National Policy Statement for Fusion Energy Generation

Lord Moynihan Excerpts

Tuesday 10th November 2026 Grand Committee

[Lord Moynihan (Con)]

My Lords, I declare my interest as chair of Amey, Acteon and Buckthorn Partners. I welcome this national policy statement and congratulate the noble Lord, Lord Khan, on his contribution. I will return to the specific points he raised as I think they are very important in the context of getting this policy right. We are in a period of consultation. The strategy aims, as we know, to accelerate growth in the UK fusion industry, building on the £2.5 billion in R&D provided by the previous Conservative Government. Today, this will be primarily achieved by investing £1.3 billion into the spherical tokamak for energy production—STEP—prototype fusion power plant. STEP, as has been mentioned, aims to design, develop and build a prototype fusion plant by the 2040s. The Conservative Government committed £240 million in funding towards the first phase of concept design in the previous Parliament.

Before I go into detail on a specific number of issues, which I would be grateful to the Minister to take into account, this is part of the Overarching National Policy Statement for Energy, or EN-1. It was drawn to our attention in the statement that we should also read EN-1 and other relevant national policy statements. In reading it, I came across a section that I know will have the enthusiastic support of the Minister, because it talks about the need for new nationally significant infrastructure projects and new nuclear energy infrastructure. Also within the section is the acknowledgement of the

“need for new nationally significant gas infrastructure”.

Gas is noted

“as a reliable source of flexible generating capacity”.

We need to:

“Meet ‘peak’ demand for gas”,


and

“Allow for a sustained delivery of large volumes of gas, for example, demand over a particularly cold winter”


and also

“Provide access to the most competitive gas supplies”.


In the spirit of harmony across this Committee, I congratulate the Chancellor on announcing Jackdaw. On the subject of hydrocarbons, we on this side of the Committee welcome the approving and defending of the Sea Lion Field by the Foreign Secretary—now known as the MP for Port Stanley and the Government’s special oil envoy for the South Atlantic. I say that today because this is the first day of consideration by the International Tribunal for the Law of the Sea, under the UN convention, in its hearing on the UK/Argentina dispute, of oil exploration in the Sea Lion Field. We wish the Foreign Secretary well in his strong defence of oil production in the South Atlantic.

Turning to the specific points in the Motion before us, particularly in terms of the House of Commons consideration of planning for fusion and the draft national policy guidance, I thought it would be helpful to outline some of the concerns and comments made by the private fusion companies and industries bodies. They welcome the draft National Policy Statement for Fusion Energy Generation but submitted several key requests for stronger political clarity. I very much hope that these will be taken into account by the Government.

They noted that individual private fusion companies did not submit stand-alone written evidence to the House of Commons Energy Security and Net Zero Committee’s inquiry. Instead, private sector views were channelled through representative bodies, primarily through the Fusion Industry Taskforce, or FIT, which represents more than 20 private engineering, supply-chain and fusion organisations, and the Fusion Industry Association, or FIA, which is the global trade body for around 50 private fusion developers. I would like to address some key points raised by the private sector representatives during the parliamentary scrutiny of draft EN-8 and ask the Minister to ensure that, if she does not fully respond today—which I would totally understand—all these points will be taken into account when the Government come to respond.

First is the question of unclear regulatory sequencing and timing. The FIA and FIT warned that draft EN-8 lacks sharp clarity on how the development consent order process interacts with regulatory justification decisions and permitting by the Health and Safety Executive and the Environment Agency. Industry representatives stressed that unclear decision points prevent developers and their supply chains committing capital and signing contracts with confidence.

The second point, admirably raised by the noble Lord, Lord Khan, as well as by FIT, is the concern is that the HSE and Environment Agency currently lack enough suitably qualified and experienced personnel to evaluate what are diverse, first-of-a-kind private fusion plant designs. FIT warns that capability bottlenecks inside these regulators could severely delay plant approvals as the sector scales. This challenge is recognised across the Committee and I hope the Government will take it into account and respond fully when it comes to their public response.

The third point is ambiguity over long-term radioactive waste liabilities. FIT commented that the draft EN-8 note failed to define who holds long-term financial and operational responsibility for fusion waste disposal across a facility’s life cycle, specifically how liability is split among the developer, the operator and the Government. It noted that this uncertainty directly harms private investment cases and project profitability.

The next point is the absence of decommissioning funding mechanisms. Industry witnesses highlighted that separating fusion from nuclear fission under the Energy Act 2023 removed established fission decommissioning frameworks without replacing them. Private sector developers require a clear, proportionate mechanism for meeting future decommissioning costs rather than waiting until the Government’s target date of autumn 2027.

