Renewable energy: Critical mass
"The nuclear industry was for many years not very glamorous in this country, to say the least," recalls Amec Nuclear legal director Kevin Smith. "Now, though, it has suddenly become fashionable," he continues, "with law firms suddenly claiming they have got a nuclear law department". The shift in attitude began in 2003, counter-intuitively with the establishment of the Nuclear Decommissioning Authority (NDA), which subsequently opened up the decommissioning of various ageing nuclear plants, including Sellafield, to private companies. Around this time the Government's commitment to reduce its carbon emission levels, agreed under the Kyoto Protocol, came into force.
September 23, 2009 at 06:49 AM
5 minute read
Carbon emission targets, decommissioning and a wave of new power stations promise to revive the global nuclear industry. Alex Aldridge finds a select group of legal veterans at the ready
"The nuclear industry was for many years not very glamorous in this country, to say the least," recalls Amec Nuclear legal director Kevin Smith. "Now, though, it has suddenly become fashionable," he continues, "with law firms suddenly claiming they have got a nuclear law department".
The shift in attitude began in 2003, counter-intuitively with the establishment of the Nuclear Decommissioning Authority (NDA), which subsequently opened up the decommissioning of various ageing nuclear plants, including Sellafield, to private companies. Around this time the Government's commitment to reduce its carbon emission levels, agreed under the Kyoto Protocol, came into force.
This saw nuclear power station construction reappear on the political agenda, with the 2008 Energy Act clearing the way for a series of new builds – the first of which, to be built by French energy giant EDF, is scheduled to be operating by 2017.
In a highly-regulated area, lawyers with a specialisation in the nuclear industry are in much demand. But, after the years that the nuclear industry has spent in the doldrums, there are not many of them around. The handful of true UK-based specialists in this area are mainly found in-house in the nuclear divisions of the major energy companies.
Amec's Smith is one of them, EDF UK general counsel Jean McDonald is another, then there is Fiona Houghton at the nuclear arm of energy company Westinghouse and Sue Quint at British Nuclear Fuels Limited (BNFL). CH2M Hill general counsel Mark Richards, who spent most of his career at Pinsent Masons before moving in-house last year, is the exception to the rule that nuclear specialists do not come out of private practice. Internationally, the name that stands out is Washington DC-based sole practitioner Omer Brown of Omer F Brown II Law Office, formerly a partner at Harmon & Wilmot.
Unlike his UK peers, Richards gleaned most of his nuclear experience abroad – acting as the lead adviser on the Chernobyl Shelter Implementation Plan since the mid-1990s and advising on all civil nuclear decommissioning programmes in countries where this was a condition of EU accession.
"The nuclear industry is first and foremost a global one that is dependant on a global supply chain," he comments. "So, in terms of the law, it is a bit like landing a plane, with the rules and safety procedures very much the same wherever you are."
The country-specific law comes in with construction, planning and environmental legislation. And that is where external counsel are called in. Burges Salmon is recognised as a leader in this area, with environmental law specialist Ian Salter the firm's leading nuclear light. Salter is the firm's relationship partner for the NDA, which it represented on the recent £387m online auction of the first tranche of UK nuclear new build sites – Bradwell, Oldbury and Wylfa.
Freshfields Bruckhaus Deringer is another leading player, regularly working with the UK Atomic Energy Authority (UKAEA) and boasting a long running relationship with BNFL. Currently the firm is advising Westinghouse on negotiations with the NDA over new operational arrangements for nuclear site Springfields, near Preston.
There is also plenty of nuclear-related work around for M&A lawyers at present, as the leading energy players position themselves to take advantage of a new nuclear-friendly era. Clifford Chance, Slaughter and May and Herbert Smith secured roles on the principal UK nuclear deal of the year: the £12.4bn sale of British Energy, the UK's largest nuclear power company, to EDF. Meanwhile, Linklaters represented Centrica on its recent acquisition of a stake in British Energy, while curently the firm is advising on the sale of the UKAEA.
The opening up of decommissioning work to private companies has also provided firms' commercial specialists with work. Linklaters, Hammonds and Pinsent Masons advised the bidders on the recent competition for the contract to decommission Sellafield, with Field Fisher Waterhouse acting for the NDA.
On top of that are the international projects currently being developed. These include the United Arab Emirates nuclear power programme being run by CH2M Hill and the construction of the Belene nuclear power station in Bulgaria and the expansion of the Mochovce Nuclear Power Plant in Slovakia – both of which Linklaters is involved on.
"Where a firm can add real value to nuclear is through its energy offering, with a key role for practitioners who can combine skills and experience in major projects work, corporate restructuring, joint ventures, financing and other related areas," says Charlotte Morgan, a partner in the energy group at Linklaters.
Part of the motivation driving the likes of Linklaters to expand their nuclear focus is the level of work that the wave of planned new build nuclear power stations will generate.
"A widespread set of nuclear new builds – which looks inevitable if the Government is to meet its energy targets – would obviously create a great deal of work across the whole spectrum of nuclear and projects-related law," says Amec's Smith.
"Right now it is manifesting itself through land sales," says Burges Salmon's Salter. "But there is already project and consenting work on the horizon, and when you think that one power station is at least a £2bn project, with a huge amount of suppliers of component parts, all of whom need advising, there will be a lot of work."
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