Nuclear Fuel Manufacturing

Mark Hendrick Excerpts

Tuesday 7th September 2021 Westminster Hall

[Sir Mark Hendrick (Preston) (Lab/Co-op)]

I congratulate the hon. Member for Fylde (Mark Menzies) on securing this important debate at such a critical time, when we need to secure a carbon-free UK as soon as possible.

The UK’s civil nuclear sector is among the most advanced in the world. Fuel production, generation, new build, and research through to decommissioning are key components of that. They provide tens of thousands of highly-skilled jobs, many in the north-west, particularly in Lancashire near my constituency of Preston, where fuel production is concentrated.

Nuclear power is one of the largest and most reliable sources of low-carbon energy and electricity in the UK. It has an essential role to play in the transition to net zero. The UK currently has only one new power station under construction. Without rapid progress, we will have what is referred to as a nuclear gap. The nuclear gap currently means that the UK’s only domestic nuclear fuel manufacturer, Springfields in Lancashire, is facing a very uncertain future. It was a pleasure to meet the trade unions on College Green today and discuss the problems that the industry faces. It was nice to see them and great that they are fighting for the industry in the way that they are.

The UK has something like 15 existing reactors, generating about a fifth of the electricity in the UK, with 13 others at various stages of construction or planning. The majority are due to reach the end of their operating lives and be shut down before 2030. In September 2016, the Government gave the final go-ahead to Hinckley Point C, which will be the first new nuclear power station for a generation. There is no doubt that we need new build if we are to have that carbon-free future.

A new nuclear sector deal was passed in the Government’s industrial strategy, and £200 million was promised by the Government to support the industry. However, since then, major events have put that future in doubt. In November 2018, there was a collapse of private sector support for a new plant at Moorside. In 2019, the Hitachi project at Wylfa in north Wales was suspended, which cast doubt on the future of nuclear plants per se. I know that the Government have consulted on alternative finance models for the new reactors and are currently in negotiations with EDF about a new nuclear plant, but it is essential that they give these industries that firm support—the hundreds of millions of pounds that was talked about originally—so that the jobs and technology remain in this country.

A number of factors have contributed to the decline in construction. Obviously, up-front costs are a big barrier, but once they are out of the way, it starts to look far more viable. The meltdown of Fukushima, the closure of THORP—the thermal oxide reprocessing plant—and nuclear waste disposal are all problems that are being overcome and, with further research and development, can be overcome, I think, in a reasonable time.

A push for faster action on nuclear is needed, which includes bringing forward legislation for the new funding model. Springfields, as the hon. Member for Fylde said, is the UK’s only civil nuclear manufacturing site. It is a source of high-value employment in the north-west and is critical, along with aerospace, to the Lancashire economy moving towards a carbon-neutral future. That carbon-neutral future is at risk. There is a possibility of anything up to 120 redundancies at the site, which currently employs around 800 people and supports around 4,000 jobs across the wider supply chain. Prospect and Unite, the trade unions, have since said that axing more than 10 roles would put that carbon-neutral future at serious risk. The Government urgently need to bring forward a mixed-energy policy, which should include carbon-free nuclear.

In addition, nuclear technology plays a part in many other areas, particularly in industry and higher education. Some universities across the UK are offering courses related to the nuclear industry, including my local university, the University of Central Lancashire. The National College for Nuclear is a cornerstone of the Government’s policy. Courses are being offered by five education providers, including two near my constituency of Preston, at Lancaster & Morecambe College and the Lakes College in west Cumbria.

I also understand that an advanced nuclear skills and innovation campus, which has an eight-month pilot launch from June this year, is now based at the Springfields site, with leaders from industry and academia, including UCLan, the University of Manchester and the University of Sheffield. I was pleased to hear the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) refer to Mike Tynan. I have known Mike for years, from when he was based at Springfields. I understand he is now at the University of Sheffield, which I am sure is not unknown to you, Mr Betts. UCLan also offers modules on decommissioning waste and environment management on the nuclear fuels cycle.

There is a lot of controversy around the industry at the moment concerning the involvement of China and China General Nuclear, which owns a significant stake in Hinkley Point C, and our involvement with France. One thing is certain: we have to co-operate with China to develop a carbon-free world. China is a huge country with a huge population and must be part of the solution, not just seen as a problem, as in the case of the very poor debate and decision over Huawei. We can either stay in the 20th century or move forward, with partners such as China and France, who have got so much to offer the industries. In conclusion, investing in new nuclear is a no-brainer, so let us get on with it.

--- Later in debate ---

[Alan Brown]

I have to admit that there is not absolute certainty, but it is predicted that the first key carbon capture and storage plant could be up and running before another nuclear power station will be constructed. We are getting very close to the final investment decisions on these carbon capture and storage plants. That in itself will give the market an indication of where that is going. We will be looking at the next year or two for the final investment decisions.

Turning to the recent history of the nuclear sector in the UK, it is obvious there has been a market failure as well as a failure of Government strategy. Clearly, that has impacted Springfields in the demand for nuclear fuel. Hinkley point C is the most expensive nuclear project in the world. When the right hon. Member for Maidenhead (Mrs May) became Prime Minister, she threatened a U-turn on this project, but then caved in and signed the deal anyway. The cost for Hinkley is now estimated at £22.5 billion, which is an increase of 25% on the estimated cost when the deal was signed. The Government tell us that cost increases are tied up in the risk and that EDF carries that burden. The reality is that no company can afford losses of £4.5 billion or 25% of the original cost estimates, so electricity bill payers must be paying for it somewhere along the line.