Then there is the very important issue of silence on third-party radiological liability and insurance. Supporting industry concerns, Lloyd’s Syndicate 1176 and sector witnesses pointed out that neither EN-1 nor draft EN-8 establishes substantive policy on third-party radiological liability, insurance or financial protection. Fusion is excluded from the Nuclear Installations Act 1965, so private developers cannot rely on existing fission insurance pools and therefore face uncertainty over early-stage risk coverage. That is another point that I hope the Government will be able to address.

There is also the very important point about the risk of planning consenting becoming the critical path. Industry leaders warned that if planning and consenting timelines are not streamlined alongside EN-8, bureaucracy rather than engineering would become the main bottleneck to building commercial plants in the 2030s. They stressed that planning frameworks must match the rapid commercial pace of private developers already selecting sites for pilot power stations. This is absolutely critical. I suggest to the Minister that more regulation and red tape can suffocate private sector development, and I hope she will be able to respond positively to the points that have been made on planning. One is on delaying commercial deployment: private developers, some targeting pilot plants by the early 2030s, have argued in planning consultations that overly prescriptive, multi-stage, statutory engagement rules risk slowing down first-of-a-kind infrastructure delivery.

Then there is the question of consent-based siting advantage. Take the example of West Burton; it was selected through a competitive volunteer-led siting process in an area—Megawatt Valley—with a 60-year heritage of coal power generation and strong local appetite for industrial renewal. Planning specialists point out that private developers acquiring commercial or greenfield sites without a prior local bidding contest face very different community dynamics that cannot be replicated simply by covering STEP’s outreach template.

There is then the question of reversing the Planning and Infrastructure Act. The Government recently removed rigid statutory pre-application consultation requirements from the Planning Act 2008, specifically to cut red tape and prevent developers running defensive box-ticking consultation rounds to avoid judicial reviews. Reintroducing a bespoke statutory consultation standard solely for fusion runs counter to the Government’s wider push for streamlined, flexible pre-application guidance. These two aspects of planning law need to be considered and, I hope, responded to by the Government.

There is a risk of gold-plating and regulatory caution from adding extra consent layers. In written evidence to the committee, planning stakeholders warned against creating additional consent letters or rigid procedural hurdles for nascent technologies. Critics argue that turning voluntary practice into strict statutory law invites legal challenge over whether a developer met subjective standards of “good” engagement, potentially recreating the exact planning bottlenecks that EN-8 is designed to prevent. At the heart of the questions that I put to the Government this afternoon are these critical planning issues that need to be addressed if we are to be successful in taking this technology forward.

Finally, I add one or two additional points that were made by those making representations on the note before us. One is a lack of a commercial market and off-take framework. In oral evidence, the FIA emphasised that planning rules alone would not deliver private fusion plants without a supporting commercial market mechanism. Private developers targeting competitive power prices need clear revenue and off-take structures alongside EN-8 to unlock private project finance.

Then there is the question of the need to support export and engineering ambitions beyond UK builds. As the noble Earl, Lord Russell, alluded to—I was going to call him my noble friend, but he is my noble friend on this issue as we are agreement on this—the FIT argued that the draft EN-8 focuses too narrowly on domestic site construction, rather than positioning the UK as the premier global hub to develop, engineer and export fusion technology. It urged the Government to ensure that planning and regulatory frameworks reinforce sovereign supply chains and international exportability. If we develop the IP that is involved in this, that is a critically important point for the Government to look at.

Reference has also been made to the importance of securing long-term skills and supply chain certainty. Both the FIT and the FIA noted that private fusion firms are predominantly people-driven enterprises that require a predictable multi-project pipeline to attract talent and justify supply chain investment. They warned that, without clear policy signals linking EN-8 to a trained workforce and to skills programmes, UK firms risk losing engineers and manufacturing capability to competing markets such as the US and China.

Finally, in oral evidence, private sector representatives highlighted the challenge of transitioning public laboratory breakthroughs, such as those at Culham, into private commercial enterprises. They called for clearer pathways to ensure public/private partnerships and national test facilities actively accelerate private sector deployment, rather than keeping intellectual property and capability locked inside state programmes.

These are all reasonable points that have been made about the Draft National Policy Statement for Fusion Energy Generation EN-8, and which the committee in another place wisely looked at in its report Planning for Fusion. Given that we have not yet heard the Government’s response, I very much hope that this exchange in Committee is taken as part of the consultation exercise. I also hope that the points raised by the noble Earl, Lord Russell, and the noble Lord, Lord Khan, are considered as representations and fully responded to by the Government. I would not necessarily expect the Minister to respond today, as that would be unreasonable because many of these points are very detailed, but the Government should take them into account when they come to respond fully to the whole consultation exercise and, indeed, to the committee’s consideration of these issues in another place.