Nuclear Energy (Financing) Bill

Bob Seely Excerpts

Report stage & 3rd reading
Monday 10th January 2022 Commons Chamber

I would also like the Minister’s thoughts on the pace of the roll-out of nuclear power, if this Bill goes well and is passed with suitable amendment. What would he expect to see by way of incremental capacity for the following two decades after 2030, if all went well with the ideas embedded in this legislation, given the state of the technology and the rather imperfect supply of capacity? Above all, does he have plans for smaller nuclear where it might be possible to approve a project more quickly and then scale it up and roll it out in more than a few locations?

[Bob Seely (Isle of Wight) (Con)]

The purpose of small modular nuclear reactors—we are going to be building 10 or 15 of them—is to enable us to bring the price down. Is my right hon. Friend also concerned that 18 major projects in oil and gas exploration have seemingly been put on hold, given that we need those projects and those fields to come online now?

[John Redwood]

Yes. I fear I may be wandering a little from the actual Bill, Mr Deputy Speaker, but given the general context of energy shortage and the crucial role that gas has been playing in recent months in generating electricity, because we are short of nuclear power and short of wind power when the wind does not blow, I would strongly recommend that we get on with exploiting our own gas reserves. That is greener and cheaper than relying on gas being brought halfway round the world in a liquefied natural gas tanker or on Mr Putin’s gas routed via the continent. That is probably an argument for another day, but I am grateful to the Deputy Speaker for allowing me to answer my hon. Friend’s very good point.

In conclusion, I would like the Minister to set out a little bit more of the context of when nuclear might start contributing to our electricity demand and need, and how he sees the balance of that developing between small nuclear being rolled out at greater scale and the one or two large nuclear projects that might still be around. Also, given the hugely radical electrical revolution that the Government wish to encourage, with switching home heating from predominantly gas to electricity and switching much transport from predominantly diesel and petrol to electricity, we are going to need a massive expansion of total capacity. Would he agree, however, that we are starting from a position where we do not have enough capacity for our current levels of demand and where the nuclear element of that capacity will contract quite a lot over this decade?

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[Charlotte Nichols]

I do not have the data on my person at this point, but ultimately more jobs are at risk in Warrington North’s nuclear sector if we do not approve the building of new nuclear. Regardless of whether that involves direct state investment, a regulated asset base model, as we are discussing today, or foreign investment, the fact is that we need to get it built, because all those jobs will be at risk if we do not.

Going back to the point that the hon. Gentleman raised, we have heard complaints about the cost of the regulated asset base model. Indeed, my preference would be direct state investment in this vital national infrastructure, which would keep the stations and the power they produce in public ownership. None the less, the model that we are discussing must be recognised as an investment that guarantees construction and production over the longer term.

As I wind up my remarks, I want to point out that the uncertainty and lack of guarantees have left the industry in the dark for so long. With the uncertainties now addressed by the Bill and the amendments that Labour has tabled, the industry can now have the confidence to plan and move forward. My hope is that by passing the Bill on a cross-party basis, it will send the signal that there is a clear consensus on the vital role that nuclear will continue to have in our energy mix. This message is fundamental as we hopefully move on from Sizewell C to other projects and plan these as a fleet to drive down costs and to maintain and expand the world-class expertise and skills of the British nuclear sector.

[Bob Seely]

I rise to speak to amendments 1 and 2. If I have time, I will get to amendment 9, but I will speak for no more than five minutes.

I hear what people say about the importance of renewables, but it is not a choice between renewables or nuclear. Frankly, if the world is to have any chance of meeting its carbon targets, it is not “either/or” but “and”. I am afraid to say that we see the environmental, energy and security disaster that is Germany’s imbecilic energy policy, caused by the shutting of nuclear and the dependence on Russian gas and lignite coal, the dirtiest form of energy production known to humanity.

