first in a series of four publications under the Renaissance Skills banner. Research Considerations As with all forecasting, a number of assumptions have had to be built into the models and analysis in order to make the process tractable. Overall, the forecast assumes that there would be no critical changes in current policy or existing circumstances that would alter expected levels of activity. The demand forecast in this report did not include the supply chain in detail; however, the report can be used as a strong indicator of likely future developments. In order to make the data from different operators comparable, a set of 13 standardised job contexts was devised, coupled with 5 skill levels. Further detail about the developments of the job contexts is provided later in this document. 3. RESEARCH FRAMEWORK The following employment areas were considered within the research: - The NDA estate - British Energy sites - Urenco - New build - including alternative scenarios - Contractor workforce The study was conducted collaboratively with stakeholders within the industry and sub-industries. 4. METHODOLOGY The study used a combination of research methods, including scenario planning and quantitative estimations. This was underpinned by qualitative analysis in order to produce a more robust outcome. Essentially, the process consisted of two stages, a comprehensive review of the employers own resource demand expectations, followed by the assembly of two model scenarios representing replacement of a) half of the current capacity, and b) total replacement. A fundamental unit of generating capacity was defined, based on a generic PWR unit. This used historical data from Sizewell B, currently the UK s only operating PWR. Total replacement capacity 3 of 13

4 equated to the output from 8 generic PWRs. Feedback and comments from the consultation provided valuable insight to allow iterative refinement of the scenarios. Data for the new build resource requirement was retro-analysed from Nuclear Industry Association constituency data. Quantitative Method Quantitative data was obtained directly from operators through a matrix showing the forecast workforce levels in each job context from 2009 to Separately, the operators were also asked to indicate the existing numbers at each skill level as a function of age band. The reply rate was close to 100% Scenario Building Techniques Cogent employed scenario building methods, based on two-rounds of a Delphi survey, to present an indication of likely trends in the new build nuclear workforce. The objective was to predict the workforce demand for 4 PWRs and for 8 PWRs. It was assumed that nuclear operators data factored in government policy, the broad industry strategy and the interaction of the two. The future price of electricity, and potential financing arrangements were not considered as explicit influences. Experts from different parts of the industry s sub-sectors were consulted to validate the models. Adjustments Made to the Demand Forecast Model The main adjustments made to the model in order to produce a forecast were as follows: The duration of forecasts was set at 32 years (from 2008 to 2040) although in practice the period to 2025 is as far into the future as many employers will provide data. Considerable attention was given to the data structure of job/role classification. This had to be a useful structure yielding meaningful skill and qualification forecasts but had also to be achievable for most employers. Cogent had already developed a Nuclear Skills template comprising of 13 Job Contexts in nuclear at 5 Skill LeveIs. In practice, NDA s National Skills Working Group s Resource code system can be correlated to Cogent s template (correlation chart available) - although the NDA sites employers data do not adhere strictly to the NDA code system. The NDA system was later extended to include an implicit correspondence with the Cogent format. Informed assumptions were made for forecasts of non-nuclear skills needed for new-build. In the case of new-build it needs to be recognised that there may be a large workforce on the site before it becomes a Nuclear Installation, and that workforce needs to have a certain basic level of nuclear knowledge. Nuclear operator s data on short and long term industrial forecasts are included directly in the model. Some forecasts were based on extrapolation where trend data were not available. 4 of 13

