Lord Howell of Guildford
That this House takes note of the role of nuclear energy in securing the future energy supply.
Lord Howell of Guildford (Con)
My Lords, I declare an indirect interest in that Mitsubishi Electric, which I advise, while not directly connected to nuclear power station building, is involved in the new transmission system that will be necessary to convey power from new nuclear sites and, even more so, in delivering greatly enlarged offshore wind power transmission flows from the north Atlantic via new coastal stations and a much more powerful and intelligent grid than anything we have today. Without that, of course, we will make no progress at all.
Our national policy on nuclear power development is at a crossroads. Some would say that it is at a wide fork in the road. One route would mean pushing ahead with the mega-nuclear giant projects as now at Hinkley Point C in Somerset and as planned at the so-called replica, where a repeat is planned of Hinkley C, at Sizewell C in Suffolk. Experience tells us—it certainly tells me—that that will take 10 or 15 years to complete. We have been at this point many times in the past 30 or 40 years.
The other route is to recognise that those giants have had their day and that instead we should concentrate resources and skills on smaller modular reactors, designed at a time of revolution in nuclear power technology worldwide—and which, it is claimed, can be built much more quickly and sooner and are much more attractive to private investors for that very reason. That is a very important point, to which I shall return.
There are also those who deny that there is any actual choice at all, and we just have to press ahead on all possible tracks. That is the sort of argument which says that there is a pipeline of new projects to replace our nuclear fleet, which we have allowed to shrink so drastically. It is embodied in the philosophy expressed by the American comedian and baseball player, Yogi Berra, when he said:
“When you come to a fork in the road, take it”.
This “let’s do it all” approach is to be driven forward now by the new Great British Nuclear office, just opened and announced, as an essential part of our affordable, all-electric economy by 2050. The goal is unambiguous and clear: we must build up our nuclear capacity to 24 gigawatts from its present 13 or 14, which is about to fall to 5 or 6 in a year or two’s time. Ministers predict that to be a quarter of the electric power that we will need by 2050—in other words, about 100 gigawatts—as all, or nearly all, fossil fuels are replaced.
When one considers that electric power today—roughly 60 gigawatts, of which 50% to 70% comes from renewables when the wind is blowing—represents less than one-fifth of total energy use in the UK, 200 gigawatts may be much nearer the mark than 100 gigawatts. This even takes into account all the wider hydrogen use that is clearly coming, much greater efficiency in energy use, better insulation and more interconnectors with our neighbours to balance the supply grid, such as the one from Morocco being mooted. This could bring as much as 10 gigawatts of solar power into the British grid—a reminder that there is no such thing as a purely homegrown energy system, as some officials in our Department for Energy seem to think. They are quite wrong.
This leaves open a large number of questions about the nuclear role. First, I gather that the start button on Sizewell C may very shortly be pressed by the new Secretary of State. We welcome her and wish her well in her very difficult new job. Before this button is pressed, may we have some up-to-date assessments of likely capital costs and completion dates for this Sizewell replica? Is the plan to continue with six more such gigawatt-generating plants, as various Prime Ministers have called for in the last decade, or to make this the last and move on to a new, cheaper and possibly less risky smaller design for the next phase?
Secondly, has account been taken of the EPR—the European pressurised water reactor design family of reactors, as developed by Électricité de France for Finland, France and China, and now for the UK? It has a most unfortunate history in construction timing, costs and reliable operation. The EPR at Olkiluoto in Finland has taken 20 years to complete and is many billions over budget. At Flamanville on the Cherbourg peninsula—which I have visited—they are running 11 years late. It is still not ready and is also €10 billion over budget. There was a much-vaunted, allegedly successful EPR model in Taishan in China, but there too a reactor had to be closed down because of fuel rod problems. Our own first EPR, at Hinkley Point, was originally supposed to be powering our ovens for Christmas turkeys by 2019. Now the forecast is for 2027 and it could easily slide to 2029. It is already £8 billion over budget—in today’s money the figure is nearer £15 billion. France is said to be looking at a new, simpler design for further replacement of its ageing PWR fleet. They call it the EPR2 but it is different from and not a direct replica of what we are trying to build here. The other day, the former EDF chief told the French Assembly that the EPR is “too complicated, almost unbuildable”.
Then there is the central question of finance. The sums are eye-watering. The last estimate for Sizewell C—the only one we have at the moment—was £20 billion. From Hinkley and other previous experiences, we know it is bound to be much nearer £30 billion. The present hope is that a funding scheme which has already been used elsewhere can somehow be mobilised. It is called the regulated asset base, which in effect makes would-be consumers start paying their energy bills from the day the scheme is launched—years before a single kilowatt of electricity is produced. The Science and Technology Select Committee in the other place warned that this RAB system contained “significant uncertainties and downsides”. On the figures we have, the Government will still need to put in about £6 billion, over and above the £1 billion or so already publicly committed. We hope that Électricité de France may come up with the same amount. Some £100 million has already been set aside to buy out the Chinese interest in both Sizewell C and an all-new Chinese plant at Bradwell-on-Sea which was once promised as part of a deal with China in times gone past when relations were happier. We thought then that they should take a major role in our nuclear progress, which we do not think any longer.
Perhaps my noble friend would care to update these estimates and figures and tell us how matters are going with the Chinese, who of course remain financially heavily involved in Hinkley Point C. Can we have the latest view on the state of play there, please?
What of the other nuclear power way forward, the other branch in the road towards much smaller units and new technology? I do not accuse, and no one could accuse, the Government of neglecting interest in the SMR possibilities, but mere interest is not really the question. The question is whether smaller and newer reactors should be not just an interest but the absolute spearhead UK priority, as other countries are making it, or whether the giant EPR replica, which remains the centrepiece of British nuclear policy, continues to be there, as appears to be the situation. Japan, America, Russia, France, China, South Korea, Canada, Germany, Argentina, Australia and Finland are a few of the countries giving priority attention to these new designs.
Most of the SMR projects under way are geared to operational readiness in the early 2030s or before, using existing or disused nuclear sites for sets of four or six, producing green, low-carbon electric power on the same scale as the old big ones. Here, Great British Nuclear is running a competition that is said to favour three SMR types: GE Hitachi, with its boiling water BWRX-300 megawatt design, which it says will be completed—I am not sure what that word really means—by 2028; our own Rolls-Royce, with its years of marine nuclear engine experience, which has linked up with US NuScale and also has Japanese backers; and Holtec, which I think is the third favourite. All these are ready to deliver before the end of this decade.
There is one oddity here that I would greatly value the Minister’s comment on. What about firms that do not need taxpayers’ money and say they are already fully funded and ready to produce and sell into the British system? For example, I was visited the other day by a firm called Newcleo—I have no interest in or connection with it—which explained that it and several other similar firms have zero-waste small machines. They are zero waste because they use old plutonium waste from older reactors as their fuel, and could be ready by 2030. It has been excluded from the competition and is not getting any of the papers. Why? Matters seem to be very much upside down.
Is there not a major choice, after all, between smaller, sooner, around 2030, and larger, later, around 2036 to 2038 at best—and between mainly private finance and billions more from the state, which mostly means from taxpayers and hapless consumers who already face huge increases in their electricity bills? Should we not instead face the reality that smaller nuclear power plants, ready much sooner, offer far the best hope in our NZ ambitions, based on new technology, on streamlined approval procedures, which are certainly needed, and, above all, primarily on private finance? That is the key advantage and the sort of advantage that would bring in pension funds and sovereign wealth funds. With sets of SMRs built off-site and ferried in, this would also avoid all the local chaos and disruption of a prolonged 10 to 12-year construction site, not forgetting the long-term decommissioning problems and costs that these mammoths necessitate.
To me the priority is obvious. Further ahead, we know, lies fusion, but it will not be ready for 2050. Frankly, it is not on the nuclear mega-dreams of the past, which took decades to build and are still bulging with growing risks, that we will depend for our clean, reliable, low-carbon electricity supply. Size no longer wins in the digital age. This is an immense subject involving enormous sums of money, and there are those in this House with far more expertise than I about many of its different aspects. My own view, putting all these aspects together, is based simply on 40 years or more of experience in grappling with the nuclear power issue. We now have the chance, for once, to get it right and be a little ahead of the curve. I beg to move.
Lord West of Spithead (Lab)
My Lords, I thank the noble Lord, Lord Howell, for introducing today’s debate on this very important subject. I am in no doubt that provision of a base electrical load using nuclear power is crucial for our nation, not least because of the vast increase in electrical requirement as the next decades unfold, as has been mentioned. I do not think the general public realise how huge that increase in demand will become.
Nuclear power is at present the only guaranteed carbon-neutral power source that can operate day and night, whatever the weather. I think everyone is aware of that, but it is important to remind ourselves. Perhaps in the future tidal might be a similar thing and able to do that, but it has not been working well and still has a long way to go. Concern is often rightly expressed about disposal of the small amounts of radioactive waste produced by power stations. Suffice it to say that work continues on the issue of disposal of the small amounts of nuclear waste using the geological disposal facility. As I understand it, it is progressing but needs to be hastened. I ask the Minister to give us an update of where we have got to on ensuring that disposal capability.
The provision of a secure baseload of green electricity is of national importance. The work to achieve it should be seen as such, and in a similar way to the national deterrent programme—the continuous at-sea deterrence—it should become a national endeavour involving all departments of state, because they all have some interest in it. Looking at these future issues, expenditure on nuclear power seems far more important than something like HS2, for example, and the Government need to bite the bullet and expedite work on it.