[Wera Hobhouse]

I am not speaking on behalf of Germany, because Germany is in a very different position from that of Britain. It is more or less landlocked, it does not have sea, and it does not have wind in the same way. Britain has a massive opportunity to invest in new renewable energy that no other country has apart from Greece, which is doing so.

[Bob Seely]

I am half German and I think my German relatives would confirm that they have wind in Germany. [Interruption.] And the Baltic sea—thank you very much indeed. There is no reputable case, including in reports from the UN and others, that disagrees that, if we are to meet zero carbon at some point in the next 20, 30 or 40 years, nuclear will play an increasingly significant element, whether we like it or not. It is a very low-carbon form of energy, with no greenhouse gas, and it is important for us to take that on board.

On foreign ownership and foreign funding, would I start from here? No. I am uncomfortable with the idea that we would ever want to build an untried, untested Chinese nuclear reactor in this country, especially one that has not been built anywhere else, to say nothing of the geopolitical ramifications of that. I am not hugely happy that we have Chinese funding in place, but I understand the critical point that we need a sense of momentum to make progress on this issue. In a perfect world, though, we would not be starting from here.

[Alan Brown]

The hon. Gentleman spoke about the importance of nuclear to get to net zero, but the UK Government are committed to decarbonisation of the electricity grid by 2035. If we are going to rely on nuclear, there is no way on earth that we can fully decarbonise the grid. Other things are needed, such as carbon capture and storage and green hydrogen.

[Bob Seely]

The hon. Gentleman makes a perfectly sensible point, but his argument that we can do it all with renewables is a bit of a cop-out. We are not doing so. I want tidal energy for the Solent and for the Isle of Wight as much as he does for the west of Scotland, but the argument that renewables will solve our problems—especially when, as the right hon. Member for Wokingham (John Redwood) says, there is no wind— is a difficult one to sustain.

Moving back to amendments 1 and 2, it is perfectly sensible for the Government to make the point—the Minister did so when we were in conversation last week, and I thank him for his time—that we need foreign institutional funding, especially from friendly states, such as the United States, Australia, Canada, and the European Union, and a RAB system to make that investment in nuclear, which is expensive and which we need for the long term, but we need to be getting on with it. Having argued against those two amendments, I have to say that we have had two decades of incredibly poor leadership on energy supply. The hon. Member for Warrington North (Charlotte Nichols) spoke eloquently about the attractions of the nuclear industry, but, unfortunately, the point she missed out was that nuclear was killed as an investment discussion early on in the new Labour years. Unfortunately, the coalition carried on with that, because, effectively, we were appeasing a rather extreme green lobby in our country. We are coming to this very late. As my right hon. Friend the Member for Wokingham said, in a decade’s time, we will lose 12 out of the 13 nuclear reactors that we have. That means that we will go backwards when it comes to producing low-carbon, low-greenhouse-emission energy, even if more renewables come on stream, which I hope they will, so we need to get on with this.

Are we in a perfect position with Chinese funding? No. Do I want to see a Chinese nuclear reactor in this country? Absolutely not. Do I want to see Rolls-Royce nuclear reactors, which I hope will be the Rolls-Royce solution in all senses of the word? Absolutely, and we need to get cracking, because that will lower the price. It is also British technology and we will be keeping those high-quality jobs. We need to get moving. On that principle, I oppose amendments 1 and 2. I am happy with where we are with the Government at the moment, but let us just crack on, get this done, get another Bill for another nuclear plant this side of an election and then get in place the laws and the Bills that we need for modular nuclear to come onstream.

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, and I am grateful for the opportunity to do so.

In the past, I have spoken in the Chamber and in smaller debates about nuclear energy and its importance in today’s society. I will put on record once again my support for nuclear energy and for what it can deliver for all of this great United Kingdom of Great Britain and Northern Ireland. We need nuclear generating capacity for the United Kingdom, and I believe that this Bill gives the opportunity for that to happen.

