Delivering the UK’s critical infrastructure is a national priority
Pictured: Sir Alex in the turbine hall at EDF's Sizewell B nuclear power station
Sir Alex Chisholm, UK Chair
| EDF
At recent economic policy fora I’ve attended, one topic has dominated: how infrastructure investment can restore growth. We want new infrastructure, but at lower cost. This article explores how we can achieve these twin goals.
Whether its building new projects, or renewing existing infrastructure, there is a mammoth task underway across Britain, involving millions of people.
More wind, solar and nuclear energy, improvements to electricity networks, water system upgrades, transport projects, digital infrastructure – all of them vital to the country’s future prosperity and economic competitiveness.
The government has rightly prioritised this; the investment is badly needed and should be welcomed. Government has also been clear about wanting to learn from previous infrastructure programmes and improve delivery.
But if we want the new infrastructure to drive growth, we should prioritise enabling over replacement infrastructure.
Simply replacing an old asset with a newer version of the same thing often delivers limited additional economic value. For example, a new rail line replacing an antiquated one may improve reliability and journey times – of great importance to the users of the line – but fundamentally does not change what people are able to do.
Contrast this with infrastructure that enables entirely new activity. Fibre replacing copper enables new digital services and capabilities. New energy and data infrastructure can unlock wholly new forms of economic activity, stemming from the AI revolution that is upon us.
The biggest gains come when infrastructure enables something that could not previously happen.
So, what are the solutions?
First, we need to move away from one-off projects and embrace the ‘build and repeat’ philosophy.
Take the nuclear sector. For many years, particularly in Europe, we built nuclear reactors one by one, with long gaps between projects. That is not an efficient industrial model.
What we see today is very different. Countries are developing nuclear programmes, not just individual projects. And for industry, this is fundamental.
At EDF, this is exactly the approach we are taking. In the UK, Sizewell C in Suffolk will replicate Hinkley Point C in Somerset and benefit greatly from this. At Hinkley we are seeing major efficiency improvements in the construction of unit two versus unit one.
Why does it matter? Because every time you repeat, you learn. Engineering is more mature. Modular components can be made offsite in factories. Suppliers know what is expected. Teams become more efficient. Construction sequences improve. And ultimately, you reduce risk, cost and schedule.
Secondly, we need a sustained effort to improve the national skills base. There has been some good work on skills. However, much more is needed.
Skills shortages remain a real challenge, particularly in recruiting highly skilled workers in the UK. Unless this is addressed, delivery ambitions will be harder to achieve.
Again at Hinkley, nearly 20,000 people have now been trained in local “Centres of Excellence” and over 1,700 apprentices hired and trained.
The project has had to deliver this level of training to fill the gap in the supply of suitably qualified people following the twenty-year hiatus in building nuclear plants. Sizewell B power station, completed in 1995, was meant to be the first of a series, but ended up being a “one-off”.
These new skills will benefit not just Sizewell C but the future Small Modular Reactor programme, as well as other infrastructure projects.
Thirdly, there is a need to deliver on the planning and regulatory reforms recommended by the Fingleton review and others.
The key question is whether they will translate into real-world outcomes, so the focus should now be on implementation rather than announcements.
We also need to ensure regulation is proportionate and doesn’t block growth. Speaking of growth, taking five regulators together – Ofcom, Ofgem, Ofwat, CMA and FCA – and looking at published data for the period 2014-24, expenditure has increased by 75 per cent (from £761m to £1.33b) and the number of staff by 97 per cent, to over 10,000 today. This is not sustainable.
Finally, we need to bring down the costs of electricity and energy generally – to help enable competitiveness to return.
Some of this cost reduction will be achieved by using more of the clean power that has grown so much in recent years.
Too much goes to waste in the current system, not least in transport where we spend billions on imported diesel and yet pay windfarms to turn off when there is low demand.
With only 20 per cent of the UK’s total energy consumption in the form of electricity, there is a huge opportunity to switch out of diesel, petrol, heating oil and gas and to enable a more electric Britain.
An increasingly electrified economy will be essential for supporting the digital economy, including vital but energy-hungry data centres. Future digital growth will depend on having access to reliable, large-scale electricity supplies.
The transition needs to be affordable. Overly expensive electricity risks becoming self-defeating if it undermines support for the transition or discourages adoption.
Conclusion
The government's focus on investing in critical infrastructure and enabling better delivery through the reforms underway is to be welcomed. Industry knows it needs to play its part by improving efficiency.
Continued political backing will be important if reforms are to have an impact.
Future investment should focus on infrastructure that enables new economic activity, not just the replacement of existing assets.
Progressing reform in planning, regulation, skills and electrification will ensure infrastructure investment achieves its full potential.
