Small Modular Nuclear Reactors

Lord Callanan Excerpts

Tuesday 28th June 2022 Lords Chamber

[Viscount Hanworth]

To ask Her Majesty’s Government when, and under what circumstances, they will place orders for small modular nuclear reactors.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, the energy and security strategy sets out our intention to take one nuclear project to final investment decision in this Parliament and two projects to final investment decision in the next, including SMRs. As with any government decision, this will be subject to value for money, relevant approvals and technological readiness and maturity.

[Viscount Hanworth (Lab)]

I am not reassured by the Answer the Minister has given. To await the completion of a generic design assessment of a proven technology is to impose an unnecessary delay. There is an international market awaiting small modular reactors. Unless the Government provide full and immediate support for the SMR of Rolls-Royce, foreign producers will capture the market and we may have to depend on them for the reactors we will need to install in the UK. Does the Minister regard that prospect, and the prospect of losing overseas markets, with equanimity?

[Lord Callanan (Con)]

We are providing immediate support to Rolls-Royce to develop the SMR; we provided it with £210 million to do exactly that. However, it is important that we go through all the relevant design approvals to make sure that SMRs are safe and easy to deploy. That is an important step to go through and which is legislated for in this country, and we should make sure that we follow it.

[Lord Bilimoria (CB)]

My Lords, building a large nuclear reactor takes well over a decade but, once built, it can power 7% of this country’s electricity. However, I am reliably informed that these small modular nuclear reactors can be put up within four to five years. Why are the Government waiting? These reactors can power a city the size of Sheffield. Why not do it now in order to have cleaner energy and to be more energy self-reliant?

[Lord Callanan (Con)]

The noble Lord might want to ask the people of Sheffield whether they want an SMR beforehand. As a serious point, this is very important; indeed, it is a matter of legislation that reactors are proved to be safe. I agree that it is a shrunken design of existing reactors; these are on a much smaller scale and designed in a modular way. It is important that we go through all the relevant approval processes. The design is not yet complete, and they have not even been submitted yet for GDA.

[Lord Cunningham of Felling (Lab)]

My Lords, can the Minister remind the House of when Britain built a civil nuclear reactor on time and within budget? I ask this not to cast any doubt on the Minister’s commitment, but to say that we know that there are numerous opponents of civil nuclear power and every time we build a reactor we give them more and more excuses over delays and cost overruns to attack the idea of civil nuclear power. It is a terrible error for which both Governments have been responsible; I am not just blaming the present Government. We give them open goals to shoot at. Should the Government not look at the whole process and come up with a new scheme or ideas to ensure that this error is eliminated?

[Lord Callanan (Con)]

We are always open to new ideas for how we can speed the process up. We want to see both existing nuclear technology and the SMR process brought forward as quickly as possible, but it is important that we go through all the relevant design approval phases to make sure the technology is safe. Many communities are willing to accept SMRs, particularly those that already have nuclear reactors in their area, so it is not the case that everybody is opposed to them. Nevertheless, it is important that we go through the proper processes.

[Lord Howell of Guildford (Con)]

My Lords, I declare an interest both past and present in this area. I welcome the support the Government have so far given to SMR development in this country. Of course, it is going on in many other countries as well. How does this play out in relation to the plan at Sizewell C, where the idea is to build another large-scale reactor as a replica—I repeat, replica—of Hinkley Point C? Hinkley Point C has had its own problems; it is over time, over budget and has component difficulties. Do we really want to think in terms of a large-scale replica there or in other sites, when the SMR option is coming on fast? We are at the edge of new technology in nuclear power; should the Government not think very carefully before deciding between SMRs and another large-scale reactor with all its problems, as already indicated?

[Lord Callanan (Con)]

My noble friend makes an important point, and we will take into account all these factors, including value for money, when we make decisions in the next Parliament on whether to proceed in these cases.