The hon. Member for Kilmarnock and Loudoun (Alan Brown) put forward a very good case for his proposals in new clause 1 and amendments 6, 9, 8, 7 and 10. I believe that, ultimately, it comes down to whether we support nuclear energy and the benefits that it brings or whether we have some concerns, which, obviously, the hon. Gentleman has.

Nuclear energy in the UK is minimal, with only 13 nuclear reactors and six plants, which are able to supply only about 20% of the UK’s electricity demand. It is worth pointing out that Northern Ireland is the only devolved institution in the UK without a nuclear plant or power station. I note from the papers supplied to us by the Minister that

“For the RAB model and revenue stream measures in Parts 1 and 2, these will extend and apply to England and Wales and Scotland only. This is because the unique energy position of Northern Ireland means they would not benefit from energy produced by nuclear energy generation projects under a RAB model in Great Britain, and so should not be obliged to pay.”

It is clear that the Government have provided protection for us in Northern Ireland. It is also important to remember that in the context of the Government’s levelling up agenda as well as the Bill, the funding is not relative.

Nuclear energy in the UK has not peaked since 1995 and the opening of Sizewell B, the last commissioned plant to be built.

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[Dr Whitehead]

Sorry, no—I have a general habit of wearing a mask whenever possible.

The Bill essentially falls into three parts. Part 1 concerns the designation of a company for the receipt of regulated asset base payments. Part 2 concerns the collection and disbursement of funds through the regulated asset base arrangements. Part 3 sets out a special administration regime, should a nuclear power plant be unable to carry out its obligations arising from the institution of the regulated asset base arrangement.

The Bill, essentially, is trying to produce a method for funding and getting over the line one particular nuclear power plant: Sizewell C. That is the only plant that is developed enough to be able to generate by 2030. A substantial part of the Bill is not about the general future of nuclear, or the relationship with nuclear renewables; it is about how one plant is to be financed over the next period so that it can actually start producing energy, hopefully by the end of this decade or shortly thereafter.

The Labour party supports nuclear power for the future and is particularly concerned that, for example, the Climate Change Committee has indicated that some 8 GW of nuclear power might be put in the mix for low-carbon renewable power for the future. Sizewell C is an important part of that process—indeed, getting it going is long overdue. Perhaps I can put the record straight, because the previous Labour Government, as the 2007 nuclear White Paper and the strategic planning documents of 2009-10 show, laid the basis for the present number of sites to be considered and, therefore, for nuclear power going forward.

[Bob Seely]

The hon. Gentleman is absolutely right, but unfortunately we lost a decade, from 1997 to 2007, when nuclear was taken off the table. Because of the timescales, which he is well aware of, will he just accept—this is not necessarily party political—that losing that decade put us back and is costing us now?

[Dr Whitehead]

The hon. Member is quite right that prior to 2007 the Labour Government did not consider the development of nuclear power by state means to be an appropriate way forward, although they never suggested that the development of nuclear power by private means could not be countenanced. However, we have since had more than 10 years of Conservative-led Government, which has produced precisely no nuclear power plants. Indeed, there is one nuclear power plant in the pipeline, and we hope a nuclear power plant that can be financed by reasonable means. One of the problems with the previous plant, Hinkley Point C, which the present Government got off the ground, was the funding arrangements, with EDF supplying most of the capital for the plant and then a CfD for the plant at the end, which looks like it will be quite disastrous, with future electricity prices being completely uneconomic.

It is therefore important that we get a method for funding those nuclear plants, and particularly Sizewell C, that does not fall into those traps and is also secure for the future. That is the concern of our amendments 1 and 2. To put the record straight, anyone who looks at those amendments reasonably closely will see that amendment 1 defines what is stated in amendment 2, and that it is defined as

“means owned by a company controlled by a foreign state and operating for investment purposes.”

That does not include EDF. Let us be clear from the outset that EDF is not

“a company controlled by a foreign state.”

Although it is substantially owned by a foreign state, it is not operating for investment purposes, but for production purposes. Let us be clear about what the particular concern is for the future.