Small Modular Reactors and Energy Security

Jamie Stone Excerpts

Wednesday 19th January 2022 Westminster Hall

[Virginia Crosbie]

I thank my right hon. Friend for his insightful intervention. He has been a vigorous champion of the nuclear sector, particularly in Wales, and he makes an important point. In the ’50s and ’60s we led the way with nuclear and nuclear export. This is an opportunity for us to get back to where we were, leading in a sector that is so vital for our energy security. That is very important for jobs, and it will create skilled jobs in my constituency and across Wales and the UK.

My third point is about co-locating and bringing together clean power with the industries that need it. That is an opportunity to bring high-skilled jobs from other industries. Such co-location is not new; the original Wylfa power station was established to provide power to Anglesey Aluminium.

Since we last debated nuclear financing, there have been major developments in the delivery of SMRs in the UK and in global energy security. The past months have seen an unprecedented rise in wholesale energy prices during winter, in part due to Russia’s aggressive behaviour towards its neighbour, Ukraine. That follows the issue in September with the Kent interconnector. I remind hon. Members that a fire at the Kent interconnector, which connects the UK with French power systems, led to soaring energy prices in the UK. We usually import 3 GW of power from France—enough to supply 3 million homes. That fire showed how fragile our energy security is when we rely on other countries for production.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

The hon. Member is making an excellent speech. Caithness is one of the most nuclear-sympathetic parts of the United Kingdom. Dounreay, Britain’s first nuclear reactor, was constructed there. Even today, some 1,500 jobs directly and 500 in the supply chain rest on the nuclear industry. When the wind is blowing hard and renewables are working, units of this nature can create hydrogen, which will help us to deal with the problem that the hon. Member describes.

--- Later in debate ---

[Jamie Stone]

In the same spirit, I extend an invitation to the Minister: if he would care to come north to Caithness, he would receive a cordial welcome from the trade council and civic leaders.

[Greg Hands]

I welcome that intervention. I am very happy to offer the hon. Gentleman a deal: if he can persuade his party to become more pro-nuclear, he will ease the path of a visit to the very northernmost part of mainland Scotland. If the Liberal Democrats will vote for the Nuclear Energy (Financing) Bill when it returns to the House of Commons, I will come to Caithness and Sutherland in due course.

Good points about the exportability of this technology were also raised by the former Secretary of State for Wales, my right hon. Friend the Member for Vale of Glamorgan (Alun Cairns), and by my hon. Friend the Member for Ynys Môn—points that are very much true. As my hon. Friend said, in November last year, the Government announced £210 million for Rolls-Royce SMR Ltd to further develop the design for one of the world’s first small modular reactor designs. Funding for that project is matched by private investment, with the design potentially capable of deployment in the UK in the early 2030s. We recognise the significant export potential of the Rolls-Royce SMR technology, which has already generated considerable overseas interest.

My Department and my former Department, the Department for International Trade, are working closely with the company to support it into overseas markets, and UK Export Finance has indicated its willingness to provide cover to Rolls-Royce, subject to the normal lending criteria being met. As my hon. Friend the Member for Ynys Môn pointed out, this funding is part of the advanced nuclear fund—a significant Government investment of up to £385 million to develop a domestic SMR design and demonstrate innovative advanced modular reactors, also by the early 2030s.

In addition to investment in SMRs, the Government plan to invest in the advanced modular reactor research, development and demonstration programme, which aims to enable an AMR demonstration by the early 2030s. Based on our own analysis as well as other public reports, the focus of the programme is on high-temperature gas reactors, which I announced at the Nuclear Industry Association’s conference in November. In addition to low-carbon electricity generation, HTGRs have the potential to produce very high-temperature heat, which could be used for increasingly efficient production of low-carbon hydrogen—as has already been referred to by various Members—to help decarbonise industrial processed heat, or even for synthetic fuel production.

Furthermore, the Government have recently launched the £120 million future nuclear enabling fund, which has already been referred to, as virtually everything else has, by my hon. Friend the Member for Ynys Môn. She is so on top of nuclear—so well versed—that I sometimes worry about my own job: my hon. Friend knows as much about nuclear as I do. The FNEF aims to address barriers to future new nuclear and help companies to reduce project risks, so that they are better positioned for future investment decisions.

In answer to my hon. Friend’s question about allowing the licensing and siting of the Rolls-Royce SMR to proceed in parallel, while there are some steps that logically must be completed before others can begin in a nuclear deployment project, companies are not, of course, prevented by law or policy from—for example—applying for a nuclear site licence and development consent order in parallel. Those are commercial decisions, as companies are best placed to decide how and when to enter regulatory projects to best support their project.

I was pleased that Parliament voted to back the Nuclear Energy (Financing) Bill last week. As my hon. Friend has pointed out, classifying nuclear as green investment in the UK taxonomy would allow billions to flow into this essential technology. That is the basis behind the Nuclear Energy (Financing) Bill—to bring in private sector institutional financing. As the Prime Minister set out to the CBI, we intend to consult on including nuclear in the draft technical standards for our own UK green taxonomy. Further details will be released when the consultation is published.

To conclude, the Government fully support the development of small modular reactors and the exciting opportunities, both in terms of energy security and of reaching net zero, that new nuclear can offer the UK. We have demonstrated our serious interest in building nuclear capacity in the UK, and over the past year we have made decisions that boost investors’ and businesses’ confidence in investing in UK nuclear. From the energy White Paper to our landmark net zero strategy and funding for small modular reactors, we have shown our dedication to net zero and nuclear. I once again congratulate my hon. Friend the Member for Ynys Môn on an excellent debate.

Question put and agreed to.