Energy Security

Alun Cairns Excerpts

Tuesday 29th November 2022 Commons Chamber

[Grant Shapps]

As I mentioned, the reference price shows that other forms of energy could be even cheaper. Until now, solar panels were not as effective on north-facing roofs, for example, but the hon. Gentleman is absolutely right that the technology is improving rapidly, with the result that we can install solar panels in more conditions than would otherwise have been available.

[Alun Cairns (Vale of Glamorgan) (Con)]

We need to recognise that developing our renewable mix of energy to 43% is a significant success—far more successful than other comparable nations—yet in these current weather circumstances, as people switch on their electric kettles during tonight’s football match, wind will only generate 2% of that energy mix. That underlines the importance of my right hon. Friend’s statement, so will he provide further detail and timescales regarding when small and advanced modular reactors will be possible? Wales has two of the preferred development sites, but does my right hon. Friend further agree that the Welsh Government need to be supportive of those projects to make them a reality?

[Grant Shapps]

My right hon. Friend is right. In Wales and Scotland, the devolved Administrations need to support new nuclear provision to provide energy security for their constituents. He talked about 43.1% of our energy coming from renewable power. Opposition Members said that it could not be done, but it has been done ahead of time and we will only go further.

Energy Security Strategy

Alun Cairns Excerpts

Tuesday 19th April 2022 Commons Chamber

[Kwasi Kwarteng]

There was drilling, and I remember it well. When I was the Energy Minister, I was receiving daily updates on the Richter scale, and yes, there were moments—there were times—when the level exceeded the limit that we had imposed. I think it entirely legitimate now, given where gas prices are, to look again at some of the evidence.

[Alun Cairns (Vale of Glamorgan) (Con)]

I congratulate my right hon. Friend on the publication of the report, which provides certainty for so many sectors, particularly oil and gas, and nuclear. However, much attention has rightly been paid to the support for energy-intensive industries, and there have understandably been many questions involving the steel industry. Will my right hon. Friend confirm that the support extends to the chemical industry, given that Dow Corning has a site in my constituency, as well as others?

[Kwasi Kwarteng]

My right hon. Friend knows very well that the chemical industry is central not only to people in his constituency, but to those throughout the north-east. We engage with energy-intensive sectors such as the glass, steel and chemical sectors, and others.

Oral Answers to Questions

Alun Cairns Excerpts

Tuesday 29th March 2022 Commons Chamber

[Kwasi Kwarteng]

As the hon. Gentleman will know, we believe that a windfall tax in this situation would be a tax on jobs, destroy investment and add to the uncertainty in oil markets. It would send completely the wrong message to investors, as well as to people who are invested in markets. Every one of us, anyone with a pension, would be adversely affected by such a tax.

[Alun Cairns (Vale of Glamorgan) (Con)]

My right hon. Friend is keen to ensure that householders and landlords improve the energy performance of properties. Will he consider the effectiveness of the current energy performance certificate system and whether that genuinely reflects the energy performance of a property? In addition, will he recognise the additional costs incurred in calling for improvements in off-grid properties, where people do not have the opportunity to invest in the same technologies as those in on-grid properties?

[Kwasi Kwarteng]

I am grateful to my right hon. Friend for that question. As he knows, the current EPC system is not perfect, but it does capture the significant improvement that has happened over the past few years. I am happy to consider people off grid and the challenges that they face from oil prices, and I would be happy to speak to him about that.

Russian Oil Import Ban

Alun Cairns Excerpts

Wednesday 9th March 2022 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I think I said quite clearly no more shouting from people who are sitting down.

[Alun Cairns (Vale of Glamorgan) (Con)]

I commend my right hon. Friend’s statement and pay tribute to him and his predecessors for the diversification they have made to the supply, security and sources of the energy mix over recent years, despite the lack of investment in nuclear during the 2000s leading up to 2010. Does he agree that oil will remain a key source of energy for some time to come as we are transitioning? What consideration has he therefore given to bringing about influence on OPEC nations to produce more oil so that the global supply can be better managed?

