Chinese Nuclear Reactor Set for UK Generic Design Assessment

King & Spalding

In a statement made to Parliament on 10 January 2017, Minister for the UK’s Department for Business, Energy and Industrial Strategy, Jesse Norman, confirmed that he had requested the UK’s nuclear regulators, the Office for Nuclear Regulation (“ONR”) and the Environment Agency (“EA”), to commence a Generic Design Assessment (“GDA”) of the China General Nuclear (“CGN”) HPR1000 Hualong Reactor design.

The Hualong Reactor 

The Hualong Reactor is one of the trophy assets of the Chinese nuclear industry – the first independently designed Chinese nuclear reactor and the result of the merging of the respective reactor development programmes of CGN and China National Nuclear Corporation. It is also at the centre of the Chinese international export strategy for its nuclear power industry. The Hualong Reactor has achieved design certification by the Chinese nuclear regulator, the National Nuclear Safety Administration. However, International Atomic  Energy Agency (“IAEA”) guidance, and the Convention on Nuclear Safety (which the UK is party to), require that even where reactor designs have been authorised in one State, the regulatory body of another State that proposes to utilise such design should undertake its own independent review and assessment.

The GDA, by its nature, does not involve a site-specific assessment of a nuclear project. However, CGN has previously announced that it proposes to deploy the Hualong Reactor at the prospective 2 x 1,150 MW Bradwell nuclear power project in Essex, currently under development by General Nuclear Services (the project company established by Électricité de France (“EDF”) and CGN for the development of this project). CGN and EDF are the sponsors behind the UK’s only nuclear power station currently under construction, Hinkley Point C. Pursuant to a Strategic Investment Agreement announced in October 2015, they have agreed to develop two further prospective projects, Bradwell and Sizewell C in Suffolk – the former using CGN’s reactor design technology.

The Generic Design Assessment 

The GDA constitutes a front-end, step-by-step assessment of a nuclear reactor design, covering safety, security and the environment. The GDA was developed by the ONR and EA in response to the UK government’s 2006 Energy Review, which concluded that nuclear power project development based on standardised reactor designs which undergo early safety-case analysis would help reduce the duration of the nuclear licensing process and the uncertainty faced by developers during this process. The GDA is not mandatory but, due to its perceived advantages for the developers, has become the accepted norm as the route to market for new nuclear reactors in the UK. The GDA, of itself, does not give the relevant reactor designer or developer (known under the process as the Requesting Party) the permission to implement a nuclear power project. The GDA forms part of the UK’s nuclear regulatory framework, of which the Nuclear Installations Act 1965 (as amended) is the primary component.

According to the Nuclear Installations Act 1965, no person shall use a site for the purposes of installation or operation of a nuclear reactor unless the ONR has granted such person a licence (known as a Nuclear Site Licence) to do so. Therefore, whether or not a reactor design has undergone the GDA, a project proposing to utilise such reactor design will need to obtain a Nuclear Site Licence through a process which will involve, amongst other things, an assessment of the reactor design and safety case. In practice, however, whilst a Design Acceptance Certification (i.e., the end product of a successful GDA) does not have any legal status, it provides a clear indication that a reactor design would meet regulatory requirements to be satisfied in the event of a Nuclear Site Licence application and it will expedite the Site Licence application process. The Design Acceptance Certificate remains effective for ten years from issuance, subject to reassessment and renewal thereafter. The licensing of a project utilising a reactor design which has a Design Acceptance Certificate will be deemed to fall into two phases: phase one being the GDA and phase two being the site-specific assessment.

The GDA is a complex, time-consuming and costly process. The process typically takes five years to complete and the regulators’ costs alone (which are charged to the Requesting Party) run into tens of millions of pounds. The Requesting Party’s own costs will be of a similar magnitude. Areva’s European Pressurised Reactor, which Hinkley Point C will use, successfully completed the GDA in December 2012. The Hitachi-GE Advanced Boiling Water Reactor, to be used at the Horizon project at Wylfa, Anglesey, and the Westinghouse AP1000 reactor, to be used at the NuGen project at Moorside, Cumbria, are both currently at advanced stages of the GDA.

Public Opinion 

The commencement of the GDA for the Hualong Reactor represents clear steps, by both CGN and the UK government, down a path toward the emergence of nuclear power stations owned and designed by Chinese state-owned entities in the UK. This will no doubt prove a controversial, albeit not unexpected, step – safety and security concerns over CGN’s involvement as a mere equity investor in Hinkley Point C (not the technology provider) were the source of much public and political debate in the UK. The government’s ‘pause for thought’ prior to its final approval of that project was seen, at least partly, as a nod in the direction of those who articulated concerns over China’s involvement. For CGN, however, the GDA represents more than just a route to the UK nuclear market (a significant prize in itself): it is regarded as an international gold standard for nuclear reactor design assessment and perceived as a possible gateway into many emerging nuclear nations that do not have equivalent processes in place (notwithstanding current IAEA guidance for each State to perform its own independent assessments). We can be certain that the GDA will be conducted independently and on the exact same basis as the other technologies which have passed, or are currently passing, through it. It will be extremely rigorous, focus solely on the technology design and take many years to complete. Meanwhile, the public and politicians will have plenty of time to discuss and debate.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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