Nuclear Fuel Manufacturing

Alan Brown Excerpts

Tuesday 7th September 2021 Westminster Hall

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

Thank you, Mr Betts. Thank you for your guidance. It is a pleasure to serve under your chairmanship. I have a funny feeling that it might not be a pleasure for other hon. Members to listen to my contribution, because, not for the first time, I might be presenting a minority and contrary view in the room. That said, I congratulate the hon. Member for Fylde (Mark Menzies) on initiating the debate. It is only right that an MP fights to retain and create jobs within his or her constituency. He has been ably supported in that by the hon. Members for Preston (Sir Mark Hendrick), for Bolton West (Chris Green), for Blackpool North and Cleveleys (Paul Maynard) and by—from the adjacent constituency—the hon. Member for Strangford (Jim Shannon), as well as the hon. Member for Gloucester (Richard Graham).

It is clear that Springfields has been an important employer through the years, with highly skilled jobs that are well paid. It is clearly very important to the north-west region of England, which I appreciate. However, if we are looking forward, when we consider the need for the production of nuclear fuel within the UK, we need to look at the strategic picture. In that strategic picture, we have to ask whether nuclear energy is required at all.

Even more important, we need to understand the cost and risks of nuclear energy and the state of the nuclear energy generation market. There are too many false narratives from the nuclear industry, though it is very successful at lobbying. Briefings from EDF argue that it is the only proven reliable low-carbon technology—many hon. Members have said that today—but, by way of an example, last year, Scotland generated 97% of the equivalent of its electricity demand from renewable energy.

Looking ahead to Sizewell, EDF argues that, with Sizewell being a copy of Hinkley Point C, there will be cost savings in that building. That might be the case design-wise, but there are different access and construction logistics to consider at Sizewell and the fact that it is still mired in the planning and environmental impact assessments, before it can proceed on to detailed design, means that nothing is certain in terms of cost at Sizewell.

It is also nonsense to say that these projects are cost-comparable with other technologies. The reality is that Hinkley Point C has a strike rate of £92.50 per megawatt-hour, for a 35-year concession contract, compared with offshore wind, which now comes in at £40 per megawatt-hour for just a 15-year concession contract. At the moment, nuclear is roughly four or five times more expensive than onshore and offshore wind. Even if the Government agree a regulated asset base funding model for Sizewell, that will not account for such a cost differential.

[Chris Green]

I do not want to debate whether the hon. Gentleman ought to approve of nuclear, but there is a question about the reliance on wind or solar panels. Perhaps there is a surge or abundance of energy at one point, but if at night we have high pressure and no wind, how do we power things at that point? At the moment we would typically be reliant on gas or coal. What will the source of power be in those times?

[Alan Brown]

I will come on to that. The hon. Gentleman himself touched on carbon capture and storage. It has not been proven at scale yet, but it is nearly there. We are looking at hydrogen. The Government have their own hydrogen production targets, as have the Scottish Government. Hydrogen can clearly be used from storage. The regulatory regime should be changed for the capacity market so that storage can be collocated with renewables and used to access the capacity market. The Electricity Act 1989 should be changed so that electricity released from storage is not double charged as a generator, which happens at the moment. There are other things in terms of Government strategy and regulation that would help advance the situation.

[Chris Green]

It is not quite the same as nuclear fusion, which is always 50 years away—or that is what is always said. On the other technologies, be it battery storage or carbon capture and storage, is there any certainty about the dates when these will become viable technologies?

[Alan Brown]

I have to admit that there is not absolute certainty, but it is predicted that the first key carbon capture and storage plant could be up and running before another nuclear power station will be constructed. We are getting very close to the final investment decisions on these carbon capture and storage plants. That in itself will give the market an indication of where that is going. We will be looking at the next year or two for the final investment decisions.

Turning to the recent history of the nuclear sector in the UK, it is obvious there has been a market failure as well as a failure of Government strategy. Clearly, that has impacted Springfields in the demand for nuclear fuel. Hinkley point C is the most expensive nuclear project in the world. When the right hon. Member for Maidenhead (Mrs May) became Prime Minister, she threatened a U-turn on this project, but then caved in and signed the deal anyway. The cost for Hinkley is now estimated at £22.5 billion, which is an increase of 25% on the estimated cost when the deal was signed. The Government tell us that cost increases are tied up in the risk and that EDF carries that burden. The reality is that no company can afford losses of £4.5 billion or 25% of the original cost estimates, so electricity bill payers must be paying for it somewhere along the line.