5 5. DATA COLLECTION AND SOURCES Data originated from a number of sources. Collecting detailed and accurate data is important in making valid forecasts and assumptions about the forces that drive demand. Cogent s approach was to obtain broad input initially, then iteratively refine the data stream. Current nuclear workforce data was collected by primary research from all of the civil nuclear operators in the UK. 31 civil nuclear site licensed companies (SLC) and their headquarters were invited to submit data against the matrix of 5 skill levels and 13 detailed job contexts. Age profile data were also requested. This was used to develop an initial understanding of the resources and to set the baseline for the demand projection. These data were then used to generate demand forecasts. Feedback achieved a 98% response rate. Data collected from the nuclear operators were not always available in same format. These data were cleansed and grouped into following three nuclear sub sectors. Decommissioning Energy Generation Fuel Processing Data Sources for Nuclear New-Build New build data from Nuclear Industry Association (NIA) members was retro analysed, in consultation with the Expert Panel new build working group, commissioned by the Department for Energy and Climate Change. Consultation Meeting and Workshop A joint workshop was held on 2 nd July 2008 with steering panel members and employers in order to review new build skills needs, discuss emerging themes from preliminary work and identify issues to explore in the new build programme. Attended by a cross-sector of nuclear employers, the workshop helped to share the emerging issues of the research. Employers were invited to discuss the areas that they wished to see addressed during the workshop and identify possible areas of criticality. New Build Expert Panel Consultation An online consultation survey was sent out on 20th August 2008 to over 30 authoritative individuals of major nuclear organisations, inviting them to give their views and comment on a number of new build workforce criteria. The consultation survey achieved a 63% response rate. The new build workforce estimate generated in this report reflects the perceptions and opinions of those who responded. Peer Review Peer review was used to establish the quality and fitness for purpose of the report. Reviewers received a briefing letter and a pro-forma identifying particular areas for consideration. This ensured a degree of standardisation between responses, although opportunities to add free text were also included. The assessment covered: Impact and value Quality of LMI Clarity of Headline and Storyline Structure Uniqueness 5 of 13

6 Most of the reviewers provided detailed replies to the questions listed in the template, quantifying the response with a grading on a 10 point scale. For some questions, reviewers did not mark any boxes but provided comments only. Responses for each of the questions are summarised and key areas of strength and weakness highlighted. See Appendix KEY DRIVERS OF CHANGE Nuclear industry activities are largely dictated by central Government decisions and internal factors in the industry. In other words, external factors will generally have little direct effect on the activity of the industry, with the following exceptions. Government Policy The Planning Bill 2008, which is now effective, will enable better control of the planning processes and quicker decisions for major projects of national interest, including nuclear new-build. Other than new build, the expectation is that the skills demand will be dictated largely by central Government decisions on decommissioning, the reliability of the operating power stations and the relicensing of AGRs. This is because nuclear power stations support base load rather than responding to load demand. The Future Price of Electricity The economic case for maintaining, upgrading and relicensing the Magnox and AGRs depends on the future price of electricity (contracted and forecast). In the period to 2025 it is anticipated that electricity prices will not fall from the current level, except in the case of serious deflation and/or surpluses of carbon fuels, which could lead to earlier shutdown of the AGRs. Serious Economic Downturn A serious economic recession might have the effect of reducing tax revenues available to HM Treasury to spend on NDA activity, although Government has already expressed long term commitment to the NDA programme. New Build Investment Plan For any utility investing, the case for a new-build project is dependent on both forecast demand for electricity and a threshold price level for competing generation. New build projects will necessarily be financed in construction over a period of about 5 years with longer term pay back. The availability of financing may prove to be a limiting factor in the rate of launch of new build projects. Risk of delay has been a significant issue for nuclear finance in the past, something that the Planning Bill 2008 may help to resolve. 6 of 13

7 7. SCHEMATIC OF THE RESEARCH Planning & Preparation ============================================================= Identify scope and timing of report Establish Job Context and agree terms with nuclear operators and Review Consultation with Nuclear Operators Data Collection & Analysis ============================================================= Written consultation with key stakeholders Matrix MS Excel Survey invitation to stakeholders Case studies Desk research: literature, reports and web-sites Consultation Meeting with industry experts Analyse data and identify emerging issues Reporting ============================================================= Draft Report Peer Review Identify areas of improvement and amend the report Final Report 7 of 13

