(Nuclear) Reaction time

Four million pounds is a lot to pay for a fence. If you’re going to fork out that much, you will want to make pretty sure there is going to be something inside. The fence in question is destined to surround Britain’s first new nuclear power station since Sizewell B. Fencing contractor Kier is already on site - a potential sign that French energy giant EDF is poised to push the button on Britain’s next generation of nuclear stations

The government last month gave its clearest indication that it has given nuclear a clean bill of health after the Fukushima disaster put nuclear expansion on hold, pending a safety review. Energy minister Charles Hendry confirmed that the government would publish a list of confirmed new sites before parliament’s summer recess.

Germany is to invest in more renewable energy. anyone who regularly flies over germany will get the impression that the country is already littered with wind generators

In theory, EDF is unlikely to get planning permission for its first £4.5bn reactor in Hinkley, Somerset, until the end of 2012. But tell-tale signs are emerging that the generator is going ahead with early preparatory works.

In addition to that fence, Kier and Dutch JV partner Bam are in the final stages of bidding for the £120m earthworks package. Again, there are indications, aired recently in Building, that EDF is preparing to push ahead with some of the earlier contracts irrespective of the status of planning.

It would also appear that plans for the next potential nuclear new build, at Sizewell in Suffolk are being warmed up.

Britain’s stance contrasts with a number of other countries in Europe, where the nuclear issue has divided public opinion. The disaster prompted a lot of soul searching - and not a little poll searching - among politicians.

Some countries have signalled an intention to phase out nuclear post-Fukushima (Scotland had done so even before the event).

Germany was the highest-profile example. Only 19 days after the disaster, the coalition government, led by the Christian Democrats, declared it would turn off the last plant by 2022, having the previous year defied popular opinion by extending the life of its reactors by an average of 12 years. Italy followed suit.

Pro-nuclear bodies in the various countries have reacted angrily, claiming the policy u-turns have been driven by political expediency rather than scientific evidence.

Be that as it may, as with many political decisions the world over, the law of unintended consequences applies. Germany, which relies on nuclear for 23% of its energy needs, is to invest more in renewable energy. That takes time to implement. The increased demand for wind generators could push up prices. Anyone who regularly flies over Germany will get the impression that the country is already littered with the things.

As to offshore generation, Germany is a big country, but with a relatively short coastline (pro-nuclear pundits have observed wryly that the last thing that German stations are at risk from is tsunamis), restricting scope for offshore wind power.

Increasing energy efficiency targets, possibly by tax incentives, is probably the most readily effective measure, but unlikely to make up all the energy gap. That leaves extending the life of coal fired plants as an option. But that would mean a lot of CO2 going up into the atmosphere. And that would mean a lot of CO2 targets going up in smoke.

• As well as making its name in the nuclear industry, Kier is regarded as being among the more risk-averse firms financially. However, at last month’s analyst visit to Sheffield the group embarked on what was possibly the most high-risk PR strategy ever encountered on investor outing. Kier carries out social housing maintenance and repairs. Rather than merely running a Powerpoint presentation on the type of work that it carries out, Kier took analysts to the homes. That has been done before - but with the analysts being shepherded en masse around estates. In this case each one was allotted one operative and one van and spent a couple of hours literally “on the job”.

Most (myself included) returned open mouthed, with astonishing tales about what the operatives encounter on their daily routine. All of life was there, including some abusive tenants, which all the men took in their stride. It could have gone horribly wrong; in the end it was the most realistic insight many of us are likely to encounter.

Alastair Stewart is a construction analyst at UniCredit Research