Civil Nuclear Road Map

Lord Callanan Excerpts

Monday 15th January 2024 Lords Chamber

[Earl Russell (LD)]

My Lords, I thank the noble Lord, Lord Lennie, for his contribution. This road map is overdue but at least it is here. The question is: will timely financial investment and industry participation follow? The Liberal Democrats recognise that nuclear energy has always been part of our energy mix and will continue to be so as we transition away from fossil fuels.

The road map creates new risks and does little to provide energy security in the medium term. It sounds very glorious to meet one-quarter of our electricity demands by 2050, but will it deliver? It is a bit of a curate’s egg. On these Benches, we think that the Government are putting too many of our energy eggs in the “grand nuclear gigawatt energy infrastructure projects will always deliver” basket. Gigawatt nuclear energy projects have a long history of being announced with much fanfare, running into a blizzard of problems, becoming delayed, being delivered late and way over budget or not being delivered at all. The reality of nuclear projects in the UK is that Hinkley Point C is well over budget, now £33 billion, and late. Little progress has been made on Sizewell C, despite years of discussion and attempts to find ways to finance it.

The current proposed financing package charges already hard-pressed consumers up-front. Why will it be any different this time? This strategy requires the extension of four AGR nuclear power plants beyond their planned end of life and is subject to regulatory approval. When does the Minister expect the regulators to take these decisions? Mini reactors should be explored, but this should be as well as, not instead of, investing in renewable energy.

If planning and regulatory processes can be streamlined for nuclear, surely that can be done for offshore and onshore wind. We welcome the £300 million invested to free the UK from energy dependence on Russian advanced nuclear fuels. This is critical to our security. When does the Minister expect that the UK will be totally free from Russia? The Government must be able to give a true account of the costs of nuclear decommissioning.

The future is renewable. By 2030, technology improvements could slash today’s prices by one-quarter for a wind and half for solar. Other technologies, such as long-term storage, are also promising. The Liberal Democrats are committed to ensuring that 80% of the UK’s electricity is generated by renewables by 2030. The UK Government are aiming to decarbonise Great Britain’s electricity system fully by 2035, yet they have not provided a coherent strategy to achieve their goal. Investment in renewables and green technologies is essential. How do the Government plan to integrate the nuclear road map with their renewables ambitions? Given the scale of renewables that the Government are planning, inflexible nuclear base load systems are an ill fit. We need the flexibility provided by technologies such as interconnectors, storage and demand flexibility. Finally, when will we see a full and comprehensive integrated energy strategy to achieve net zero with a clear road map for renewables?

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

I thank the noble Lord, Lord Lennie, and the noble Earl, Lord Russell, for their introductions. On the comments from the noble Lord, Lennie, we of course welcome the support of the official Opposition. The noble Lord is right to say that these are essentially very long-term schemes. It is good to have a degree of cross-party consensus between the two main parties about the importance of nuclear to our future energy system and energy security.

I was not sure of the Lib Dem position. The noble Lord started off quite positively, saying that the Lib Dems welcome the role of nuclear, which of course is a change from their attitude during the nuclear financing Bill. I think I spotted in what the noble Lord was saying a hint of possible support, but we will have to wait for clarity on that. I also agree with his comments about renewables. It is not an either/or choice; we need to do both. We need to contribute to nuclear to support our baseload ambitions and, of course, continue our world-leading support for renewables and the future rollout of solar, offshore wind and all the other renewable technologies.

We have published three key documents which reinforce the UK’s position as a leader in the civil nuclear renaissance: first, a civil nuclear road map; secondly, a consultation on alternative routes to market; and, thirdly, a consultation on a proposed policy for siting new nuclear power stations. In response to the question from the noble Lord, Lord Lennie, this really does set us on a path towards deploying up to 24 gigawatts of nuclear power in Britain by 2050, as part of the cleaner, cheaper and more secure energy system of the future. The road map very much establishes our vision for a vibrant British nuclear sector, which includes exploring building a major new power station and investing in advanced nuclear fuel production. It includes key enablers such as skills regulation, financing and effectively managing our nuclear legacy, and it sets out our long-term ambition for nuclear, providing high-level timelines and key decision points for a wide range of nuclear technologies over the next decade.

Finally, in recognition of our enhanced nuclear ambitions and the exciting potential offered by these new technologies, we are launching a public consultation on the proposed siting of new nuclear stations to help attract investment into the UK nuclear sector, and empowering developers to find suitable sites to enable a wide range of potential communities to benefit.

The noble Earl, Lord Russell, asked about freeing us from Russian nuclear fuel. I can confirm that it is the ambition of the Government to make sure that we are completely free of any components of Russian nuclear fuel by 2030.

