Motion to Take Note
My Lords, the Science and Technology Select Committee report, Nuclear Research and Technology: Breaking the Cycle of Indecision, is the topic of our debate tonight. It is the latest instalment in the committee’s work on civil nuclear policy which goes back at least 20 years, the most relevant previous report being that of November 2011. The committee then recommended that the Government should set out a long-term strategy for nuclear energy and establish an independent nuclear research and development board which would advise the Government and monitor the Government’s progress against a nuclear research road map. Following that committee report, an ad hoc advisory board was formed under the guidance of Sir John Beddington, then the Government’s Chief Scientific Adviser. The work of this ad hoc board led to the development of the 2013 nuclear industrial strategy and a nuclear R&D road map; so far, so good.
The committee’s recommendation that a statutory nuclear R&D board be formed was not accepted. Instead, the Government established the Nuclear Innovation and Research Board as a temporary advisory board for three years, with its term expiring in December 2016. Our committee therefore decided last year that it was an appropriate time to revisit this topic in the light of the Government’s forthcoming industrial strategy White Paper. We benefited greatly from the expertise of our committee clerk, Anna Murphy, our specialist adviser, Professor Tom Scott, and our policy analyst, Dr Daniel Rathbone. We are most grateful to them.
As noted in paragraph 19 of our report, the evidence showed that within its terms of reference, NIRAB has been widely regarded as a success. It was, however, handicapped by not being charged with responsibility for the full co-ordination of UK civil nuclear research, nor was it constituted to develop international co-ordination, and of course it had only a three-year timespan. Our report restates the recommendation from 2011 that a non-departmental public body should be set up on a permanent basis with a co-ordinating and supervisory role for nuclear R&D in the United Kingdom.
The nuclear sector desperately needs continuity and consistency for its research and development. The Clean Growth Strategy, published last Thursday, states:
“The Government has asked the Nuclear Innovation and Research Office (NIRO) to convene a new advisory Board, building on the success of the Nuclear Innovation and Research Advisory Board (NIRAB)”.
It is a relief to learn that NIRAB is effectively to be re-established, but it does not appear that the new advisory board will be given the wider remit we have called for, both in the 2011 and in the 2017 reports. Our witnesses seemed unaware that the Government still consider they are working to their 2013 road map. Time and again, our witnesses told us that the UK was missing a clear vision and strategy as far as the nuclear industry is concerned. We state in paragraph 52:
“In light of the strongly critical evidence we have received the Government needs to review and refresh the 2013 strategy for nuclear energy, in conjunction with the NIC”—
the Nuclear Industry Council—
“and take swift and concrete steps towards its further implementation”.
The current work on preparing a nuclear sector deal, referred to on page 37 of the clean growth strategy, would provide an excellent opportunity to review and refresh the 2013 strategy.
The strategic policy decision which needs to be addressed first and foremost was posed to us by the noble Lord, Lord Hutton, chairman of the Nuclear Industry Council:
“Do we want to be a top-table nuclear nation, which is the role we have always occupied and done so brilliantly in the last 60 years, or are we going to settle for some other role which might not be the full-spectrum range of capabilities that we have got used to?”
I profoundly agree with him that the Government must decide whether they wish the UK to be a serious player in developing nuclear generation technology as a designer, manufacturer and operator, or alternatively to restrict its interests to being an operator of equipment supplied by others.
Once the Government have made this overarching decision, other strategic decisions will flow from this to define a clear set of objectives and timescales with which the nuclear industry can align itself. We recommend, in paragraph 58, that,
“If the Government were to decide that the UK should be a serious player in nuclear fission, the following would be the minimum steps needed to achieve this: development of a domestic research programme that is of sufficient scope and scale to make the UK an attractive partner for developing new technology to support new nuclear build (including Small Modular Reactors) in the UK and abroad; participation in and contribution to international programmes (for example the Generation IV International Forum)”.
The Government’s clean growth strategy reports that £460 million will be allocated,
“to support work in areas including … advanced reactor design”.
Can the Minister explain whether that £460 million is all new money or includes what remains unspent from the £250 million allocated over five years in 2015 for nuclear research and development?
It would be madness to attempt to develop the next generation of fission technologies on our own. If ever there was a need for international collaboration, it is in this respect, and the Generation IV International Forum is fulfilling precisely that role. We stopped being an active member of that forum in 2006 for financial reasons. NIRAB and our committee have both recommended that we rejoin the forum rather than continue with observer status. Now that the Government have declared their intention to support work in advanced reactor design, the case for rejoining the forum has become overwhelming.
There is wide international recognition that the future of nuclear energy from fission is likely to depend on SMRs, whether using light water technology—as used in existing reactors—or Generation IV technologies, for which the timescale is much longer. Those noble Lords who were in the Chamber last Thursday to hear the Answer to the Oral Question of the noble Viscount, Lord Hanworth, on when the Government would report progress on the competition to design SMRs, will remember that the answer was “shortly”. The techno-economic assessment of SMRs was commissioned in May 2015 and completed in August 2016. This assessment is an essential piece of evidence for the public debate on whether SMRs have a role to play in the United Kingdom and in global markets for electricity generation, district heating, water desalination, and the production of certain chemicals. Should we seek to design and manufacture SMRs both for domestic and overseas markets? The delay in publishing the assessment is yet another example of the need to break the cycle of indecision. I have some sympathy with Jesse Norman MP, who in his evidence to the committee as the then departmental Minister for these matters stated that he did not think that the SMR competition should have been named a competition and that it was more a call for ideas across a much wider spectrum.
Chapter 5 of our report refers to the National Nuclear Laboratory, owned and operated by the Government but required to operate as a commercial business. We believe that the Government should make use of this resource for independent advice and provide a modest amount of core funding.
We then refer to the sorry situation of our membership of Euratom being deemed incompatible with Brexit. The die is now cast on this and the Nuclear Safeguards Bill is making its way through Parliament. When the Bill comes to this House, we must give it careful scrutiny. Unless it secures all the benefits—and they have been considerable—that we have derived from our membership of Euratom, we will face many problems, not least that of losing our lead in nuclear fusion research. I beg to move.
My Lords, Britain needs to continue to generate a substantial proportion of its electricity from nuclear power. The supply of electricity will need to increase considerably to accommodate the electrification of transport and the continuing decarbonisation of our energy resources.