How our nation, which at one stage led the world in civil nuclear power, is now reliant on Chinese, Japanese, French and American expertise is a national disgrace. I will not go into that now, but it is appalling when you think that we led the world. This needs to be turned around and we need to generate the scientists, engineers and designers to ensure that we are never again in this position.
As regards large power stations, I do not completely see eye to eye with the noble Lord, Lord Howell. I believe we need three—Hinkley Point C, Sizewell C and probably Bradwell B—online as quickly as humanly possible. It is all very well to say they take a long time. Yes, they do, but for the last 30 years we have been saying that; if we had done something then, we would have them operating now, so we should move ahead with those. However—and this is where I have to take a new line, down the middle—we should also embark on a major programme of small modular reactors.
One of the benefits of large power stations is that the national grid power line infrastructure is already in place on these sites. This is not the case with new offshore wind farms and other energy options. Other things we need to look at, but not as urgently as the small modular reactors, are the advanced modular reactors that can produce hydrogen and so on. There is considerable scope there for the future.
As the noble Lord, Lord Howell, said, Rolls-Royce has been producing nuclear reactors for Royal Navy submarines since the late 1950s when the first one was built. That expertise is highly relevant to production of SMRs. It would be extremely unfortunate, in terms of resilience, for those used in this country to be designed and built overseas, not least because of the whole issue of having scientists, engineers and people capable of doing all these things. To see it going to someone other than Rolls-Royce would be extraordinary. As an aside, people talk about fusion; although this is attractive, I think it is a very long way off.
The complications of having Chinese involvement in what is a crucial part of our critical national infrastructure has to be unravelled. It should never have got to the position it is in, and no doubt there will be huge problems, particularly as regards Bradwell B power station, which I believe may have to be of a completely different design in future.
With the right leadership, political direction and public/private partnership, there is still just time to provide the civil nuclear power our nation needs. There just needs to be the absolute focus to achieve that. If noble Lords think back, we did a similar thing when we opened up North Sea oil and gas in the late 1970s and 1980s; think of the huge national benefit that came out of that. I believe there is no time for delay.
Lord Ravensdale (CB)
My Lords, I congratulate the noble Lord, Lord Howell, on raising this debate, and on the penetrating way in which he introduced it. I declare my interest as a project director working for Atkins in the nuclear industry. I am also a co-chair of Legislators for Nuclear and chair of Midlands Nuclear. The Sizewell B nuclear plant, which the noble Lord secured when he was Energy Secretary, has now been operating for almost 30 years. In the industry we are now working on a potential life extension to 2055, which will take the life of the plant up to 60 years. This really shows what an incredible asset nuclear reactors are for the country.
We have seen great progress with policy in recent years, with the 24 gigawatt commitment from the Government and the formation of GBN. We are now into the really difficult part: delivery. There is still ferocious debate about the future energy system and the right mix of technologies to best balance the energy trilemma of security, sustainability and economy, with the economics of nuclear coming under particular focus. What is really needed to start with is a more sensible discourse around costs. Across the media and in debates here and in another place, we regularly see the view put across that renewables are cheap and everything else is expensive, which is somewhat simplistic.
Perhaps one way of cutting through this debate is a simple thought experiment, where we have a grid that is reliant solely on renewables for generation—which is certainly technically feasible. Those renewables may be cheap in terms of cost at the generator, but how do we manage intermittency? The consensus of studies done to date points towards the necessity of long-duration energy storage: probably hydrogen stored in salt caverns if we are going for a low-carbon option. The scale of that storage requirement would be absolutely enormous—up to 100 terawatt hours. To put that into perspective, the amount of energy that would have to be stored is considerably more than that released by the largest thermonuclear weapon exploded to date. The engineering challenges and technical risk in constructing such a system, using technology that has not yet been demonstrated at scale, would be extremely challenging. The cost per megawatt hour of that system would be far more than the levelised cost of electricity figures we routinely see quoted for renewable electricity.
So the picture is much more complex than simply comparing costs at the generator. We live in a radically uncertain world and we cannot rely on modelling estimates of the costs of unproven technologies. We should be pursuing a broad range of proven technologies, including nuclear and renewables, rather than putting all our eggs in one basket. Critically, we should focus on system costs rather than costs at the generator. I hope that is something we can all agree on.
Continuing the trilemma theme, energy security is critical here. We are well positioned in the UK in that we have the expertise and facilities for the complete nuclear fuel cycle following the importation of uranium: conversion, enrichment and fabrication of the fuel itself. However, we know that Russia dominates aspects of this cycle. For example, it has around 45% of global enrichment capacity. To ensure that fuel supplies are secure, drawing on lessons from the war in Ukraine, the Government should consider legislating to mandate that all fuel used in the UK is from western sources within a defined time period. Could the Minister say in his summing-up what consideration the Government have given to legislating in the area of our nuclear fuel supply?
I also hope we can also move to start seeing the stock of plutonium at Sellafield as an asset rather than a liability. There is an intriguing possibility here, in addition to recycling that store into nuclear fuel. Within that stockpile are tonne quantities of an isotope called americium 241, which could be used as a fuel source for nuclear batteries of the type that power the Mars Curiosity rover and the Voyager probe. To date, these have been fuelled with an isotope of plutonium that is extremely costly to manufacture and made only in the United States and Russia.
Americium-powered nuclear batteries could open up a whole new industry in the UK and create thousands of jobs. The National Nuclear Laboratory is currently planning a facility to extract kilogram quantities per year, but a strategy from the Government is required on how we seize the economic opportunity here. And it is not just the economic opportunity; it demonstrates the wider value that nuclear brings beyond power generation into things such as medical isotopes, and we need to get the public on board. Can the Minister say what plans there are to progress with a strategy for seizing this unique opportunity for the UK?
On how we actually deliver nuclear, I will say something about our supply chain development. Rightly, there has been a lot of focus recently on our skills base in delivering the aspirations of the Government, but that needs to be matched by investment in our supply chain. The successful Fit For Nuclear programme, run by the Nuclear AMRC, which is part of the High Value Manufacturing Catapult, provides a good starting point. Since 2013 the programme and its predecessor have helped UK companies win over £2.5 billion of new contracts, has created or safeguarded over 9,700 jobs, and has secured almost £100 million in private sector investment. It is important that we build on that and put in place the funding to address bottlenecks, invest in shared testing and demonstration facilities and develop the tools needed to provide the integrated supply chain planning capability that we need as a country to support nuclear new build. If we fail to do that, the opportunity to deliver long-term UK economic benefit will be lost; we risk driving up costs and exposing ourselves to global markets and international supply chains. Can the Minister confirm that the Government will urgently provide the funding needed to support the development of a UK nuclear supply chain capability and seize the resulting opportunities for UK industry?
Finally, I will speak briefly about planning. There is a real need to increase the speed of nuclear projects going through the planning system, particularly if we are to increase radically the speed of delivery of nuclear. For example, the environmental statement for Hinkley Point C ran to 31,000 pages, and that for Sizewell C to 44,000 pages. Those are just two examples, but, clearly, we will not deliver new nuclear quickly if we do not have some fundamental reforms to the planning system and how large net-zero projects are progressed. That is something I am looking at for smaller projects within the Levelling-up and Regeneration Bill. Can the Minister say what the Government are doing about reforms to the planning system for large nuclear?
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, it is always a pleasure to follow the noble Lord, Lord Ravensdale, many of whose comments I thoroughly endorse. I am particularly grateful to my noble friend Lord Howell for securing this timely and important debate and for introducing it in his usual thoughtful and well-informed way. I draw attention to my interests in the register, notably my role as an independent consultant to Terrestrial Energy, a Canadian technology firm developing advanced nuclear technologies. I, too, am a member of Legislators for Nuclear.
It has been frustrating to read the recent extensive criticism of the Government’s work to cut emissions to reach our net-zero targets. The expressed view that commitment to our green policies is waning is a false narrative. In all the media chatter about green levies on energy bills, heat pumps and targets on zero-emission vehicles, many seem to have forgotten that one technology in particular will do most of the heavy lifting—the one the Government can now be seen to be standing behind fully and completely, namely nuclear power.
The recent establishment of Great British Nuclear is a critical start on this pathway; it will be instrumental in both meeting our net-zero targets and reducing our dependence on energy imports. It also heralds a strong commitment to establish a supply chain that can be exported worldwide—and doing so in areas of the UK that desperately need levelling up: for example, north-west Wales. To continue the point raised by the noble Lord, Lord Ravensdale, save for the lack of a robust uranium supply chain, the UK could be completely self-sufficient throughout the nuclear lifecycle.
On nuclear fuels, the UK has manufactured fuels for reactors for decades, ensuring the long-term operation of our current fleet. Urenco and Westinghouse are now investing in new skills and infrastructure to manufacture a range of higher-enriched fuels for a future reactor fleet at Capenhurst and Springfields in the north-west, and the National Nuclear Laboratory continues to develop advanced fuels to support our future reactor fleets.
