Nuclear Update

Alan Brown Excerpts

Thursday 17th January 2019 Commons Chamber

[Greg Clark]

My right hon. Friend is right that small modular reactors have significant potential. The nuclear sector deal that we agreed with the sector and published last year contains a substantial commitment to small modular reactors, many of which would be deployable on the sites of existing and recently decommissioned nuclear reactors. However, even large new nuclear reactors can make a useful contribution. There is a challenge in every country, and this is by no means just a feature of Japanese investors. I have described clearly and, I hope, candidly the challenges that exist given the abundant availability and falling prices of alternatives. That is why we will take forward a serious assessment of whether a different financing model might make the economics more competitive. Again, the sector deal that we struck contains a programme to reduce the build costs of new nuclear, which would of course also help its financeability.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

This statement confirms that the UK Government’s nuclear programme is in tatters, yet the Secretary of State comes to the House, commends this statement, and says that he will carry on regardless, which makes absolutely no sense whatsoever. The National Audit Office confirmed that the Hinkley Point C strike rate of £92.50 per MWh was a bad deal. We know that offshore wind is currently £57.50 per MWh, but that is based on a 15-year concession, as opposed to a 35-year concession for the nuclear deal.

The Secretary of State has confirmed that the Government were so desperate for Wylfa that they would take something like a £6 billion stake and provide £9 billion of debt financing, yet he pretends that they were being prudent by limiting the 35-year contract to £75 per MWh. His use of the word “generous” in the statement could not be more appropriate. When Toshiba pulled out of Moorside with the loss of £100 million, its share price increased. At the time, the Secretary of State said, “Don’t worry. The circumstances are unique.” With this latest setback from Hitachi, the UK Government need a proper re-evaluation of their nuclear policy; they should not look just at alternative funding mechanisms.

Four existing nuclear power stations are due to close by 2024, taking more than 4 GW of capacity out of the grid, so what is the Government’s plan for replacing that capacity? New nuclear power stations are clearly not an option that could be completed by 2024. When will we know how much money is going to be thrown at Rolls-Royce for the small modular reactors that the Secretary of State mentioned? Why are the Government still blocking onshore wind in Scotland when it is clearly the cheapest mode of generation? When is the cut-off date for the ongoing discussions with Hitachi? When will the plug finally be pulled? When did the Government first find out about Hitachi pulling out? It was already being reported in the press, so how long before coming to the House to make this statement did the Secretary of State find out? When will nuclear power be properly benchmarked against onshore and offshore wind? When will the Government wake up and end their ideological obsession with nuclear?

[Greg Clark]

Given the hon. Gentleman’s suggestion that the strike price for Hinkley Point C was excessive, I would have thought he would welcome and approve of my statement, which sets a limit on what it is possible to provide to finance a private investment. He asks when the decision was made by Hitachi. My understanding is that it was made in Japan at 9 o’clock this morning, and I hope he would accept that I have come to the House as soon as possible.

The hon. Gentleman is critical of the nuclear industry, but I would have thought that he might want to pay tribute to Scotland’s proud tradition in the nuclear sector and to the people that have worked and contributed to our energy supply and still do. Chapelcross, Dounreay, Hunterston and Torness have for decades provided good jobs and employment both directly and in the supply chain across Scotland and continue to do so today. My determination to continue our tradition of being a nuclear nation offers continuing opportunities to Scotland, and I would have thought that he would welcome that.

Far from being at the expense of renewable energy, our energy policies have supported Scotland to become a world leader in securing energy from renewable sources. In fact, we heard earlier this month from WWF Scotland that wind output in Scotland has broken through the barrier of 100% of demand for the first time. That comes as a result of the policies that this Government have put in place to bring down the costs of wind, which is highly competitive. As a result, that is causing some competitive challenges for other technologies, including nuclear, but I would have thought that the hon. Gentleman would welcome the progress that has been made on renewables.