The sign-off for Hinkley was supposed to send signals to the market to allow other sites to be developed to generate competition and bring down prices. Since then, we know that Toshiba has walked away from developing Moorside and Hitachi pulled out of Wylfa and Oldbury. The good news for us electricity bill payers is that £50 billion to £60 billion of expenditure has not been committed. From a UK Government perspective, that should have been the realisation that their nuclear aspirations were in tatters. Unfortunately for Springfields, that is three pipeline projects that they could have accessed now lost. Worse, Hinkley point C is now predicted to come online in June 2026 instead of 2025, but it is a possible 15 months away on top of that, so it could be September 2027 before unit 1 of Hinkley comes online. We will have to bear in the mind that the European Pressurised Water Reactors system has still not been shown to be successful. Flamanville in France is expected to generate in 2024—12 years late. Finland’s project is due to come on to the grid next year, but that is 13 years late.

[Sir Mark Hendrick]

Will the hon. Gentleman give way?

[Alan Brown]

I have to watch my time, I apologise. I can come back maybe. Taishan in China was held up as an exemplar when it went online, but it has now been taken offline because of safety concerns. If China General Nuclear Power Corporation is involved at Hinkley and the consortium for Sizewell, the fact that Taishan has got safety concerns should be ringing alarm bells for the Government. We talk about energy security, but the reality is that we have a reliance on France’s state-owned company EDF and on China’s state-owned company China General Nuclear Power Corporation. That kind of blows our energy security argument. I have not heard any answers alternative to that in here.

[Sir Mark Hendrick]

Will the hon. Gentleman give way?

[Alan Brown]

Very briefly.

[Sir Mark Hendrick]

I thank the hon. Gentleman for giving way. He consistently mentions France. President Macron recently said that by generating more than 41% of the energy in France, “nuclear makes us autonomous”. Macron also said,

“It preserves French purchasing power, with a kilowatt-hour 40% cheaper than our European neighbours.”

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[Alan Brown]

That is what Macron said worked for France. In actual fact we are helping France by paying EDF, effectively helping to subsidise the French nuclear market, so that does not make sense to me. It is by the by. We will also have interconnectors coming from the EU, including France, that do not pay grid charges. In the north of Scotland Scottish renewable energies pay the grid charges, so French nuclear energy comes here at no charge, whereas Scottish renewables have to pay charges to connect the grid. The actual system is not thought through properly and that is why we need a much better strategic look at things.

Going back to the timeframe before Hinkley is operational, it is certain that seven of the existing eight nuclear power stations will be offline, because we know that the advanced gas reactor stations are all closing earlier than planned. We heard that Dungeness went offline seven years early. Four more stations will go offline in the next three years. Nobody is going to bet on Torness and Heysham making it to 2030. The existing market demand for nuclear fuel production in the UK all but ends before Hinkley comes on stream. That is why it is so critical to think about and debate the future of Springfields.

That is why, for me, the UK Government should have a nuclear diversification or transition policy to help to save jobs or create new jobs as alternatives. We have the North sea transition deal; why not something similar for nuclear? Communities all over the UK have financially benefited from the jobs created by nuclear, but they need replacement jobs. These communities need to be supported, not left behind. That is what I suggest the Government need to look at.

We hear that Hinckley has created a lot of jobs, but a £22 billion project should create thousands of jobs. It is not difficult with that level of expenditure. If we look at the £20 billion that the Government may commit to Sizewell, I would argue that this money could be better spent in creating other jobs UK-wide. We are truly world leading in wave and tidal energy development, and floating offshore is getting there. Why not invest in the future? As I said earlier, hydrogen development is getting close to a commercial reality. These considerations need to be part of that transition.

The nuclear baseload argument is an outdated concept. That was confirmed by the former chief executive of the National Grid in 2015. Can the Minister confirm that taking these existing nuclear stations offline will not increase the risk of the lights going out? Moreover, going forward, a report by Good Energy and the Energy System Catapult has demonstrated that net zero can be achieved without the need for new nuclear. I suggest that the Minister needs to look at that.

Although we hear about renewables and fluctuations, large-scale nuclear is inflexible. Indeed, having more large-scale nuclear in tandem with renewables is a problem. That is why we have the constraint payments for renewables as well. I refute the arguments about baseload and energy security. I am not sure that the future is therefore nuclear, in the way that we keep hearing, because that argument has not held up to date. I ask the Government to revisit their strategy, please support these communities around the UK, and look at diversification and a fair transition.

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[Dr Whitehead]

I congratulate the hon. Member on securing what is an important debate, not just for the future of the plant in his constituency, which we are talking about this afternoon, but for the wider question of our strategic future, when we look at the future of nuclear at all.