The recent announcement that the Government are planning to award funding as part of the nuclear fuel fund for advanced nuclear fuel processing facilities is welcome. We may soon be able to regard that store of nuclear waste at Sellafield as an asset—a potential fuel source for some of the newer Generation IV nuclear technologies, as well as batteries. Projections suggest that, by 2050, around half of our final energy use will be from electricity. This itself represents a fourfold increase in production compared to today, which is why the Government have set such ambitious and ground-breaking targets for nuclear, but I question whether it is enough.
A secure future electricity supply is only part of the story. While nuclear power can be a major source of reliable baseload low-carbon power for an electrified future, it can also be a low-carbon energy source to assist with hydrogen production for use in many sectors, particularly those where decarbonisation is required but where it is difficult to do so because of the lack of alternatives to fossil fuels. Sectors such as aviation and shipping, and industries such as steel-making and agriculture, drive our economy, and their successful decarbonisation is not only fundamental to our continued economic success but, unless we are successful in doing it, we will fail to meet our legal obligation to achieve net zero by 2050.
Just as in electricity production, nuclear-generated industrial heat can play a pivotal role in the production of a whole range of other energy products, including sustainable aviation fuel, hydrogen and ammonia, and in the UK we are making this possible. When we talk about ensuring a secure energy supply, we need also to be thinking about low-carbon fuels which, when produced by nuclear heat and electricity, can enable us to continue our increasingly energy-intensive lives in a future-proofed and sustainable way. Some of these fuels are also direct replacements for current carbon-intensive versions, requiring little or no costly and time-consuming infrastructure upgrades.
Under this Government, nuclear has been included right across the board to support decarbonisation in many hard to abate sectors. This includes the publications we have all seen such as the hydrogen strategy, the sustainable aviation fuel mandate, the net-zero innovation framework, and the heat and buildings strategy—the list goes on. All include consideration of the viable role that nuclear can play in achieving net zero across all areas of our energy system, far beyond electricity.
Nuclear energy can provide the direct-process heat to decarbonise our industrial clusters, responsible for 16% of our greenhouse gas emissions—that is, if we can also unlock opportunities for siting small modular reactors close to those clusters. That is where the planning situation has to be considered. The heat from nuclear reactors can deliver low-carbon fuels, such as sustainable aviation fuel. Aviation is one sector that is extremely difficult to decarbonise. However, with nuclear energy as the primary energy source, the UK can produce mass-scale sustainable aviation fuel—SAF—for net-zero flights. Current engines can already run on SAF-mixed fuels; our challenge is to make enough to decarbonise the aviation industry.
The Department for Transport recognises that nuclear energy produces a particular type of SAF, known as power-to-liquid, which combines water and air through a chemical process to produce aviation fuel. This is predicted to fuel up to 45% of all aviation by 2050, yet today the amount we produce is next to zero. The opportunity for the UK to capitalise on this market through the application of nuclear energy is immense. If we start now, this can be a reality as early as 2035, raising the ceiling on SAF production, delivering on government SAF targets, creating well-paid UK clean energy jobs, driving exports and positioning the UK as a world leader.
Nuclear technology can also decarbonise other methods of transport and industry by producing hydrogen. Hydrogen is often touted as the golden solution to our climate change problems; it is probably the most talked about solution beyond electrification. Not in itself a source of energy, like electricity it needs to be manufactured through a production process driven by energy, and we need huge amounts of it. Every day in the news we see progress made in the decarbonisation of sectors by developing point-of-use technologies, hydrogen buses, trains, cars and so on. However, to achieve all this requires the production of staggering amounts of hydrogen—far more than renewables and electrolysis alone can provide. The Climate Change Committee said that to achieve net zero we need 270 terawatt hours of hydrogen by 2050. That is the equivalent of creating within 30 years a hydrogen economy the same size as the total amount of electricity we use today on the grid.
While we have made strides in nuclear’s future for our electricity system, it has a role far beyond electricity. The role of nuclear energy to decarbonise the other 50% of our future energy system is real—delivering large-capacity heat and electricity from a land-area footprint with orders of magnitude smaller than wind and solar. We need to make the UK the best place in the world to invest in commercial projects that leverage nuclear energy for system-wide decarbonisation, driving economic development and supporting levelling up the whole of the UK. Above all, in my opinion, we need to back all forms of nuclear technology, from fusion to fission, from gigawatt to micro, and from SMR to AMR, That probably puts me in the same camp as the baseball player of the noble Lord, Lord Howell.
Finally, the noble Lord, Lord West, is correct: there has been a very real worry globally about the lack of engineers, scientists and skilled workers necessary to keep the industry operating and properly regulated. The announcement in July of the creation of a Nuclear Skills Taskforce underlines the strategic approach the Government are pursuing in creating the next stage of our nuclear story. It will set up the industry for success and prosperity, making sure that our nation’s ambitions for nuclear can power up Britain and our energy security for decades to come, helping us to achieve net zero by 2050, and beyond.
Viscount Hanworth (Lab)
Britain is experiencing an energy crisis. Despite its commitment to staunch the emissions of carbon dioxide, it remains heavily reliant on fossil fuels to power its industries and, more significantly, to power its transport and its electricity generation. The electricity generation is increasingly dependent on renewable sources of wind and solar energy. These sources are intermittent and require to be supplemented by other means of generating electricity which depend, mainly, on gas purchased on the international markets at prices that are subject to extreme fluctuations. We would not be in our present position of vulnerability to international markets if we had maintained our nuclear industry.
At the beginning of the Cameron-Clegg coalition Government in 2010, it was proposed that contracts should be offered for building eight new nuclear power stations. Whereas the existing nuclear power stations had been financed by central government, it was decided, in accordance with the philosophy of the Conservative Party, that the new power stations should be financed by private capital. It would be tedious to recount the history of the repeated failures of the Government’s nuclear policy. Over the succeeding 13 years, only one semi-nationalised enterprise, EDF, has undertaken to build a nuclear power station in Britain.
Politicians appear to have woken up, belatedly, to the crisis in our energy supply. A body called Great British Nuclear—GBN—has been established, which will be charged with overseeing the revival of our nuclear power industry. Its first activity will be to oversee a competition in which the favoured design of a small modular reactor—an SMR—will be chosen. This process is shrouded in secrecy, which inhibits a rational discussion of the options. It looks as if there will be a three-horse race, in which the competitors will be Rolls-Royce, GE Hitachi and X-energy, which are one British enterprise and two American enterprises.
It is galling to recall that Britain was the first nation to establish a civil nuclear industry. The world’s first civil nuclear power station was opened at Calder Hall, in Cumbria, in 1956. The domestic and geopolitical circumstances at that time determined the nuclear technologies that have prevailed to this day. A covert purpose of the nuclear industry was to manufacture the plutonium that would be deployed in nuclear weapons. The first two reactors that were erected at Windscale, adjacent to Calder Hall, were devoted entirely to this purpose. The Calder Hall reactor, which was a gas-cooled Magnox reactor, was entirely devoted to the civil purpose of electricity power generation. Britain continued to pursue technological advances in this area. This led to the advanced gas-cooled reactors which power all but one of Britain’s nuclear power stations. It also gave rise to a so-called pebble bed gas-cooled reactor, the Dragon reactor, in Winfrith, in Dorset, which operated from 1965 to 1976. Another experimental reactor was the sodium-cooled fast breeder reactor at Dounreay, which was capable of consuming the excess stocks of plutonium.
There were other developments in the United States. A leading proposal for a civil nuclear reactor was a thorium molten salt reactor that was advocated by Alvin Weinberg, of which a prototype was realised at the Oak Ridge laboratory. Weinberg encountered fierce opposition from Admiral Hyman Rickover, who was in charge of the American nuclear fleet. Rickover favoured a pressurised water reactor for submarines. The consequence was that such reactors have come to dominate both in civil nuclear power stations and in military applications in submarines and aircraft carriers.
The pressurised water reactor was favoured for submarine propulsion because it appeared to be light and compact. An irony is that, in its civil applications, it has spawned massive nuclear power stations that are burdened with safety devices designed to overcome the dangers of a pressurised nuclear meltdown, of the sort that we witnessed at Three Mile Island, Chernobyl and Fukushima.
This account of the available nuclear technology provides a backdrop to the British competition for a design of a small modular reactor. Rolls-Royce should be a front-runner in view of its experience with pressurised water reactor technology and in view of the fact it is a British enterprise. Its reactor would generate 470 megawatts. This exceeds the 300 megawatts which is the conventional limit of a small modular reactor. GE Hitachi is offering the tried and tested technology of a pressurised water reactor, packaged as an SMR and rated at 300 megawatts. This amounts to a small power station. Perhaps one would be more excited if GE Hitachi were to offer its fast sodium-cooled PRISM reactor, which would be capable of burning the plutonium of which there is an abundant stock at Sellafield. X-energy is proposing a pebble-bed reactor that is cooled by helium and which weighs in at 80 megawatts. It looks complicated. Among the complications are, first, the manufacture of the fuel pebbles; secondly, the deployment of the helium coolant; and, thirdly, a mechanism for the active control of the reaction. If this reactor were to be favoured, Britain would be importing from the United States a technology that it already pioneered in the 1960s via the Dragon reactor.