The growing volume of wind-generated and solar-generated electricity, which is affected by a wide variability, will need to be underpinned by baseload generation, which has to come from nuclear power. At present, nuclear power provides some 18% of our electricity. At the peak in 1997, 26% of the nation’s electricity was generated from nuclear power. Since then, numerous reactors have closed, including all the original Magnox fleet. The older AGRs, or advanced gas-cooled reactors, built more recently, have been life-extended, and further life extensions across the AGR fleet are likely.
In 2010, when the coalition Government came to power, we seemed set to build a new generation of nuclear power stations. The then Government were prepared to construct up to eight new nuclear power plants and keen to consider the proposals of any willing provider. Those who expressed an interest included the French company, EDF, and the German companies, E.ON and RWE. However, in consequence of the Fukushima disaster of March 2011, the German Government decided to abandon their own nuclear power projects. This led to the withdrawal of the two German contenders, leaving EDF alone to build the power station at Hinkley Point.
In March 2012, E.ON and RWE put their Horizon joint venture up for sale, and it was eventually purchased by Hitachi in November 2012. From 2010 until 2015, the policy of the Government was that the construction of any new nuclear power stations in the UK would be led and financed by the private sector. By 2015, faced with the collapse of the programme to build new nuclear power stations, the Government proposed to provide large subsidies to the Hinkley Point C plant, paying twice the market rate for electricity. It appears nevertheless that the Government still adhere to the belief that the nuclear programme should be largely self-financing. They seem to have lost the will to face up to the realities of what is needed to secure the future of our electrical power industry.
There is a strengthening opinion that we can do without additions to nuclear power beyond the eventual contributions of the Hinkley C power station. This delusion has been encouraged by the growth of renewable power generation and by its declining cost. There is also a belief in some quarters that we can overcome the intermittency of the renewable power resources by relying on an interconnected energy market which will enable us to draw our power from the wider European community. It hardly needs to be said that Brexit threatens that ambition. It also needs to be understood that electrical connections to the continent of Europe cannot be expected to compensate greatly for the variability in our own power supply. The uniformity of the meteorological conditions over a wide European area implies that, at times, there will be a universal dearth of the supply of renewable electricity. At such times, it would be very expensive to acquire our power via a wider European market.
The report of the Science and Technology Select Committee does not hesitate to express dismay at the Government’s delay and indecision in confronting the needs of our future electricity industry and of its nuclear component. There are two immediate priorities. The first of these, which has not commanded much attention in the report, is for the Government to provide sufficient support and encouragement to the Horizon consortium to enable it to proceed with its plans to build new reactors at Wylfa and Oldbury, which were the sites of the last two Magnox reactors to be built. The final investment decision is yet to be made by the consortium, and it will depend on the financial support of other parties, which will join the enterprise only if they can be convinced that favourable terms will be forthcoming from the Government.
The second priority, to which the report pays considerable attention, is the lack of progress in the competition to determine the design for a small modular reactor—SMR—which could be deployed extensively in the UK and which could also be aimed at overseas markets. As we have heard, the Government announced the competition for a small modular reactor in March 2016, and it was expected that phase 1 of the competition would be completed by autumn 2016, with the publication of a road map. We are still waiting for that. Meanwhile, some UK companies have invested heavily in developing their solutions. I am told that, without a clear government road map, those companies will have to decide by the end of year whether to continue to invest in SMRs or to walk away. Should they walk away, Britain will lose much of our nuclear competence—in which case, we would have to rely entirely on foreign suppliers for our nuclear equipment. That would be an extraordinary outcome for the nation that was the first to create a civil nuclear power station.
These are the demands of the immediate future. However, there are demands and opportunities that lie further in the future to which we should also be paying attention. Perhaps the foremost of these requirements is for a means of disposing of our nuclear waste. The indecision of which the report talks has severely afflicted the Nuclear Decommissioning Authority—the NDA—which has responsibility for decommissioning the sites of the original Magnox power stations and for the disposal of their waste.
There have been three options for waste disposal with which the Government have been confronted since they acceded to office in 2010 and on which they have failed to make a decision. The first option, which was rejected in the past by a previous Conservative Government, is to bury the waste in a secure depository. The second option is to partially burn the waste in a version of the Canadian CANDU reactor, which can be described loosely as a slow breeder reactor. This reactor has a far more powerful digestive system than the conventional civil nuclear reactors. The third option, which proposes a more fundamental solution to the problem of waste, is to burn it in a fast reactor, of which the Hitachi PRISM is one of the most capable of being realised within an acceptable timescale. The PRISM reactor would be able to profit from an abundant supply of nuclear fuel—the stock of plutonium residing in the UK. In this way, what has long been regarded as a nuclear hazard would become a major asset.
The problem of radioactive waste is not an inevitable accompaniment of nuclear power generation. It affects the fast reactors to a much lesser extent than the conventional second- and third-generation reactors, which are preponderantly pressurised water reactors which consume only a limited proportion of the available uranium fuel. The predominance of such reactors is because, at its inception, nuclear power was dominated by military rather than civil demands. The pressurized water reactor was required for military marine propulsion. It displaced another early design, which would have been much more appropriate to civil purposes. This alternative design, which had been tried and tested by the 1960s, was a molten salt reactor for which the fuel is an abundant thorium isotope. It has the virtue of passive safety; it would never have been implicated in accidents such as the Three Mile Island or Chernobyl incidents, or the Fukushima meltdown. Its waste products are far less hazardous and long lasting than those of conventional reactors.
I believe that, if the UK were to become involved in the development of a molten salt thorium reactor, its future as a leading nuclear nation would be assured. For that purpose, we would need to regain some of the technological courage that characterised our nuclear industry in the early post-war years. We should also need to depend upon public investment in the project and to seek a partner in the enterprise, which might be another European nation.
My Lords, I congratulate the committee on the report and its apt subtitle, Breaking the Cycle of Indecision. There are excuses for that indecision—public opinion features large—but it resulted in having to make decisions about electricity generation while staring in the face of concerns about a “lights out”, as well as global warming.