[Lord Howell of Guildford (Con)]

My Lords, this road map is extremely welcome. However, in view of the fact that Hinkley Point C is now €15 billion over budget and many years late, and has almost bankrupted Électricité de France, with the Chinese partners reportedly stopping all further payments, does my noble friend think it wise to make a replica of the Hinkley Point project at Sizewell C and make it the spearhead of our nuclear programme, when smaller modular reactors and new technologies could be ready many years sooner and with much less burden on the taxpayer and the consumer?

[Lord Callanan (Con)]

My noble friend makes a good point, but the attraction of using a similar design is that many of the teething problems that have been undergone at Hinkley will hopefully be solved by the time we get to a decision on Sizewell. As I said, my noble friend makes a valid point and, again, it is not a question of either/or. We will continue the development of SMRs and AMRs in conjunction with large-scale nuclear.

[Lord Birt (CB)]

My Lords, I welcome the Government’s Statement on their long-term nuclear policy. It is and it should be a critical component of our strategy for achieving net zero. However, I want constructively to raise some points. I worked at No. 10 in 2004 when the decision was made in principle to give the go-ahead to a new nuclear plant, which of course became Hinkley Point C. It has become a 25-year project. This is a genuine question: what lessons does the Minister think the UK can learn about how we manage these ambitious long-term infrastructure projects? Did we set out to fund it in the right way?

--- Later in debate ---

[Lord Callanan (Con)]

The noble Lord makes a number of good points. Clearly, there are some lessons to be learned from the process of Hinkley. We absolutely funded it in the right way, to go back to the point made by my noble friend Lord Howell, because the cost is being borne by EDF—and it is very kind of the French taxpayer to help us out in our nuclear programme. That is one of the reasons why we needed to look at alternative funding mechanisms for the Sizewell project. Of course, there are always lessons that can be learned in the regulatory process, the planning process and so on to try to bring these projects onstream a little sooner.

[Lord Jones (Lab)]

My Lords, the Minister will know of the great contribution made to the generation of nuclear power by the plants of Trawsfynydd, in the magnificent landscape of old Meirionnydd, and Wylfa on Ynys Môn, Môn Mam Cymru, or Anglesey. Can he give any encouragement today to people who wish to see further generation at the Trawsfynydd plant and the renewal of energy production at Wylfa? Does he know that those plants are far-flung in the north-west of Wales, where well-paid and skilled work is very rare? Can he give any encouragement at this stage?

[Lord Callanan (Con)]

I welcome the noble Lord’s comments. We recognise the substantial contributions that many communities in Wales have made over the years towards our nuclear policy in the UK and all the energy that we have received. Part of the consultation is a check on the siting of new nuclear plants, and community support, the existence of existing grid connections and so on will play important roles in future siting policies. The plants that he mentions score very well in that regard.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I draw attention to my nuclear interests as outlined in the register. I wholeheartedly welcome this report—and its earlier cousin, Towards Fusion Energy—particularly its emphasis on the cross-Whitehall endeavour to build the skilled workforce that the industry needs, which we all know will be a challenge. But back to Wales. Following on from what the noble Lord, Lord Jones said, can my noble friend the Minister reassure me that, in deciding sites for a further large-scale and small modular reactor, sufficient weight will be given to the levelling-up needs of north-west Wales, where the creation of a nuclear cluster, including gigawatt generation at Wylfa and both SMR and medical radioisotope production at Trawsfynydd, would indeed be transformative?

[Lord Callanan (Con)]

My Lords, I know from many conversations that I have had with my noble friend her absolute commitment to pursuing the cause of Wales and the contribution that it can make to our nuclear renaissance. I give her the absolute reassurance, building on the reply that I gave to the noble Lord, Lord Jones, that the communities she has mentioned are very well placed to benefit from the new nuclear policies that we have announced. On her other point, my noble friend is correct to say that we need to build a skilled nuclear workforce to ensure that we have the people we need to power this future nuclear renaissance.

[Viscount Hanworth (Lab)]

My Lords, the road map makes frequent reference to high-temperature gas-cooled reactors. An indigenous project to build such a reactor, called U-Battery, was shelved due to a lack of government support. From whom do the Government propose to import such technology—which, by the way, was pioneered in Great Britain? When will the Government give sufficient support to our native industry, which was once pre-eminent in the world?

[Lord Callanan (Con)]

The noble Viscount makes an important point. We had one of the most pre-eminent nuclear industries, but that industry was left to die during a number of Governments, particularly starting with the Labour Government in 1997. Now we are on a different page. There are a whole host of different new technologies and processes coming forward in this space, and it is very much the job of Great British Nuclear to guide us in the process of selecting the best technologies to take forward.