Other options are available to us which we are in danger of overlooking. Foremost of these is a British design for a molten-salt reactor, described as the MoltexFLEX reactor. This reactor has an inner core in the form of a collection of fuel rods that contain a salt-uranium reagent. Its cooling circuit, which transfers the power to a heat exchanger, also contains molten salt at a temperature of 750 degrees centigrade. The outer cooling circuit is powered solely by convection, with an absence of valves or pumps. The reactor is inherently safe. If, for some unimaginable reason, the reactor were to rupture, the escaping salt would quickly crystallise at a temperature of 550 degrees centigrade. A single MoltexFLEX reactor would produce 40 megawatts of energy; and it could be deployed on its own in an industrial application, which might use its heat, or a combination of heat and electricity generated by steam, using turbines. An electrical power station might contain a battery of 32 such reactors.
The MoltexFLEX prototype could be up and running before 2030. Therefore, it seems unaccountable to me that it has not also been considered as a front-runner. I have difficulty in understanding this. I presume that, in the minds of the civil servants, the advantage of the X-energy reactor, with which the MoltexFLEX might be compared, is that it is receiving funding from the United States Department of Defense and from the Department of Energy. Also, if the X-energy reactor were to be adopted in the UK there would be some inward financial investment, but these are insufficient reasons for failing to sponsor a native design; yet I believe that they are typical of the thinking of the Civil Service and of the Government.
Three distinct purposes could be served by the various designs of nuclear reactors. First, we need nuclear power stations that contribute electricity to the grid. Various reactors are on offer for this role, which are mainly pressurised water reactors. At one end of a spectrum are the EPR reactors, rated at 4,500 megawatts thermal power, which are to be deployed in the mega power stations of Hinkley C and Sizewell C. At the other end of the spectrum are the small modular reactors of Rolls-Royce and GE-Hitachi. We should persist with Hinkley C and Sizewell C: but they should be succeeded by a fleet of SMRs from Rolls-Royce, which could be distributed widely throughout the country.
Secondly, there is the need for a much smaller reactor for powering industrial processes. The MoltexFLEX reactor should be chosen on the grounds of its simplicity and robustness.
Thirdly, there are fast reactors that are capable of burning the stocks of plutonium and of consuming other kinds of nuclear waste. The GE Hitachi PRISM reactor, which is finding favour in the USA, could be an appropriate choice.
I must ask the Minister to reveal the Government’s appraisal of these opportunities and I seek an assurance that they will take steps vigorously to support our native endeavours, which include the Rolls-Royce SMR and the MoltexFLEX reactor.
Lord Bilimoria (CB)
My Lords, the week before last I was speaking at the B20 in Delhi and today our Prime Minister is flying out to attend the G20 in Delhi. I was president of the Confederation of British Industry from June 2020 to June 2022, during which time I was privileged to chair the B7 when Britain hosted the G7. During my presidency I spoke to a leader in the nuclear industry about small modular reactors. He said in no uncertain terms that these reactors can be built within five years—and we have not even started building one.
An energy transition will take place over the coming years, moving from oil and gas to solar, hydrogen, wind—and nuclear, which will play a major part. The Government have very clearly outlined their ambitions to significantly increase nuclear power capacity, also saying that it is one of the most reliable technologies available to provide a baseload level of low-carbon electricity on a giant scale. I thank the noble Lord, Lord Howell, for initiating this debate on the role of nuclear energy in securing the future energy supply. It is crucial at this time.
However, the reality is that in the 1990s nuclear’s share of our electricity supply in this country was almost 25% and today we are down to under 14%. It has almost halved in that period. The House of Commons Science, Innovation and Technology Committee said that the contribution of nuclear to the UK’s energy mix will
“fall substantially by 2028, when all plants bar Sizewell B are scheduled to come to the end of their lives”.
We know that we must achieve net zero by 2050. Delivering new and advanced nuclear power was one of the 10 points in the Government’s Ten Point Plan for a Green Industrial Revolution. The Government published its British Energy Security Strategy for how Britain will accelerate homegrown power for greater energy independence, exacerbated and necessitated by Russia’s invasion of Ukraine. The strategy described nuclear energy as
“the only form of reliable, low carbon electricity generation which has been proven at scale … a big enough baseload of reliable power for our island”.
The strategy set a target to generate 24 gigawatts of power by 2050, which is three times what we have and 25% of our projected electricity demand. So we are going to get to where we were in the 1990s. I think that we would want to get further than that.
Of course, we now have Great British Nuclear, officially launched in July this year. Grant Shapps, at that time Energy Secretary and now of course Defence Secretary, said when he launched it that
“we are seeing the first brushstrokes of our nuclear power renaissance to power up Britain and grow our economy for decades to come”.
We talk about SMRs and say that we want to build them, but would the Minister acknowledge that a company such as Rolls-Royce wants to build SMRs around the world, yet I am told that many countries will not even allow it to tender unless it builds something in its own country, the UK. So, if the Government give Rolls-Royce the chance to set up a plant here quickly, that will enable it to export around the world. Rolls-Royce is, of course, one of Britain’s great exporters. These SMRs can generate electric power up to 300 megawatts, compared with up to 1,400 megawatts for the giant plants, and they can be built very quickly.
However, in an interview with the Financial Times, Mr Shapps said that he did not expect SMRs to be online and producing energy until the 2030s. That is seven years from now, when an expert told me that we can build them in five years. Why are we not moving on this with much greater urgency?
My old university contemporary and friend at Cambridge, the former Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, said that, in the committee he chairs, “witness after witness” who appeared before the committee’s inquiry highlighted the lack of a strategic plan for nuclear. He said that
“the government’s stated aim to deploy a nuclear reactor a year is not grounded in any explanatory detail’.
He added that it was unclear whether the 24-gigawatt target was intended to be met by gigawatt-scale, massive plants such as Hinkley Point C, or smaller, more distributed nuclear reactors such as SMRS. Could the Minister please confirm this? SMRs are quicker and cheaper to build, and you can build them right near the source where they will be supplying power.
The good news is that the Labour Party has expressed support for nuclear power: Keir Starmer has described it as
“a critical part of the UK’s energy mix”,
and the party has said that if it were in government, it would get new nuclear projects such as Hinkley and Sizewell over the line, extending the lifetime of existing plants, and would back new nuclear, including small modular reactors.
In the FT recently, just a week ago, Gillian Tett wrote an excellent article on nuclear power and the array of different companies we are competing with around the world, including Hitachi and GE. A race is taking place, and we need a sense of urgency. US President Joe Biden will be arriving at the G20 summit in Delhi and is very keen to partner with India on SMRs: specifically, the US wants to set up six nuclear reactors in India. Why are we not competing for those as well and doing business with India? Everyone wants to do business with India: it will be the third-largest economy in the world very soon and, in my view, the largest economy in the world by 2060.
The IAEA has also highlighted that African countries are looking to have SMRs built over there, which is another huge export opportunity for us. The small modular reactor market was valued at £3.5 billion in 2020 and is projected to reach almost £20 billion by 2030. This is an enormous opportunity for British business. We should be going at this at speed and with urgency. I am a stuck record in this Chamber. I keep asking: why are we not showing more urgency towards this, and why is our plan not clearer? Julia Pyke, joint managing director of Sizewell C, said that, if Hinkley had been on last year, UK consumers would have saved over £4 billion. Both projects will form a vital part of the future nuclear field, helping to lower carbon emissions and reduce costs.
The Government are investing, and I applaud that. Some 90% of our homes are heated by fossil fuels. By making our homes more fuel efficient, again we will be able to save so much. This will create many more jobs—tens of thousands more. Are we skilling people enough to be able to deal with this transition?
I conclude with this: if we go to plan and show a real sense of urgency, I believe we can reach that 25% of our power and 24 gigawatts much sooner than 2050.
Viscount Trenchard (Con)
My Lords, I am grateful to my noble friend Lord Howell of Guildford for introducing this most timely debate on nuclear energy. I declare my interest as a member of the advisory board of Penultimate Power UK and as a consultant to Japan Bank for International Cooperation, which is a shareholder in NuScale Power LLC.
I strongly agree with everything my noble friend said in his comprehensive and inspiring introductory speech. It could have been so different, as is so powerfully brought home by the useful 8th report from the Science, Innovation and Technology Committee of another place on delivering nuclear power. From 1955 until 1995, government policy strongly favoured the construction of nuclear power stations: 10 Magnox and seven advanced gas-cooled reactor plants, and one pressurised water reactor plant at Sizewell B, were built. However, only one new reactor has been approved in last 28 years: the 3.2 gigawatt plant at Hinkley Point C.
Today, nuclear power contributes roughly 15% of our electricity needs. That is expected to fall substantially before Hinkley Point C comes online, and the impending retirement of all our other nuclear power stations except Sizewell B means that, even then, the contribution of nuclear power to electricity generation will remain below current levels. I ask the Minister, why do the Government not recognise the need to increase substantially their plans for creating new nuclear capacity in this country beyond their current policy?
It is welcome that the energy security strategy, published in April last year, aims to achieve 24 gigawatts of nuclear capacity by 2050. However, the Government’s net-zero obligations will require an enormous increase in electricity generation as consumers are forced to purchase electric cars and replace their oil and gas-fired heating systems with heat pumps. Whereas today electricity accounts for around 20% of total energy consumption, that is forecast to rise to 40% to 50% by 2050. The Government believe that renewable energy can provide the bulk of this. They speak of nuclear as playing an important back-up role in providing firm baseload power when the wind does not blow and the sun does not shine. Unfortunately, that is for much of the time.