The Economic Affairs Committee report on the electricity market is referenced in Chapter 3 of the report we are discussing and, as a member of that committee, it is fair to say that that the effect of indecision played a part in our putting greater emphasis on reliability and security of supply. Nuclear power normally fits into the reliability slot; I say “normally” because of concerns that still flow around Hinkley Point C. The Hinkley build demonstrates all the frustrations that arise from buying in technology. We have analysed and reanalysed Hinkley C, looking at cost penalties and financial risk, while always having to take promises about delivery. Being on the outside of development and intellectual property makes that evaluation very difficult, as well as cutting us out of spinoffs and significant construction jobs.
I have some small personal experience of spinoffs in the nuclear industry. At the start of my career as a patent attorney, I drafted some of the very first European patent applications ever filed. I thought it was neat that they were in the name of Euratom. They were for things from the JET project, but one reason for seeking patents was their technical relevance well beyond nuclear fusion. For other clients, I drafted patents for robotics and communications in the nuclear environment—again, all with spinoff relevance for use in other industries. The combination of ability to evaluate, security of supply for electricity, supply chain and spin-off potential leads me to conclude that there is a strong case for the UK to be a nuclear technology maker, not a nuclear technology taker. That includes the case for SMRs.
The UK already has extensive nuclear commitments, and there have been several debates on the effect of leaving Euratom. At this late hour, I will not revisit the things that I have spoken about before, but we have been told that various options might be negotiated with the EU—perhaps associate membership or something more—although those options might require freedom of movement commitments, as was the case for Switzerland.
I welcome that the Nuclear Safeguards Bill has been published to establish a new nuclear regulator. Can the Minister update us on how preparations are going for the actual setting-up of inspection regimes, given that inspection has to involve international bodies? Having those inspections in place is required before we can make nuclear co-operation agreements.
Finally, as with all things Brexit, businesses want to know what is going to happen. Some cannot wait until 2019 to find out and are making plans to establish themselves in other countries. There was a report just last week on “Sky News”, the gist of which included that, although the Government said there would not be restrictions, industry said there would be. Reasons include, of course, that even where nuclear regulations do not interfere, customs delays and other considerations come into the mix, such as delay for short-lived isotopes trying to get over the border. Unfortunately it is not in the Government’s gift to provide any guarantees other than that they will negotiate hard, and that makes it all the more important to remove uncertainties that the Government can control and show that there are things worth hanging on for. Earlier rather than later commitments to a substantial nuclear sector deal would be valuable. Regrettably, I am not reassured by the 22 February minutes of the Nuclear Industry Council, which record the Government’s high-level expectations for the potential nuclear sector deal as:
“Many important issues such as skills, exports and technology should be considered, with the overarching objective of cost reduction across the industry firmly in mind”.
After mentioning short, medium and long-term objectives and opportunities to enhance the supply chain outside the nuclear sector—it is good that that is there—the minutes end with another call for ideas for cost reduction. Competitiveness is yet again emphasised in the Government’s response to the relevant part of today’s report. While understanding competitiveness, I sincerely hope that the Minister is able to give something a bit more visionary about a nuclear sector deal than the expectation management that these comments suggest.
My Lords, I am sure the whole committee would like to express its thanks to the noble Earl, Lord Selborne, for his skilful navigation through these tricky waters. He guided us with great skill. I declare an interest as a fellow of the Royal Society and of the Royal Academy of Engineering.
Last week, the Government published their clean growth plan, so I concentrate today on the role of nuclear power generation in clean growth. Once in operation, nuclear power stations are virtually emission-free. Currently, most electricity in the UK is generated by a combination of gas, coal, nuclear and intermittent renewable sources, mostly wind. However, as the National Audit Office recently noted, BEIS,
“expects almost all existing nuclear and coal-fired power stations, which together generate almost half of the UK’s power, to close by the end of the 2020s”.
Moreover this corresponds to a time when demand is expected to increase. There is a challenge.
Currently, the UK has a maximum electricity demand of around 50 gigawatts. With the expected increase in the number of electric vehicles, this figure will rise, but that rise will be dwarfed by the increase that would occur if our national heating shifted from gas, which it is at present, to electricity. That would increase electricity demand by something like four or five times. It would be enormous.
The most striking change in UK electricity generation over the past decade has been the astonishing rise in the contribution of renewables, largely wind. However, the wind does not blow all the time and there is no sun at night, so for dark early evenings in mid-winter when there is no wind we do not have enough dispatchable power to meet maximum demand. By “dispatchable”, I mean power that is available on tap when we need it. This is true whatever the volume of intermittent renewables we add to the system; that minimum demand remains.
Until gas generation is equipped with CCS to mitigate its emissions, nuclear remains the principal means of generating clean dispatchable electricity. The Government recognise that more nuclear will be needed and have identified a number of sites. As our report points out, over recent years there has been increasing interest in so-called small nuclear reactors, SMRs, which other speakers have discussed. The attraction of SMRs is that they are small enough to be built in a factory with tight quality control; individual units can be transported complete by road; and a number of units may be assembled together to provide any desired output, or they may be deployed in smaller groups. In principle, they can be commissioned one by one as they are delivered to a properly prepared site.
Large reactors, by comparison, are somewhat inflexible and respond slowly to changes in demand. The more nimble SMRs could be shut down in summer and, operating in tandem with some battery storage for immediate response, could prove very effective in following changes in demand at any time of year. Factory-built small reactors have been used by the navies of the world for some years. The civil requirements are rather different but the UK has indigenous relevant technical experience. The financial aspects of SMRs remain uncertain but, broadly, it is believed that after the first of a kind, subsequent power costs would be less than those of conventional large reactors.
At present there is no SMR operating anywhere in the world, and the first company to be able to demonstrate an operational system will clearly have a significant commercial advantage in what is likely to be a burgeoning market. The opportunity that we have is to re-enter the field of nuclear manufacture. In their industrial strategy Green Paper, the Government mentioned the possibility of a sector deal for the nuclear area. This is the opportunity.
There are two main questions for the Government. First, what role is there for SMRs in our nuclear future, recognising that they would fit well into a clean-growth plan that heavily emphasised intermittent renewables? Secondly, if we are to have SMRs, who will build them? A response to the Government’s SMR design competition, due nearly a year ago, then becomes urgent. The Government’s reply on SMRs is lengthy but virtually content-free. The window of commercial opportunity is open for a limited time, and further Micawber-esque procrastination is likely to consign the UK to the role of follower rather than the leader it could be.
