Nuclear Energy (Financing) Bill

Debate between Dan Poulter and Alan Whitehead

2nd reading
Wednesday 3rd November 2021 Commons Chamber

[Dr Whitehead]

Interestingly, the Climate Change Committee, which has looked into this matter in great depth, considers that in the overall long-term future make-up of our energy mix, about 8 to 10 gigawatts of standby power—therm power—is likely to be required in the shape of new or existing nuclear power stations. That is about the size of the difference with an overwhelmingly renewable but variable economy, with elements of firm power backing it up.

I have mentioned that one plant only that would be included in the suggested 8 GW to 10 GW is in prospect for a start before the late 2020s, because every other proposal has fallen away. However, it is not financed and is probably not financeable by private capital. It is only part financeable by a state financer, with which we do not now want to do business. Let us be clear before we go any further: this Bill is about finding a formula to fund and build Sizewell C power station. Whatever its generic pretensions, that is the issue we should be concentrating on. Even so, getting that plant going would cover most of what the Climate Change Committee considers is the presence in the mix needed.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

Before the hon. Gentleman moves on from discussing the financing for Sizewell C, does he agree that it is important, when we are talking about financing, that the financing is not just in place for the build of the power station itself, but for the necessary infrastructure and mitigation measures for the local communities in the area, who will be suffering from construction traffic and the like for potentially a 12-year period?

Geothermal Energy

Debate between Dan Poulter and Alan Whitehead

Tuesday 19th June 2018 Westminster Hall

[Dr Whitehead]

No, it is a very factual debate—that is the difference.

The geothermal potential of the country is enormous, and the hon. Member for Falkirk (John Mc Nally) set out what the potential would be, in electricity and heat, for the UK were we to proceed seriously with geothermal energy. Perhaps a limiting factor is the fact that geothermal energy is not available everywhere in the country. We need to be clear about the fact that deep geothermal is available on the basis of three different kinds of site. Basins with very ancient water at the bottom are one kind of site. Another kind, which require slightly different technology, are areas with radiothermal granite batholiths. I believe that the Minister, as a first-rate geographer in her time, will know all about batholiths and lopoliths and various other things. We have quite a lot of radiothermal batholiths in the UK, with naturally occurring radioactive-based heat coming from deep within the earth’s crust. Another kind of site relies on the availability of technology to release heat by putting water down one pipe and up another, giving geothermal as a result.

As my hon. Friend the Member for Bishop Auckland mentioned, lower-temperature geothermal resources arise from abandoned mine workings. With heat-concentration techniques that is not a problem, in terms of concentrating the heat to get into production either for heat distribution or, indeed, for making steam to generate electricity.

As hon. Members have kindly mentioned, I have an interest in the debate because I think I can claim to be the only sitting Member of Parliament who has directly set up a geothermal energy scheme. I know a little, therefore, about how it all works. That scheme is based, as has been mentioned, in the middle of Southampton in a not particularly prepossessing shed, with a small wellhead in the carpark of the former Toys R Us store. That unprepossessing setting hides a well, drilled to about 1,800 metres. Water comes up at just over 70° Celsius and is converted into the material for a district heating scheme by a heat exchanger and concentrator. Now Southampton has a city centre district heating scheme with some 17 km of pipes, covering the university, the civic centre, the country’s only geothermally heated hypermarket and a five-star hotel. In other words, there is a complete city centre arrangement, heated substantially by geothermal energy. Not only that, but it has been heated in that way on an untroubled basis since 1987, and will continue to be so until 2087 on present estimates of what may be available. That is the potential, in practice, for geothermal energy.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

The hon. Gentleman speaks with great knowledge, and I pay tribute to his work promoting geothermal power in his constituency. What are his thoughts on the potential for geothermal power in more rural areas, where there is great reliance on oil central heating, often at great cost and with a high carbon footprint? Does he believe that more could be done to incentivise and encourage developers in rural areas to look at geothermal power for new developments and homes?

[Dr Whitehead]

I have to tell the hon. Gentleman that he is the only Member present for the debate who does not have a geothermal resource under his constituency. I have mentioned the different types of geothermal resource, and the large Mesozoic basins are in East Yorkshire and Lincolnshire, around the whole Wessex area, in Southampton and Worcester, and in Cheshire. The radiothermal batholiths are in the eastern highlands, across the north-east and north-west of England, and in Cornwall. The hon. Member for Strangford (Jim Shannon) will be delighted to know that about half of Northern Ireland is covered by two Mesozoic basins, giving most areas a strong resource.

The problem is, first, that that resource is not available everywhere and, secondly, that because of the capital cost of the borehole, geothermal energy is probably best suited to larger district schemes. One of the key issues is that because of the immediate availability of the resource, if an area—particularly a rural area—is capable of receiving it, it can be used for relatively small district heating schemes, or for local plant producing electricity in the area with a combination of a relatively small heat take-off. There is considerable potential, but I am sorry to tell the hon. Member for Central Suffolk and North Ipswich (Dr Poulter) that drilling under his constituency at the moment would be fruitless, as far as I am aware. However, it is possible to do it in some rural constituencies where the resource is more available.

[Dr Poulter]

A number of new, larger homes—particularly barn conversions, which are very popular in Suffolk—have invested in the technology as a means of heating. My question is more about how we can do more to incentivise developers on small-scale developments, perhaps on the edge of rural villages and towns, to look at similar schemes, and what suggestions the hon. Gentleman may have to bring forward those incentives.

[Dr Whitehead]

I think that the hon. Gentleman is referring to vertical hole shallow geothermal ground source heat installations. They are perfect for rural homes, as he described. They will provide sufficient heat, from a relatively shallow penetration into the earth, for heat exchangers to heat a home to a regular temperature of 60°-plus. Although I do not think that that is an essential part of this afternoon’s debate—it is more to do with ground source heat pumps—the hon. Gentleman is right. It is a technology that I would strongly recommend for off-grid properties in which, in the past, the alternative heating might have been oil. It can absolutely reliably replace that form of heating. I join the hon. Gentleman in recommending to the Minister and the Government that efforts to secure the installation of ground source heat pumps for off-grid properties in rural areas would bear considerable fruit and ought to be strongly supported—rather more strongly supported, I suggest, under the renewable heat initiative than is currently the case.

I hope that I have set out the potential for geothermal energy, and stated how it can be done in practice and what its benefits are. I was leader of Southampton City Council at the time that the scheme I described was initiated, but provided that it had the resource, almost any local authority in the country could pilot and undertake such a scheme relatively easily. The main issue is how to raise the initial capital funding up front to get the scheme under way.

Let me say one or two words about what the Government ought to be doing—in addition to the constructive and sensible suggestions made by my hon. Friend the Member for Bishop Auckland—to start using this resource. Capital grants will be required up front for the essential drilling of the well. The Government have underwritten several such schemes in various parts of the country to the tune of about £2 million a time, and we should extend the availability of those initial grants. Currently, the money available through the non-domestic renewable heat incentive is not sufficient to get those schemes under way from a capital point of view. As far as deep geothermal is concerned, the RHI currently provides 5.38p per kWh. That does not compare favourably with funding for ground source heat pumps, which comes out at 9.36p.

At the moment, the incentives to get such a scheme going properly in any area are not sufficient. That is particularly unfortunate; geothermal energy ought to be considered a different form of renewable energy, because of its known longevity. When we invest in a geothermal energy plant, we are investing in a capacity that will give us free energy for 120 years—we cannot say that about pretty much any other renewable energy source, except possibly the Swansea tidal lagoon. I therefore think that the criteria under which geothermal energy is considered should be based on that kind of payback and that kind of timeframe.