Nuclear Fuel Manufacturing

Chris Green Excerpts

Tuesday 7th September 2021 Westminster Hall

[Chris Green (Bolton West) (Con)]

It is a pleasure to serve under your chairmanship, Mr Betts, and to follow the hon. Member for Strangford (Jim Shannon), who has articulated so many of the arguments and points in this debate so well. It was a great pleasure to visit the constituency of my hon. Friend the Member for Fylde (Mark Menzies) to see the amazing facility at Springfields, and to get such a strong sense of how key it is—not just to our nuclear future, but in the framework of our energy future—and the importance of nuclear as a reliable form of energy. This, after all, is what the debate is about.

I not only met the organisation there; the National Nuclear Laboratory is sited there as well. I heard the powerful representations and views of the trade unions, Unite and Prospect. Their championing of the workers there, and the clear collaboration and close relationship between the management of the site, the workers and the union movement, is such an important thing for the future of any organisation. Working together is such a key part of the success and, hopefully, the ongoing future success of the site, but we need to understand what ought to be a fairly straightforward debate.

Fundamentally, we need clean, reliable and affordable energy to meet not only our current needs but our future needs as well. We do not know what the future will bring, but I would certainly like to see far more industry being located in Britain. China, India and many other countries around the world have been very competitive. We have been losing a great deal of heavy industry, and we need an energy supply that industry and heavy industry can use in an affordable way to be competitive with those countries, and with Germany as well. Germany is going down in terms of nuclear, but by doing so it is going up in terms of coal and other fossil fuels. That does not really fit in with what we normally hear about our European neighbours, which is that they are far more environmentally friendly than us. By turning their back on nuclear, they are embracing carbon emissions.

With our ambitions for COP26 and our leadership in this area, we ought to be looking at those sources of power that can reduce carbon emissions. It is the Government’s agenda; it is the international agenda. Nuclear is a key part of that, but we have to think about the steps that we need to take to get there. There was a bit of controversy recently about coking coal being produced in Cumbria rather than being imported for the British steel industry. It is so important that we take the effective and right judgments, and not only for the short term for British industry. Whether it is the Minister or the wider Government, we have to reassure industry and the nuclear sector that we have a future here, and will not export our industry overseas and feel good about exporting our carbon emissions to countries that perhaps have slightly lower expectations and standards than we do.

We need to support British manufacturing industry. We also therefore need to support reliable energy, baseload or firm energy, as I think the term is now, where we know, day or night, whatever the day of the year, we will have the energy that we need for industry and for homes—for cooking and for heating. We ought to be able to rely on that. As highlighted earlier this week in The Daily Telegraph, the UK produced a record of 14,286 MW of energy on 21 May, which is extraordinary, but earlier this week or last week we dipped down, just from wind, to 474 MW. That is not reliable energy that people wanting to keep a warm home in the middle of winter can rely on. It is not what industry can rely on, especially the steel industry. The next generation furnaces will be reliant on electricity. How can the steel industry run an arc furnace if it cannot rely on the energy supply?

It all goes together and the nuclear industry is key. This is technology that we have at the moment. We know how nuclear energy works. We know that we can produce stations that are reliable and cost-effective. We often hear about wind and solar energy, but there are significant technological problems with those forms of energy when it comes to providing firm energy. Until we have storage of that energy, so that when the peaks happen we can store the energy to take us through more difficult times, those forms of energy will not be as reliable as industry and homes need.

It is very positive that the Government have an increasingly strong hydrogen agenda. Again, that relies to a significant extent, it seems, on carbon capture and storage and that is not yet at scale or cost effective. Again, this is more technology that will probably be quite expensive and has not yet arrived. Perhaps in the longer term, we will need those technologies, but in the shorter term, we need more reliance on nuclear. That is where Springfields plays such a key part. It produces the fuels now and will produce the fuels in the future, but there is a short-term gap that needs to be bridged.

With more of our nuclear fleet being decommissioned in the very near future, we need to secure the future of the Springfields site. As My hon. Friend the Member for Fylde highlighted, we should perhaps renegotiate with the French nuclear industry to make sure that we can manufacture in the UK, perhaps under licence or whatever kind of relationship. We can do that. We also have the promise of massive investments in the nuclear fleet, because they are very expensive projects. That is some level of leverage we can use with the French, and I am sure we will be able to get a deal that ensures that we can keep those skills. That is such a key part: having Springfields there for the short, medium and longer term means we keep the skills in the United Kingdom.

Not only my hon. Friend but the team in Government and the COP 26 President have to have that ambition. We need to speak out more consistently. It is disappointing—I do not know how true it is—that the sense in Glasgow is that the nuclear industry is not being welcomed to participate in COP 26. It ought to be a key part of it. I hear the COP 26 President speak passionately on a regular basis about other forms of energy, but I do not hear the same passion about the nuclear industry. For the nuclear sector, for long-term investment, we need to hear far more about the British Government’s commitment to the sector—not just Springfields but the sector more widely—because that is what creates confidence. If people, whether from my constituency or more likely my neighbours’ constituencies of Fylde, Blackpool North and Cleveleys or even Preston, are to take up an apprenticeship, they must have confidence in the future. There are other companies—British Aerospace and others—that can take that talent, but Ministers need to give confidence to the next generation of engineers and scientists and other people coming through that this is a career for them.

We have to see the sector also within the framework of national security and strategic national interest. If we lose the skills and the businesses, it is very difficult if not impossible to bring them back. It is also a question of Hinkley C and the skills there. We need to have that certainty about building the rest of the nuclear fleet, when that is going to happen and what type of nuclear fleet we are going to have. If those engineers and that talent at Hinkley C do not have jobs to go to, they will use their talents in other projects around the country. When we get around to building the next nuclear power station, that talent will be gone. For reliability and effectiveness in terms of delivery, we have to secure that talent, just as we need to secure the talent in Lancashire. It ought to be seen as a key part of the levelling-up agenda, not just for championing Lancashire, the north west and the border, and the north of England, but even for Derby North. I do not know what kind of next-generation nuclear fleet we are going to have, but Derby is going to be a key part if we choose to have small modular reactors, perhaps of the Rolls Royce design. I am sure we have a strong voice in Government championing the cause. It would be lovely to hear it a bit louder.

[Mr Clive Betts (in the Chair)]

Finally, but not least, Richard Graham. Just to say that we need to start the wind-ups at 3.28 pm at the latest.

--- Later in debate ---

[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.