My Lords, this is an important debate as Parliament once again considers nuclear research and technology and how it should be organised in future. I thank the noble Earl, Lord Selborne, for chairing our committee very well. I declare an interest, having worked in the past on research and advice in civil nuclear fission associated with industry in the CEGB, the UKAEA and EDF Energy, and more recently on fusion, first with the Culham fusion laboratory and then with the commercial Tokamak Energy.
As the report by the House of Lords committee concludes, the UK’s planning and co-ordination of civil nuclear fission power stations has not led to investment in fission construction—really, from the 1970s onwards. In his evidence to the committee, a director of EDF Energy, Mr Xavier Mamo, was asked how they did things in France. If you look at paragraph 29, you will see his very complete description. He described the strategic governance of the nuclear fission industry by the French Government and said that there was high-level political participation in the committee. Over 50 years, nuclear-powered electricity expanded to 80% of the total. A strong feature was the involvement of top engineers and scientists—for example, École des Mines—with access to the highest levels of government.
By contrast, the UK has had a number of different technical bodies, listed on page 9 of our report, for its research, technology and regulatory tasks, with different sources of funding. Our committee was not impressed by the current co-ordinating body of NIRAB, set up in 2014. At points 9 and 10 of the Government’s response, they announced the creation of a successor to NIRAB, but they could not find time to give it a new name. I gather that the name is likely to stay the same. Surprisingly, the new body is apparently only for nuclear fission; there is no reference to fusion research and technology, which will play a significant role in future energy systems. Is the new NIRAB membership restricted to non-commercial bodies, even in key areas of expertise, which would then be omitted? Can the Minister clarify that in his response? This high-level independent body should review and promote the appropriate public and private nuclear systems to be considered. It should take a strong role in participating in international programmes such as the fourth generation system, and international bodies such as the IAEA and the future form of and connectivity with Euratom.
This body should also involve the UK’s two significant fusion programmes. One is run by the UKAEA at the Culham laboratory, which also works in collaboration with Euratom. The second, totally unmentioned in all government statements, is the very large and significant commercial Tokamak Energy system. I know from other parts of my life that you can do some extraordinary work and the Minister can announce it in the House of Commons, but then there is no reference in any public document to this commercial activity. Sometimes you feel that the parties are swapping on the other side of the House. This company, Tokamak Energy, whose publications are now the most cited of any fusion project in the world, is in Britain, in Didcot. Is it referenced? No, it is not.
An important part of the Government’s response is their outline proposal that the UK should start soon on a programme of constructing small modular reactors, such as the Rolls-Royce proposal for constructing about 10 400-megawatt nuclear fission devices, pressurised water reactors, which could be operational in about five years. Sites have been specified and identified, some of which are in critical parts of the UK, where the northern powerhouse could participate. The UK’s construction of submarines, which is where this technology was developed, involved stressful conditions, ensuring that these reactors will be very reliable. I understand that already some overseas countries are expressing interest in buying UK-proposed SMRs.
The new NIRAB should also address the long-term challenge of developing nuclear energy fusion, so that there will be no need for mining uranium or processing past and present nuclear waste. It will take hundreds of years even to deal with that waste, but not the tens of thousands of years into the future when we have nuclear waste either in concrete underground or in other processes. Such very long-term issues need to be discussed by the new body, and it needs to bring in all the people and organisations who can contribute.
My Lords, I congratulate the noble Earl, Lord Selborne, both on his excellent opening speech, which so well reflected the findings of the Select Committee, and on his characteristically expert chairing of this inquiry, as mentioned by the noble Lord, Lord Oxburgh.
I shall restrict myself to one request this evening in the hope that, should it be granted, we would be in a better position to realise what is proposed for power generation in the Clean Growth Strategy, published last week. This strategy contains some good news on renewables and points out that one way to see power emissions fall by 80% by 2032 is to grow renewables and nuclear to over 80% of electricity generation. I agree with that approach. My request is that a detailed and quantitative road map also be developed that shows the possible ways for delivering this combination of renewables and nuclear and, indeed, other alternatives. This road map can use as a starting point the Nuclear Energy Research and Development Roadmap, developed by Sir John Beddington’s ad hoc committee in 2013, and should become an essential part of the cost of energy review to be carried out by Professor Dieter Helm.
The Clean Growth Strategy contains what are called decision pathways, which are valuable but far from complete in giving specific targets for delivery either in energy supply or usage. They do not describe how and when the many different technologies will be introduced and at what price the energy will be delivered. Nor do they set quantitative targets, or schedules for the various methods for reducing consumption. The type of road map that I am seeking would allow progress to be monitored across the full spectrum of energy supply and demand and include alternative pathways that could be followed should technologies fail to meet their predicted performance levels or schedules. I have not been able to find such information anywhere in the supplementary documents referred to in the Clean Growth Strategy. So, at the moment we seem to be proceeding with a hope and a prayer that what is required will be delivered when it is needed and we can only despair when schedules slip and costs overrun, as they inevitably will with the complex factors that comprise our overall energy system.
These factors include everything from the price of gas and the potential of fracking to the long-range consideration of when fusion energy will become practicable. One cannot predict with any precision the progress gained through investment in R&D, but it is none the less necessary to make predictions so that one has a scale against which to measure actual progress. Reference to the road map will indicate whether it is necessary to change direction as new ideas and unforeseen problems appear and show the options that are open for change.
As I have said, the Clean Growth Strategy states that renewables and nuclear together may have to increase by 80% by 2032. There are many options open to back up intermittent renewables but the best option appears to be nuclear fission, and this is what is put forward in the Clean Growth Strategy. The pair of EPR reactors at Hinkley Point are to play a major role in maintaining our nuclear capability. However, there are likely to be continuing delays and cost overruns before they are operating. The two similar EPRs that the Chinese are building at Taishan are experiencing further delays, as are the reactors at Flamanville in France. The first Taishan reactor is now scheduled to go online in 2018, four years behind schedule, and the first at Flamanville in the middle of 2018, about six years behind schedule.