[Baroness Stuart of Edgbaston (CB)]

My Lords, could I have reassurance from the Minister that, in his discussions about civil nuclear energy and the skills space, which has been mentioned several times before, he works very closely with the Ministry of Defence? At the very time when it has an increased demand for those types of skills, it is experiencing a shortage. I do not want to see us robbing Peter to pay Paul and still not having enough people who can do these jobs.

[Lord Callanan (Con)]

The noble Baroness makes a very valid point. We are looking forward to the upcoming findings of the nuclear skills taskforce, very ably chaired by Sir Simon Bollom. I am sure he will have some interesting comments and observations for us in taking forward the diverse needs of the workforce.

[Lord Naseby (Con)]

Is my noble friend in a position to tell us when there will be a move forward on the advanced small modular reactors? My understanding of the background is that Rolls-Royce has been ready for the best part of two years, and I understand the same is true for the competitors, which are supposed to be bidding in due course.

[Lord Callanan (Con)]

I am happy to reassure my noble friend. We have given Rolls-Royce £210 million to help in the development of the next phase of small modular reactors. There are a number of competing technologies. Great British Nuclear will be making progress on selecting the most appropriate technology in the months and years to come.

[Viscount Stansgate (Lab)]

My Lords, on page 28 of the road map document, reference is made to the fact that additional sites will be needed beyond those already designated. In the light of what the Minister has just said about the process of consultation, when does he expect the Government to be in a position to make announcements as to which sites have been chosen?

[Lord Callanan (Con)]

There is quite a process to go through before then. We announced today the consultation on the national policy statement on siting, and we look forward to seeking the views of various interested parties and communities. There will be a further consultation once we have produced the national policy statement. There are a few steps to go through yet, but we want the process to be as transparent as possible, involving communities, residents and companies looking to take this work forward.

[Lord Walney (CB)]

My Lords, further to the question from my noble friend Lady Stuart, do the Government understand the scale of the step-up needed to run a massive civil nuclear expansion alongside military expansion? There is the renewal of the deterrent and the additional responsibilities that the hugely welcome AUKUS agreement places on the UK, getting not simply the workforces ready but the interdependencies across the supply chain in the UK.

[Lord Callanan (Con)]

We very much understand that. I know the noble Lord, in his previous constituency interests, had a close connection with these matters. It is important that we take the two projects forward together. There are a lot of synergies in the experience and training required among very skilled workers, and we are determined to make sure that we have the appropriate skills here in the UK.

[Lord Jackson of Peterborough (Con)]

My Lords, I welcome the road map and particularly the important focus on energy security. However, is not the wider context that many of the delays over the years have been as a result of the planning system and, therefore, that the Government need to look holistically at reform of strategic infrastructure planning, the compensation code and compulsory purchase? We have not had new legislation on compulsory purchase for over 40 years. Are those wider issues not just as important as access to private and public money?

[Lord Callanan (Con)]

My noble friend makes a good point. Separate processes for potential reforms to the planning system are going forward in government across a range of areas. Of course, it is important not just for the nuclear industry but in terms of grid connections, solar farms and all the other technologies coming forward. We need to find ways to do these things more quickly in this country and to make sure that people have appropriate opportunities to feed in their views, their objections, et cetera, but there is no reason why it should take literally decades to do some of these schemes.

[Lord Liddle (Lab)]

My Lords, speaking as a native of Cumberland and a former Cumbria county councillor, does the Minister recognise that the most enthusiastic supporters of new nuclear power are to be found in west Cumberland and among the people who work at Sellafield and in its associated activities? Will he end the record of dither and delay—this is not a party-political point—about what is to happen in the nuclear industry? Does he recognise that at Sellafield and at Moorside there is a potential site for SMRs and the major new gigawatt nuclear power station, which was planned but then scrapped, although it is now apparently back under consideration?

[Lord Callanan (Con)]

I agree with a lot of what the noble Lord said. I absolutely accept the strong support of the communities in west Cumbria. I am not sure I agree that they are the most enthusiastic—I am sure our colleagues from Wales would disagree about that—but we can probably agree that they are as enthusiastic as many other communities. His party-political point about dither and delay was slightly unfair; much of it was started under a Government whom he was close supporter of. But perhaps we should put those matters aside and welcome the fact that both Front Benches now agree that we should take forward the new nuclear renaissance we have announced.

[Lord Lansley (Con)]

My Lords, I draw attention to my registered interest as co-chair of the UK-Japan 21st Century Group, and to the fact that I have family members living on Anglesey. I say to my noble friend that they, too, share the view that the further development of nuclear power generation at Wylfa would be very welcome on Anglesey. Since Hitachi withdrew from the project at Wylfa, we have legislated for the regulated asset base model. With the example of Sizewell C, is there scope, and indeed action, to bring Hitachi back for a project at Wylfa again?

