Nuclear Energy (Financing) Bill

Baroness Neville-Jones Excerpts

2nd reading
Monday 21st February 2022 Lords Chamber

[Baroness Neville-Jones (Con)]

My Lords, I support the Bill because it is both urgent and important. It is urgent because, as the history of Wylfa recently demonstrated, the lack of ability to provide funding for new nuclear energy has become a serious obstacle in the way of new building. That applies whether it is a big site or project or SMRs and AGRs.

We need the Bill because, as the Minister has said, it provides an alternative funding method that, as the noble Lord, Lord Rooker, pointed out, has been used for other utilities—it is not quite the same, but nevertheless there has been good experience. We need to get it on the statute book as soon as we can, with early commencement, so that the detailed work on financial flows via the RAB model can go ahead, with some prospect of Sizewell and other possible nuclear sites coming on stream in a reasonable timescale. It is not too much to say that, absent a Bill like this or the funding method that it would give us, it will be very difficult to support and fund Sizewell. So the stakes are high.

I am not an expert on funding mechanisms and will not compete with those who are more competent than I am in discussing them, but I will make a couple of points. As the Minister said, the RAB model enables private sector capital to be brought in, reducing the burden on the taxpayer. As has also been pointed out, we do this by getting a contribution from the consumer—this reduces the loan element and drives down the overall cost. There has been comment on this aspect both in this Chamber and in the other place, and I share the concern that the consumer should not be taken for a ride. The experience in South Carolina was cited, certainly in the other place. It is fair to say that any method of finance can be discredited by poor management and, indeed, fraud.

But the concern for protecting the consumer is legitimate, and I hope that the Minister can assure us that there will be due diligence on the project costing so that we are not faced subsequently with unprovided cost overruns. I hope that he can also tell us that incentives will be placed on the builders to keep costs down and that they will be real and effective.

I said that I thought the Bill was important as well as urgent. The truth is that this country is not going to achieve its statutorily embedded climate change goals of net zero by 2050, nor the decarbonisation of electricity production by 2035, without a contribution from nuclear energy generation, which, as has also been said, is at the moment declining. We need that base power when renewables are not performing. I know there is a big divide on this issue, but it is not just the Government who say we need it; so does the Climate Change Committee. We need the contribution of nuclear-generated power. Frankly, Parliament cannot deny the means to the end that it has ordained.

We need to bear in mind something else that is often forgotten. In a data world, we need a much greater quantum of electricity, above all, to power the world that we are going into, which is going to be so desirable and green. If we want the greenness, we need to provide the means to get there.

I also strongly suspect that, for the foreseeable future, which is quite some time, the era of cheap energy is over and that people will take a different view of what the appropriate strike price is likely to be in an upwards direction.

Lastly, I have a couple of thoughts on safety and security. The UK’s record on nuclear safety is of the highest order and we can have confidence in it. I do not come to the same conclusion as the noble Lord, Lord Teverson, who legitimately mentioned this issue. We already have sound methods for dealing with nuclear waste, but it is absolutely true that we must find a permanent solution. I hope the Minister will confirm that finding that solution remains a high priority. It is important for future generations to be able to cope with the outcome of nuclear power.

On security, if ever the world needed a demonstration that high dependence on international energy markets carries a considerable risk to the economy, Mr Putin is giving us a masterclass. Do we really need more persuasion that we must exploit our undoubted ability to become more self-reliant in energy? Secondly, as discussed in the other place, there is the participation of foreign state money in funding nuclear energy plants. I am not in favour of a blanket ban on this, but I am sure the Government need to be vigilant on the issue and use, if necessary, the power of the special share and the terms of the recently passed foreign investment Act. That is what those bits of legislation are there for. I hope the Minister can assure us that, if we are going to counter it, this would be the case.