The road map I am asking for should include all of the many alternative energy sources, but it is especially important that it includes small modular reactors, which have several advantages that make them ideal, as mentioned by many speakers, for backing up intermittent renewables, as advocated, for example, by NuScale for wind energy. The US company, NuScale, was the first to have its design accepted for evaluation by the US Nuclear Regulatory Commission in March of this year. The NRC will take 40 months to review and issue a design certificate. When that is done, it is expected that the first SMR will be operating in conjunction with a wind farm in Idaho in the early 2020s. SMRs will be the smallest commercial reactors, giving them great flexibility and low cost. It is claimed that they can be too small to melt down, so they are safe. Worldwide there are about 50 SMR designs under development and it is hoped to reduce the capital cost to about $2,000 per kilowatt, which is about the same as for the EPRs.
If we are to enter the SMR market, we had better get on with it. Please Minister, may we have a comprehensive road map so that we may better understand how and when to employ the different types of nuclear reactors?
My Lords, I add my thanks to the noble Earl, Lord Selborne, for his ever deft chairmanship of your Lordship’s Science and Technology Committee and to its ever helpful staff. I confess that, having left the committee, most Tuesday mornings I now rather pine for our sessions. They were often fun and always fascinating. I declare my fellowship of the British Academy. I have no idea why, but it occasionally looks at the history of civil nuclear power, so I think I ought to.
The question lurking behind tonight’s debate is whether we as a nation have lost our nerve as a serious civil nuclear power. There was a time—when I was a teenager in the early 1960s—when we seemed to be brimming with nuclear nerve, even verve. In 1956, we had become the first nation to provide civil nuclear-generated power into a national grid, when the Queen threw the switch at Calder Hall in Cumberland. As other noble Lords have mentioned, by the early to mid-1960s a fleet of first-generation Magnox stations was coming on stream and they did sterling service to baseload provision over several decades. We also had a plan for the future all mapped out. There was a road map: my noble friend Lord Broers is calling for another one. The second-generation advanced gas-cooled reactors were to fill the gap between the Magnoxes and the fast breeder reactor, whose dome on the prototype site at Dounreay in Caithness stood gaunt but full of promise, looking over the swirling waters of the Pentland Firth, where the North Sea meets the Atlantic. Beyond the fast breeder beckoned the lustrous prospect of nuclear fusion—abundant and clean—which we thought in the 1960s would be transforming world energy about now. Dounreay is being dismantled and cleaned up as we meet and fusion is almost certainly still decades away as a feeder of grids, though I am sure we will get there one day.
Where does the Government’s response to the Science and Technology Committee’s report fit into the wide sweep of UK civil nuclear history? Does it offer the country a fighting chance of leading the small modular reactor generation deploying to maximum and sustained effect our scientific prowess, engineering skills and technological flair? Can we hear a call to arms to restore ourselves as a serious civil nuclear pioneer and pacemaker, no longer reduced, as at Hinkley Point, to buying another country’s technology off a very expensive shelf? Up to a point. Things are moving, but is there enough of what David Lloyd George liked to call “push and go” in Whitehall? I hope there is, that the Minister—for whom I have great respect—can convince your Lordships this evening that there is, and that the cycle of indecision has been well and truly broken.
However, the language of the Government’s reply to the Select Committee report does not exactly glow with a critical mass in the making. There is no ruling out in its prose, but there are tepid signs of ruling in. Let us eavesdrop for a moment on the BEIS draftsmen and women as they crafted paragraph 27:
“As we move to de-carbonise our economy, there will continue to be a demand for the secure, low carbon energy that nuclear provides. This could include energy from SMRs. For example, third generation modular reactors have the potential to play an important role within the near-term electricity generation market, but only if they can reduce costs to a competitive level. While more novel modular reactor technologies offer the potential to deliver major breakthroughs in cost, safety or functionality but are less technologically mature and require further basic research and development support”.
More than a touch of the tentative there, as there is in paragraph 29 with its recognition that:
“Government could have a role in reducing barriers, including on siting and regulatory approvals, which could help de-risk projects and ensuring they are acceptable to the public”.
I counted five coulds in the response to our report.
However, to be fair to Her Majesty’s Government, there is a dash of push and go in paragraph 32. Dealing with the SMR, it declares that:
“We must invest time now to make a strategic decision for the UK—a decision that could have implications stretching many decades into the future”.
Exactly, but can the Minister be more precise than the Government’s response of 13 September, which said that the decision would be taken in the coming months? Paragraph 35 is certainly very welcome, outlining as it does government funding for advanced manufacturing and for the nuclear R&D programme.
I gladly acknowledge that the Government’s reply to the Select Committee report has its touches of pep, but much of it strikes me as a long, weary sigh induced by the feeling that it is all too difficult. I hope that the Minister will sweep this impression away with a burst of brio and enthusiasm and a flurry of reasons to be cheerful. I live in hope.
My Lords, it is always a pleasure to hear the noble Lord, Lord Hennessy, speak but it is also a challenge to follow him. I predict that there will be no swirling waters of the Pentland Firth in my speech.
Along with everyone else who has spoken, I thank the noble Earl, Lord Selborne, for his leadership on the report and during my early years on the committee, and join him in thanking the team that supported us in producing this report. I also thank my fellow members of the committee, many of whom were able to give a seminar on this subject at the drop of a hat, as noble Lords have heard.
This is a subject of great complexity, but I hope that the Minister has received some clear messages from what has been said today. The time for the Government to sit on their hands, if ever there was one, has gone. As the noble Lord, Lord Hennessy, said, the time for push and go is with us.
The report sets out three things that have to happen for us to see some action in this area. First, as my noble friend Lady Bowles, the noble Lord, Lord Oxburgh, and others set out, the Government need a strategic plan for the UK energy market—the road map which the noble Lord, Lord Broers, set out in detail on the kind of energy that we will need, how we will generate it and when we will need it. Without that master plan, it will be very difficult for us to fit this one technology into the wider picture. It is clear from the Clean Growth Strategy that some of the elements of that are in place. However, as the noble Lord, Lord Broers, very clearly set out, there is work to do before this becomes a clear and obvious road map. I hope that the Minister can tell us when and how this will be forthcoming and whether it follows on from the Dieter Helm review. If we are to have a nuclear section within the industrial strategy, surely it has to be based on something of this nature in the first place. In a sense, what is the chicken and what is the egg in the process of developing the industrial strategy?