[Lord Wigley (PC)]

My Lords, may I break the habit of a lifetime and welcome the statement made by the Prime Minister in his speech in Newtown last month, when he announced an SMR for Trawsfynydd? Can the Minister confirm that the five-year timescale announced by Cwmni Egino, which will be taking this forward, is within the framework of what he has just described and that this project will go ahead for 2027?

[Lord Callanan (Con)]

I cannot confirm any individual projects, but I have said that we are proceeding with making final investment decisions in the next Parliament on two further nuclear reactors.

[Lord Ravensdale (CB)]

My Lords, I work in the nuclear industry and one of the biggest issues I am currently seeing is a lack of available skills to undertake the work. We are doing our best to recruit, but we simply cannot find the skilled engineers to meet the demand we are seeing. Does the Minister agree that a sector-wide skills strategy is needed to demonstrate how we will deliver the more than 100,000 new jobs in the industry that will be needed by 2030?

[Lord Callanan (Con)]

The noble Lord makes an important point. There are a lot of very skilled engineering jobs. We have made some errors in the past on our nuclear strategy, which resulted in a lot of very skilled employees leaving the country and the industry effectively closing down. We are resurrecting the industry now and it will be a longer-term process to build up the skills base, but the noble Lord is right.

[Baroness Blake of Leeds (Lab)]

My Lords, although we on these Benches welcome an increased rollout of small modular nuclear reactors, given that they offer savings in cost and construction time and more flexibility related to energy demand, it will likely take until 2024 for the first project to reach a final investment decision. Furthermore, Rolls-Royce does not expect to turn on its first SMR until 2029. This is a positive long-term strategy but it does not address the short-term and immediate need for action. Can the Minister inform us of what solutions the energy security Bill offers to reduce our dependency on oil, coal and gas in the short term?

[Lord Callanan (Con)]

The noble Baroness makes an important point; these are long-term decisions. Most energy policy decisions are longer term, as it takes many years to bring on stream new energy infrastructure projects in whatever field we are looking at. In the short term, however, the answer to the noble Baroness’s question relies principally on renewables: we are advancing the hydrogen strategy and accelerating the rollout of offshore wind, which has proved immensely successful. In this country, we have the second-largest offshore wind capacity in the world and it is a world-beating industry.

[Lord Stoneham of Droxford (LD)]

Could the Minister confirm whether the Government consider regulated asset base—RAB—funding appropriate for something as experimental as these small reactors?

[Lord Callanan (Con)]

We have not made a decision on the relevant business case model—it could be either the RAB or the CfD model—but we will consult on this shortly.

[Lord Naseby (Con)]

My Lords, my noble friend knows as well as anyone that we have suffered an energy crisis and continue to have one. Against that background and the vacillation over the North Sea, which is not my noble friend’s fault, does he not think that, given Rolls-Royce’s history and what it did during the war—twice as quickly as anyone forecast—it is a major company that can really get a grip on this, if Her Majesty’s Government push the button for it to do so?

[Lord Callanan (Con)]

I agree with my noble friend’s point: Rolls-Royce is indeed an excellent company, which is why we are funding it to do this work.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I am so glad that the Minister mentioned safety because a recent study from Stanford University says that, overall, small modular designs are “inferior” to conventional reactors—

[Baroness Jones of Moulsecoomb (GP)]

It is not my work; it is from a university. The study says that they are inferior with respect to radioactive waste generation, management requirements and disposable options. The researchers make the point that they should not be doing this research; the vendors should. Will the Government make sure that such research is done by vendors?

[Lord Callanan (Con)]

Of course they are doing that research. A vital part of the work and the financing model will be to make sure that all decommissioning costs are taken into account, which is one of the advantages of the SMR process: SMRs will, we hope, be easier and cheaper to decommission. But this is all part of the design process that we are going through, and it will be subject to the proper regulatory approvals. I obviously do not agree with the noble Baroness’s anti-nuclear stance, but it is nevertheless important fully to take into account the safety approvals process.