I do not want to be a party pooper, but this debate is about Springfields nuclear fuels. There is a lot I could say about all sorts of things, such as the role of hydrogen in the economy and whether, when the wind does not blow very well, other forms of thermal power may be needed. However, we need to concentrate our minds not on the future of our entire nuclear programme, but on Springfields nuclear fuels. What is unique about Springfields nuclear fuels is that it has single-handedly held up the entire UK nuclear programme for four or five decades now. It has provided pretty much all the fuel for the Magnox systems. It now provides the fuel for advanced gas-cooled reactors, and it should hopefully be able to provide the fuel for the new nuclear power stations coming on stream.

The role of fuel is usually unsung, but it is crucial to the whole process of nuclear power. There is a popular perception, which I am sure is not shared among hon. Members here, that using nuclear fuels means finding some uranium, enriching it a bit and sticking it in a pot to make the energy. That is very far from the truth. It is a highly skilled operation, requiring intensely developed engineering skills, which are involved in making the rods and the pellets, which must have the right specification and order for the particular form of nuclear reactor for which they are being made.

There is also a whole load of ancillary activities, some of which have been mentioned, such as the reprocessing of uranium to go back into the rods. That is another very highly skilled enterprise, far from the perception of this being a pretty simple journeyman activity that anyone can do. No, not anyone can do it. In the case of the UK, there is only one company that can do it—Springfields nuclear fuels. We need to see Springfields nuclear fuels not just as part of the nuclear landscape generally, but as a vital national strategically important component of whatever our nuclear programme was and whatever it will be.

It should be a cause of enormous alarm for hon. Members if there are suggestions that somehow this strategically important national asset will either be downgraded or lost in the not too distant future. There is a very real prospect of that because, as hon. Members have said, despite its crucial and honourable history backing up the nuclear industry in the way that it has, it is finding it difficult to get contracts for the continuation of its excellent production activities. I think there was some work recently for the Norwegian nuclear corporations, but there is a real gap in what is coming up—what we know will be an important requirement, particularly of Hinkley C and certainly of Sizewell C when they eventually come on stream. There is a substantial gap between that time and now. There is a real prospect, therefore, of that company—which is owned by Westinghouse, a private US company with no great feeling for UK national strategic interests—dying, not for lack of praise but for lack of an immediate future between new nuclear and modular nuclear reactors coming on and where we stand now.

[Alan Brown]

What kind of timescale does the hon. Gentleman envisage for small modular reactors or even Sizewell C coming on stream?

[Dr Whitehead]

The hon. Gentleman himself mentioned that Hinkley C is coming on stream in 2026—maybe even later than that. I will come to the arrival of Sizewell C in a moment, which is probably at the heart of his questions, should we develop modular nuclear reactors that are even further off.

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[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)]

It is a great pleasure to serve under your chairmanship, Mr Betts. I thank my hon. Friend the Member for Fylde (Mark Menzies) for securing today’s really important debate and my parliamentary colleagues for expressing their support for the UK’s nuclear sector and future.

I will start by reaffirming the strategic importance of maintaining our sovereign fuel manufacturing capability, as set out in the 2018 nuclear sector deal. As many hon. Members have said, the UK is a world leader in the nuclear fuel cycle, which is a testament to the highly skilled workforce currently employed at the Springfields and Capenhurst sites and in the wider UK supply chain. Maintaining and developing that skilled workforce will be critical to delivering our net zero ambitions. I welcome the Westinghouse launch of the clean energy technology park last year. Such commercial ventures support collaboration and low-carbon research. Development and business are central to the UK’s transition to net zero. I am aware of the short-term challenges facing the Springfields site as the UK’s advanced gas-cooled reactor fleet retires. However, as we look forward to the 2030s, I agree with my hon. Friend that the site could and should have a bright future. That leads me to the Government’s commitment to nuclear power.

The 2020 energy White Paper sets out our vision for the transformation of our energy system, continuing to break the dependency on fossil fuels and moving homes and businesses to clean energy solutions. We have not yet made the full transition away from coal, let alone decarbonised our energy system, but “The Ten Point Plan for a Green Industrial Revolution” highlighted the key role of nuclear power in delivering the deep decarbonisation of our electricity system alongside renewables and other technologies.

This is an exciting time for the nuclear industry. This Government are clear that nuclear has an important role to play in decarbonising the electricity system, and in meeting carbon budget 6 and net zero targets. In the energy White Paper and “The Ten Point Plan for a Green Industrial Revolution”, this Government committed to advancing large, small and advanced nuclear projects as part of our future low-carbon energy mix, heralding what my hon. Friend the Member for Fylde called a golden age of new nuclear across the regions and nations of the UK, thereby contributing to the levelling-up agenda.

