Small Modular Nuclear Reactors

Lord Hunt of Kings Heath Excerpts

Wednesday 22nd January 2025 Lords Chamber

[Lord Spellar]

To ask His Majesty’s Government when they expect to announce the orders for the first small modular nuclear reactors.

[The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)]

My Lords, Great British Nuclear is pushing forward with the SMR competition and is negotiating with a four down-selected companies. Once negotiations have concluded, the companies will be invited to submit final tenders, which Great British Nuclear will then evaluate, with final decisions to be taken in the spring.

[Lord Spellar (Lab)]

I thank the Minister for that Answer. He will be aware that the Government’s response to the AI action plan this month refers to the opportunity

“to accelerate investment in … Small Modular Reactors”.

He will also be aware that Britain is at the forefront of developing this technology, which could make a significant contribution to our growth agenda right through the country. However, delays in decision-making by the last Government led to significant slippage in the programme. What is the Minister’s department doing? He gave the procedure that would be undertaken, but what is the department doing to get the SMR programme back on track?

[Lord Hunt of Kings Heath (Lab)]

My Lords, I understand my noble friend’s impatience. It is an impatience that I share, because we can all see the potential of small modular reactors in the UK and the export potential of UK companies that are involved in developing SMRs. With fairness to Great British Nuclear, it is going through a tough process. We will have assurance with regard to the technologies and value-for-money issues. Spring is not far away. I understand the haste with which my noble friend wishes us to act in this area.

[Lord Deben (Con)]

My Lords, the French Government have given this Government a great opportunity to stop any further growth of Sizewell C and use that money for small modular nuclear reactors. This is an out-of-date proposal. It will cost much more than we bargained for. It is a brave and sensible Government who would say, “We will stop that and move to new technology”.

[Lord Hunt of Kings Heath (Lab)]

My Lords, if a Government were suddenly to say to Sizewell C, “We’re not going ahead with it”, that would have a devastating impact on our nuclear industry. We are not going to do that. We are moving towards a final investment decision. I do not recognise some of the figures that have been quoted in the media recently. It is 80% replication of Hinkley Point C, but because of that, a lot of the risks have already been ironed out.

[Lord Birt (CB)]

My Lords, I am attracted in principle to the idea of small-scale nuclear reactors scattered across the country on small sites and not just in nuclear submarines. But I have attended a number of meetings with the industry and have no clarity on the economics of the technology and how they compare with alternative paths to net zero. Does the Minister think that the economics are clear yet? If not, will the Government set them out?

[Lord Hunt of Kings Heath (Lab)]

My Lords, there are two points to make. Our analysis is that, overall, a renewable-led system complemented by flexible technologies, alongside technologies such as nuclear, will form the cheapest foundation for our decarbonised power grid. The value for money for SMRs is a very good question. That is precisely why the work that Great British Nuclear is doing will be so important and why it then has to feed into more general discussions within government about the finance involved.

[Earl Russell (LD)]

My Lords, as the SMR contracts have been delayed, has the proposed twentyfold increase in AI been included in the clean power plan? What are the Government’s proposals to deliver the energy required and meet our energy net-zero targets if SMRs will not be ready before 2032?

[Lord Hunt of Kings Heath (Lab)]

My Lords, obviously, we are all very excited by the potential of AI. My understanding is that current electricity demand from, for example, data centre growth—which is part of the package that the noble Earl is referring to—would in 2022 account for 4.05% of UK electricity consumption. NESO’s analysis of future energy scenarios reckons that data centres could increase annual electricity demand by between 27 and 62 terawatt hours by 2050, with estimates of total annual electricity demand ranging from 533 to 700 terawatts hours. Obviously, we are giving this a great deal of consideration.

[Lord Harris of Haringey (Lab)]

My Lords, I refer to my interests in the register. Existing civil nuclear power stations are protected by the Civil Nuclear Constabulary, which is, of course, wholly armed. What consideration has been given to who will protect and police modular nuclear reactors? Will it be the Civil Nuclear Constabulary, which would mean covering far more sites than it currently does, or will it be the other police forces? What discussions has the Minister had with his colleagues at the Home Office?

[Lord Hunt of Kings Heath (Lab)]

My Lords, it is a little early to give a definitive view to my noble friend but clearly the role of the Civil Nuclear Constabulary is a very important one. I reassure him that in the 14-year gap since I was last responsible for that force, there have been huge improvements in the way in which the constabulary works. I keep this matter under very close oversight.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, it is welcome news that the Minister has indicated there will be a decision by Great British Nuclear on SMR technologies in the spring. However, we still await any guidance on advanced modular reactors, let alone details on how they can come to the market and generate much-needed clean energy here in the UK from the early 2030s. A number of privately funded developers—newcleo, X-energy, TerraPower and others—are ready to go and want GBN to have a parallel process alongside the SMR competition to help them realise their ambitions in the UK as soon as possible. Will the Minister please give a clear indication on when a plan for AMRs will be published? Will His Majesty’s Government support those that want to get on with things in the meantime, invest in the UK, boost economic growth, and create thousands of jobs through their supply chains?

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the noble Baroness for her questions and we certainly take account of what she said. We all see the potential of AMRs. We have also seen that some of the major west coast companies in the US are interested in reaching agreements with project developers for AMRs to be sited near data centres in order to produce decarbonised energy. The noble Baroness’s Government produced an alternative routes to market consultation. We are currently considering the results of that and will make announcements in due course. I understand what she said about the role of GBN. These matters are all under earnest consideration at the moment.

[Lord Tarassenko (CB)]

My Lords, the noble Lord, Lord Spellar, mentioned the AI opportunities action plan, including the plan to build data centres—among them, the largest UK data centre so far. These data centres, which have been designated by the Government as sovereign data centres, will require SMRs to power them. Rolls-Royce, in which the Government hold a golden share, has produced and maintained the nuclear power systems for the UK’s submarine fleet using similar —not the same but similar—technology for SMRs for the last 60 years. Will the Minister ask the Science Secretary and the Energy Secretary, who together will chair the AI energy council, to designate the SMRs that will supply the sovereign data centres, also as sovereign assets, and run a much shorter bidding process open to UK companies only?

[Lord Hunt of Kings Heath (Lab)]

My Lords, I do not think I can give that commitment, although I recognise what the noble Lord says. I can certainly assure him that we are in close discussions across government departments about taking forward the implications of what was contained in the plan. I, of course, recognise the role that Rolls-Royce plays. I do not want to say anything further about that because it is currently in a competitive process in relation to SMRs that is being run by Great British Nuclear.

[Baroness Winterton of Doncaster (Lab)]

My Lords, is my noble friend the Minister aware that the proposal by a consortium of Sheffield industrialists for an SMR national manufacturing centre of excellence would create hundreds of highly skilled jobs in South Yorkshire and across the country, and would also open up the opportunity for British industry to compete internationally for the manufacture of SMRs with British components? Can he assure me that this is exactly the sort of proposal his department will consider supporting and is in line with the points made by my noble friend Lord Spellar?

[Lord Hunt of Kings Heath (Lab)]

My Lords, the noble Baroness may know that I met our former colleague Richard Caborn and colleagues from Sheffield to discuss this. We have now asked UK Research and Innovation to review the detail and advise us. We will then consider the next steps. Clearly, this is a very interesting concept.