Secondly, as other speakers, including my noble friend Lady Bowles, set out, the Government need to firmly establish what sort of nuclear industry we want to have. Are we a maker or a taker, as she said? Are we going to be a player in electricity generation technology or are we going to settle back and buy it off the shelf? If the answer is that we are going to be a player, time really is at a premium. For example, our position regarding Generation IV and SMR reactors needs to be clarified very swiftly. This report sets out those questions, but the Government’s response largely avoids giving us an answer to them. In the Government’s opinion, are we going to be fully in the generation technology business—because being half in and half out is an expensive way of not achieving that?
Looking at the committee’s report, the pedestrian nature of the Government’s response should not be a surprise. For a long time, we have had slow progress and, frankly, a lot of retracing of steps as well as shuffling forward. Yet, to be fair, some elements of that response were positive. It is good to see that a successor organisation to NIRAB is on the horizon. I found the language about its nature in the Government’s response somewhat sphinx-like, so if the Minister can set out when he thinks this organisation will emerge and what differences and similarities it will have in relation to NIRAB, that will be very helpful. It is also interesting to see that the NIC will soon meet. What outcomes does the Minister expect from the NIC, and when will these begin to flow?
I said that there are three conditions. Obviously, the third of those is funding. It was good to see set out in the Clean Growth Strategy that the Government are earmarking £460 million. Sadly, in the atmosphere of suspicion, I had exactly the same questions that the noble Earl, Lord Selborne, had. Is this new money? Is it coming out of the Challenge Fund, or where is this money coming from? Perhaps the Minister could fill that in.
Before closing, I would like to say a few words about SMRs—there has been a lot said already—and about Euratom. It is good news that, after stalling a year ago, the SMR competition is moving forward. The noble Lord, Lord Oxburgh, set out the situation very thoroughly. My understanding is that there are more than 30 entrants sitting in the in-box for this competition, and it is going to be a challenge to deselect these. The issue of comparing apples with pears is going to arise very quickly. Some of these bids will be finished for very highly developed concepts and designs; some will be merely front-end concepts. Some, I suspect, will be genuine light-water Generation III-style; some will border on Generation IV. How is that deselect process going to be embraced? It is a challenge, and it could happen that we will end up spending another year or two in that comparison process, so it would be very helpful to know how that technical comparison is going to be carried out.
In their response, the Government talk about the SMR market—“the market”—in abstract, but frankly, the Government are the market, and they need to take responsibility for being the market. Indeed, in some cases, or many cases, the UK alone will not be a sufficient market for the economics of these reactors, so the Government have to be in, in order for whoever wins this complicated down-select process to be able to step forward into the international market and gain purchase in that market to create an economic product. Therefore, I would welcome the Minister’s view on how the Government intend not just to encourage other people to be the market but to be the market themselves.
On Euratom, I associate us with all the comments that have been forthcoming, particularly those of the noble Earl, Lord Selborne. The Government are making reassuring noises about the post-Euratom environment in which we will find ourselves. We on these Benches still consider this to be an unnecessary burden that the Government have taken upon themselves. There is still an opportunity for the Government to buy themselves some more time. The Prime Minister is acknowledging that the ECJ will have a role in certain aspects of the transition process. Given that the major bugbear for the continuing relationship with Euratom is the role of the ECJ, it seems perfectly reasonable that, if the ECJ has a role in some aspects of the transition process, it could also continue to have a role with Euratom, and we would not have to leave Euratom until after the transition period. Can the Minister say what thoughts the Government have had on that point, so that, rather than leaving Euratom on leaving day, we would leave after the transition period? Perhaps that is what they are already planning, but it would be very helpful to have that information.
The noble Lord, Lord Hennessy, asked whether we had lost our national nerve; the noble Lord, Lord Hunt, pointed out that we need a nuclear vision for the United Kingdom. Now is the time for that clarity because, if the Government wait any longer, the corporate will and the people—the engineers, the people with the knowledge to deliver any vision—will be gone. I would welcome the Minister’s views on those points.
I thank your Lordships’ Science and Technology Committee for its report on nuclear research and technology and thank its chairman, the noble Earl, Lord Selborne, for his excellent introduction to our debate tonight. The report is timely and cogent and provides a slight déjà vu moment as it is in so many respects a reiteration of its earlier 2011 report, with many similar recommendations.
The Government set up the Nuclear Innovation and Research Advisory Board in January 2014 for a three-year period. To the charge of indecision and its implications throughout this report, the Government replied that they must take account of the risks and costs associated with being the first-mover solution in adopting nuclear technologies. It seems that, with the report highlighting NIRAB’s final report recommendations and returning to its report of 2011, the Government must set out their position once more.
Continuity and consistency are needed. One of NIRAB’s recommendations is for a successor body to be set up to retain access to independent expert advice on nuclear research and innovation to reform its policy decisions. Only last Thursday, in The Clean Growth Strategy document, the Government came forward and asked the Nuclear Innovation and Research Office—NIRO—to convene this new advisory board. Perhaps now the Government could establish this new advisory body with the wider remit called for by your Lordships’ committee both in this report and in its 2011 report. My noble friend Lord Hunt also asked some probing questions about its constitution.
Throughout the report, there is a thread of criticism that the Government are failing to come forward with a vision and a clear strategic direction of travel. Many speakers tonight have drawn attention to this from the many witness statements. The differences in approach between the committee’s report and the Government’s answers highlight that the Government need to take on board what and how they communicate as they take their role forward.
The report reiterates many of its challenges from the 2011 report. The Government need to reiterate their revision following the disbanding of NIRAB, communicate again what is the road map for the future, and define the nuclear industry’s ambitions against other sectional interests in their industrial strategy. The noble Lord, Lord Hennessy, thought the Government —and, by implication, the nation—have lost their nerve.
Last Thursday’s launch of the Government’s clean growth strategy is the opportunity to reset the Government’s strategy and determine their approach. The overriding concerns around climate change set the emphasis on the energy market to decarbonise the economy. The Government must be at the leading edge of innovation and technologies to achieve this. They must be at the leading edge in acting on this imperative. The Government are correct to identify the UK as a world leader in cutting emissions while growing the economy. Statistics back up this analysis. UK emissions in 2016 were 42% lower than in 1990 and 6% below those in 2015, while in the same period UK GDP increased 67%. Low-carbon innovation is at the core of the strategy. The noble Lord, Lord Broers, challenged the Government further to set a comprehensive road map for this growth strategy to include the relative merits of renewables and nuclear to provide a balance in power generation.
