Nuclear Power Funding

Gavin Newlands Excerpts

Tuesday 9th November 2021 Westminster Hall

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

I would love it if my hon. Friend were here, Mr Sharma, but sadly he is in his constituency. I am sure Hansard will correct the record shortly.

[Mr Virendra Sharma (in the Chair)]

My apologies.

[Gavin Newlands]

That is okay, I am used to it—although my hon. Friend has a ginger beard, so I am not sure what that says. I congratulate the hon. Member for Ynys Môn (Virginia Crosbie)—I will try to pronounce her constituency correctly—on securing today’s debate. It is an issue, to be honest, that deserves a better turnout than we have today, although she said there was a poor turnout for the Bill last week, so it is probably no surprise that a Westminster Hall debate on the same issue will not generate a large crowd either.

She said it was one minute to midnight, which we have heard a number of times from different politicians over the past few weeks, particularly at COP26, and she is right about that. As a Scot and SNP Member of Parliament, that makes me wonder why the Government continually put up barriers to Scotland’s renewable industry, not least by not getting involved in the grid connection charges, as Scotland has the highest in Europe.

Had I known that there would not be many Members here today, I might have prepared a longer speech. I will certainly leave plenty of time for the hon. Member for Southampton, Test (Dr Whitehead). The hon. Member for Ynys Môn spoke about the elephant in the room. With this Government, it is the mammoth in the room, such is the old-school thinking on this country’s future energy needs, and the fact the Government are utterly blinkered on the issue of nuclear. Nuclear industry lobbying has convinced them that nuclear is not only desirable but essential for the future. That is simply not the case.

Hinkley Point C is the most expensive power station in the world. The Government’s rationale was that building a suite of large-scale nuclear power stations would lead to competition and cheaper costs. However, the piecemeal approach of nominally awarding sites to different preferred bidders meant that EDF was the only game in town. There was no competition whatsoever when negotiating the contracts. EDF had been beset with problems with prototype stations in Finland and France, so it had to be a bit more cautious in its pricing. It is no surprise to anyone that the UK Government had to sign such a bad deal. The extraordinary strike rate of £92.20 per megawatt-hour for a 35-year contract, compared with the cost of offshore wind at £40 per megawatt-hour, for just a 15-year concession, meant that Hinkley C was not just a bad deal, it was economically illiterate.

In the Budget, the Chancellor committed £1.7 billion to progress Sizewell for a final investment decision. That was in addition to the £500 million earmarked for the development of nuclear. As I said, the Government’s previously stated position was that building a suite of new large-scale nuclear power stations would lead to competition and cheaper costs. If they are using the same design as Hinkley, and a second station is easier and cheaper, as they have told us time and again, why do the Government need to commit a further £1.7 billion up front for outline design and costings? I am sure the Minister will answer that in his summing up.

Let us remember that that is essentially £1.7 billion just to make a final decision on its construction or otherwise. The truth is that not only is nuclear hideously expensive now and for the 35 years following construction, it will be horrendously expensive for hundreds of years to come. It will cost £132 billion just to deal with the existing nuclear waste legacy. Tories are usually keen on dealing with issues now and not leaving them for future generations to deal with. That is the excuse they give us when they freeze public sector pay or remove the £20 universal credit uplift. Why do they want to create another costly, needless and dangerous waste legacy for future generations to deal with?

The Minister rather let the cat out of the bag by essentially admitting in a recent letter that accompanied the Bill that the Government were introducing an alternative funding model that might save the taxpayer between £30 billion and £80 billion, and that the Hinkley Point C project was very poor value for money. I am certainly not going to argue with that. That being the case, how much money does the Minister estimate has been wasted on Hinkley? Crucially, how many billions of pounds are the Government willing to commit bill payers to, and what are all the future costs locked into nuclear power? If they say that they can save up to £80 billion, there would surely have to be a commitment of hundreds of billions of pounds.

The hon. Member for Ynys Môn alluded to the announcement made yesterday that Rolls-Royce has essentially match-funded the £210 million from the UK Government to develop small modular reactors. Initially, the hope is to have five SMRs at an estimated £2 billion a pop. We all know what happens with estimates in the nuclear industry, but that is another £10 billion that will likely end up on our energy bills in capital cost alone.

What else could we do with that amount of money? For starters, as the Minister has heard many times from my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown), Scotland is crystal clear. We do not want any new nuclear power stations. A YouGov poll showed that only 30% of Scots want nuclear to have a major role. The experts are clear that we do not need nuclear energy to decarbonise. In the 2019 world nuclear industry status report, Mycle Schneider, who was the lead officer of the report, said that nuclear power

“meets no technical or operational need that these low-carbon competitors cannot meet better, cheaper, and faster.”

The previous chief executive of National Grid, Steve Holliday, said that the idea of large power stations for baseload was “outdated”. He went on to say:

“From a consumer’s point of view, the solar on the rooftop is going to be the baseload.”

We could upgrade our homes to energy performance certificate band C. We could have wave and tidal generation, in which Scotland currently leads the world. This is a position that will be under threat unless this Government can find a fraction of the money that they are committing to new nuclear to help scale this up. There needs to be much greater investment in carbon capture and storage. The Government really must reverse their disgraceful decision not to select the Acorn Project cluster bid at St Fergus—the stand-out project—as one of the track-1 CCS projects. If the Tories were serious about decarbonisation, they would have approved the St Fergus carbon capture, utilisation and storage site, instead of the lesser pork-barrel options in the red wall.

There is a false argument, made by many in this place, that nuclear is required for when the sun does not shine and the wind does not blow. Pumped storage hydro, a renewable energy source that utilises surplus grid energy to fill the reservoirs and dispatch electricity when required, is cheaper, greener and more efficient. Pumped storage hydro is the perfect complement for intermittent renewables. An Imperial College London report suggested that there could be a system saving of £700 million a year from using pumped storage hydro instead of nuclear. Why should Scottish bill payers be forced to pay for nuclear energy that they do not want or need? This is another democratic deficit for Scotland, especially when so much of our renewable energy is not being supported at the moment and we are stuck with the highest grid charges in Europe.

To conclude, Scotland is very poorly served by UK Government energy policy. It is crystal clear that we need to control our own energy decisions through independence; that day will be coming a lot sooner than the Members in this room think.

[Mr Virendra Sharma (in the Chair)]

I want to apologise for getting mixed up with the names.

[Gavin Newlands]

That’s okay—my own wife gets it wrong.