Nuclear Energy (Financing) Bill

Bob Stewart Excerpts

2nd reading
Wednesday 3rd November 2021 Commons Chamber

[Chris Skidmore]

I believe that we do not have a choice. We must look at every form of renewable energy, nuclear energy, carbon capture and storage and hydrogen to reach net zero. We cannot make the perfect the enemy of the good. Equally, in looking at how to decarbonise, there are no good and bad actors; the most important thing is outcomes. We have a target set for 2050 but cannot ignore that we wish to reduce our carbon emissions now. I therefore welcome any technology that can achieve that sooner rather than later.

[Bob Stewart (Beckenham) (Con)]

My right hon. Friend knows a lot about these things. What percentage of our energy does he estimate will be produced by nuclear power stations by 2050?

[Chris Skidmore]

That depends on the potential for innovation for the future. We have an energy crunch coming down the line with perhaps just a single nuclear plant open by 2030 and, at the same time, we will move from existing nuclear fission reactors through to small modular nuclear reactors, advanced modular nuclear reactors and, ultimately, fusion.

As science Minister, I assigned Government investment for the spherical tokamak for energy production units. We need certainty and a clear strategy for where the nuclear pathway is going beyond the existing reactors and to front-load that investment now. I will come to why the RAB model is so important as it allows that front-loading.

As I mentioned, nuclear power has resulted in an annual saving of 22.7 million tonnes of CO₂, the equivalent of taking one in three cars off the road. The Government’s proposal to adopt the regulated asset base funding model for nuclear power is bold and ambitious, but it is also needed. The beauty of the funding model is that it inherently encourages a wider range of private investment in new nuclear projects, reducing the UK’s reliance on overseas funding.

As it stands, developers are forced to provide the finances for construction up front and begin receiving revenue only when the station starts generating electricity. Even in the best of times for energy markets, which we certainly are not in now, that lack of certainty diminishes how investable nuclear power projects are. As we have seen, sadly, with the nuclear projects at Moorside and Wylfa, our current funding model is simply not fit for purpose; 5.8 GW of nuclear energy, just over half our current supply of nuclear power, was lost directly because funding could not be secured. Those locations have both been described as highly desirable sites for new nuclear power plants, but even after the Government offered to take the equity, provide all the debt finance and back a revenue-stabilising mechanism, private investors still had to walk away.

--- Later in debate ---

[Chris Green]

That is such an important point. I agree entirely that we already have the larger-scale nuclear reactors and the established technology. It is so important that we look at SMRs and AMRs, and at the leadership that can be provided in a consortium by Rolls-Royce. If we get in early and develop that technology in the United Kingdom, we can export it around the world and create more wealth in the United Kingdom from this incredibly important source of energy and the power stations.

[Bob Stewart]

As I listen to discussions on the expansion of nuclear capability in this country, it slightly worries me that we have not talked about the security of those assets. My worry is that they could be interfered with by some foreign power in a cyber-attack. That must be part of all the planning for these places.