[Kwasi Kwarteng]

My right hon. Friend raises a particularly important point. We had a discussion at the IEA ministerial only last week where we all agreed as a collective to release our stock. That was an American initiative that we supported. Clearly, we need to work as an international community to ensure we can provide enough supply to dampen the increase in prices that we are seeing.

Small Modular Reactors and Energy Security

Alun Cairns Excerpts

Wednesday 19th January 2022 Westminster Hall

[Alun Cairns (Vale of Glamorgan) (Con)]

I pay tribute to my hon. Friend for the work she is doing, not only in championing this issue in Parliament but prioritising Anglesey and Wylfa in the Minister’s mind as potential sites for nuclear investment. In the case of small modular reactors—[Interruption.]

[Mr Peter Bone (in the Chair)]

Order. I am not interrupting the right hon. Member because his intervention was too long; I am interrupting, I am afraid, because there is a Division.

--- Later in debate ---

On resuming—

[Alun Cairns]

It is a privilege to serve under your chairmanship, Mr Bone. In my intervention, I was supporting my hon. Friend’s contribution about the opportunities and benefits that small modular reactors will bring. Does she agree that the export potential is significant, and that an early intervention in the UK will yield significant benefits as that export opportunity becomes real?

[Virginia Crosbie]

I thank my right hon. Friend for his insightful intervention. He has been a vigorous champion of the nuclear sector, particularly in Wales, and he makes an important point. In the ’50s and ’60s we led the way with nuclear and nuclear export. This is an opportunity for us to get back to where we were, leading in a sector that is so vital for our energy security. That is very important for jobs, and it will create skilled jobs in my constituency and across Wales and the UK.

My third point is about co-locating and bringing together clean power with the industries that need it. That is an opportunity to bring high-skilled jobs from other industries. Such co-location is not new; the original Wylfa power station was established to provide power to Anglesey Aluminium.

Since we last debated nuclear financing, there have been major developments in the delivery of SMRs in the UK and in global energy security. The past months have seen an unprecedented rise in wholesale energy prices during winter, in part due to Russia’s aggressive behaviour towards its neighbour, Ukraine. That follows the issue in September with the Kent interconnector. I remind hon. Members that a fire at the Kent interconnector, which connects the UK with French power systems, led to soaring energy prices in the UK. We usually import 3 GW of power from France—enough to supply 3 million homes. That fire showed how fragile our energy security is when we rely on other countries for production.

Nuclear Energy (Financing) Bill

Alun Cairns Excerpts

2nd reading
Wednesday 3rd November 2021 Commons Chamber

[Alun Cairns (Vale of Glamorgan) (Con)]

Thank you, Mr Deputy Speaker, for calling me to speak in this important debate. I declare an interest as the chairman of the all-party parliamentary group for energy security.

The development of new nuclear power stations in the UK is long overdue. Right hon. and hon. Members have made excellent points about the need for energy. The period of outright objection more than 20 years ago, and the stop-start nature of progress in the last decade, have largely stemmed from the funding challenges faced by new nuclear power stations.

The Bill is a major positive and significant step to help to meet our net zero carbon agenda and to secure our energy supply, which has come into clear focus in recent weeks. The challenge of the gas supply and the variability in renewable sources have led to a sharp rise in energy costs, the bankruptcies of many providers and an alarming worry for constituents. Some businesses have even been forced to operate at reduced capacity because of energy supply challenges. Europe as a whole has been exposed as vulnerable to other states’ decisions.

New nuclear diversifies the supply, delivers energy from within the UK, and offers a reliable, stable and clean source of energy that can form a major part of our baseload electricity needs. As my hon. Friend the Member for South Cambridgeshire (Anthony Browne) said, diversification is important and nuclear is fundamental to providing the necessary energy security.

The argument in favour of nuclear power has been won among the public for some time, yet until now, we have not been able to develop projects that minimise the financial risk to the public as taxpayers and as consumers. The regulated asset base financing model is therefore a significant positive step that I strongly support, because it has the capacity to reduce the cost of capital to allow projects that would otherwise remain on the drawing board to move forward.

