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Ynys Môn: Economy

Volume 810: debated on Tuesday 2 March 2021


Asked by

To ask Her Majesty’s Government, further to the decision by Horizon Nuclear Power to drop their planning bid at Wylfa Newydd, what steps they intend to take to support the economy of Ynys Môn.

My Lords, we recognise the need to pursue other opportunities for the region in parallel to large nuclear. In December, the UK Government, working with the Welsh Government and local authorities in the region, committed £120 million to the north Wales growth deal, which has the potential to create over 4,000 jobs by 2036 and to deliver an economic uplift of £2.4 billion.

With the promise of future UK Government investment in Wales, will the Government commit to working with the Welsh Government to encourage a major new energy scheme on Ynys Môn, including options for tidal power, with both barrages and free-standing turbines? Further investments in offshore wind and the grid infrastructure to support it would make north Wales an attractive option for low-carbon electricity generation and bring much-needed economic opportunities for young people in north Wales.

The noble Baroness is right to focus on the energy sector for Ynys Môn. The announcement overnight of the £5 million investment in the Holyhead hydrogen hub, adding to the Welsh Government’s investment, £253,000 from the £120 million north Wales growth deal for the Morlais tidal flow schemes and the commitment to invest in the production of one gigawatt of offshore floating wind, in which Wales has a technological head start, all show that we are delivering on our promises for Wales and working with the Welsh Government.

My Lords, the Minister believes passionately in the need for nuclear power and, judging by her excitement over the result of the match on Sunday, also about Wales. When I asked on 11 January about how many large nuclear power stations were planned as part of our future energy mix, she replied that the country would need “significant, large nuclear capacity”. First, is she able to specify a number? Unless we act now, we will run out of options and, indeed, power stations. Secondly, if we cannot get a major nuclear power station at Wylfa, possibly the best site for one in the whole of the United Kingdom, is there scope for development of advanced small modular reactors, with the benefit of the production of hydrogen as well as power?

We have been ambitious in our plans for new nuclear. We committed to at least one more gigawatt power plant in the energy White Paper published before Christmas and we are in discussions with a number of operators. There will be two operational power stations in 2030 and, by 2032, the first SMR should be operational too. We will look at all reasonable proposals for the development of the Wylfa site, which is, in fact, the best nuclear site in the world, not just the UK.

My Lords, the Government has refused to support the construction of a tidal lagoon in Swansea Bay, whose suitability will be well known to the Minister. She has referred to the possibility of tidal power in the Anglesey area. Will the Government consider the feasibility of tidal power in the Menai Strait between Liverpool Bay and Caernarfon Bay, a large infrastructure project that would provide jobs for Anglesey and beyond?

Indeed, the Government are committed to exploring all the possibilities for tidal and wave power—in south Wales there is not only the Swansea tidal lagoon but the Dragon Energy Island project, and we will certainly look at other proposals in the north of Wales as well.

Given the unfortunate news that Horizon Nuclear Power has decided to drop its planning bid for Wylfa Newydd, does my noble friend agree that a freeport would transform the fortunes of Holyhead and Anglesey, encouraging greater development, investment and tourism on the island, as was outlined clearly to the House of Commons Welsh Affairs Select Committee last year? Is the Minister able to inform the House as to whether any progress has been made on a freeport?

The noble Lord, Lord Davies, raises an important point. The freeport bids for England are already in and an announcement is expected shortly. I know that the MP for Ynys Môn, Virginia Crosbie, has worked tirelessly with a group of qualified and interested local stakeholders to put together a bid for a freeport for Ynys Môn. This will be ready to go when we launch the competition for Wales, on which we will work together with the Welsh Government.

My Lords, I declare my interests as in the register. The national thermal hydraulics facility is a key part of the nuclear sector deal and will bring jobs and investment to Anglesey, making the most of the strong nuclear skills that exist in the area. Can the Minister say what progress has been made with this facility and, importantly, how it will align with the testing requirements of the UK SMR programme?

The national thermal hydraulics facility is a key part of the nuclear sector deal and would indeed bring jobs and investment to Anglesey. The issue is very live at present. Collective and separate discussions are taking place between BEIS, the Welsh Government, the UKAEA, Rolls-Royce, whose SMR design is pivotal in this decision-making process, and the Menai Science Park, which would host the hydraulics centre. The technical needs of the Rolls-Royce SMR are being worked into a redesign of the proposed facility, but issues still remain over the height-planning restrictions, extra funding and future financing requirements of the facility. Perhaps all the parties can dig deep.

I heard the referee got man of the match. Is Shearwater Energy, which could be generating power by late 2027, under consideration? The energy White Paper announced £385 million for the advanced nuclear fund to support the development of both SMRs and AMRs, with up to £215 million of investment to develop a domestic SMR design. Does the Minister champion a large sum of this funding to support a small hybrid reactor at Wylfa on Anglesey?

The Shearwater design is indeed an imaginative use of Ynys Môn’s unrivalled potential for generating power, both nuclear and in offshore wind; the Shearwater proposal as I understand it combines both, with an interconnector. The Government remain open to discussing well-developed proposals from all developers for the Wylfa site, and I believe the team has had some discussions with officials in BEIS.

Will the Minister agree with me that what is happening to Holyhead as a port is a very threatening thing indeed? There was no preparation when we were leaving the European Union and the result is that for documentation, lorries from Holyhead, having come over the Irish Sea, now have to go to either Birmingham or Warrington. Has the Minister any proposal at all that will avoid Holyhead becoming a port of the past, with ferries from Ireland going directly to the European mainland? What hope can the Minister bring to Holyhead?

The noble Lord raises an important point in an area of concern. Freight through all Welsh ports is down more than 50%, unlike freight through most UK ports, which have now recovered to pre-Brexit levels. We have no obvious answer as to the question why, as the landbridge between Ireland and Wales remains a vital transport artery, with significant cost and time advantages over maritime routes. The Minister for Wales in the other place has a meeting scheduled with the relevant freight transport association to discuss these issues and what we can do about them.

My Lords, I welcome today’s announcement of government backing for the hydrogen hub at Holyhead put forward by Menter Môn and Anglesey Council, and indeed proposed in the Senedd a year ago by Ynys Mon MS Rhun ap Iorwerth. Given the aspiration of Anglesey, seen as the “energy island”, what steps will the Government take in partnership with the Welsh Government to ensure that the Wylfa labour force, with its huge skill base in energy-generation technology, is retained in the local energy sector and is not lost to the region?

The noble Lord makes an extremely good point about trying to preserve the corporate knowledge within Wylfa and I will certainly take back this concern and proposal to the department. Wylfa still has the potential to be part of the north-west nuclear arc, along with the national thermal hydraulic research centre, the Trawsfynydd site for SMR, AMR and, potentially, medical radio isotopes, alongside Bangor University, which is a centre of excellence for nuclear studies.

My Lords, does the difficulty of finding a company to build a large nuclear power station at Ynys Môn not highlight the lack of nuclear expertise in this country—the first country to actually use nuclear for civil purposes. The one area where we do still have it is building nuclear units for submarines. Perhaps I might add my voice to that of the noble Lord, Lord West of Spithead, and ask my noble friend to consider a small modular reactor at this site; after all, additional modules can be added later.

There are indeed design proposals that involve a number of small modular reactors on that site, and the Government believe that these will play an important role alongside large nuclear for low-carbon energy. As I have said before, the energy White Paper has put £385 million towards an advanced nuclear fund to support research and development into both SMRs and AMRs.

My Lords, I am afraid that the time allowed for this Question has now elapsed. We come to the second Oral Question, in the name of the noble Lord, Lord Moylan.