Nuclear Update

Lord Goldsmith of Richmond Park Excerpts

Thursday 17th January 2019 Commons Chamber

[Greg Clark]

The Prime Minister has repeatedly discussed nuclear investment with the Prime Minister of Japan, as have I with my opposite number there. In fact, in November, I flew to Tokyo to discuss the negotiations going on here, given the difficulties that the investor was having, and I met my opposite number at the Japanese Ministry of Economy, Trade and Industry. This has been a substantial, and cordial, Government-to-Government relationship, and the hon. Gentleman has my assurance that we will continue that. I mentioned in my statement the work of our embassy in Tokyo, which has been an excellent and expert source of advice. That will continue to be available.

When it comes to investment in renewables, the hon. Gentleman will know that Wales is a substantial and proud leader in renewable energy. I think Gwynt y Môr is the second largest wind farm already deployed in Europe. I mentioned in my statement the rising availability of alternative technologies. To put this in context, in 2017 we procured more than 3 GW of offshore wind in a single contract for difference auction at £57.50 per MWh. That is more in a single auction than this plant was going to provide. As I have said, the challenge is the competition coming from other technologies, and Wales is a beneficiary of some aspects of that.

[Zac Goldsmith (Richmond Park) (Con)]

In his statement, my right hon. Friend said that the economics of the energy market had changed significantly in recent years, meaning that renewable energy could now be not only cheap but readily available. Does he share my concern that consumers will not see all the benefits of the reduced prices, given that we are bound into these exceedingly long-term and hugely expensive contracts? An example is Hinkley, whose strike price means that it will probably be the most expensive form of energy in the history of energy generation. Can he give me an assurance or commitment that nuclear power will not result in consumer bills skyrocketing in the years to come?

[Greg Clark]

That is demonstrated in my statement today. We were talking about a strike price substantially less than that of Hinkley, and I said when I made my statement to the House on Hinkley that we would do that. I say gently to my hon. Friend, who is a lifelong environmentalist, that exactly the same arguments were advanced against the initial contracts for offshore wind—namely, that they would be burdensome and that we should not enter into them. We have now seen substantial capacity becoming available at prices that will shortly be free of subsidy entirely. That is an excellent development for consumers, for the reasons that he has given, but it is also the case that the manufacturers in the supply chain are located right across the UK, which is a further industrial benefit of the strategic policy.