The briefing paper produced by the Library contains many useful and relevant facts. However, I believe it is misleading in its contention that the share of electricity generation provided by renewable energy has increased from 3% in 2000 to 42% in 2022. I understand that the 42% figure was maintained for around half an hour on one day in June 2022. Last Thursday, I understand that the contribution from wind was just 4.6%, which illustrates the unpredictable contribution of wind to electricity supply. Furthermore, the use of renewables is also inflated by the fact that they receive grid priority, meaning that the grid will always take electricity from renewable sources ahead of that available from other sources. This distorts the comparative costs, which are already significantly distorted by renewables subsidies and the cost of linking wind and solar facilities to the grid. The intermittency of wind and solar energy illustrates all to clearly the lack of storage facilities for all kinds of energy, and there is no capacity for long-term electricity storage.
The Government acknowledge that intermittent renewable energy requires firm baseload back-up such as nuclear and gas can provide, so why do we not install much more nuclear capacity, which does not have such a need for back-up? We would not need to make over so many thousands of acres to unpopular wind and solar farms, nor ruin Constable’s beautiful Suffolk landscapes and other areas of outstanding natural beauty with even bigger electric pylons and power lines. It is unclear how the Government are going to realise their present target of 24 gigawatts and whether their ambition of one new reactor every year means a 1.6 gigawatt European pressurised reactor—such as the pair being built by EDF at Hinkley Point—or a 3.5 megawatt reactor by the Ultra Safe Nuclear Corporation, which has taken over the U-battery project formerly pursued by Urenco.
It is unclear what powers will be available to Great British Nuclear, and what its remit will be, beyond running an SMR competition which is under way. This competition excludes high-temperature gas-cooled reactor technologies, as the UK and the UK alone classifies these as AMRs—advanced modular reactors—with which it brackets all other new technologies that are not light-water reactors, even though they are as ready for commercial development now as any of the technologies now undergoing the SMR competition.
Does the Minister accept that electricity is only part of the problem? There is little chance of achieving net zero without significant decarbonisation of industry; particularly heat required for chemical processes, paper, steel and glass, for example. Several AMRs can provide green industrial-grade heat, as well as power. For example, Japan’s HTGR technology, which JAEA showcased for commercial development at the IAEA conference in Vienna in 2019, is arguably the most flexible and best potential source of industrial heat, energy and hydrogen. The NLL is now working with JAEA on developing a demonstrator by the early 2030s. This could be an exciting new Japanese-British project and would mitigate the disappointment resulting from the collapse of the two other bilateral projects: Hitachi’s Horizon project at Wylfa and Toshiba’s NuGen project at Sellafield Moorside.
However, unless plans and ambitions for this technology, which was originally developed by the UKAEA in Winfrith, Dorset, in 1965, as mentioned by the noble Viscount, Lord Hanworth, are rapidly and radically developed from the present modest R&D project with the National Nuclear Laboratory, all the available nuclear sites will have gone and we will have missed the opportunity to be Japan’s partner for the rollout in the EMEA region of this extremely versatile and potentially cheap and efficient technology. We need a public-private joint venture consortium to develop this, in short order.
As a first step to try to keep open this exciting possibility, will the Minister discuss with the new Secretary of State whether she will, without delay, ask GBN to start comparing and assessing the leading HTGR technologies against the companies already in the SMR competition? There is no reason for them to be artificially held back and confined to the limited objectives of the AMR competition. The noble Viscount also spoke about the interesting MoltexFLEX reactor, which deserves more attention.
Lastly, I would like to hear the Minister’s comment on the total absence of a level playing field between UK-based applicants to the ONR going through the GDA process and their US competitors. American nuclear consortia are at a huge advantage to their British competitors because the US Government are much more generous, with an element of state funding. Neither does this help for rebuilding a UK skills base.
I apologise for going over my time and look forward to the Minister’s reply.
Baroness Bennett of Manor Castle (GP)
My Lords, in following the noble Viscount, Lord Trenchard, I feel that I need to begin by defending the House of Lords Library and its briefing. Noble Lords might wish to follow the link provided in that briefing to the source of the figure of 42% of electricity generated from renewables in 2022, which links to BEIS’s Energy Trends: UK Electricity ET5.1 document, which shows clearly that that is the annual figure.
I thank the noble Lord, Lord Howell, for securing this debate and agree with many of the concerns he expressed about our current nuclear programme, its costs, its delays and the many problems with it. The House of Lords Library briefing looks at how we have seen a significant decline since the 1990s, when 24.5% of electricity came from nuclear. That is down to about 14% now. This is a dinosaur technology that was tried out in the 20th century, has proved to be a failure and is on the decline.
Our energy future very clearly is in renewables and, to use a phrase I do not believe I have heard mentioned today, energy conservation. The cleanest, greenest, best possible energy we can have is the energy we do not need to use. We need to look forward to a future of social innovation and innovation in the way we operate our societies that demands less energy, which will leave all of us better off in the pocket and in terms of the environment in which we live.
I referred to the decline of this dinosaur of the 20th century, but we are still very much bearing the costs. One of the first costs to look at in the UK context is the fact that the current estimate for clearing up the mess left by the industry from the last century is £260 billion, and that figure just keeps going up and up. We have referred a great deal to the problem of skill shortages in the nuclear sector. We have a huge problem with the shortage of skills for that clean-up, which is where a great deal of expertise naturally needs to be delivered.
It is also interesting that this debate was secured at the point where there is great controversy about what is happening at this moment in Fukushima, in Japan, where wastewater is being released from the destroyed nuclear plant. The figures are truly mind-boggling: there are currently 463 million gallons of contaminated water being held on that site, and they are collecting more contaminated water—26,000 gallons a day. One of the big concerns is the impact on the Japanese fishing industry, just one of the many ways in which nuclear has been a blight for many of the communities in which it has been sited.
A number of noble Lords have referred to the costs. There are many figures I could cite but France is often seen as a nuclear leader: Flamanville 3 cost €12.7 billion, a cost that more than quadrupled from the original quote in 2004. Something else that has not come up is the geopolitical cost. Many noble Lords will be aware of the recent coup in Niger. Niger supplies 15% of France’s uranium, and a fifth of the EU’s uranium stock comes from Niger. Uranium mining there was undoubtedly a political factor in instability. This is a real problem area.
To come back to the UK, an issue with Sizewell B is that the fuel comes from Russia, as does a great deal of EU fuel, with the obvious issues that I do not need to raise. Namibia is another potential source, but it reflects many of the same problems that are relevant to Niger. If we look to Australia—somewhere else that is often cited—we see that Rio Tinto, a mining company with a very dubious history, has recently been forced to fork out a significant amount of the cost of 750 million Australian dollars for the rehabilitation of the Ranger uranium mine, which sits right in the middle of the Kakadu National Park and has been of great concern to the aboriginal inhabitants of the area as to the impacts. So we really have a situation where this is a dinosaur of the past.
I will pick up a couple of points raised by others in the debate. The word “baseload” keeps popping up. I will go to a quote that I go to often. In 2015, Steve Holliday, CEO of National Grid, said:
“The idea of large power stations for baseload is outdated”.
We are looking to a new, flexible, functional electricity system that works with what is available. It is a different kind of model—a model in which nuclear is a huge problem due to the lack of resilience and flexibility, as well as the lack of reliability.
The noble Baroness, Lady Bloomfield, talked about the land that might be required for solar and wind. Of course, if we put solar panels on our roofs, that is not taking up any extra land at all, and we should see a Britain with roofs covered with solar panels. We would love to take up some land for onshore wind—the cheapest source of electricity available to us—if the Government would actually allow that to go ahead, as so many people from so many parts of the sector are pushing for.
We need to look at some of the Government’s actual models and the way they have been looking at this issue. The current power sector model—the dynamic dispatch model, which is used to justify current policy decisions—cannot model long-duration storage and is being replaced. I have already talked about how it is difficult and inflexible; that is the practical reality. EDF has suggested that Sizewell C EPR reactors could load follow and is exploring the option, but that has never been done before in the UK.
I come to one final main point—as far as I am concerned, this is the absolute killer argument against any new nuclear. If we look at the history of Flamanville and other recent builds of nuclear reactors, we see not only that the costs have exploded but that the construction time has gone on and on. Then we have the issues of reliability.
The fact is that we are in a climate emergency. Renewables are there now. All those roofs are sitting there ready to have solar panels put on them. We need to act fast and now with proven technologies. Nuclear has been a continual disaster. It has been continually unreliable. We need an energy future based on renewables and energy conservation.
Lord Liddle (Lab)
My Lords, I cannot compete with many of the speakers in this debate in their degree of expertise and knowledge on this subject. It has been more like an adult education seminar than a political debate, except perhaps for the last contribution from the noble Baroness, Lady Bennett, which was typically robust and in her own style.
I come to this as a natural supporter of nuclear power, in the first instance, and as a Cumbrian, which I think puts me in a unique position on this issue. I was a natural supporter of nuclear power from what my mother told me when I sat on her knee. She was brought up in a pit village in west Cumberland and her view was that nuclear was wonderful because it meant that people like my father would not have to go down the pit working a 2.5-foot seam in very dangerous conditions and that this would supply us with the power that we need without that dreadful human cost. I took that on board, and I think there are still a lot of people who think like that.
