Energy Infrastructure

Alan Brown Excerpts

Wednesday 5th July 2023 Commons Chamber

[Stephen Crabb]

The hon. Lady makes a good point. Investment in large-scale nuclear, or even small modular reactors, is a longer-term feature of our energy system, as the Government’s “Powering up Britain” report recognised. In fact, the Government’s targets for increasing nuclear are for 2050, not 2030.

On the cost of nuclear, yes, those points were made to the Committee. We made sure that we had an evidence session to hear from Friends of the Earth and others who are opposed to nuclear per se. We heard their strong arguments about their belief in an energy system entirely comprising of renewable and power storage technology in the future, but we also heard strong evidence that the technology for that does not yet exist. We have to stay in the real world, so nuclear, which has been tried and tested over the long term as a provider of cheap and reliable power, is an important part of our future energy mix, in conjunction with other energy sources.

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

I was going to make a similar point to that made by the hon. Member for Brighton, Pavilion (Caroline Lucas). The right hon. Gentleman is talking about not relying on future technologies, but SMRs are future technologies—he has admitted that they use technology that does not exist at the moment. How much does he estimate one large-scale new nuclear plant will cost, and how much would a fleet of SMRs cost, if they come to fruition?

[Stephen Crabb]

I am going to disappoint the hon. Gentleman, because I do not have those specific figures in the pile of notes I have brought with me. However, those figures are out there and the evidence is there. He is right that small modular reactors are a technology for the future and testing is still required, but that work is going on, and not just in the UK but in other countries. It will be a technology for the future, so there is no point in us putting our heads in the sand and wilfully pretending otherwise. I believe it will be a technology for the future, but a lot will depend on future costs.

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

I am sure you do not need to remind people to come and listen to me starting the wind-ups, Madam Deputy Speaker.

I commend the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), the Chair of the Welsh Affairs Committee, for opening the debate. The fact that 13 Back-Bench Members followed him shows what an important subject he picked. This is clearly the best subscribed of the estimates day debates.

For the most part, there has been consensus today. Everyone seems to understand the rate of deployment of renewable energy that we need, the number of grid upgrades required, the need to improve consent processes, the opportunities to create new green-based jobs, and the importance of training people in the right skills and of efficient workforce planning. That ties in with the just transition as well. There was also broad agreement on the benefits of floating offshore wind, and cross-party agreement about the importance of carbon capture and storage at Humber and Tayside. I shall say something about Acorn later. Four speakers were in favour of new nuclear energy, so there is a kind of consensus there, although I will shatter that consensus shortly. With one honourable exception, everyone also seems to agree that we need to get on with delivering net zero.

Let me begin by raising a point that no one else raised: post-Brexit trading arrangements for energy. Energy UK has estimated that they are adding £1 billion a year to our bills—£1 billion that could be spent better elsewhere. It could, for example, upgrade 100,000 homes a year to an energy performance certificate C rating, or it could just be taken off our bills, given the cost of living crisis. I want to know what the Government are doing to improve the energy trading arrangements to remove this £1 billion surcharge from our bills.

I said a moment ago that I would break the consensus on new nuclear energy. Although there is clear cross-party support from Labour and the Tories, we in the SNP remain opposed to it. Nuclear is the only energy technology that has become more expensive rather than cheaper over the years. On an estimates day, it is worth noting that the estimate of the cost of nuclear decommissioning has risen by a staggering £130 billion. Why do we want to build more new nuclear and increase the nuclear waste legacy? This would also require the construction of a new nuclear geodisposal site. So nuclear is expensive, and it is not the way forward. No successful European pressurised reactor project has yet been built anywhere in the world. Hinkley Point C is years behind schedule, and the costs have increased to £33 billion. I therefore do not understand the rush to enter into a new agreement to build another nuclear power station at Sizewell C, which will clearly cost between £35 billion and £40 billion—money which, again, could be much better spent elsewhere.

The strike rate for Hinkley is £92.50 per MWh, as opposed to £40 per MWh for offshore wind, but the renewable energy contracts for offshore wind are only for a 15-year period, whereas the Hinkley contract is for 35 years. The Government want to enter into a 60-year contract for Sizewell C. This is collective madness. There are also hidden subsidies. If EDF connects with the grid and starts generating electricity, it will be paid for doing so—let alone the strike rate. Scottish renewable energy projects, meanwhile, pay the highest grid connection fees in Europe. How is that equitable? There is another hidden subsidy for EDF. The strike rate of £92.50 was supposed to be reduced by £3 per MWh if the Government entered into a contract with Sizewell C, but the Government is now dropping that contract. I should like to know why they are giving that hidden subsidy to EDF, and why they are not holding it to reducing the strike rate.

The fact is that we do not need big new nuclear projects. We have heard talk of the need for nuclear when the sun does not shine and the wind does not blow, but nuclear is not always there when we need it either. Over a 10-year period, each nuclear reactor is offline for nearly 25% of the year. Even the reactors at Sizewell B, the newest nuclear station in the existing fleet, are offline for between 15% and 20% of the year. Nuclear is not the reliable baseload that we keep being told it is, and that is why we need to look at other technologies, such as pumped storage hydro and storage in general.

Another aspect of nuclear that we have heard about today is small modular reactors. As I said in an intervention, that is a future technology, although people keep talking about it as if it were already here. There is no approved regulated design for a small modular reactor yet, and if Rolls-Royce sticks to the assessment that has been made, it is not due to be completed until September next year. How can the Government launch a competition to pick a small modular reactor when there is not even a design that complies with UK regulations? That makes no sense.

