Lord Ravensdale (CB)
I beg leave to ask the Question standing in my name on the Order Paper. In so doing, I declare my interest as an engineer in the energy industry, as set out in the register.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy and Northern Ireland Office (Lord Duncan of Springbank) (Con)
My Lords, a substantial increase in low-carbon generation will be needed to reduce our emissions to net zero by 2050. Nuclear power currently provides a fifth of our generation and will have an important role in securing a low-cost, stable, reliable low-carbon system by 2050. The Government will publish an energy White Paper in 2020, which will provide further detail of the necessary transformation of our energy system.
Lord Ravensdale
My Lords, I thank the Minister for his response. Our current nuclear fleet is approaching the end of its working life and only a single new station is being built. We need much more than that to provide additional zero-carbon firm power and reduce the risk of not meeting net zero by 2050. Does the Minister agree that a key means of doing this at least cost is to focus on replication: building a number of the same design to learn lessons and gain efficiencies, rather than using a wide range of designs, as per the previous strategy? Can he confirm that the Government are prioritising a decision on the financing of new nuclear to enable the industry to move forward?
Lord Duncan of Springbank
The simple answer to that question is yes, but more details are required. The first thing to remember is that by 2030 all but one nuclear power station will be closed.
The noble Lord’s second point is correct: we do need replication on a common theme to help us, but there are other factors too, not least of which is experienced management in the construction industry and sometimes constructing nuclear reactors in greater numbers on the same site. Each of these can make a significant difference, and in order for us to increase capacity we need, in the energy White Paper, to give serious consideration to them, at which point the decision-making will be made clear.
Lord Cunningham of Felling (Lab)
My Lords, I welcome the Minister’s statement strongly in support of civil nuclear power. It is quite obvious to most people—not to everyone, I know—that we are never going to meet our carbon targets without a significant contribution from nuclear energy. For the first time in a generation we have the opportunity now, at Sizewell C, to use the learning curve and replication of design and construction to bring down costs and possibly the timescale involved in building the second nuclear power station, much more than the last Labour Government did, I must say—to my regret; I do not know about theirs. I hope the Minister will persuade his colleagues that we need to expedite these developments.
Lord Duncan of Springbank
We must expedite these developments. The nuclear sector deal which the Government have invested in is worth £200 million. Its purpose is to reduce significantly the costs of the replication of these new developments, and the regulated asset base should be a new model for us to make sure that there is value for money as well. Nuclear will be a vital part, I believe, of the ongoing energy mix in this country.
Lord Howell of Guildford (Con)
My Lords, I wonder whether my noble friend’s brief really reflects the full position. After all, Hinkley is now £3 billion over budget and delayed by a year or two, Wylfa has been suspended, Moorside has been abandoned, and the Chinese and French are struggling to raise finance for Sizewell C. It is not a very good picture. Should we not be focusing rather more on prospects for small modular reactors, which can be built much more quickly, and perhaps more cheaply, and might make an even bigger contribution when it comes to global climate change, which is the real problem?
Lord Duncan of Springbank
My noble friend is, of course, absolutely correct. If we get to the stage where Hinkley comes online according to its timetable in 2025, it will in due course supply 7% of our electricity needs. However, the reality is that small modular reactors are vital. That is why we have invested £18 million in development thus far—£18 million that is matched by the private sector. This may well be how we can move forward a whole new generation of nuclear electricity generation.
Lord Fox (LD)
My Lords, I think all your Lordships will welcome the fact that an energy White Paper is going to be published. This country has lacked a joined-up strategy on energy for many years. Can the Minister confirm that this White Paper will include not only generation of all kinds but the storage of energy and the flexible, or more flexible, distribution of energy? Clearly those will be key in how we go forward.
Lord Duncan of Springbank
The noble Lord has raised these points before; he was right then and is right now. Storage is absolutely vital in this area. Without it, we run the risk not just in nuclear but in our renewables more widely that we cannot capture and hold the energy that we create. Storage needs to be in the White Paper.
Baroness Whitaker (Lab)
My Lords, nuclear energy is obviously essential to enabling us to combat climate change, as my noble friend Lord Cunningham just said, but what are the Government doing to enable the public to move away from the other fossil fuel, gas, which is so widely used in domestic heating?
Lord Duncan of Springbank
There will also be a strategy next year examining gas in the domestic heating system. There are options available to us and decisions will be required. Shall it be electrification, use of hydrogen, or indeed a hybrid of the two? We need to consider that, and the White Paper will help inform our decisions going forward.
Baroness Neville-Rolfe (Con)
My Lords, what discussions has my noble friend had with friends and partners internationally on the potential for using UK nuclear expertise and technology in the fight to deal with climate change?
Lord Duncan of Springbank
As part of my responsibilities as Climate Change Minister, we have engaged with a number of countries to examine what prospects we have to ensure the development of the small modular reactors, which we believe will be key to the development of a workable global strategy. We commit to continuing to do that at a greater pace.
Lord Lennie (Lab)
How will the Government ensure that any new offshore wind capacity during the 2020s will not simply replace retiring nuclear plants rather than push carbon-emitting gas power plants off the grid?
Lord Duncan of Springbank
The noble Lord is quite right: each of our ambitions in these areas has a finite lifespan, and it is important to make sure that, each time we replace them with the next generation, the carbon footprint decreases. We would like to see it significantly decrease, which is why offshore wind remains vital and why nuclear has a significant part to play.
Lord Lansley (Con)
My Lords, the Wylfa project on Anglesey has been suspended, as we have heard. Would my noble friend agree that it is clear that Governments will need to invest in new nuclear? Will the Government look at promoting that project with Hitachi through a government commitment to invest sovereign capital, thereby reducing the cost of capital and offsetting some of the risk?
Lord Duncan of Springbank
Yes, indeed. We will be looking at exactly this through the regulated asset base approach. The Wylfa site is at the moment still owned by Hitachi. There are still opportunities to build on that site, and we are in discussions to make sure that we can move this matter forward.
Lord Wigley (PC)
In considering the position of the small modular reactors, can the Minister give an undertaking that the medical dimension will be taken on board so that any possible synergy between the development of the two can take place, possibly at Trawsfynydd?
Lord Duncan of Springbank
The noble Lord is absolutely right. We often think of nuclear only in terms of energy generation, but in fact our health service depends significantly upon the isotopes that are created by the system. Yes, we need to recognise the synergy and work with it.