As several noble Lords have pointed out, west Cumberland is the birthplace, as it were, of the British nuclear industry. It is where Windscale and Calder Hall were located. I even remember that when I was at school, there was an accident and we were all told we could not drink school milk for many weeks—which as a child I was very puzzled by—because of the proximity to the activities there. West Cumberland is still the centre of British nuclear skills. All the skills involved in the clean-up at Sellafield are very important. My regret is that we have never managed to internationalise, for instance, the robotics which have been developed to deal with the nuclear waste in the ponds into a global competitive industry, which we should have been able to do. The National Nuclear Laboratory has lots of interesting ideas about the future of nuclear and they should be taken forward, but the tragedy for me as a Cumbrian is that at the moment we do not seem to appear much in the plans for the future of the industry, other than as dealing with waste and the possibility of a long-term waste repository.
The noble Lord, Lord Howell, in his very analytical approach at the start of the debate said that we are at a fork in the road; we could go one way towards big reactors on the Sizewell model or the other way towards smaller nuclear reactors. I rather agree with my noble friend Lord West of Spithead that we should do a bit of both. That seems the most risk-free option. The trouble with Britain is that, when we come to these forks in the road, we dither and argue. We have been stop-start on our nuclear policy for the past 30 years. When the noble Lord, Lord Howell, was Energy Minister, we were pushing ahead with a great programme; it was with Mrs Thatcher’s full support but, at the end of the 1980s, that all collapsed. Labour dithered around for quite some time when we came in in 1997 and then decided that we would go ahead with a big nuclear programme. Then we had the coalition, and the Lib Dems said that they would not allow any public funding of nuclear.
There has to be an element of public funding or public guarantee. No private sector company will undertake totally on its own the risks of construction costs running beyond what was anticipated; nor will they bear the very uncertain risks of clean-up at the end of the life of the station. There must be a public-private partnership of some kind in this area if we are going to get anywhere, but we seem to have dithered about it for years and years.
We have got to the point in Cumberland where the only industrial project that has been touted is a new coal mine, which is absolutely ridiculous. What could be more backward-looking than the idea of a new coal mine in west Cumbria when we have a whole lot of expertise that should be able to contribute to a nuclear revival that must play an important part in the fight against climate change?
We need a plan from the Government. I applaud the idea of setting up Great British energy, or whatever it is called, as it might give some coherence to these issues, but we need a plan. At the moment, there is no plan for energy that relates to the grid, which is a huge, unresolved question. What is our plan for the grid? That needs to be put in place. Much of the plan for the grid depends on where you have the generation. I am not making a party-political point, but a general point that we seem to have dithered a lot on all this. I hope the Minister will tell us that we will now get some action.
Baroness Sheehan (LD)
My Lords, I thank the noble Lord, Lord Howell of Guildford, for tabling this really important debate and for his very balanced introduction. It is always a pleasure to follow the noble Lord, Lord Liddle. I may not agree with his support for nuclear, but I now understand where it is coming from.
When I looked down the list of speakers for this debate, I feared that I would be in a minority of those urging caution before taking costly, long-term decisions that would lock us into a new generation of nuclear power plants—whether they be large gigawatt plants, such as EDF’s Sizewell C; the as-yet unproven at scale small modular reactors; or the more exotic advanced modular reactors. So it has proved to be: I am in the minority.
I hope that all speakers in this debate will acknowledge my very firm belief that we must act with extreme urgency to tackle the existential crisis of climate change. Let me assure noble Lords that I would grab with both hands any solution that proponents say could deliver 25% of our clean energy needs by 2050.
However, it is highly questionable whether those claims for nuclear energy are deliverable at a speed dictated by accelerating climate change, cost effectively and at scale, to meet our 2030 target for decarbonised electricity. Often it is a case of jam tomorrow, and nuclear is very expensive jam. It is eye-wateringly expensive, and investment from the private sector is proving to be a challenge. Let us take the example of Sizewell C, the overall cost of which remains shrouded in secrecy. The last published figure, circa £20 billion, dates back to May 2020. I ask the Minister to tell your Lordships’ House how much the Government estimate that it will cost now. He should know, because a capital raise was expected to begin in 2023, with a final investment decision due in 2024.
As I understand it, UK pension funds are not enthused, with Legal and General, NEST, BT and NatWest ruling Sizewell C out. The Government’s plan to include nuclear in the UK’s green taxonomy is unlikely to be a game-changer. The House of Commons Science, Innovation and Technology Committee in its July 2023 report on nuclear energy has called for greater transparency on Sizewell C’s costs, its value for money and level of risk, as well as its impact on households, which already face an escalating cost of living crisis. The regulated asset base model, replacing the failed contracts for difference deal struck for Hinkley Point C to pay for nuclear, really is deplorable; it leaves the British taxpayer on the hook for undefined costs as a sweetener for commercial interests.
The optimism of the British energy security strategy in backing new large nuclear projects has failed to generate commensurate enthusiasm from commercial operators. I am afraid that the legacy of nuclear disasters such as Three Mile Island, Chernobyl and Fukushima still loom large in people’s memories. Will Sizewell C happen? Who knows? It is beset with problems. French state-owned EDF alone can deliver the European pressurised water reactor. However, it is committed to urgent expansion of French nuclear power, raising serious questions about EDF’s priority in delivering Sizewell C for the UK at the speed required.
Hinkley Point C may or may not open in 2027, so the Government are banking on small modular reactors, smaller versions of conventional water-cooled nuclear reactors. Many different designs are being worked on around the world—about 50, at the last count—yet there is no clear winner. For the moment, our Government are backing the Rolls-Royce choice of design. But here is the rub: these SMRs are proving to be ferociously difficult to standardise for their stated USP, modular assembly. It turns out that nuclear power is site-specific and does not lend itself easily to repetitive design.
The July 2023 Commons Select Committee report on nuclear says:
“Neither SMRs nor AMRs are ready for commercial deployment”.
These are not technologies that will be deployable in the necessary timescale. Another fundamental issue with nuclear is that it is not indigenous in the way that our renewables, such as wind and solar, are. It relies on supplies of enriched uranium. We used to import enriched uranium for Sizewell B from Russia. Could the Minister say where we get it from now?
Even if we were to resurrect our own enrichment capabilities, we would nevertheless be dependent on the import of the mined raw material. The noble Baroness, Lady Bennett of Manor Castle, has already talked about some of the geopolitical issues surrounding this. There are those who speak about the reuse of spent fuel, but that technology is not yet deliverable.
The Commons Select Committee report also points out that there is strong competition for resources and minerals, both within the UK and internationally. For example, large domestic infrastructure projects such as HS2 and the nuclear programmes in France for six new nuclear reactors draw on the same skills and resources supply chain that will be needed for our nuclear new build. There is also the fundamental question of whether nuclear reactors are suitable for providing flexible energy to fill gaps left by the intermittency of renewables such as wind and sun, when we need power that can be readily turned on and off. Nuclear reactors do not take kindly to this. Fission is a chain reaction. Once it is going, it is much cheaper and safer to let it continue than to stop-start it. Its inflexibility makes it unsuitable for the role envisaged for it in a net zero future. Not only is it eye-wateringly costly, historically it has been beset by delivery problems, has a complex supply chain and a lack of skilled UK workers. Nuclear does not even solve the baseload problem.
I have not even touched on decommissioning. I know a little about it, as the international maritime transport of spent nuclear fuel was the subject of my master’s dissertation at Imperial College. Decommissioning deserves a debate of its own, so big and intractable is the problem. Stanford University’s recent research on the huge amount of additional toxic nuclear waste generated by SMRs that will be added to piles of legacy waste is a frightening read. There is no depository for it anywhere in the world, despite decades of trying. I assure the Minister that if these fairly substantial barriers to nuclear energy could be overcome, I would wholeheartedly support it. Otherwise, I am much more minded to solve the intermittency problems with maybe boring but pragmatic and quickly deliverable additional renewables. Energy efficiency, interconnectors and storage, both short and long term, also have a vital part to play and are achievable today.
In conclusion, my view is that the better, flexible baseload option would be to invest in tidal power, where the billions spent on nuclear would bear better fruit and be truly green—and British—in the way that nuclear never could be.
Baroness Blake of Leeds (Lab)
My Lords, I thank the noble Lord, Lord Howell of Guildford, for securing this important debate. I thank all noble Lords who have contributed for their well-informed and welcome efforts to explain such a complex area. The Library staff in both Houses have done an excellent job with their briefings.
We all know that our energy supply reliability and affordability are at the forefront of the thinking of many in government departments at all levels, as well as across industry and consumers. This focus is generated not only by net zero considerations, but by concern about security of supply and cost of living considerations. We now have a clear sense that the clock is ticking fast, and a focus on delivering alternatives to gas should be paramount.
Supporters of nuclear say that it can provide reliable baseload power, bolster energy security, provide industrial or domestic heat and potentially reduce the legacy of nuclear waste produced by reactors and weapons through reuse as fuel. Nuclear power is also a low-carbon power source, as the fission process produces no greenhouse gas emissions.
The Intergovernmental Panel on Climate Change estimated that the average full-cycle emissions of nuclear are below those of fossil fuels and, indeed, some renewables. The uncomfortable truth, as we have heard, is that the contribution of nuclear power to the total energy supply has fallen significantly since the 1990s and is set to decrease further over coming years. Numerous factors have contributed to this, as we have heard. The upfront cost of nuclear power can exceed that of other sources, leading to the need for subsidies or long contract settlements. The meltdown of Fukushima in 2011, on top of previous disasters, contributed to a weakening of global public support for nuclear power and a new series of safety measures that only added, of course, to costs and timescales. Also, the accumulation of nuclear waste continues to draw criticism due to a lack of disposal solutions; some point to renewables such as wind and solar as a cleaner alternative.