8 8. CLASSIFICATION OF JOB CONTEXT The Civil nuclear operator s footprint encompasses functionally and geographically diverse operations around the UK. In practice, each nuclear operator has a comprehensive range of operational job roles in which they provide employment. Thus the consistent capture and classification of jobs was a particularly important task in shaping this research. A job-oriented approach was used to classify roles by occupational title with the help of the industry expert panel at NSWG. The job context was determined so as to capture the job roles rather than disciplines. There are important limitations in using a skill based job classification, since the procession of certain skills does not necessarily imply their actual full or even partial use. For example, a Mechanical Engineer could work in Decommissioning or as a Reactor Shift Engineer, or as a Safety Case author. Equally, an Electrical Engineer could work as a Process Operations Technician or a Reactor Engineer. The 13 job contexts were developed, in order to provide a common language to collect consistent LMI data and capture the competences and associated qualifications/training required by various roles.they were developed on the basis of groupings of the NDA s occupational job roles. Although not completely comprehensive, the resulting system has been approved by the industry experts in the NSWG. Factors reflecting the level of qualification or career history of employees have been excluded from this research. Description of Core Nuclear Job Contexts Energy Production Operation Energy Production captures a number of roles associated directly with the generation of electricity from a nuclear source. For example, this will cover the BE and Magnox North reactor shift engineers and desk engineers, as well as the technicians responsible for the operation of the turbines and auxiliary systems. This classification will further capture the equivalent roles within the naval nuclear propulsion programme (submarine reactor and propulsion watchkeepers). Decommissioning Operations Decommissioning Operations covers mainly those personnel directly involved with the decommissioning operations in the NDA contracted sites e.g. Decommissioning Operators, Technicians and Engineers. Process Operations Process Operations covers the processing of nuclear fissile material in this sense it generally involves those directly involved in the operations at Urenco, Westinghouse Springfields and Sellafield. For the Defence Sector there will be personnel at AWE and the naval fuel plant at Rolls Royce Derby. Process Operators, Technicians and Engineers. 8 of 13

9 9. DEMAND FORECAST The Demand Forecast in this report employed quantitative methods and expert assumption based on current and historical data from the civil nuclear sectors. The scenarios modelled here are Cogent s own and are for the purposes of forecasting resource demand only. The Civil Nuclear Sector model was developed to project demand, layered by 13 job contexts, through to The demand forecast was based on estimates of job role demand, and its effect on the demand in each sector given that no action is taken to resolve the workforce shortage. In order to cover all aspects of the civil nuclear industry and associated issues, the analysis was divided into three parts. Decommissioning Energy production Fuel processing Demand Scenarios The report presents two scenarios for a new-build programme; each scenario has different drivers and captures different development pathways. A primary purpose of new-build scenario building was to create integrated images of how the future might evolve, and to provide a range of forecasts between what seems realistic at the present time and the upper bound of what might actually arise. The Scenario plan takes a Scenario 1 and then considers the effect of variants causing acceleration on the skills demand picture to make a Scenario 2. New-build scenarios in this demand forecast modeling considered the four and eight PWR reactors using aggregate intelligence based on industry expert knowledge and NIA s constituency data. The scenario models did not attempt to project alterations in demand caused by changes in the investment plan, any policy of operators and government or regulators. The Scenario plan for new-build skills will therefore have to consider: - identification of sites for New build - investment plans in New build: key investors and the place of New build in their overall business plans, financial demand versus availability, programme of planning and construction - the planning process and duration as they actually materialise - reactor type and size, which define the amount of skilled work - project management - sourcing of the equipment and the UK supply element - sourcing of nuclear island detailed design and UK participation - site engineering construction scope and UK participation. The scenario must also consider the interaction between new-build projects which may be undertaken by and for different investors. There may, in theory, be an optimum sequence of, and interval between, new-build projects but without a single controlling hand over them all. Coordination is unlikely to exist in practice. 9 of 13