That includes at least one large-scale nuclear project, and in December 2020 we announced that negotiations with EDF on Sizewell C had begun. Those negotiations are already well under way. Moreover, as the Secretary of State has said in the House, we will bring forward legislation in this Parliament that will further commit us to creating more nuclear power in this country.

[Alan Brown]

What does the Minister think is a realistic timescale for our Government agreeing a deal with EDF on Sizewell C?

[Amanda Solloway]

I thank the hon. Gentleman for his question, and I will come on to that issue later.

As my hon. Friend the Member for Gloucester (Richard Graham) noted, nuclear could have a role in beyond grid applications such as low-carbon hydrogen production. Last month, we published the UK’s first ever hydrogen strategy, confirming our support for low-carbon hydrogen production across the United Kingdom. In addition, we have announced up to £385 million in the advanced nuclear fund to invest in the next generation of nuclear technologies, with an ambition to employ small modular reactors and to develop an advanced modular reactor demonstrator as early as the 2030s.

I also recognise the importance of developing our fuel-manufacturing capabilities to support these ambitions. My Department, in co-operation with the National Nuclear Laboratory, has delivered a £46 million advanced fuel cycle programme, aiming to develop world-leading skills and capabilities in advanced fuels and recycling. Recently, we announced a short extension to the programme, which will focus on advanced nuclear fuels for use in small and advanced modular reactors. The programme has been delivered at the National Nuclear Laboratory facility located on the Springfields site in the constituency of my hon. Friend the Member for Fylde.

I will also touch on the Government’s levelling-up agenda. We remain committed to addressing the economic disparities across the whole of the United Kingdom. The civil nuclear supply chain is playing an important role, currently supporting over 59,000 jobs across the United Kingdom in the areas where high-skilled, high-value jobs are needed most, including, for example, in the north of England and north Wales. As we develop the next generation of nuclear technologies, with the emphasis on high-quality manufacturing, I agree with the hon. Member for Strangford (Jim Shannon) that it would be excellent if the skilled workforce in Northern Ireland could play a part in that process.

I was delighted to hear that nearly 2,000 apprenticeships have been delivered on the Springfields site over the last 70 years. These kinds of training opportunities benefit not just the site and its workforce but the surrounding communities. Westinghouse and Springfields Fuels Ltd should be proud of their impressive achievement.

We keenly anticipate the outputs of the trial of the advanced nuclear skills and innovation campus at the Springfields site, which the hon. Member for Preston (Sir Mark Hendrick) drew attention to. We hope to see the successful collaboration between industry, academia and the National Nuclear Laboratory to support skills development. As my hon. Friend the Member for Bolton West (Chris Green) rightly pointed out, the objective should be to create careers, not just jobs.

As previously mentioned, the Government recognise the importance of maintaining and developing a strong nuclear skills base in the United Kingdom. I am aware of the plans for redundancies on the Springfields site this year. My Department has been working with Westinghouse, the National Nuclear Laboratory and the Nuclear Decommissioning Authority to explore opportunities to support the workforce on the Springfields site. We will also continue to encourage vendors and developers to maximise their UK supply chain content, including fuel, wherever that is possible, in order to support the economic growth of the UK nuclear sector’s supply chain.

Finally, I will reflect once more on the strategic importance of our sovereign fuel manufacturing capability and on the ability of the United Kingdom, as my hon. Friend the Member for Bolton West reminded us, to provide cost-effective support to reduce our reliance on imports, which may have a bigger carbon footprint. This Government would like to see the UK continuing to pioneer nuclear technologies in the lead-up to net zero. Our success will be underpinned by the capacity of our civil nuclear supply chain, including fuel manufacture. We are already considering, along with operators, fuel producers and the research and development community, how best to meet the needs of future nuclear power stations, including the opportunities provided by small and advanced modular reactors.

We also continue to work closely with our nuclear fuel industry and trade unions via the nuclear fuel working group, as noted by my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), to explore ways to secure the industry’s future. Those discussions are wide ranging, and I understand that EDF and Framatome are actively involved. Further Government support is under review as a part of the spending review. Further communications on the subject can be expected following the settlement.

In the meantime, the nuclear fuel working group that we have set up will meet again this month and, as my hon. Friend the Member for Blackpool North and Cleveleys said, it is important that we continue the dialogue and make sure that opportunities and ideas are given proper consideration. My right hon. Friend the Minister for Business, Energy and Clean Growth is taking a very active interest in this important issue.

The Government have made a clear commitment to nuclear as part of our future low-carbon energy mix. The UK’s success in achieving our net zero ambitions will be underpinned by the critical work carried out in the civil nuclear supply chain. We will continue to work with the nuclear industry to maintain our sovereign capability and the benefits that it brings for the local workforce and surrounding communities.