It is fair to say that it is still a politically controversial energy source, as we have heard. Some commentators have questioned the value for money of nuclear power, particularly the Hinkley C deal, following a fall in the cost of renewables such as offshore wind. One thing we have not stressed enough today is how we tackle the attitude of the public. Unless we recognise that the public are at best agnostic on this, we will continue to struggle to deliver the solutions we need. I believe that winning over public support will be key and needs to have far more of a focus.
Labour supports the development of nuclear power as an integrated element of our planning and long-term strategy to deliver our future energy needs. It is interesting to reflect back on when the Labour Government came in. As we have heard, there was an interregnum, if you like, in commitment in this area, but in 2006 Tony Blair, addressing the CBI as Prime Minister, made a very prescient comment:
“The facts are stark. By 2025, if current policy is unchanged, there will be a dramatic gap on our targets to reduce CO2 emissions; we will become heavily dependent on gas; and at the same time move from being 80/90%, self-reliant in gas to 80/90% dependent on foreign imports, mostly from the Middle East and Africa and Russia”.
How that has come home to roost.
The change happened from there. The Labour Government published the Energy Challenge review, saying that there was no one single energy solution and calling for new nuclear to be included, with a wider push for renewables and energy efficiency to achieve a low-carbon, secure and affordable supply of energy, and Gordon Brown continued this, releasing a White Paper on nuclear power. In 2011 the coalition Government, despite their difficulties, developed this and identified eight sites suitable for new nuclear reactors. All these proposed reactors are classed as generation III or generation III+ reactors.
What happened next? Conservative Governments from 2015 have continued to support new nuclear. The final go-ahead for Hinkley Point C was given by the May Government in 2016. In December 2020 the Johnson Government set out, in the Energy White Paper, the aim
“to bring at least one large-scale nuclear project to the point of Final Investment Decision by the end of this Parliament, subject to clear value for money and all relevant approvals”,
and so it has continued. However, the collapse of private sector support for a new plant at Moorside in November 2018 and the suspension of the Hitachi project at Wylfa in January 2019 cast doubt on the future of nuclear plants in the UK, and the Johnson Government did then come forward with a plan to come up with alternative financing models.
All this begs the question of where we stand today, and I hope the Minister will be able to answer some the questions that have been raised and give some much-needed clarity around future and long-term planning. First, we need an explanation of why there has been no delivery of nuclear projects over the past 13 years. I support my noble friend Lord Liddle’s comments and ask the Minister whether Great British Nuclear has a long-term, clear strategy and an investment plan. Will there be a final investment decision on Sizewell C by the end of this Parliament? Moving on from Sizewell, where is the promised announcement on developing a pipeline of new nuclear projects? Promises were made in November 2022 at the launch of Great British Nuclear that plans would be announced earlier this year. Where are those plans?
I firmly believe there is enormous private sector ambition and interest in developing nuclear to its rightful place in contributing to the mix of energy solutions. There is real interest in the thousands of jobs that will be created if the programmes go ahead, but there are serious questions for the Government to answer. First, concerning site provision and associated planning matters, how are the Government going to get these sites away? How will they work to unlock investment and, importantly, what will their contribution be? How can we move away from considering just one proposal at a time to having a long-term plan, including a whole series of proposals—the so-called “fleet deployment approach”?
We have known that successive Governments have supported nuclear power. Reactor designs have of course changed over time, from advanced gas-cooled reactors to pressurised water reactors, to European pressurised reactors and other new advanced designs, as we have heard today. The current and previous Conservative Governments have also been supportive of innovation, such as small modular reactors, fast reactors, molten salt reactors and other generation IV designs. However, I hope that at the end of the session today we will have a much clearer idea of how all this is going to be brought into play. We need certainty and a long-term plan to resolve these matters, and to enable nuclear to fulfil its potential and contribute to tackling the worsening energy and climate crisis that faces us all.
Lord Mott (Con)
My Lords, I thank my noble friend Lord Howell for securing this important and timely debate. I had the pleasure of sitting down with him yesterday morning to discuss nuclear policy in greater detail. I must say that his enthusiasm and expertise in this area are unmatched, and I thank him for his ongoing support for the civil nuclear industry in the UK. I thank also all noble Lords for participating in the debate and for their valuable contributions. I welcome the support for nuclear we heard from the noble Baroness, Lady Blake; this is an important signal for the industry. I would also like to reference at the outset my support for the Legislators for Nuclear initiative, as referenced by my noble friend Lady Bloomfield and the noble Lord, Lord Ravensdale. I understand that noble Lords met earlier this week with my ministerial colleague, Andrew Bowie MP, to discuss this further. I look forward to receiving an update on the progress of this work.
As the noble Viscount, Lord Hanworth, and the noble Lord, Lord Liddle, rightly pointed out, it is 70 years since construction began on the world’s first commercial nuclear power plant at Calder Hall in Cumbria. This incredible technology is undergoing a revival. Climate change, soaring global energy prices and improving nuclear technology have all prompted a rethink in our strategic priorities and, over the last 18 months, Vladimir Putin’s invasion of Ukraine has highlighted the enduring importance of energy security. This Government recognise the major role nuclear power has played, and will continue to play, in our own energy mix: not only delivering energy security but helping us to decarbonise.
That is why, last year, the Government set out in the British energy security strategy plans to generate up to a quarter of the country’s electricity from nuclear by 2050. To achieve this, we remain committed to the full spectrum of nuclear technologies, from traditional large-scale reactor projects through to exploring more innovative small, advanced and even microreactor designs. That is also why we have launched Great British Nuclear, to ensure we have the right structures in place to help deliver the nuclear programme.
The Government have committed to a new programmatic approach to the delivery of nuclear projects going forward, giving industry and investors the confidence to make the necessary investments that will help deliver projects at pace, while also reducing costs through learning and replication. To deliver this programme, we have launched Great British Nuclear—GBN—which will be an arm’s-length body responsible for helping to enable new nuclear projects, backed with the funding it needs.
GBN will apply a programmatic approach to both project deployment and technology selection. This has two key advantages: it will send the right signals to the sector, to provide long-term certainty and facilitate investment in the supply chain and skills; and it will offset the gradual retirement of existing capacity, strengthening UK energy independence while being central to delivering the decarbonisation needs set out by the noble Baroness, Lady Bennett.
GBN’s first priority is to identify the small modular reactor technologies best able to deliver a final investment decision by the end of 2029 and deliver projects in the mid-2030s, potentially releasing multi-billions of pounds of private and public investment to build SMR technologies on sites. To this end, following a market engagement exercise, GBN invited SMR technology vendors to register their interest in a technology selection process. The initial application window is now closed, with the ambition being to assess and decide on the leading technologies by the autumn.
In response to the question of the noble Lord, Lord Bilimoria, and as Minister Bowie said this morning at the World Nuclear Symposium, the UK’s technology selection process is three times quicker than that of any contemporary country and gives a unique rigour to the way that the UK selects SMR technology—something that we think will make the UK highly competitive globally.
In response my noble friend Lord Howell’s question about those reactors that have not yet sought government financing, I reiterate that, while GBN’s initial focus is the SMR down-selection process, the Government remain strongly committed to the full spectrum of nuclear technologies and continue to consider how all technologies could further contribute to UK energy security. For the companies referenced by my noble friend Lord Howell, the Government have committed to consult in the autumn on alternative routes to market for nuclear projects, in addition to that provided by the Great British Nuclear small ordmodular reactor technology selection process.
To respond to the question of the noble Lord, Lord Bilimoria, on the balance between GW and SMRs, the evidence received will help shape future policy and ensure that the UK’s nuclear programme is as comprehensive and inclusive as possible.
The Government are particularly keen to understand where Great British Nuclear and the Government could support the private sector to bring forward projects, and to understand the different technology designs—as referred to by the noble Viscount, Lord Hanworth, in his speech—particularly the safety, security and non-proliferation considerations that come with different technologies. As the noble Viscount pointed out when he described the range of different technologies being developed, the Government have recognised this.
To support different designs, the Government have launched the future nuclear enabling fund of up to £120 million, to provide targeted support for new nuclear development. The aim of the FNEF is to help industry reduce project costs, so that it is better positioned for future investment decisions. In July 2023, the Government shortlisted potential grants from the FNEF. This will release up to £77.1 million, to remove barriers to entry for nuclear projects.
In response to the comment of the noble Lord, Lord Ravensdale, on the supply chain, with the Government’s long-term plans for the deployment of civil nuclear to up to 24 gigawatts by 2050, strengthening domestic capabilities and capacity is a high priority. The development of further nuclear new build, regardless of technology, is likely to bring further supply chain companies to market.
There is good reason for GBN’s initial focus on SMRs. As my noble friend Lord Howell echoed, not only are they potentially less capital intensive to build than traditional nuclear power plants, because of their smaller size, but factory-based modular manufacturing is expected to make them more flexible to deploy, ultimately helping to secure our energy supply and bring down carbon emissions. Importantly, our support for SMRs dates back to 2020, when the Government announced the £385 million advanced nuclear fund to support pioneering SMR designs and to demonstrate an advanced modular reactor by the early 2030s. Of this funding, which a number of my noble friends recognised, up to £210 million was awarded to Rolls-Royce SMR Ltd to ensure that the SMR technology can continue to be developed and progressed according to the UK’s robust regulatory regime.