While the UK has done well so far, it is now falling behind since the Conservative Party took charge of the Government. The UK is now on course to fail to meet the fourth and fifth carbon budgets. On the fourth carbon budget, the UK will be 6% over, and on the fifth budget, it will be 9.7% astray—that is, widening over time. The Government need to rectify the situation as a matter of urgency and build on this report to set the parameters for nuclear research and technology to inform the role of nuclear power. It is proven that low-carbon transition is compatible with high growth. The Government must refresh the 2013 strategy, answering the question posed at paragraph 55 of the report: what sort of nuclear nation does the UK want to be? The noble Lord, Lord Fox, underlined this question and posed three conditions that the Government must meet in their answer.
The Government have already been challenged by the Economic Affairs Committee, which says that their reliance on Hinkley Point is a very risky strategy. This one nuclear plant cannot provide the defence that this is “nuclear power solved”. The Government have the huge problem of dealing with plutonium waste disposal. In the days of DECC, it consumed half the Minister’s departmental budget. How can this plutonium material be linked to reactors at the Magnox sites? It is existing technology. Can the Minister say whether there is a joined-up strategy between plutonium disposal and low-carbon energy generation at least cost? My noble friend Lord Hanworth added indecision on this to his charge sheet. What are the Government’s thoughts on this and the other areas on which they are delaying a decision?
The noble Lord, Lord Oxburgh, expressed disappointment at the government response regarding small modular reactors. Against the challenges of Brexit, the size of the market is open to debate, and the amount of international collaboration needed could well be an added impediment to the Government at this critical time. However, I have one important question for the Minister in this respect. What estimate has his department made of the cost of electricity produced by small modular nuclear reactors, and has that estimate appraised the differential in cost where a number of SMRs are aggregated?
In keeping with the report’s challenge to the Government, the section on the National Nuclear Laboratory argues that the lack of direction in government thinking has resulted in a less than satisfactory coherency to the NNL as it straddles the dichotomy between being a commercial entity competing with other companies and being a government-owned national laboratory with public assets. In their reply, the Government state that they have agreed with the NNL to expand the role of NIRO, which is hosted by the NNL. Does this resolve the situation or merely continue the lack of coherency?
Finally, regarding Euratom, the Government have come forward with the Nuclear Safeguards Bill. We will examine this carefully. Although this underlines the clear importance of the issue regarding how the UK will undertake its responsibilities as a member of the International Atomic Energy Agency, there are many concerns. I have two important questions for the Minister in the present Brexit discussions. First, does the Prime Minister’s proposal for a two-year post-Article 50 implementation period extend to Euratom? Secondly, will nuclear co-operation agreements concluded between Euratom and third countries continue to apply to the UK for the duration of any post-Article 50 implementation period?
It is imperative that the UK concludes nuclear co-operation agreements with Euratom and non-EU countries such as the US before the UK leaves the EU. Can the Minister inform the House what is happening in this respect? The Government have much to achieve and they need to set out the clarity of their vision following tonight’s debate.
My Lords, I begin by thanking my noble friend Lord Selborne and the members of his committee for an exceptionally good report. I would like to read out a paragraph from the summary at the beginning, because in a sense it underlies the big question behind this debate. It says:
“The decision the Government must make is whether the UK should be a designer, manufacturer and operator of nuclear generation technology or alternatively whether it should restrict its interest to being an operator of equipment supplied by others from overseas”.
That is the big question that we are talking about this evening. If I may put it slightly less eloquently than she did, the noble Baroness, Lady Bowles, asked whether we are going to be a maker or a taker.
The noble Lord, Lord Hennessy, asked whether we have lost our nerve. I may be wrong, but I do not think he was directing that question at the Government today but rather was looking at it historically. The truth of the matter is that we did lose our nerve in the 1980s. The incidents at Three Mile Island and Chernobyl did not help, and Fukushima since then has not helped. The noble Lord, Lord Hennessy, described the history of civil nuclear power in this country, and I will talk about that myself. It is true that we were a leader in this technology, but in the 1980s we lost our nerve—it goes without saying. And we lost our nerve for 30 years.
The question this evening is whether we have regained that nerve and to what extent, especially given that this is not a no-risk, zero-sum game. Civil nuclear power is fantastically expensive. As the noble Lord, Lord Broers, mentioned, the technology being used at Hinkley is not yet on stream in China or France; it is running four or six years late and over budget. Let us not pretend that this is an easy decision. When people say, “Make up your mind; make a decision”, let us at least be realistic. The sums of money we are talking about are massive—the budget for Hinkley is more than £20 billion.
Sometimes, especially at this time of night, our glass is half empty. Therefore, I thank the noble Lord, Lord Grantchester, for reminding us that carbon emissions are 42% lower than in 1990 at a time when we have had economic growth of 67%. That is a remarkable achievement. No one can say that our energy policy has been all bad over that time.
To start, I will talk a little about the history. We have long experience of working in the civil nuclear field going back to the 1940s, coming out of the Manhattan Project in 1945. The UK Atomic Energy Authority was set up in 1954 to oversee the development of nuclear power in the UK. The first reactor was Calder Hall in 1956. This led to the construction of the Magnox fleet of reactors in the 1950s and 1960s, followed by the AGRs in the 1960s and finally the PWR at Sizewell B, which began operating in the 1990s. As the noble Lord, Lord Hennessy, reminded us, the Dounreay Nuclear Power Development Establishment developed fast-breeder reactor technology. It is true that until the mid-1980s, we were at the forefront of nuclear research and development and were world leaders in many areas. Throughout that time and subsequently, nuclear power provided reliable, low-cost, base-loaded electricity to the UK, producing about one-fifth of all our electricity.
That brings us to the mid-1980s. Since then, publicly funded research and development, and the people working in the nuclear sector, have contracted as the UK facilities landscape was consolidated and global interest focused on the deployment of evolutions of existing light-water reactors. Since the early 2000s and the renaissance of interest in civil nuclear power, it has become apparent that those with the skills to take forward a nuclear programme in the UK are getting older and the R&D facilities and skills required would be lost unless we embark on a major reinvestment in nuclear. That is where we found ourselves in 2010 and 2011.
