Infrastructure Procurement

Debate between Jim Shannon and Alan Brown

Monday 19th February 2024 Commons Chamber

[Alan Brown]

Again—no surprise—I wholeheartedly agree with my hon. Friend. It is classic “penny wise, pound foolish” all the time, particularly when it comes to nuclear. The Government are kidding themselves about nuclear, because they still estimate that Sizewell C will cost only £20 billion. We already know that Hinkley, which is the model for Sizewell C, is costing nearly £50 billion, so why pretend that it will cost only £20 billion? They are setting their stall out wrongly and have a blinkered approach that suggests we somehow need nuclear, when clearly we do not actually need it. What they should be investing in is renewable energy, storage systems and, as my hon. Friend says, much better grid infrastructure as well.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for bringing this issue forward. Does he agree that there seems to be a disparity between those who live in towns and those who live in rural areas, where costs are, more often than not, much larger? Does he feel that it is time for the Government to have a centralised access point for infrastructure material, as a way of ensuring that each council area and constituency can access the same material for the same cost and begin to build what is broken in the way that it should be done in each area?

[Alan Brown]

That is a fair point. There is always a rural premium, and people living in rural areas suffer disproportionately when it comes to infrastructure, upgrades, energy efficiency and heating their homes. I have long argued, particularly in relation to the roll-out of energy efficiency schemes such as ECO4, that the Government really need to consider a rural programme. Otherwise, all that happens is that urban homes get upgraded and—

Nuclear Energy (Financing) Bill

Debate between Jim Shannon and Alan Brown

Report stage & 3rd reading
Monday 10th January 2022 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, and I am grateful for the opportunity to do so.

In the past, I have spoken in the Chamber and in smaller debates about nuclear energy and its importance in today’s society. I will put on record once again my support for nuclear energy and for what it can deliver for all of this great United Kingdom of Great Britain and Northern Ireland. We need nuclear generating capacity for the United Kingdom, and I believe that this Bill gives the opportunity for that to happen.

The hon. Member for Kilmarnock and Loudoun (Alan Brown) put forward a very good case for his proposals in new clause 1 and amendments 6, 9, 8, 7 and 10. I believe that, ultimately, it comes down to whether we support nuclear energy and the benefits that it brings or whether we have some concerns, which, obviously, the hon. Gentleman has.

Nuclear energy in the UK is minimal, with only 13 nuclear reactors and six plants, which are able to supply only about 20% of the UK’s electricity demand. It is worth pointing out that Northern Ireland is the only devolved institution in the UK without a nuclear plant or power station. I note from the papers supplied to us by the Minister that

“For the RAB model and revenue stream measures in Parts 1 and 2, these will extend and apply to England and Wales and Scotland only. This is because the unique energy position of Northern Ireland means they would not benefit from energy produced by nuclear energy generation projects under a RAB model in Great Britain, and so should not be obliged to pay.”

It is clear that the Government have provided protection for us in Northern Ireland. It is also important to remember that in the context of the Government’s levelling up agenda as well as the Bill, the funding is not relative.

Nuclear energy in the UK has not peaked since 1995 and the opening of Sizewell B, the last commissioned plant to be built.

[Alan Brown]

I appreciate that the hon. Gentleman is saying that he would welcome new nuclear power. I mentioned earlier that the impact assessment stated that the capital and financing costs of a new nuclear power station would be some £50 billion. If I were to offer the hon. Gentleman £50 billion for an investment in Northern Ireland, would a new nuclear power station really be it?

[Jim Shannon]

If only we had the opportunity of a nuclear power station in Northern Ireland! We do not have that possibility at this moment, but I would certainly be keen. I have supported this throughout my years as an elected representative—as a councillor from 1985, in the Northern Ireland Assembly, and now today.

This group of amendments also deals with reports to Parliament on costs of nuclear projects, provision of information on outages, and limits on additional charges to revenue collection contracts.

We are expecting the next nuclear plant to be built in Hinckley Point C in Somerset in 2025, some four years from now. |There is no doubt that there is a huge cost implication when it comes to safe nuclear energy, but I look to Members today to see the good that comes along with it. It ensures that we keep our carbon footprint to a minimum, which is one of the main goals that we addressed at COP26. It is also essential in addressing the energy gap and relaying our response to climate change and lowering gas emissions.

The new RAB model is expected to allow new nuclear projects to be financed privately, which is the thrust of what the Bill is about. However, it is the responsibility of our Government, and our Minister, to ensure that private investors are protected. I should like to hear from the Minister how he plans to include Northern Ireland in this strategy, so that we can gain some benefits. What will happen to private investors should things change in future? I encourage the Minister to engage with the relevant Ministers back home to ensure that similar opportunities are within reach for Northern Ireland. I have historically encouraged him and his Department to ensure that there are the correct provisions for nuclear energy improvement across the UK. While this is a long and costly road, I urge other Members to look at the benefits and sustainability factors that come along with it. Additional funding must be secured for successful and green living throughout the UK.

What is important in this debate is that we understand the essential role that nuclear power has to play, and allow that role to be played in a regulated and possible manner. I support the aim of the Bill to allow the Secretary of State—or the Minister, in this case—to regulate for revenue collection contracts, which will be used to fund a nuclear company. Payments will be managed by a “revenue collection counterparty”. Projects will be paid an “allowed revenue”, which is broadly the agreed capital cost of a project along with other relevant costs. Payments will be made by electricity supply companies which are expected to pass the cost on to consumers. Costs will start to be charged to consumers during construction, based on the allowed revenue due for that period. During operation, the cost will be the allowed revenue due, minus the value of selling the energy generated.