As my noble friend Lord Trenchard correctly pointed out, nuclear is not just about electricity generation; it is vital to decarbonising the wider heat and water industries. The Government recognise that advanced nuclear innovation creates opportunities for new uses of nuclear energy beyond electricity. That is at the heart of the partnership he referenced between the UK and Japan on high-temperature gas reactors. IT is also central to the Government’s commitment to demonstrate an AMR and the associated R&D fund being allocated in the advanced nuclear fund. Furthermore, we have committed to consult on additional routes to market for nuclear projects later in the autumn.
Delivery of the first reactor building at Hinkley Point C is now well under way. When finished, Hinkley will provide 7% of the country’s electricity, as well as an enormous boost to both the local and national economy, with up to 25,000 new employment opportunities. In response to my noble friend Lord Howell, EDF is aiming for reactor 1 to start commercial operations in June 2027, with reactor 2 forecast to start operating a year later. The cost has moved from between £22 billion and £23 billion to between £25 billion and £26 billion in 2015 monies. The drivers behind this cost and schedule increase are the Covid pandemic, with inefficiencies caused by working restrictions, and an overoptimistic initial cost and schedule estimate by EDF.
In response to the question about Chinese participation in Hinkley Point C from my noble friend Lord Howell, CGN is a minority partner in financing and building Hinkley Point C. It is not involved in major supply chain contracts at Hinkley Point C, nor is it involved in the instrumentation, control systems or any other critical function of the plant, including the intellectual property of the reactor.
Furthermore, the Hinkley project has already revealed a huge amount about how to plan and build large-scale schemes, which will be crucial in the development of the sister project at Sizewell C. That will allow lessons to be learned and costs to be controlled directly in response to delivery challenges, as the noble Baroness, Lady Bennett, highlighted in her speech.
Last November, the Government announced an historic £700 million investment in Sizewell C, the first direct investment in a large-scale nuclear project for more than three decades and directly responding to the delivery challenges highlighted by the noble Lord, Lord Liddle. As shareholders in this project, we have been pressing ahead with Sizewell C’s development. This summer, we invested and made available a further £511 million to mature the project further. Making that funding available now will mean that the project can start construction faster at the point of any final investment decision being made. From that, we would expect a result in cost savings and faster overall delivery. We are also continuing to develop plans with EDF and the project to raise private capital later this year, using our newly established regulated asset base model for nuclear. In response to my noble friend Lady Bloomfield, that will further develop the attractiveness of the industry as a place to invest.
In answer to my noble friend Lord Howell, Sizewell C is expected to be generating power by the mid-2030s, but the timescales for construction will depend on the outcome of our ongoing development of this project. I can assure the noble Baroness, Lady Blake, that the timing of a final investment decision is intended to be in this Parliament. As a near-exact replica of Hinkley Point C, Sizewell C will benefit from the lessons learned and the established supply chain of that project, providing high levels of maturity and de-risking the project relative to other options.
As I am sure the noble Baroness, Lady Sheehan, will appreciate, the capital costs for Sizewell C are commercially sensitive and subject to ongoing negotiations, which means that we cannot at this stage disclose them.
My noble friend Lord Howell asked about Taishan and the quality issue. Framatome has rectified the known issue with the redesign of the fuel assembly for Taishan and it is important to note that Hinkley Point C and Sizewell C use a different design.
To ensure that all this delivers energy security for the United Kingdom, we need to ensure a secure supply of nuclear fuel for future UK reactor fleets and those of our allies. As the noble Lord, Lord Ravensdale, noted, the UK is in the envious position of having deep fuel cycle capabilities. Preserving and growing this capability to benefit ourselves and our allies is at the heart of the Government’s ambition in the Atlantic declaration earlier in the year for the UK to have full front-end fuel cycle capabilities by the end of the decade, and we have been investing in the sector to deliver that commitment.
As my noble friend Lady Bloomfield correctly pointed out, at the start of the year the Government also launched a nuclear fuel fund of up to £50 million, which will be match-funded by industry, to strengthen our domestic fuel production capability. This is on top of the £13 million we awarded to Westinghouse Springfields Fuels Ltd last autumn to support a venture to convert freshly mined and recycled uranium. Again, this was match-funded to deliver £26 million in benefit to the UK.
To respond to the noble Baroness, Lady Sheehan, the fuel supply for Sizewell B is the responsibility of the operator, EDF, which sources it from the wider EDF supply chain. However, the investments into nuclear fuel facilities in the UK by the nuclear fuel fund are exactly designed to bring new capabilities to the UK and to those who source nuclear fuels, including operators such as EDF. These investments will strengthen UK fuel production capability, develop supply chains for advanced fuels and bolster efforts to diversify nuclear fuel production capacity away from Russia.
While the sourcing of civil fuel is a commercial decision for the reactor operator, I can assure the noble Lord, Lord Ravensdale, that the Government, in partnership with our allies, continue to look at how we strengthen and secure fuel supplies for our future reactors to ensure that they are not dependent on Russia. I note in particular the SMR technology selection criteria as an example of how we are doing this. I reassure the noble Lord, Lord Bilimoria, that the UK’s unique position here, unlike that of most of our global competitors, will increase the export potential for SMRs.
The noble Lord, Lord Ravensdale, asked about medical isotopes. The Government have launched a medical radionuclide innovation programme to identify where further government intervention is required to secure UK supplies, including an ongoing call for evidence from industry to inform this.
Of course, to achieve our ambitions, we must also demonstrate how to deal with our nuclear legacy safely and responsibly by providing the disposal route for the waste. This will also support the delivery of new nuclear projects that the Government are committed to bringing forward.
To answer the noble Lord, Lord West, we are making progress with plans to develop a geological disposal facility to dispose of our most hazardous radioactive waste and the waste that will arise from new nuclear projects. The siting process for the GDF is under way. It is a consent-based approach which requires a willing community to be a partner in the project’s development. Four areas have entered the siting process—some very close to the heart and home of the noble Lord, Lord Liddle, and the home of the UK’s world-beating decommissioning expertise. Three areas are in Cumberland—in Copeland and Allerdale—and one is in Theddlethorpe in Lincolnshire. Geological investigations in the shape of a marine geophysical survey were conducted last summer off the coast of Copeland, Cumberland.
On skills, which the noble Lord, Lord Bilimoria, and my noble friends Lady Bloomfield and Lord Trenchard correctly highlighted, we will of course need to address a key challenge in delivering our nuclear ambitions, ensuring that we have sufficient skills across our nuclear enterprise. The new Nuclear Skills Taskforce will ensure that the UK’s defence and civil nuclear sectors have the right people with the right skills to seize growth opportunities. It will build on existing work, cohering and turbocharging actions to address the skills challenges across the whole nuclear sector.
Finally, I will address the question on planning from the noble Lord, Lord Ravensdale, and the comments from the noble Baroness, Lady Blake. Although the process brought in by the Planning Act 2008 has been successful, we recognise that the current volumes and the complexity of applications have introduced greater challenges and resulted in longer timeframes for reviewing decisions over recent years. This is why we are pressing ahead with our action plan for reform. Furthermore, we are developing a new nuclear national policy statement, or NPS, which will cover the deployment of new nuclear power stations beyond 2025. This new NPS will take into account the changes in the nuclear landscape since the current NPS was published in 2011, including the realistic potential for deployment of advanced nuclear technologies such as SMRs.
To conclude, when construction began at Calder Hall seven decades ago, nuclear power was a bright and shining beacon that promised cheap, clean and reliable energy. Today we are witnessing the beginnings of a renaissance in nuclear power, only this time we have the proven, reliable and safe technology required to exploit its full potential and a Government determined to do everything we can to ensure that the UK remains a world leader in civil nuclear power. I thank noble Lords again for their varied yet equally important contributions to this debate.
Lord Howell of Guildford (Con)
My Lords, I thank the Minister for his comprehensive wind-up. He answered many of our questions—almost all, I think, although perhaps not one or two. I thank all those who have taken part in this debate with an excellent mixture of expertise, judgment and wisdom, all of which are needed in this issue. The debate has been short but the issues are absolutely vast, and we will have to return to them again and again in the coming months and years. I am particularly grateful that the general tone is very strong support for the newer technologies, the smaller machines, the quicker build and the better prospect of attracting private investment.
If anything is missing, it is slightly that question of finance. I see shadows of the magic money tree again. The FT ran an article yesterday based on the view of the noble Lord, Lord Stern, that the energy transition is going to cost £100 trillion spread over the next 27 years. Yet we know that there is no more money—indeed, the Labour shadow Chancellor always recognises that. It is rather like in 2010; there was no more money then, although for different reasons, and now there is no more money. Where is it going to come from? The answer is that there is masses of money around the world, in the pension funds and the sovereign wealth funds, but it will come into our system only if it is investable. If we build giant white elephants on yesterday’s technology, no one will touch it, and certainly not investors. That is my only regret.
There is expert knowledge and, I hope, a momentum from this short debate for us to move forward into areas where we can attract the private money, the waste is limited, popular understanding of and support for what has to happen is increased, and we are able to move forward towards our goals of a low-carbon, green energy economy and a prosperity that at the moment seems to be eluding us.