Hinkley Point

Lord Bourne of Aberystwyth Excerpts

Wednesday 11th May 2016 Lords Chamber

[Lord Holmes of Richmond]

To ask Her Majesty’s Government what the current economic and technological case is for continuing with Hinkley Point.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth)]

My Lords, Hinkley Point C is a good deal for consumers. The plant will provide reliable energy at an affordable cost, powering nearly 6 million homes for around 60 years and creating more than 25,000 jobs during construction.

[Lord Holmes of Richmond (Con)]

My Lords, there is no economic case for Hinkley Point and there is no technological case for it. The numbers do not work; neither does the EP reactor. We need nuclear plants but we do not need this nuclear plant. In the light of this, for the sake of the UK taxpayer and the UK energy consumer, is it not time that we pulled the plug on this power project?

[Lord Bourne of Aberystwyth]

My Lords, I hesitate to disagree with my noble friend but I do on just about all counts. We need Hinkley C and there is a very strong economic case, as I have indicated, in terms of jobs and the power that is necessary. I agree that we also need other nuclear plants. We are of course developing those as well to help us transition away from reliance on coal.

[Lord Cunningham of Felling (Lab)]

My Lords, does the Minister recognise that, with all due respect, we do not need his noble friend to put the boot into Hinkley C? The French Cabinet and the board of EDF are quite capable of doing that for themselves. The Minister mentioned other projects. What is the latest situation with respect to the NuGen proposals to build three AP1000 reactors at Moorside in west Cumbria or the Horizon project to build reactors at Wylfa on Anglesey and in South Gloucestershire?

[Lord Bourne of Aberystwyth]

My Lords, President Hollande and Emmanuel Macron, the French Finance and Economy Minister, are both very much committed to the EDF project. The noble Lord is right to highlight the importance of NuGen in Moorside and Horizon at Wylfa Newydd on Anglesey. They are both proceeding quite independently of Hinkley Point C.

[Lord Howell of Guildford (Con)]

My Lords, aside from the option of postponement, which of course is the choice of the French trade unions, is my noble friend aware that the Chinese also have a plan B, which is to bypass EDF altogether and to build two smaller reactors on the Hinkley C site, and to do it rather quicker than the present Hinkley C plans?

[Lord Bourne of Aberystwyth]

My Lords, my noble friend will be aware that the workers are being consulted; indeed, he indicated as such. It is of course a consultation that will last 60 days, so in the view of the French Government and the UK Government it is no more than a hiccup. Yes, I am aware of the Chinese situation.

[Lord Teverson (LD)]

My Lords, we have had the Hinkley station on the planning board since 2008 and we are now in 2016, without an investment agreement. As the noble Lord, Lord Cunningham, said, it seems that this is very unlikely to finally happen. We have taken solar and onshore wind off the field of play. How do the Government intend to meet their carbon targets for the budget and for the 2030 target?

[Lord Bourne of Aberystwyth]

My Lords, we will be publishing the fifth carbon budget shortly. The noble Lord will know, as well as I do, that we need nuclear to transition away from coal. We need a reliable and constant source and, in that regard, we cannot rely on renewables. He will also know that we spent more on renewables last year than in the previous year, and the second most in the whole of the EU.

[Lord Stoddart of Swindon (Ind Lab)]

My Lords, are there not fears about the safety of the present reactor plans? Is it not a very expensive project and could nuclear provision not be better arrived at by building smaller nuclear power stations near highly populated places? Does the Minister understand that many people believe that we used to build our own power stations under the CEGB?

[Lord Bourne of Aberystwyth]

My Lords, standards of nuclear safety are second to none in the United Kingdom. The noble Lord is of course right about small modular reactors, and we are progressing with that, as my right honourable friend the Chancellor announced in the Budget. We have had 38 expressions of interest, which will be written to by the end of May. That is certainly an important part of the energy jigsaw.

[Lord Grantchester (Lab)]

My Lords—

--- Later in debate ---

[Lord Grantchester]

My Lords, further to the noble Lord’s question regarding safety, France’s independent nuclear safety authority has found irregularities in an audit from Areva after it detected a very serious anomaly in a nuclear reactor vessel in the country’s Flamanville European pressurised reactor. Britain is using the same model at Hinkley Point. Has the Minister’s department asked for a report on this from the Office for Nuclear Regulation and whether these irregularities are also present at Hinkley Point? Will any report be published to allay public concerns regarding nuclear safety at Hinkley Point, or indeed any other nuclear reactor in the UK?

[Lord Bourne of Aberystwyth]

My Lords, I repeat the point I made about the high standards of nuclear safety. We are aware of the alleged defects at the Le Creusot works. We are working on that, and it will not affect the generic design assessment process that is going on at Hinkley Point C.

[Viscount Ridley]

My Lords, can my noble friend tell us, at the current price of electricity, what his department’s estimate is of the subsidy that will be paid by energy bill payers in this country over the 35 years of the Hinkley Point contract to Chinese and French investors? Is it true that the figure will be a staggering £50 billion?

[Lord Bourne of Aberystwyth]

My Lords, my noble friend will be aware that the strike price is £92.50 on the assumption that we do not go ahead with Sizewell. If we do, which we may well, it will come down. This is unaffected by all these issues with the works council—the strike price is set, and increased costs and any minor difficulties do not affect the strike price at all.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I am sure the Minister is well aware that the global solar industry is doubling every two years. In spite of this Government’s withdrawal of subsidies, there will be sufficient global capacity in 12 years to cover all demand on the planet. Does that not make Hinkley Point obsolete? We will probably not even have it built in 12 years’ time.

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness is right on the growth of renewables and absolutely right to highlight the importance of that, as I have been doing repeatedly, without subsidy. But she is wrong to say that we do not need a back-up, because renewables are not constant. That is where nuclear is so important and why we need Hinkley Point C.