Yorkshire set to lead world with £160m nuclear power deal

A £160m deal to make South Yorkshire a world-leader in manufacturing new nuclear power stations has been unveiled by the Government today.

Business Secretary Lord Mandelson has announced a package to finance a huge 15,000-tonne forging press at Sheffield's Forgemasters to manufacture key components for power plants which will built over the next decade.

In a deal which will confirm South Yorkshire's emergence as a centre for low carbon technology, the Government is expected to provide up to 80m in soft loans, with Westinghouse expected to provide about 40m in forward orders for the new press. The balance is likely to come from a combination of bank debt, with state-supported Lloyds set to play a role, and some private equity.

The press will be only the second in the world, allowing Forgemasters to play a leading role in the development of the new generation of nuclear power plants being ordered by the British Government, along with projects overseas.

"It is brilliant news for the civil nuclear supply chain in Britain, and will help them compete against the best in the world," Lord Mandelson will say.

Sheffield Central MP Richard Caborn, who was an apprentice at Forgemasters, said: "This is a major statement about manufacturing and investment on this magnitude is very pleasing indeed. The challenge now is for the rest of industry to rise to the challenge. We ought to be looking at becoming a major international centre of excellence."

Currently about 40 companies in Yorkshire are involved in the nuclear supply chain, although this number is growing as Britain gears up for a 40bn civil engineering project to build up to 12 new nuclear power stations.

In a further boost for the region, the Government has also named Yorkshire and the Humber as a low carbon economic area for carbon capture and storage (CCS).

The designation is likely to help the region attract new investment.

The technology is designed to catch harmful CO2 emissions from burning fossil fuels, which can be sent offshore and stored under the sea in depleted oil and gas fields.

The Government expects CCS to be able to sustain 100,000 jobs in Britain by 2030, and worth 6.5bn-a-year to the economy, with Yorkshire and the Humber leading the way.