Nuclear Energy (Financing) Bill

Lord Howell of Guildford Excerpts

Report stage
Thursday 24th March 2022 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, I rise to oppose this amendment. It is not that I am out of sympathy with the concerns and motives behind it; I am all for any moves that create a more explicit explanation of the real, full value of modern nuclear power and the way in which it is developing. Nevertheless, I oppose the amendment because, if you are talking about value for money, it is wildly unrealistic and out of touch with reality, as the noble Viscount, Lord Hanworth, rightly indicated.

Let us certainly have a good argument about value, but what is the value, first, of national security? What is the value of building up a large chunk of our electricity power for low-carbon reliability in the future when, although we all want to see more wind and sun and so on in the package, we know that any part of a complex energy system can go down or be disrupted at any time? There has to be diversity and a large block of reliable, low-carbon power from modern nuclear, with full provision for taking care of the difficult problems of waste which we discussed in Committee, and all the rest. But there is a value in the national security of having a large section of our power coming from nuclear, ready to come in—at a cost, yes—when the wind does not blow, when there are interruptions in oil or gas supplies, and all the rest, as we are experiencing now, when prices go crazy, when LNG, the frozen gas on which we rely, is beckoned by higher bids from China and turns away from us.

What on earth is the value of having this provision? What is the value of diversity in our system, in having conserved the system which we have now which, alas, is grossly overconcentrated either on renewables, which can go down occasionally, or on gas? We were never meant to have as much gas in our electricity production as we have now. When I was looking after these matters a long time ago—and I should declare my registered interest on that—1% of British electricity came from gas, and Sir Denis Rooke, the then chairman of British Gas, was very opposed to an increase. Now it has gone to the other, mad extreme: we are now at 45% to 50%, and when gas problems go badly wrong internationally, as they have, and we have a sevenfold increase in the gas price, we are hit directly through our gas and electricity prices. So the case for a large chunk of renewable energy through nuclear increases by the day, particularly now that we may get an acceptance that nuclear electricity is green electricity and is approved under ESG rules and so on.

I put it to our Liberal Democrat friends that they must face the issue that there is a value—yes—but it cannot be put into money, because it has to be measured in terms of security, diversity, back-up for wind when the wind does not blow, hydrogen production and a variety of other things. There must be some realism in the stance of great political parties in addressing this issue: that is all I plead for. Therefore, I think this amendment is unrelated to the real needs of our security and our national prosperity, and to the whole helping of the poorest and the most vulnerable in society in the future. It cannot be the right amendment to make.

[Viscount Trenchard (Con)]

My Lords, as acknowledged by the noble Lord, Lord Oates, Amendment 1 was debated in Committee. And, as acknowledged by the noble Viscount, Lord Hanworth, just now, I also thought that my noble friend Lord Howell explained very well, both in Committee and today, that value for money is totally subjective. The judgments that have to be made will, of course, take account of the financial plans for projects. I thought that the noble Baroness, Lady Worthington, was spot on in referring to Switzerland, whose electricity grid depends almost entirely on hydro and nuclear. It is hard to put a price on the huge value that energy security gives that country.

Amendment 3, in the names of the noble Lords, Lord Oates and Lord Stunell, is unnecessary, because the Secretary of State will clearly consider this point in assessing any applicant company under the designation process. Furthermore, Ofgem is bound to protect consumer interests as part of the consultation process. I recognise that electricity bills are already rising exponentially, and I expressed concern in Committee that payments under the RAB model will further increase the subsidies that consumers are required to pay. The solution here is to reduce the subsidies paid to renewables projects, to provide a more even balance between support for those sectors and support for the nuclear sector, which has been left out in the cold until very recently.

As for Amendment 10, in the name of the noble Lord, Lord Oates, and others, I fear that the costs of administering such a complicated exemption would far outweigh any possible benefits to the particular groups of people concerned. Besides, there are other groups facing difficulty in meeting higher electricity bills, such as pensioners, who are seriously disadvantaged by the suspension of the triple lock. The best way to assist the people whom noble Lords who put their names to this amendment seek to assist is to enable a stable, well-funded energy mix, including a significant amount of nuclear, both large gigawatt plants and smaller, more flexible SMRs and AMRs. On the latter, the Government are trying to reinvent the wheel and are moving much too slowly in the case of JAEA’s HTGR technology, which has been operating for 10 years and is inherently safe.

I hope that the Prime Minister’s much greater enthusiasm for nuclear, revealed in recent weeks, will lead to rapid changes to the very cautious current plans of BEIS, in three phases, merely to establish a demonstration by the early 2030s. We need this technology yesterday, and we should be rolling it out commercially before the end of the decade. The Times reported last week that Ministers are exploring the creation of a state-owned nuclear company that would take stakes in future nuclear projects, to reduce our reliance on foreign energy. That is very welcome. What a pity it is that such a company was not in existence before Hitachi made the decision to cancel the Horizon project in September 2020.