10 Scenario 1 The scenario 1 incorporates the following variations: British Energy: the AGRs to operate until shutdown at the current licensed end of life (per table). Then to be defuelled and decommissioned. Sizewell B PWR to continue operation through STATION SHUTDOWN AT START OF Hinkley Point B 2016 Hunterston B 2016 Hartlepool 2014 Heysham Dungeness B 2018 Heysham Torness 2023 NDA sites: to follow the current LTP on each site. Oldbury and Wylfa to shutdown in Urenco: to continue operations, with additions to capacity at the historic rate. New Build: Four new PWR units becoming available at 18 month intervals from Scenario 2 The scenario is as the Senario1 but with the following variations: British Energy: four AGRs operate for 5 years beyond current licensed life New Build: Eight new PWR units becoming available at 12 month intervals from The extent of UK industry participation is based on that described in the NIA New Build capability report 2006 (updated 2008). 10. ASSUMPTIONS IN THE SCENARIOS General assumptions made for the existing NDA, BE, Urenco and other segments of the industry are that there are no critical changes in policy or circumstances to disrupt the level of activity from current and planned levels. On the whole, no new nuclear licensed sites emerge except where extensions of existing ones during the plan period. For the NDA, the demand for skills follows the pattern set out in Lifetime Plans of each site. For BE, the AGRs continue to be operable for their licensed lifetimes, with a 5 year extension for Hartlepool and Heysham 1 power stations and they all generate power while operable. However, it is known that BE intends to extend the operating lives of the AGRs as far as economically viable and subject to licensing, so further extensions of life may be expected. 10 of 13

11 For Urenco, planning cycles can be shorter because of the technology and the market they serve. In the UK, the Capenhurst plants continue to operate with a slight decline in skill demand over the next 4 years then remaining constant to New enrichment capacity is built progressively in the UK and requires additional manning at a rate of 2% pa. In general, high level and intermediate level wastes continue to be held on the sites where generated at least to AGE PROFILE AND RETIREMENT The age profile of the civil nuclear workforce data was independently collected by age profile short questionnaire from all civil nuclear operators in March It recorded age distribution by 5 skill levels with 10 year age band. Age profile of the UK workforce was used as a comparison in this report was collected from the Labour Force survey (LFS) In order to demonstrate data comparability, age distribution of UK workforce was analysed by the same 5 skill level used in civil nuclear industry primary data analysis. The age profile information is used in calculating the retirement attrition. The retirement age is assumed that everybody above a 65 retires and leaves the nuclear sector. This age limit may be slightly different for each sector and may change over time. Still, in most nuclear sectors, the number of people above the retirement age is relatively small. It appears that a retirement rate of nuclear workforce has the most significant effect on the number of nuclear workforce in the year 2020 to Retirement Attrition The forecasts assume that the number of new entrant and the number of leavers would not change over time. There is an uncertainty about spontaneous leavers, which is considered a small risk factor in the analysis. The retirement attrition in each consecutive year can be written as follows: Retirement Attrition = Supply of existing workforce Retirement Supply of existing workforce is defined to be equal to the number of people currently working in the civil nuclear sector. The current stock of workers depends on the stock of workers a year earlier less retirement attrition. The number of people who are retiring was estimated on the basis of the age profile of the current existing workforce. Currently there is a trend of employers offering an increasing number of part time contracts to attract a short term workforce. This may increase to total number of workforce represented in this report; because the demand forecast created in this report was based on full time equivalent (FTE) members of staff. It is assumed that the size of a workforce will decline with a fixed growth rate, equal to the average growth rate of over the last 8 years. It is also assumed that the demand for workforce grows with the same percentage. This can be formulated as follows: Demand new = Demand old * Growth rate There is a correlation between the growth rate of the workforce and the number of new build nuclear power stations. The relationship is as follows: Growth rate of workforce = Scenario Factors * Growth rate new build 11 of 13

12 It is assumed that the demand in the base year is equal to the number of people employed in the sector. However, if more specific information is available, or policy changes are expected, this information has been be used, in order to get a better estimate. The replacement demands for job roles are as follows: Replacement Demand = Total demand Retirement Attrition Expansion Demand As the UK government recently announced new sites for the nuclear new build power station and also lifetime extensions agreed for existing AGRs, it is expected that the workforce will grow significantly in the near future. APPENDICES Appendix 1 Occupational Skill Level of Civil Nuclear Workforce 2009 Appendix 2 Civil Nuclear Workforce by Region and Nation 2009 Appendix 3 12 of 13

13 Retirement Profile of Civil Nuclear Workforce Appendix 4 Age Profile of Civil Nuclear Workforce 2009 Appendix 5 Demand Forecast of Civil Nuclear Workforce Appendix 6 Civil Nuclear Industry Job Role Demand Forecast Appendix 7 Peer Review form 13 of 13