The sign-off for Hinkley was supposed to send signals to the market to allow other sites to be developed to generate competition and bring down prices. Since then, we know that Toshiba has walked away from developing Moorside and Hitachi pulled out of Wylfa and Oldbury. The good news for us electricity bill payers is that £50 billion to £60 billion of expenditure has not been committed. From a UK Government perspective, that should have been the realisation that their nuclear aspirations were in tatters. Unfortunately for Springfields, that is three pipeline projects that they could have accessed now lost. Worse, Hinkley point C is now predicted to come online in June 2026 instead of 2025, but it is a possible 15 months away on top of that, so it could be September 2027 before unit 1 of Hinkley comes online. We will have to bear in the mind that the European Pressurised Water Reactors system has still not been shown to be successful. Flamanville in France is expected to generate in 2024—12 years late. Finland’s project is due to come on to the grid next year, but that is 13 years late.

[Sir Mark Hendrick]

Will the hon. Gentleman give way?

[Alan Brown]

I have to watch my time, I apologise. I can come back maybe. Taishan in China was held up as an exemplar when it went online, but it has now been taken offline because of safety concerns. If China General Nuclear Power Corporation is involved at Hinkley and the consortium for Sizewell, the fact that Taishan has got safety concerns should be ringing alarm bells for the Government. We talk about energy security, but the reality is that we have a reliance on France’s state-owned company EDF and on China’s state-owned company China General Nuclear Power Corporation. That kind of blows our energy security argument. I have not heard any answers alternative to that in here.

[Sir Mark Hendrick]

Will the hon. Gentleman give way?

[Alan Brown]

Very briefly.

[Sir Mark Hendrick]

I thank the hon. Gentleman for giving way. He consistently mentions France. President Macron recently said that by generating more than 41% of the energy in France, “nuclear makes us autonomous”. Macron also said,

“It preserves French purchasing power, with a kilowatt-hour 40% cheaper than our European neighbours.”

--- Later in debate ---

[Dr Whitehead]

The hon. Gentleman himself mentioned that Hinkley C is coming on stream in 2026—maybe even later than that. I will come to the arrival of Sizewell C in a moment, which is probably at the heart of his questions, should we develop modular nuclear reactors that are even further off.

[Sir Mark Hendrick]

When does my hon. Friend think that carbon capture and storage will be done at any significant scale in this country?

[Dr Whitehead]

I try to set myself a self-denying ordinance of not straying too far into wider issues such as firm power, but I would say that carbon capture and storage is very well developed already, and is up and running. I have actually been to see a carbon capture and storage plant operating at full scale in Canada.

However, it is not a question of whether carbon capture and storage can actually do the work, and it is not that the technology has not been developed to make carbon capture and storage perform the entire chain of activities—sequestration, storage, transport, and so on. It can do all those well and at scale; that has already been proven. It is a question of how quickly we can develop carbon capture and storage and put it into operations, so that it works from the day they start, with carbon capture and storage on the back of them, rather than developing operations that are carbon capture and storage-ready, but where carbon capture and storage is not on the back of that process. That is really a question of planning and investment, more than anything else, but it needs to be done in the right place at the right time. That is the end of my diversion.

The issue for Springfields nuclear fuel, therefore, is that there is clearly a substantial valley of death before what Springfields can reasonably expect for its work for the future. If we leave it at that, it is inevitable that, even if it eventually survives that gap and comes through well in the end, that may well be at the cost of all the skills in that organisation and most of the workforce; and, at a time when Springfields’ services absolutely will be required in the national interest, its ability to spring back may well have expired in the meantime.

As a country, we cannot let that happen. I therefore congratulate the unions, Prospect and Unite, for campaigning strongly for that view of Springfields as a company. It is beholden on the Government to take that view as seriously as the workforce do—and, I think, all of us in this Chamber do—in their responses and reactions to this particular issue.

When looking at the nuclear sector deal that was signed in 2018, I was interested by this statement from the Government on securing fuel capabilities:

“We will work with the UK nuclear fuel industry to ensure continued, commercial operation of their facilities and secure the long-term future of these important UK strategic national assets to deliver future energy security as well as ensuring the UK nuclear fuel industry continues to deliver long-term UK economic benefit”.

That is what they committed themselves to in the nuclear sector deal. However, as far as I know, nothing has yet been done about that.

Therefore, my first question to Government is: does the Minister intend that that nuclear sector deal commitment will actually be carried out? Are the Government looking seriously at ways in which Springfields nuclear fuels can be properly supported during this period of its existence and assured of remaining in existence as we move to whatever the next stage of our UK nuclear programme is?

My second issue is also important. Are the Government serious about moving on the programme for the already existing nuclear facilities and bringing in arrangements to give greater certainty on the development of Sizewell C? I refer to what hon. Members have also mentioned this afternoon: the regulated asset base arrangement or similar. If the Government do not like that arrangement, an alternative could give certainty to the development of Sizewell C in the next period. As I am sure the Minister knows, there is a row going on between Departments about whether the regulated asset base should be introduced for Sizewell C. That needs resolving. Something needs to come out shortly to get that programme under way. That is also relevant to the future of Springfields nuclear fuels in the way I have described it this afternoon.

I have two direct questions for the Minister, both relating to the future of Springfields nuclear fuels, which we want to see secured. We want to make sure that the Government play a full role in securing that future, so that we can say that that national asset is in good shape and in good hands. In passing, there is a question mark about the future ownership of Springfields nuclear fuels. As a national asset, perhaps it should be a Government agency, so that we can secure its activities for the future in a way that befits its importance to the country.