--- Later in debate ---

[Baroness Bennett of Manor Castle (GP)]

My Lords, I will speak very briefly to Amendments 11 and 12, and chiefly to Amendments 13 and 14 in my name.

On Amendment 11, the noble Lord, Lord McNicol, perhaps predictably, stole the line I was going to use, so I will just note how this amendment demonstrates the practical reality that the state always ends up the last guarantor—the structure having to pick up the pieces. In so many areas of our economy we have privatised the profits and socialised the costs. This is a reminder that that is ultimately what always has to happen, but it is important that it is in the Bill.

On Amendment 12, it is interesting that the noble Lord, Lord Ravensdale, and I can agree on this. The whole question of whether nuclear can be included in the UK green taxonomy is something that I am sure we will continue to debate on another day, just as I will continue to debate with the Minister about intermittency. However, being aware of the time on a Thursday afternoon, I will spare everyone by not venturing in that direction.

My Amendments 13 and 14 would prevent financing being made available to nuclear companies until a plan exists for the safe treatment and disposal of the nuclear waste generated. In Committee, the noble Baroness, Lady Worthington, suggested that this was a “wrecking amendment”. I would say that it is a precautionary amendment. You do not start something until you know how you will finish it off. That is how we think about our existing and previous nuclear plants: given the huge decommissioning costs that our society is bearing today, we wish that people in the past had applied that principle, but they did not. They did not think about what would happen with decommissioning, and now we bear the costs.

In Committee, the Minister referred to the Energy Act 2008 and its legal requirement that all proposed new nuclear power stations have in place a decommissioning plan, approved by the Secretary of State, before any nuclear-related construction can commence on site. I put it to the Minister—whose comments I am interested to hear—that decommissioning surely must include dealing with the waste. This includes higher-level waste which, as the Minister said in Committee, is the waste which has to be “treated and stored safely” until there is a geological disposal facility available.

We had a considerable discussion about geological disposal facilities in Committee. There, the Minister spoke—and then wrote to me—about the three proposed sites in Cumbria and the one in Lincolnshire. I said extensively in Committee, and I will not repeat it now, just how resistant Cumbria was the last time there was an attempt to put a geological disposal facility there. I have seen no reason to think that there will not be the same reaction this time as there was last time.

It is interesting to look at what has happened at Theddlethorpe, in Lincolnshire. There is a really valuable local report from Lincolnshire Live, which reminds us of the importance of local media in helping people to know what is happening—as an aside, it is tragic that so much of that has been lost. The report, apparently quoting the Nuclear Waste Services, says that

“people would have the final say … in a binding referendum”

before a geological disposal facility goes ahead. So it appears that the people will be given the right to decide.

What timeframe do we have here? The Nuclear Waste Services people say that the feasibility studies which have just started now will take two to three years to complete. After that, if it passes that two or three-year process, we will start drilling more holes to seriously look at the geology. The Nuclear Waste Services is attributed as saying that the “first trainloads of waste” would not roll out

“until the 2040s at the earliest”.

I come back to the requirement under the Energy Act 2008. If we do not have a plan for decommissioning, which must involve geological disposal facilities, and if this is something which is going to take a decade or more, how can we possibly go forward? What we are talking about here is putting the money in. How can we do that without, as it would appear, a legal route forward?

I feel that I should probably say at this point that I am aware of the time on a Thursday afternoon. For anyone who is thinking about their train, I have no intention of moving these amendments this afternoon—for the avoidance of doubt. I am well aware of the position of the largest opposition party, so I know where that vote would end up. However, this is an issue which needs a great deal more exploration and discussion, very clear timelines and an understanding that, if we must have a binding referendum before we have a geological disposal facility, this will be a pretty remote prospect.

[Lord Howell of Guildford (Con)]

My Lords, I support Amendment 12 from the noble Lord, Lord Ravensdale, and my noble friend Lady Neville-Rolfe, because I am really quite keen to know what the Government’s thinking is on this fascinating and key issue.

First, can they tell us what is going on in Brussels, in the European Commission, where there is a great debate about this very subject? Furthermore, can we get some good information about where German official minds are turning on this issue? As we know, there is a thought going around that Germany, and indeed Switzerland as well—I have been talking to the Swiss and they have confirmed this—are going to delay further closure of their nuclear power which they had turned against. Austria is also following them. Now, as members of the EU, they are all discussing whether in fact the status of investment in future nuclear should be changed in this—to me—desirable way: ESG qualified. There is a very interesting and important matter to be clarified here, and it would be good to hear what the Government are thinking.

Secondly, the whole situation reminds us that the gigantic energy transformation which is being attempted across the planet—to decarbonise energy completely—is an entirely international and global issue. It is a vast undertaking. In fact, it is much bigger than the scale of the Industrial Revolution. It is the biggest change, after 200 years of embedded fossil fuels, not only in the energy industry but in the entire social and industrial structure of countless countries. We are moving on to an entirely new situation, and clearly the status of investment, and the taxonomy concerned in investing huge sums of money through the capitalist system, is absolutely central to this.