Nuclear Power: Procurement
Debate between Baroness Verma and Viscount Hanworth
Viscount Hanworth
To ask Her Majesty’s Government what steps they are taking to ensure that United Kingdom suppliers will be called upon to provide the components that will be required in building any new nuclear power station in the United Kingdom.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
My Lords, the Government are committed to ensuring that the UK supply chain is able fully to capitalise on the opportunities that will come with the UK’s nuclear new-build programme. Investor confidence continues to grow with projects being taken forward by three consortia. These projects have set out plans to develop around 16 gigawatts of new nuclear power in the UK, which could support an estimated 29,000 to 41,000 jobs across the nuclear supply chain at the peak of its construction.
Viscount Hanworth (Lab)
I thank the Minister for that reply. Recently, one of the EDF executives called into question the competence of the UK to supply high-tech equipment for the Hinkley C power station. This contradicts a current capability report of the Nuclear Industry Association, which maintains that, apart from a few large-scale items, the UK could supply almost all of the mechanical and electrical equipment, including the controls and the instrumentation. There are some essential misgivings concerning the possible wilful exclusion of competent UK suppliers. Will the Minister declare more fully what steps, if any, are being taken to protect their positions?
Baroness Verma
My Lords, EDF has indicated that around 57% of the opportunities in the construction of Hinkley Point C would come to the UK, while Horizon has estimated that it is expected that around 60% of the value of the first plant will be locally sourced. Nuclear is a key growth industry that provides highly skilled jobs. The 16 gigawatts of new-build capacity planned by industry would create a very large number of jobs, as I said. We in this country have the capability and the capacity.
Energy: Winter Supply
Debate between Baroness Verma and Viscount Hanworth
Baroness Verma
My Lords, my noble friend is right to raise this important question, but I hope that he will be reassured to know that we still have a large percentage of our gas provided from the North Sea. We have greatly increased our import infrastructure over the past few years, so have a good diversity of supply sources and gas storage to meet our demands comfortably. For both gas and electricity, National Grid is confident that it has the right mix of tools to ensure that energy requirements are met reliably and safely without having to resort to contingency measures.
Viscount Hanworth (Lab)
The Minister is bound to acknowledge that since the Government came to power there has been an unprecedented hiatus in investment in the energy industry. This must be due in large measure to the mixed messages that the Government have given in regard to their energy policy. She is also surely aware that, among the big six energy companies, those that have reaped the largest profits have had the worst investment records. What measures, beyond those contained in the Energy Bill, are the Government taking to encourage investment in the power industry?
Baroness Verma
My Lords, I remind the noble Viscount that under this Government, since 2010, £35 billion-worth of investment in the energy sector has come forward and there has been a 56% increase in the renewables sector. It is a fallacy to say that there is a hiatus when we are a very open and welcome country for investment. However, if we were to go by the plans that the noble Viscount’s party is trying to project, that investment would be driven away.
Energy Bill
Debate between Baroness Verma and Viscount Hanworth
Baroness Verma
My Lords, I thank the noble Baroness, Lady Worthington, for her amendment and for prompting the debate on strike prices for CFDs. Amendment 55ZC raises the important point that the draft strike prices we published on 27 June must be set at a level capable of incentivising investment. This is extremely important, and I am grateful for the opportunity to reassure noble Lords. As they will be aware, the draft strike prices were published on 27 June with their supporting detail for consultation in the draft EMR delivery plan on 17 July.
I would like to provide reassurance to the Committee that the Government have put extensive effort into ensuring that strike prices are set to balance the objectives of EMR stated in the Bill we are debating currently. They are to drive the necessary investment to meet our important targets while ensuring security of supply and value for money for consumers. The Bill ensures that all the functions exercised under it will take these important objectives into account. I therefore reassure the noble Baroness that the intent of this amendment is being achieved without the need for a further statutory requirement.
Further, we are working hard to ensure the process through which final strike prices are set is transparent, robust and informed by a full range of expert input, including from consumer groups. Our reason for consulting on the draft strike prices is to allow industry and all other stakeholders to scrutinise the figures and the evidence used to develop them and provide us with feedback to inform the final strike prices.
The strike prices proposed by the Secretary of State in the draft delivery plan were informed by two pieces of independent advice: first, analysis provided by National Grid to help the Secretary of State understand the potential impacts on the Government’s objectives, including the potential generation mix that the decision may incentivise, from different strike prices; secondly, that analysis has been subject to independent scrutiny by a panel of technical experts, as the noble Baroness said. Both these reports were published alongside the draft EMR delivery plan and copies were deposited in the Libraries of this House and the other place.
