Lord Foulkes of Cumnock
To ask Her Majesty’s Government what contribution they propose nuclear generation should make to a balanced energy policy.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)
My Lords, the long-term vision for electricity market reform is of a market where low-carbon generators compete fairly under a robust carbon price. New nuclear should be able to contribute as much as possible to the need for new capacity within that framework. Last month, the Government welcomed Hitachi’s purchase of Horizon Nuclear Power for £700 million in a deal that will help to meet energy security and decarbonisation objectives, and bring massive economic benefit. This demonstrates confidence in our new nuclear policy.
Lord Foulkes of Cumnock
First, I thank the Government for publishing their Energy Bill to coincide with my Question. Does the Minister agree with me that, with the imminent rundown in our current generation and the inability of renewables to provide base-load generation, new nuclear is absolutely vital? Although some companies have announced their intention to go ahead with new nuclear, there have not been any go-aheads yet. Will the Government, as soon as possible, announce an agreement on pricing so that new nuclear can start as quickly as possible?
Baroness Verma
My Lords, the noble Lord of course knows that we are very keen to ensure that we have a diverse energy mix, and part of that will be new nuclear. He also knows that some processes take a little longer than others. However, new nuclear will help to diversify our electricity supply. Each nuclear power plant will be able to give reliable base-load electricity to around 6 million homes per year. We look forward to working alongside all our energy providers, including nuclear.
Lord Jenkin of Roding
My Lords, the question of new nuclear is slightly overshadowed because, in America, the extremely low price of unconventional gas is causing some anxiety to the nuclear industry. Will my noble friend accept that the Government’s policy of contracts for difference being introduced in the Energy Bill— the noble Lord, Lord Foulkes, has drawn my attention to the fact that the Bill is being published today; I have not seen it—is hugely important to the reassurance of the nuclear industry that it will be able to operate successfully and at a profit? Can my noble friend say when the actual strike prices will be announced, because that is the key?
Baroness Verma
My noble friend is of course right that there needs to be certainty. However, he will know that these things take a lot of negotiating and a lot of detail needs to be worked out. When I am able to offer my noble friend a definitive answer, I shall bring it to the House.
Lord West of Spithead
My Lords, how much have we drawn on the British experience and expertise built up in the naval nuclear programme during the past 50 years in trying to move forward this important ability to generate power from nuclear energy? I am very happy to take an answer from both parts of the coalition on this one.
Baroness Verma
As the noble Lord will know from his own previous role in government, we draw on expertise from all sides.
Baroness Miller of Chilthorne Domer
My Lords, is not one of the difficulties faced in establishing any new nuclear build, as the Defra report published last January highlighted, the fact that all eight proposed sites have a low-to-high risk of flooding, most of them ending up with a high risk of flooding within the proposed life of the new nuclear plants? Has the cost of added sea defences where sites can be defended—of course, they cannot be defended where there is coastal erosion—been added into the equation?
Baroness Verma
My Lords, my noble friend raises a very important point given the circumstances of recent days. However, she will know that no planning permission for any site is given unless there is a proper investigation of environmental impact on nuclear plants.
Viscount Hanworth
My Lords, is it not clear to the Government that their pursuit of a free-market ideology has led to the collapse of their plans for Britain’s nuclear energy? Is it not time to establish a national agency that could commission the building of our nuclear power stations and that would be empowered if necessary to borrow funds on the open market to finance such vital infrastructure? Can the Minister give an opinion on this?
Baroness Verma
My Lords, the noble Viscount will be pleased to hear that at least this Government have taken new nuclear very seriously, as they have other energy sources. I remind him that his Government were in power for 13 years and failed to address any of these problems.
Lord Ryder of Wensum
My Lords, the Government have been in office for two and a half years. Why cannot my noble friend the Minister answer the question posed to her by my noble friend Lord Jenkin after two and a half years?
Baroness Verma
I go back to what I said to my noble friend Lord Jenkin: these things take time and are under negotiation. I am sure that my noble friend will appreciate that the outcome needs to satisfy many parties.
Lord Avebury
My Lords, when do the Government expect to receive the report of the Nuclear Decommissioning Authority on the future management or reuse of the 100 tonnes of plutonium that are now held at Sellafield at an estimated cost up to 2030 of £16.9 billion? What consideration are the Government giving to the offer by GE Hitachi to build two PRISM reactors that would reuse this material and be provided at no cost to the Government? That would generate 630 megawatts of electricity that would cost the taxpayer nothing.
Baroness Verma
I know that my noble friend is very involved with this issue. While we have a preferred option, we are always open to other forms of disposal. We will keep the noble Lord informed of what we are doing, if he is interested to know.