Lord Bourne of Aberystwyth (Con)
My Lords, I thank my noble friend Lord Ridley for bringing forward this debate. It is good to see so much consensus on some of the important issues that we face, particularly after yesterday. I also welcome his idea of the nuclear bake-off; I shall be speaking later to the noble Baroness, Lady Worthington, because I see a definite commercial possibility in going forward with what she suggested on television.
I will first say a little bit about Hinkley and then try to deal with the contributions made by noble Lords. At the outset, I will say that given the time constraints, I would like either to make a Written Statement on the nuclear position or alternatively, if that is not possible, to write setting out the position of what we have touched on today, and on things we have not, given that there is an awful lot that we have not touched on. I want to be able to update noble Lords on what the department is doing, which is a considerable amount.
As has been said, the debate is timely given the signing of a strategic investment agreement this week in relation to Hinkley. Let me say a little about that because it is a significant step forward in the development of the first new nuclear power station in the United Kingdom for two decades. However, that is just the beginning. As has been suggested by some noble Lords, and in particular by my noble friend Lord Ridley, this is not an either/or situation. We can have Hinkley, and, indeed, we do need Hinkley, and we can have small modular reactors. It is my belief that they are not mutually exclusive in any way. The technologies for the next tranche of nuclear power are coming forward with Hinkley, Bradwell and Sizewell.
I thank the noble Baroness, Lady Scott, for what she said about her personal view on nuclear energy, and I also thank the noble Baroness, Lady Worthington. As I say, it is very good that at least within this forum we are able to have such unity, which is important. I say that, but I will not say any more about what is happening down at the other end. Clearly, it would be very useful to have some investment certainty on the nuclear power programme as we go forward. That is important.
The decommissioning and clean-up of the United Kingdom’s civil nuclear legacy also remains a national priority. Many noble Lords touched on this and, indeed, touched on the high hazard of Sellafield and the very high costs associated with it. I believe that we have learnt the lesson of that. It remains a massive part of the budget of the Department of Energy and Climate Change, and will do so for a considerable time into the future because of the particular hazards associated with it.
Many noble Lords also raised points about research and development, including the noble Lord, Lord Rees. That is crucially important. Research and development in this area was largely halted in the middle of the last decade. The department regards this as a high priority and views it as money well spent. I will say something about that in a minute in the context of the spending review. As noble Lords are aware, the spending review process is under way and we are at a crucial period. More will be able to be said when we are on the other side of it, but substantial work has been undertaken by officials in the Department of Energy and Climate Change, the Department for Business, Innovation and Skills, the Treasury, and the Nuclear Decommissioning Authority in relation to the nuclear decommissioning issue. We are also, of course, looking at the position of research.
Looking to the longer-term future, while technologies such as fast reactors and molten salt reactors and vehicles such as small modular reactors are still a significant time away from commercial deployment, we maintain a very close interest in their development. We are not starting from scratch. The United Kingdom, as has been indicated, has a rich research and development history which covers many of these reactor technologies and fuel types. We have previously designed and operated a diverse range of research and demonstration reactors, from the fast reactor programme at Dounreay to a number of interestingly named research reactors at Winfrith in Dorset. These include Zebra, Nestor, Zenith, Hector, Juno and, indeed, Dimple. Winfrith was also the home of the high-temperature Dragon reactor which provided some of the earliest experimentation with thorium-based fuels. I know that the noble Baroness has an interest in this.
The United Kingdom is also a leading nation in fusion research, which was touched upon by the noble Lord, Lord Hunt. I will get a specific answer to him about the position regarding the International Atomic Energy Agency. I was unaware of that, as officials were as well. If there is any particular information that the noble Lord could give us after the debate, we will certainly look at it to see what is holding up or preventing a demonstration at the annual event next year. If the noble Lord could come forward with that we would be very pleased to look at it.
There is also the Culham Centre for Fusion Energy. That part of Berkshire is becoming a sort of nuclear energy hub and it is very important to foster that. The Culham Centre is the United Kingdom’s national fusion research laboratory and forms a crucial part of the worldwide fusion research programme. It hosts the Joint European Torus, which is currently the world’s largest and most powerful fusion reactor and the focal point of the European fusion research programme.