[Lord Callanan (Con)]

Wylfa is one of a number of excellently co-ordinated and positioned sites. I am not sure I want to give it any prominence beyond what it already has; there are a number of other potential sites. I am sure we will be very interested in having further discussions with Hitachi if it wants to progress those proposals.

[Lord Hope of Craighead (CB)]

My Lords, the sole remaining nuclear power station in Scotland, at Torness, is nearing the end of its useful life. Are discussions taking place with the Scottish Government about the contribution that Scotland can make to the road map once the Torness power station has to be closed down?

[Lord Callanan (Con)]

The noble and learned Lord is absolutely right: Scotland has an excellent long tradition of support for nuclear power. Sadly, that is not shared by the existing Scottish Government. We would like to have discussions with them on this, but they seem to have set their face against nuclear power. Of course, some of the planning powers are devolved, so they are entitled to take that decision. However, speaking on behalf of their friends in England and Wales, I am sure we will be very happy to help them out with power in the future, with the many cross-border connections.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I begin by welcoming the Government’s launch of the consultation on amending the contract for difference bidding, which will potentially allow repowering of onshore wind to be included within it. Of course, that could potentially see us finally getting new onshore wind, which we have not seen for so long—the cheap, affordable facilities that can be spread around the country. That can be done very quickly, if the Government sort that process out. But as the noble Lord, Lord Lennie, said, we are talking about the suggestion of small modular reactors and the final investment decision in 2029. The Minister in the other place said that we would not be looking at them until well into the 2030s. Are the Government not simply being distracted from the solution to our energy issues and energy security, which is renewables?

Given that the last estimate I have seen for the nuclear clean-up of our old nuclear is a cost of £260 billion—an estimate made by Professor Stephen Thomas at the University of Greenwich—and that the Nuclear Decommissioning Authority has just been warning that ageing equipment at Sellafield means that there is a serious risk of a fire there, should we not clean up the old mess before we risk creating new ones? Will the Government make sure that there is no public cost in any future clean-up, if indeed we see any new nuclear?

[Lord Callanan (Con)]

Yet again on this subject, the noble Baroness sets up a false choice between either nuclear or renewables. We are in favour of doing both; they both have a contribution to make to our diverse energy system. I bow to no one in my support of renewables. I think that wind and solar are great, and they are relatively cheap compared with fossil fuel sources; they will make a massive contribution to our energy supply in future. But they are intermittent, so it is important to have baseload capacity as well. You cannot run your whole energy system on wind and solar, however much the Greens would like to tell us you can. We need other sources as well—we need diversity, we need storage, and we need nuclear. We can do both.

[Baroness Lawlor (Con)]

My Lords, I welcome the Statement on the development of civil nuclear. I thank my noble friend for his answers so far but, given that it is a long-term project, two things must be kept under constant review and need constant effort. Have the Government made any further plans or given any thought as to how they will allocate finances between the large-scale nuclear projects, the SMRs and the AMRs? Bearing in mind that the research and technology will continue to change, we should not be tied too much to those that may not be so easy to achieve. What is the thinking about changing the weight given to the different sorts of nuclear? That is my first question.

In relation to long-term development, I pick up on the remarks of the noble Lord on the Cross Benches who talked about the large-scale structures involved and the kind of education and training we need for nuclear physicists, who are very highly trained. Physics is not a growing subject at university—many universities have closed their physics departments. That goes right down to the skilled technicians and technologies that we need to run any civil nuclear plant. I pick up on the comments of the noble Lord who mentioned the skills near Sellafield. We need to keep whatever skills we have, but there is a lot of work to be done at every level of education and training so that we have the workforce. Can the Minister comment on that?

[Lord Callanan (Con)]

I thank my noble friend for her suggestions. Of course, we need to pay close attention to the skills needs of the future, which is why we have set up the nuclear skills task force and are eagerly awaiting its report for us to take forward. My noble friend is also right that we need to keep a close eye on the costs of the different technologies. She is right to say that they are essentially long-term projects, but many of our energy infrastructure projects are long term—even offshore wind developments take a number of years to bring to fruition. Many of the projects that are coming on stream now were started a decade ago. Obviously, we want to try to bring down the timescale for those deployments, but nevertheless all those infrastructure projects contributing towards our long-term energy security of supply are essentially long term, and nuclear will be an important part of the mix.

[Lord Lucas (Con)]

My Lords, is the European pressurised reactor working reliably and safely anywhere in the world and, if so, where?

[Lord Callanan (Con)]

My noble friend makes a good point—but, of course, these are matters for the regulators, which will keep a close eye on the safety, security and efficacy of the technology.