Nuclear Energy (Financing) Bill

Deidre Brock Excerpts

2nd reading
Wednesday 3rd November 2021 Commons Chamber

[Deidre Brock (Edinburgh North and Leith) (SNP)]

The right hon. Member speaks of the baseload and the constant flow of energy from nuclear. Does he support the tidal energy efforts being made in Scotland? Would he support far more investment in that?

[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.

--- Later in debate ---

[Alan Brown]

I was so hopeful that I was getting an answer there on the hundreds of billions of pounds that are being committed.

Returning to Hinkley Point C, we hear how advanced the project is and how well it is going, but the reality in terms of cost is that it is £4.5 billion over the initial estimates, which is 25% over budget. On progress, the commissioning date for unit one has now been put back to June 2026, instead of the anticipated 2025, but they also admit there is a programme risk of up to 15 months on top of that. That means that it could be September 2027 before unit 1 of Hinkley is operational and unit 2 will then follow a further year behind. So it is realistic to say that Hinkley Point C will not be fully operational until 2027-28, which is 10 years after we were initially told that Hinkley Point C was required to stop the lights going out. Given that the lights have not gone out, that undermines the original case for Hinkley.

We have to bear in mind that the EPR system has still not been shown to be successful. Flamanville in France is expected to start generating to the grid in 2024, 12 years late. Finland’s project has been delayed yet again, until next year, and it is 13 years late. Both have been crippled with spiralling cost increases.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

Further to those costs, we know that the permanent safe disposal of radioactive waste from nuclear power plants has not yet been achieved by any country. A 2018 study from the department of geology at the University of Kansas recently suggested that nuclear waste disposal would be two and a half to four times more expensive than has been estimated. Those costs will be passed on to those who come after us. Is my hon. Friend satisfied that these possibilities have been fully taken into account in the financing model?

[Alan Brown]

It will be no surprise to hear that I have no confidence that the true costs of nuclear waste disposal are actually included. We hear that this is rolled up in the strike rate for Hinkley, but if something happens and EDF goes out of operation, who will pick up the additional costs? It will clearly be the bill payers or the taxpayer. We hear about the fact that nuclear is supposed to be clean energy, but how can it be classed as clean energy when we are burying radioactive waste and having to store it for up to 1,000 years? That, to me, does not mean clean energy.

Taishan in China was held up as an exemplar EPR project when it was commissioned, but it has been offline since June this year due to safety concerns and rod damage. It is clear that the design and construction of EPR nuclear stations has still not been bottomed out properly. As the shadow Minister, the hon. Member for Southampton, Test (Dr Whitehead), said, a reliance on French state-owned EDF and the Chinese state company China General Nuclear kind of undermines the argument about having sovereign energy security. It makes no sense.

Despite the cost and programme issues at Hinkley, we are told that Sizewell C will somehow be different. There will be cost savings from learning on Hinkley. The design will be replicated, saving more money, but the reality is that the site at Sizewell C is bound to have different ground conditions, different environmental considerations and different logistics and site constraints, which affects methods of working, and that means that we cannot build an exact duplicate station the same way.

Even if savings are realised on Sizewell C compared with Hinkley, what does that mean cost-wise? If Sizewell C saves 25% compared with Hinkley, that is still a capital cost outlay of £18 billion. Surely there are better ways to spend £18 billion. We heard from the right hon. Member for Kingswood (Chris Skidmore) about the number of jobs being created. If I was given £18 billion to £20 billion, I am sure that I could create 30,000 jobs —by the way, that is £730,000-odd a job in capital costs alone. That is not a good return.

On costs, we are told that a new deal signed under the proposed new funding model in the Bill will cost consumers only £1 a month during construction, but if we look at a 10-year construction period for Sizewell C, we see that that means that bill payers in 28 million households will pay £3.4 billion before it is operational. That is a further £3.4 billion in expenditure when that money could be better invested elsewhere.

We still do not know with this Bill what the long-term pay-back options will be. Will there be a further agreement on the strike rate or a minimum floor price on the sale of energy? What length of contract will bill payers be tied into once a RAB model for an agreement is signed off?

What else could we do with that amount of money? We could upgrade all homes to energy performance certificate band C. We could have wave and tidal generation. The UK Government are willing to introduce the Bill and commit hundreds of millions of pounds to nuclear—the Budget has £1.7 billion just for developing nuclear to a negotiation stage—but they will not even ringfence £24 million for wave and tidal in pot 2 of the forthcoming contracts for difference auction. The disparity is clear.

It is time the Government took their blinkers off. It will be a real disgrace if they do not provide a pathway for wave and tidal projects to scale up. Scotland is currently leading the world on the issue; the O2 tidal generator is operational and grid-connected in Orkney. I hope that the Minister will reconsider the request to ringfence a small amount of money in pot 2 of the forthcoming contracts for difference auction.