Nuclear Energy

Lord Bilimoria Excerpts

Thursday 7th September 2023 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, the week before last I was speaking at the B20 in Delhi and today our Prime Minister is flying out to attend the G20 in Delhi. I was president of the Confederation of British Industry from June 2020 to June 2022, during which time I was privileged to chair the B7 when Britain hosted the G7. During my presidency I spoke to a leader in the nuclear industry about small modular reactors. He said in no uncertain terms that these reactors can be built within five years—and we have not even started building one.

An energy transition will take place over the coming years, moving from oil and gas to solar, hydrogen, wind—and nuclear, which will play a major part. The Government have very clearly outlined their ambitions to significantly increase nuclear power capacity, also saying that it is one of the most reliable technologies available to provide a baseload level of low-carbon electricity on a giant scale. I thank the noble Lord, Lord Howell, for initiating this debate on the role of nuclear energy in securing the future energy supply. It is crucial at this time.

However, the reality is that in the 1990s nuclear’s share of our electricity supply in this country was almost 25% and today we are down to under 14%. It has almost halved in that period. The House of Commons Science, Innovation and Technology Committee said that the contribution of nuclear to the UK’s energy mix will

“fall substantially by 2028, when all plants bar Sizewell B are scheduled to come to the end of their lives”.

We know that we must achieve net zero by 2050. Delivering new and advanced nuclear power was one of the 10 points in the Government’s Ten Point Plan for a Green Industrial Revolution. The Government published its British Energy Security Strategy for how Britain will accelerate homegrown power for greater energy independence, exacerbated and necessitated by Russia’s invasion of Ukraine. The strategy described nuclear energy as

“the only form of reliable, low carbon electricity generation which has been proven at scale … a big enough baseload of reliable power for our island”.

The strategy set a target to generate 24 gigawatts of power by 2050, which is three times what we have and 25% of our projected electricity demand. So we are going to get to where we were in the 1990s. I think that we would want to get further than that.

Of course, we now have Great British Nuclear, officially launched in July this year. Grant Shapps, at that time Energy Secretary and now of course Defence Secretary, said when he launched it that

“we are seeing the first brushstrokes of our nuclear power renaissance to power up Britain and grow our economy for decades to come”.

We talk about SMRs and say that we want to build them, but would the Minister acknowledge that a company such as Rolls-Royce wants to build SMRs around the world, yet I am told that many countries will not even allow it to tender unless it builds something in its own country, the UK. So, if the Government give Rolls-Royce the chance to set up a plant here quickly, that will enable it to export around the world. Rolls-Royce is, of course, one of Britain’s great exporters. These SMRs can generate electric power up to 300 megawatts, compared with up to 1,400 megawatts for the giant plants, and they can be built very quickly.

However, in an interview with the Financial Times, Mr Shapps said that he did not expect SMRs to be online and producing energy until the 2030s. That is seven years from now, when an expert told me that we can build them in five years. Why are we not moving on this with much greater urgency?

My old university contemporary and friend at Cambridge, the former Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, said that, in the committee he chairs, “witness after witness” who appeared before the committee’s inquiry highlighted the lack of a strategic plan for nuclear. He said that

“the government’s stated aim to deploy a nuclear reactor a year is not grounded in any explanatory detail’.

He added that it was unclear whether the 24-gigawatt target was intended to be met by gigawatt-scale, massive plants such as Hinkley Point C, or smaller, more distributed nuclear reactors such as SMRS. Could the Minister please confirm this? SMRs are quicker and cheaper to build, and you can build them right near the source where they will be supplying power.

The good news is that the Labour Party has expressed support for nuclear power: Keir Starmer has described it as

“a critical part of the UK’s energy mix”,

and the party has said that if it were in government, it would get new nuclear projects such as Hinkley and Sizewell over the line, extending the lifetime of existing plants, and would back new nuclear, including small modular reactors.

In the FT recently, just a week ago, Gillian Tett wrote an excellent article on nuclear power and the array of different companies we are competing with around the world, including Hitachi and GE. A race is taking place, and we need a sense of urgency. US President Joe Biden will be arriving at the G20 summit in Delhi and is very keen to partner with India on SMRs: specifically, the US wants to set up six nuclear reactors in India. Why are we not competing for those as well and doing business with India? Everyone wants to do business with India: it will be the third-largest economy in the world very soon and, in my view, the largest economy in the world by 2060.

The IAEA has also highlighted that African countries are looking to have SMRs built over there, which is another huge export opportunity for us. The small modular reactor market was valued at £3.5 billion in 2020 and is projected to reach almost £20 billion by 2030. This is an enormous opportunity for British business. We should be going at this at speed and with urgency. I am a stuck record in this Chamber. I keep asking: why are we not showing more urgency towards this, and why is our plan not clearer? Julia Pyke, joint managing director of Sizewell C, said that, if Hinkley had been on last year, UK consumers would have saved over £4 billion. Both projects will form a vital part of the future nuclear field, helping to lower carbon emissions and reduce costs.

The Government are investing, and I applaud that. Some 90% of our homes are heated by fossil fuels. By making our homes more fuel efficient, again we will be able to save so much. This will create many more jobs—tens of thousands more. Are we skilling people enough to be able to deal with this transition?

I conclude with this: if we go to plan and show a real sense of urgency, I believe we can reach that 25% of our power and 24 gigawatts much sooner than 2050.