The talk of small modular reactors makes them sound like small compact units. The capacity of Rolls-Royce’s small modular reactor will be 475 MW, which is nearly 50% higher than the international definition. Moreover, it will be the size of two football pitches, which is not exactly small in my book. As for the cost, it is estimated to be between £1.5 billion and £2 billion per reactor. The kicker is that Rolls-Royce wants its own contract to supply between 12 and 15 small modular reactors. What it is actually asking for is an order worth between £20 billion and £30 billion in up-front capital costs. Again, that is money that could be much better elsewhere, and there are existing technologies that could be deployed much more quickly.

That could include pumped storage hydro. I keep returning to this point, but SSE’s Coire Glas scheme in the highlands has all the consents in place. It is spending £100 million just now on up-front design works. That project could be delivered by 2031. With £1.5 billion of private capital investment, there is no Government capital subsidy needed; all that is needed is a revenue guarantee and a cap and floor mechanism. The Secretary of State said yesterday that he has been in talks with SSE, but he has not been in proper talks with SSE about developing a cap and floor mechanism. We want the Minister to take that point away today. Please will the Government listen? Up to 7 GW of pumped storage hydro could be deployed in Scotland—dispatchable energy that will be there when the wind is not blowing. It would utilise spare excess energy, taking it when it is cheaper and dispatching it when there is a need, so it is the perfect complement to renewable energy.

On carbon capture, we really need definitive timescales for track 2 clusters. As was said earlier, investors are getting nervous about the timelines. Yesterday, the Secretary of State was talking about confirming track 2 this year, whereas in the Energy Bill Committee recently, the Minister said that there would be an update this summer. We need certainty. We need to get Acorn up and running and give it the backing it needs. Acorn does not need a pipeline, and it is strategically important because it can import carbon dioxide from other clusters in the UK and store it. It should be a UK strategic site, so we really need to get it up and running.

Finally on technologies, I want to talk about tidal stream. Concerns have been raised about strike rates for AR5 with respect to wider renewables. The same pressures apply to tidal stream. We need to look at the strike rates that it is expected to achieve. We need to find the pathway to allow it to scale up. Ringfencing the pot for AR5 was welcome, but frankly £10 million is not enough. We need to be willing to commit more to support tidal stream in future.

This has been a good debate, as I say. Everybody bar one agrees about the need to hit net zero, and I think we can all see the opportunities for job creation. Going forward, we need to grab those opportunities.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Minister.

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[Andrew Bowie]

Given the limits on time, I will not. However, I commit to meeting the hon. Lady and other Members from the Humber region—or one of my ministerial colleagues will do so—to discuss how we can move those projects forward at a pace that she would find acceptable and that would be beneficial to the Humber region.

My hon. Friend the Member for Ynys Môn (Virginia Crosbie), who is such a champion not just her constituency but for the nuclear industry in general, raised the prospect of the innovations and investment that we are taking forward and making in nuclear. I look forward to having many more conversations with her in the months and years ahead, as we get Great British Nuclear off the ground, begin our down-selection process and then move forward to further gigawatt projects later on.

The only problem with the comments made by the hon. Member for Bath (Wera Hobhouse), which were well informed, was that they were so negative. As my hon. Friend the Member for Stroud (Siobhan Baillie) pointed out, we cannot meet doom with doom—we have to be positive about the benefits to our economy, this country and the environment that will be brought by this energy revolution. I am very positive, as are this Government. For those who think that this Government are complacent, let me say that this Prime Minister and this Government created the Department for Energy Security and Net Zero, we are leading the G7 on cutting carbon emissions and we are launching new nuclear programmes, as well as investing in new technologies across the piece. This Government are not complacent: we are tackling the challenges head-on and we are growing the economy in the process of doing so.

[Alan Brown]

Will the Minister give way?

[Andrew Bowie]

I will not, sorry.

My hon. Friend the Member for Mole Valley (Sir Paul Beresford) was right to raise the prospect of fusion and the transformative impact it will have. As has been said today, and as everybody says, fusion is always seen as being 20 years away. I can inform the House that we are looking to have the first commercial fusion reactor on the grid in this country by 2040. We are absolutely leading the world in this regard. It is fascinating to go up to the Culham centre to see the developments that are taking place and the science that is happening on that site. I cannot wait to see the developments at the West Burton site in Nottinghamshire as we move towards commercialisation at scale.

We heard contributions from the hon. Member for Stockton North (Alex Cunningham), my hon. Friend the Member for Peterborough (Paul Bristow), the hon. Member for Ceredigion (Ben Lake), my hon. Friend the Member for North Devon (Selaine Saxby), the hon. Member for North West Leicestershire (Andrew Bridgen), my hon. Friends the Members for Stroud and for Great Grimsby, and the hon. Members for Kilmarnock and Loudoun (Alan Brown) and for Southampton, Test (Dr Whitehead). It has been a very positive debate overall. I am pleased to have been able to respond on behalf of the Government. I am very committed to leading the change that is required to our networks, infrastructure and national grid, and in bringing forward the new technologies. We are proud to lead the world in ending contributions to climate change, as is demonstrated through our commitments to building a new energy infrastructure on a scale never seen before in Great Britain. Our strategy supports our ambitions for green growth and jobs, and will ensure that our energy infrastructure is secure and resilient, and delivers value for money to consumers, while delivering on our net zero target.