All this seems to me to be common-sense and logical. It is important that we regulate effectively and ensure maximum security. This is not a matter that we can ever take lightly, and I believe that the Bill’s progress has been right and proper. I therefore support the Bill, but ask the Minister to reconsider the role of Northern Ireland in our nuclear power plan. Now that the potential for a plant has been removed from the old equation, there must be a place for us in the new equation.

Community Energy Schemes

Debate between Jim Shannon and Alan Brown

Tuesday 30th November 2021 Westminster Hall

[Alan Brown]

I completely agree. Actually, that touches on the point made by the hon. Member for Leeds Central that we have a grid system and a grid charging system still fundamentally based on where coal-fired power stations or nuclear power stations are sited. That needs a complete overhaul. I may touch on that a wee bit later.

[Jim Shannon]

Strangford Lough Wildfowlers and Conservation Association in Newtownards came up with a small tidal scheme, which, with a small grant, generated some electricity for its use. The scheme has allowed the club to reduce its costs and keep running. That same process could be used in many cases across the whole of the United Kingdom. Has the hon. Gentleman got any similar examples?

[Alan Brown]

The hon. Member gives a good example. I do not have any specific ones to hand, although I will touch later on how some community energy projects have been held back because of the removal of the feed-in tariff.

It is clear that hon. Members are agreed on the importance of community energy generation, and I am sure that the Minister will stand up and say that he agrees with it as well. The key thing is not just agreeing with the principle but taking action to facilitate the growth of community energy projects.

I, too, am a signatory to the Local Electricity Bill, and I pay tribute to Steve Shaw for his campaigning, dedication and ability to get so many local authorities on board behind the Bill, as well as 282 MPs and 77 national organisations, including the Energy Saving Trust, Good Energy, Forum for the Future, the New Economics Foundation, ResPublica, Solar Energy UK, the British Hydropower Association, Triodos bank, the Transition Network, the Royal Society for the Protection of Birds, Friends of the Earth, the Wildlife Fund for Nature, Greenpeace and ClientEarth. That in itself suggests that the Bill is a good thing and should be implemented.

If we look at the energy retail market, we see how badly it is struggling. We just saw Bulb—the seventh largest company, with 1.7 million customers—go bust, so it is clear that we need alternative solutions for the provision of electricity. Clearly, local powering will not replace an organisation such as Bulb overnight, but, as I say, it is logical to try to facilitate local community-based renewable energy where possible.

Changing the regulations to make new community renewable energy businesses viable allows communities to bypass the large utility companies. It means significant additional value for local economies and, as we have heard already from other hon. Members, more money will then circulate in the local economy, leading to more skilled jobs, more viable local businesses and stronger local economies. As I touched on earlier, it empowers local people and companies to be part of the green revolution and part of the pathway to net zero. That can only help to focus minds and create the general buy-in for the need for collective action to tackle climate change.

Evidence suggests that community energy generation currently accounts for less than 0.5% of the UK total. It has been suggested that it has the potential to increase tenfold over a six-year period. As we have heard, figures from the Environmental Audit Committee suggest it could be a twentyfold increase by 2030. That would more than offset the need for new nuclear power generation, and it is something that the Government need to consider.

The Scottish Government have made strong progress towards community energy, but their efforts have been undermined by UK Government cuts. The Scottish Government had a target for 500 MW of community and locally-owned energy by 2020, which was exceeded and then increased to 1 GW by 2020. They have now doubled the target to 2 GW for 2030. Progress towards the bigger target has been positive, but, as I touched on in response to the intervention from the hon. Member for Strangford, the removal of feed-in tariffs has hindered the growth of those projects. There is a project in my constituency that never got off the ground because of the removal of the feed-in tariffs. By taking away those tariffs, the Government are blocking community energy projects, and they are not doing enough to help facilitate them in a different way so as to allow the sale of energy. That is why urgent action is needed.

The Scottish Government published an updated local energy policy statement in January. Of course, community energy projects in Scotland are further hampered at the moment by Scotland having the highest grid charges in Europe. Lucy Whitford, managing director of Renewable Energy Systems UK and Ireland, has said that

“it doesn’t feel as if charging is fit for purpose anymore for us to deliver net zero. We have worked up some examples of network costs. The additional cost per annum of a 22 MW wind farm in Argyll versus one in Essex could be £500,000. Continuing in the current direction of travel on charging reforms could add another £120,000 per year to a project, so it is very significant.”

That is why I have been calling for reform of the grid charging system.

At the moment we have the cost of living crisis, and the energy cap will increase by between £400 and £600 in April. We have the retail energy market in crisis, with 23 companies going bust since August. In 2018 there were more than 70 companies in the market, but now there are fewer than 30, so Government action is needed to reform the sector.

Meanwhile, the Tories have managed to find £1.7 billion to further develop proposals at Sizewell C, and they want to commit bill payers to a regulated asset base payment contract that will last for 60 years on top of the 10 to 15-year construction period. That is madness. The money would be much better spent on community energy growth, as we have discussed. The Local Electricity Bill is an alternative that will not cost the taxpayer or the consumer any money. In fact, it is intended to help create lower local energy costs. Like other hon. Members, I urge the Government to consider supporting the Local Electricity Bill and, if need be, work on a cross-party basis to improve the Bill and get it to a place where everybody is happy with it.