Turning to the setting of strike prices for investment contracts, as we set out in our update on Final Investment Decision Enabling for Renewables, which was published on 27 June 2013, strike prices for renewables generation will use the strike prices published in the final delivery plan. The potential terms, including the strike price, for any investment contract for Hinkley Point C will be set through bilateral negotiation, with specialist advice sought as appropriate and rigorous scrutiny of proposals.
I will write to the noble Baroness regarding the supplier obligation. I hope that she will withdraw her amendment.
Nuclear Research and Development
Debate between Baroness Verma and Viscount Hanworth
Viscount Hanworth
To ask Her Majesty’s Government what steps they are taking to foster nuclear research and development in the United Kingdom.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)
My Lords, over the past year, the Government have been working with industry, academia and other key stakeholders on a programme to help maintain, co-ordinate and further develop the UK’s nuclear research and development capabilities. We will publish details and outcomes from this work alongside a wider nuclear industrial sector strategy in the near future. Alongside this work, we are also engaged in positive discussions with international partners about joining an international research reactor programme. We have made a number of investments through the Skills Funding Agency and the UK Commission for Employment and Skills in support of the nuclear skills agenda.
Viscount Hanworth
I thank the Minister for that Answer. She will have observed how closely the nuclear research agenda of the European Union is aligned with the interests of France’s nuclear industry. Does she not agree that it would be timely and appropriate to establish a British directorate of nuclear research to guide and co-ordinate our research efforts? Does she not also recognise the virtue of providing guaranteed long-term funding for research directly to our own National Nuclear Laboratory?
Baroness Verma
My Lords, the noble Viscount raises a number of key points. The UK is working very positively with its international partners and its partners in the EU. Alongside what I have already mentioned to the noble Viscount is our forthcoming strategy, which we are working on and will incorporate a number of streams, one of which will be a comprehensive landscape review of all our R&D activities. I am sure that when the noble Viscount sees that, he will be reassured that the UK is one of the leading hubs of nuclear research and development.
Arctic Report Card
Debate between Baroness Verma and Viscount Hanworth(11 years, 9 months ago)
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Viscount Hanworth
My Lords, an example of extreme folly is the manner in which we are allowing petroleum companies to pursue the exploration of oil and gas in the Arctic as the reduction of ice cover renders this more practical. Can the Minister tell us what steps, if any, the Government are taking to restrain such activities?
Baroness Verma
My Lords, the fact of the matter is that we will need supplies of oil for the near future. Although we work very hard with our partner countries to ensure that everything is done in an environmentally safe way and with consideration to the environment and locations, we cannot dictate to the Arctic states or to the Arctic Council how they progress with their drilling. However, we know that they take the issue very seriously and are very environmentally effective when it comes to the security and safety of how they drill.
Energy: Nuclear Power
Debate between Baroness Verma and Viscount Hanworth(11 years, 11 months ago)
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Baroness Verma
My Lords, my noble friend raises a very important point given the circumstances of recent days. However, she will know that no planning permission for any site is given unless there is a proper investigation of environmental impact on nuclear plants.
Viscount Hanworth
My Lords, is it not clear to the Government that their pursuit of a free-market ideology has led to the collapse of their plans for Britain’s nuclear energy? Is it not time to establish a national agency that could commission the building of our nuclear power stations and that would be empowered if necessary to borrow funds on the open market to finance such vital infrastructure? Can the Minister give an opinion on this?
Baroness Verma
My Lords, the noble Viscount will be pleased to hear that at least this Government have taken new nuclear very seriously, as they have other energy sources. I remind him that his Government were in power for 13 years and failed to address any of these problems.
Nuclear Waste
Debate between Baroness Verma and Viscount Hanworth
Baroness Verma
My Lords, I congratulate the three councils in Cumbria. They are robustly engaged with the Government in ensuring that it is a community-led approach. We are also working closely with key decision-makers such as business, the unions and local Members of Parliament. As my noble friend knows, it is a staged process, and this pause has come about because the councils require some clarifications to be addressed. I am pleased that they are taking this issue so seriously. The process will take many decades, so a rushed response would actually not be helpful to anyone.
Viscount Hanworth
My Lords, our stock of plutonium waste would represent a valuable resource for power generation if we were to consider burning it in fast breeder reactors. Could the Minister tell us whether or not there are any genuine intentions to pursue this recourse?
Baroness Verma
My Lords, we are very serious about underground disposal. We are going to ensure that all the questions that are being asked are answered. We are working very closely with local authorities in Cumbria. We welcome other local authorities coming forward, but making sure that we safely secure radioactive waste is a serious question. That is the mission of this Government.