Much of the policy’s success will focus on assessing risk. RAB has been used successfully in other major infrastructure projects around the world, and there is no reason it cannot be used for new nuclear, but its evolution will not be straightforward. The challenge will come in assessing and costing the risks faced by developers. New nuclear is different from some of the more predictable models that RAB has been used for, so we will have to be open and candid about the challenges as we develop the policy.

The biggest challenges of developing new nuclear come in the early construction stages when operation is typically 10 years or more away and when design problems and implementation faults emerge. They often lead to significant cost overruns and the need for changes at a huge cost financially and with long delays. Those uncertainties have hampered the development of new nuclear through more traditional financing models for so long. RAB will help, but the risks and costing the risks will remain.

I was closely involved in Wylfa Newydd, the Horizon proposal by Hitachi on Anglesey, and along with my right hon. Friend the Member for Tunbridge Wells (Greg Clark), developed a third-third-third finance plan between the UK taxpayer, Hitachi and the utility companies to bear the risks of the early stages in particular. Despite the Government offering a third of those capital costs, including covering the financing costs in the proposal, the project stalled. I pay tribute to my hon. Friend the Member for Ynys Môn (Virginia Crosbie) who is working tirelessly to keep the project alive. I am optimistic about its future. That highlights the challenges, but does not negate the risk or the assessment of the risk. RAB certainly overcomes the challenges of financing costs, which is welcome, but I ask the Minister to recognise that central to the policy’s success is assessing the risk and, therefore, the costing of the risk. Any further detail as the Bill passes through the House and the other place will be helpful in reassuring investors, policy makers and operators in the process.

The RAB policy is an excellent fit for SMRs and AMRs, and will be even more so once the first concept has been proven. The repeat structures of SMRs and AMRs will allow such projects finally to get off the ground significantly. I gently remind the Minister that when the nuclear strategy was launched, my right hon. Friend the Member for Tunbridge Wells and I visited Trawsfynydd in north Wales to highlight how it and Wylfa on Anglesey were both perfect sites for small modular reactors. I hope that he will recognise that as policy initiatives develop.

I want to support the Minister and the Bill’s proposals. This is a welcome, major and positive step in satisfying our energy demand, achieving our climate goals and securing our energy needs and supply. Assessment of the risk is central. As I mentioned, despite challenges we sought to overcome with fair and generous offers, challenges will remain, but RAB will play a big part in overcoming them. The detail of how we assess and cost the risk as part of the RAB model will be fundamental to giving confidence to investors and the nuclear industry.

Oral Answers to Questions

Alun Cairns Excerpts

Tuesday 21st September 2021 Commons Chamber

[George Freeman]

As I have said, I am wholly committed to ensuring that science innovation drives levelling up and regeneration, and I should be delighted to meet the hon. Lady. I shall be on my way to County Durham on Thursday, so perhaps I can meet her next week or the week after.

[Alun Cairns (Vale of Glamorgan) (Con)]

6. What recent progress he has made on the Government’s proposals to support automotive battery manufacturers.

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

The Government remain firmly committed to securing gigafactories in the UK, and have demonstrated that commitment through the automotive transformation fund. As many Members will know, the first site in Sunderland was announced in July, and will see an unprecedented 100,000 battery-electric cars produced annually by Nissan and Envision AESC from 2024.

[Alun Cairns]

I congratulate the Minister on his appointment, and pay tribute to the Secretary of State and his team for facilitating investment in gigafactories in the UK. Britishvolt is making excellent progress in Blyth, but was originally intended to come to my constituency. These large-scale projects have both devolved and reserved functions. When similar projects arise, might a Minister be dedicated to lead them, looking after both the devolved and the reserved functions and working with the Welsh Government in securing that investment?

[Lee Rowley]

I am extremely grateful for my right hon. Friend’s question. I know that he is a huge champion of Wales, and that he has huge experience in this regard. I should be happy to meet him to discuss his suggestion. As he will know, the automotive transformation fund is a UK-wide programme, and we will welcome applications for support throughout the UK. I look forward to talking to my right hon. Friend about that.

