Nuclear Energy (Financing) Bill

David Jones Excerpts

2nd reading
Wednesday 3rd November 2021 Commons Chamber

[Mr David Jones (Clwyd West) (Con)]

It is a great pleasure to follow my right hon. Friend the Member for Vale of Glamorgan (Alun Cairns). As the hon. Member for Richmond Park (Sarah Olney) pointed out, all the events of COP26 are proceeding in Glasgow as we speak, which reminds us forcibly of the need to reduce still further greenhouse gas emissions from our energy-generating sector. While recent years have seen a notable increase in energy from renewable sources such as wind and solar, it must be recognised—as many hon. Members have—that such forms of generation are intermittent, so other sources must be pursued to produce the reliable, predictable baseload of generation that a modern economy needs.

Hon. Members have pointed out other technologies that can produce reliable baseload generation. The hon. Member for Kilmarnock and Loudoun (Alan Brown) mentioned pumped storage, and of course the Dinorwig pumped storage scheme in north Wales is an exemplar of such technology. Similarly, there are proposals for a large-scale tidal range lagoon in Colwyn Bay in my constituency, which, with a projected installed capacity of more than 2 GW, would be a major generating station by any standards. However, we must recognise, as my right hon. Friend the Minister did in opening the debate, that the most proven technology is nuclear, and we should certainly pursue that, too.

While I was at the Wales Office, I devoted much of my personal energy to trying to secure the construction of the Wylfa Newydd nuclear station on Anglesey. I echo my right hon. Friend the Member for Vale of Glamorgan in paying tribute to my hon. Friend the Member for Ynys Môn (Virginia Crosbie) for all her efforts in trying to revive that project. It was a happy day in November 2012 when Hitachi announced its purchase of the Horizon operating company. There was no doubt about its enthusiasm for the project. I visited the Hitachi construction factory in Hitachi city in Japan and spoke to a senior nuclear engineer. He told me that Wylfa was the very best location he had seen anywhere in the world for a nuclear power station, so it was not anything wrong with the site that saw off Wylfa Newydd; it was the contracts for difference financing model. The strike price that was offered was too low and, as my right hon. Friend the Member for Vale of Glamorgan pointed out, even an equity deal between the British Government, the Japanese Government and the operators could not make it work. The Government are therefore entirely right to look for a different funding model.

The regulated asset base model has a good track record of funding major infrastructure projects; it was successfully used to fund both Heathrow terminal 5 and the Thames tideway tunnel. Importantly, as other hon. Members have pointed out, it is a model that can be used to attract private funding, making the need to rely on foreign sources of funding less likely and, it is to be hoped, obviating the need to look to companies directly or indirectly controlled by foreign Governments, some not entirely friendly, to develop our new nuclear fleet.

The Bill will be welcomed in north Wales. I mention north Wales in particular because it has a long history of expertise in the nuclear industry. Not only does the Bill put the potential of developing Wylfa back on the agenda, but it offers hope of providing a funding model for a new fleet of small modular reactors. There has for some time been a call for a pathfinder SMR project at Trawsfynydd, where the old reactor has for many years been in a state of decommissioning. The local authority, and the Welsh Government too, support the development of SMRs at Trawsfynydd. This is the opportunity for Her Majesty’s Government to take the lead in an exciting new project that could establish the United Kingdom as a leader in the technology, as well as provide a new centre of excellence in a location that has established nuclear expertise.

I welcome the Bill, which provides the opportunity for a new funding model and the prospect of a revived nuclear industry in north Wales. However, I wish again to echo the points made by my right hon. Friend the Member for Vale of Glamorgan. The question of potential cost overruns is a significant issue. It is important that the Government make a very careful assessment of the likely costs. It has been pointed out by commentators that pension funds may be reluctant to invest in such projects unless they can be assured that the costs will be kept under control, so that is key. Otherwise, I fully welcome the Bill and look forward to supporting its Second Reading.