The Government can help to create the environment and the frameworks required to support nuclear development and deployment, and the department is keen to do that. We also need to underpin the regulatory framework. I note what my noble friend Lord Ridley said about the long periods of time it takes to get these projects off the ground, but I also note the comments made by the noble Lord, Lord O’Neill, in relation to our first-class safety record. Clearly, we would not want to prejudice that, so we need to try to get the right balance between the two. Safety must come first.
However, I agree that we need to march forward, specifically on small modular reactors, which was mentioned by all noble Lords and has wide backing. The Government recognise that these could offer cost reduction and massive commercial benefits to the United Kingdom, particularly through factory production processes—the egg box point—and the reduced cost of capital needed to finance projects. There is also a big advantage with siting them. Potentially they do not need to be near the sea and the process of selecting sites could therefore go forward very quickly.
An initial feasibility study was completed in December 2014 and this made a start in building the evidence base we need to take it forward. This is being further developed, as my noble friend Lord Blencathra said, through a more detailed techno-economic assessment which is to be completed in March 2016, so that is not long to wait. I know that there is an urgency about this and I will ensure that as soon as we have the information, it is relayed on to noble Lords. This assessment will enable the United Kingdom Government to understand the opportunities for delivery, including industry views on strategic partnerships if Ministers decide to support small modular reactors. The department is sympathetic to the case. We are waiting for that evidence and then we will clearly assess it. This evidence will help to crystallise the Government’s objectives for SMRs by building our understanding of how the potential for SMRs could be unlocked.
Picking up on the point made by the noble Baroness, Lady Worthington, about the need for agreement on the harmonisation of regulation, we are engaged in discussions with our European partners about this and I will try to cover it in more detail in the letter that I send to noble Lords. It is a point well made in terms of the market. Obviously we need to march forward hand-in-hand and with the same considerations.
On the points about small modular reactors made by my noble friend Lord Blencathra in relation to marine nuclear propulsion reactors, certainly they are a part of the evidence base for looking at how they could be deployed However, there are particular problems with them. As the noble Lord said himself, they are not an automatic translation to land base. They have shorter serviceable lifetimes and the relative size of individual marine reactors is much smaller—they are at the smaller end of the scale of small modular reactors. Nevertheless we are looking at that and considering it.
As to the other points that have been made, I have picked up the point about the safety standards. I should perhaps have covered earlier a point relating to Hinkley. There will be what I understand is at least a 60% supply chain for UK business, which is important. I have covered the research programme. I have covered the point of the noble Lord, Lord Hunt, on Tokamak and the position with the IEAA. If the noble Lord could bring forward more detail on that we will certainly look at the conference in 2016 to see whether we are able to help. It sounds like a very good point.
The issue of CCS was raised and it is an important part of the mix. We spent a long time on it in the Energy Bill and there has been a degree of consensus around the Chamber and with the different parties which I am anxious to keep. However, again, it is not mutually exclusive with nuclear power. It is understood and agreed that we need a diverse mix.
The noble Viscount, Lord Hanworth, quite rightly talked about some of the challenges faced and the very good record of Rolls-Royce, with which I definitely concur. The noble Baroness, Lady Worthington, raised the record of France on nuclear, which, at the moment, as other noble Lords, including the noble Lord, Lord Hunt, have pointed out, is 80% nuclear. This is declining a little to diversify but what France does is significant and we are studying that.
Perhaps I may undertake to write with more detail on some of the points that have been covered and on some of the points that were not covered on the different technologies. In closing I should thank the Nuclear Innovation and Research Advisory Board for the advice it gives to the department. It is chaired by Dame Sue Ion and provides the Government with assistance and expert advice on the R&D needed for nuclear energy, which is significant. We need R&D in order to develop our nuclear future and to be competitive. It published its first annual report in January, which recommended an R&D programme of up to £250 million over the next five years. We are considering its advice. It is a vital part of the current spending review and I hope that the Chancellor will see a copy of the record of our proceedings today.