UK Gas Market

Alun Cairns Excerpts

Monday 20th September 2021 Commons Chamber

[Alun Cairns (Vale of Glamorgan) (Con)]

I declare an interest as chairman of the all-party parliamentary group on energy security. I pay tribute to the Secretary of State for the action he is taking to protect consumers and to calm the concerns that some commentators and some Members have expressed. Does he agree that diversity is key to reducing the long-term risk of such volatility in the markets? That means diversity of supply, diversity in energy generation—be it wind, nuclear, biomass, hydro or other sources—but also diversity in the location that the energy is generated. Some nations, regions and even countries have an excess supply on some occasions and a shortfall on others. The greater the diversity, the less the risk. Is he sufficiently reassured that Ofgem is sufficiently proactive in this field?

[Kwasi Kwarteng]

My right hon. Friend spoke about three distinct categories. I can assure him that on all three we have a degree of robustness. On the spread of the gas supply, I said that we have a wide range of sources for gas. On electricity generation, I can reassure him that with our work on renewables—onshore wind, offshore wind and solar—there is a much wider range of electricity generation supply in the UK than in practically any other country. On geographical spread, he will notice that a lot of installations and a lot of that capacity are spread very evenly across the United Kingdom. I happen to know that because I spent a large part of the past two years visiting those sites.

Vauxhall at Ellesmere Port and Battery Manufacturing Strategy

Alun Cairns Excerpts

Monday 1st March 2021 Commons Chamber

[Kwasi Kwarteng]

I really appreciate those words of support and help. This is a cross-national issue and a cross-party issue, and I would be very happy to engage with the hon. Gentleman. He knows that I have already made a commitment to visit the HyNet industrial cluster near his constituency. I am very much committed, as previous Secretaries of State have been, to doing all I can to make sure that we get the right investment and the right result.

[Alun Cairns (Vale of Glamorgan) (Con) [V]]

The Secretary of State will be familiar with my long-standing ambition to see a battery valley—or a battery vale—established in Wales, so I was delighted when Britishvolt prioritised St Athan in the Vale of Glamorgan, my constituency, as its preferred site for its gigafactory, although I was later disappointed when it decided to shift its priority elsewhere, possibly because of the lack of capacity or expertise within the Welsh Government in order to serve its needs in bringing such a large, major investment project to Wales. Does my right hon. Friend agree that his Department needs to play an active role in co-ordinating such large, complicated investment projects for the UK, wherever they may be in any nation within the UK, so that my constituency will not necessarily lose out as it has now?

[Kwasi Kwarteng]

There are huge opportunities in Wales for the siting of gigafactories, and also, particularly, in terms of the net zero challenge. I spoke to Ken Skates of the Welsh Government only this morning. There is a huge appetite in Wales to drive the net zero agenda. I would be very happy, as my right hon. Friend knows, to have a conversation with him on how best we can work together to do that.

Energy White Paper

Alun Cairns Excerpts

Monday 14th December 2020 Commons Chamber

[Alok Sharma]

The Minister for Business, Energy and Clean Growth and I have a regular dialogue with the sector and, of course, I am fully aware of the importance of oil and gas as an employer in Scotland and, indeed, across the whole of the UK. I can tell the hon. Gentleman that, in November, we received a formal proposal from industry for a deal, and we will now move into negotiations with the sector. On timing, we aim to complete the negotiations and publish that in Q1 next year.

[Alun Cairns (Vale of Glamorgan) (Con) [V]]

I congratulate my right hon. Friend and his ministerial team on today’s significant statement. I warmly welcome the commitment shown towards nuclear energy and the open mind that he shows towards the financing model. Does he recognise the challenges that the regulated asset base will give to assessing the risk at the early stage of a traditional build of nuclear power stations? Will he also show the same enthusiasm for small modular reactors that provide an exciting opportunity to parts of the UK that are looking for significant investment and the job-creating opportunities that small modular and advanced modular reactors can bring?

[Alok Sharma]

I very much support the idea that we should be advancing on SMRs and AMRs, and my right hon. Friend knows that there is a £385 million advanced nuclear fund to support the development of SMRs. He will also know that we will be supporting a consortium led by Rolls-Royce on that. He is right that that offers not only an opportunity for us to create jobs, but export opportunities for our country in the future.