The UK’s nuclear research landscape and supply chain are increasing again due to the Government’s £180 million nuclear innovation programme to meet the challenges brought about by the national resurgence in interest in nuclear energy. In the wake of the House of Lords Science and Technology Committee’s reports of 2011 and 2017, and the 2013 nuclear industrial strategy, which set out the Government’s aims for a world-leading nuclear research landscape, the Government have also put in place the necessary advisory and co-operative frameworks to support such aims. The 2015 spending review followed this with an announcement of funding for,
“an ambitious nuclear research and development programme that will revive the UK’s nuclear expertise and position the UK as a global leader in innovative nuclear technologies”.
As some noble Lords have pointed out, last week we announced the clean growth strategy, which reiterated the Government’s commitment to nuclear and outlined our ongoing investment of £460 million in nuclear innovation, covering both fusion and fission. For the avoidance of doubt about where that money is coming from, £180 million is coming from BEIS for nuclear fission, £131 million for fusion, £61 million is coming from Innovate UK, £68.3 million comes from research councils and £20 million has come from the industrial strategy challenge fund. That is where the £460 million comes from.
BEIS launched the initial phase of its £180 million nuclear innovation programme in November 2016 with over £20 million of funding covering five areas of research on future fuels, fuel recycling, reactor design, materials and manufacturing and a strategic toolkit to underpin decisions on which emerging technologies are brought to market. The first £20 million tranche is progressing well and is providing evidence and information that will set the foundations for further funding to be announced in November.
The £180 million nuclear innovation programme was developed based on the recommendations of NIRAB, which ran from 2014 to 2016 as a three-year temporary advisory board comprising 26 experts, chaired by Dame Sue Ion. The Government are working in partnership with the Nuclear Innovation and Research Office to convene a new advisory structure, under the banner of NIRAB, to provide independent expert advice on research and innovation. A process of seeking people to join this board has commenced and we expect that to conclude in November.
In view of the central question posed by the committee’s report—and to ensure that there is no misunderstanding on this—we are not currently in the business of designing and building our own conventional reactors for new build. That is self-evidently the case. It is not a realistic short-term proposition. That said, the UK supply chain has a number of niche capabilities that makes it attractive to international partnerships. In particular, modular and advanced reactor technologies present an opportunity in future for the UK to build its capacity alongside international partners—and in the longer run, of course, there is fusion as well. Government research and innovation support targets a number of these opportunities, and we are investing in the capacity of our regulators to engage with their peers on the co-operation and harmonisation that will be essential to the deployment of any new technology on a global basis. As noble Lords have pointed out, this could never be a national strategy. Even SMRs, which are a cheaper alternative to conventional nuclear, would work efficiently or effectively only if there were an international market and not only a national market.
The Government have made good progress—I accept that it has been slow to date—in assessing the potential of small modular reactors. We will be closing the competition and publishing the detailed techno-economic assessment in the very near future. The techno-economic assessment used evidence gathered from 14 SMR vendors and the subsequent competition received eligible expressions of interest from more than 30 different companies across the nuclear industry, including 18 SMR vendors.
We recognise that the Government have a role to play in helping to establish the right market conditions to allow credible and investable modular reactor propositions to come forward. Only last week we announced £7 million investment to expand the capacity of the UK’s nuclear regulators to prepare them and the sector for the advanced technologies of tomorrow. The Government are now working with industry, through the industrial strategy nuclear sector deal, on a potential policy initiative to support the sector. That includes setting up a national college for nuclear to train 7,000 people by 2020, and Sellafield committing to achieve a workforce where 5% are apprentices, graduates or sponsored students within five years.
The nuclear industry, therefore, is in a position, from the point of view of technology, skills and regulation, to rebuild for the future the kind of leadership we had in the 1960s and 1970s. In response to the committee’s central question, the investments currently being made create the opportunity for the UK to be a,
“designer, manufacturer and operator of nuclear generation in the future”.
Nuclear power is a mature technology capable of providing secure, low-carbon affordable energy. The Government are committed to it playing a significant role in our future energy mix and being a key element in helping to meet our long-term climate change commitments. In terms of new nuclear, as all noble Lords know, the Government have signed a contract for Hinkley Point C, which is scheduled for completion in 2025. It will be the first new nuclear plant in the UK for more than 20 years. As existing plants come to the end of their lives over the coming decades, the Government believe that new nuclear will have a key role to play in meeting the demand.
My Lords, perhaps I can press the Minister on one point. He was right to point in his analysis to the very expensive cost of this new technology coming on stream and the nuclear industry in general. A question that I hope he will be able to answer in his winding-up remarks is about the relative cost to the consumer of the new build. We have the example of Hinkley Point C in terms of one technology. If the noble Lord is looking to the future, it may be something which the UK could put an emphasis on. Is he able to say what the cost of the electricity is in his department’s analysis of power produced by small nuclear reactors?
As the noble Lord knows, the price for Hinkley is £92.50, which I think is indexed. The latest price in the auction for offshore wind was £57 and I think that the general figure I have heard for SMRs is around £60. Do not quote me on that, but it is a figure I have heard from people in the industry. Clearly, it depends on how much is produced and how economic it is in producing SMRs. The sum may come down below that. The fact is that the price of renewables is coming down. I know that the prices are variable and not baseload, but the industry does not stand still.
I am pleased to announce today that the Government intend to work with the secretariat and other members of the Generation IV International Forum in order to retake our place as an active and participating member of the forum in 2018. The GIF is the main grouping of countries interested in developing advanced nuclear technologies. Government can help to create the environment and frameworks to support nuclear development and deployment. We can also underpin the regulatory framework necessary to assess the safety, security and environmental aspects of new technologies. Ultimately, however, we must remember that the assessments and decisions on which technologies succeed rest not only with government but with the industry—and when I say the markets, I mean the price of the product.
We must remember that other industries are not standing still and waiting for nuclear to play catch-up. Renewables such as offshore wind and energy storage technologies are evolving at a pace. To maintain its place in the competitive low-carbon energy markets of the future, nuclear will need to provide additional value in terms of its flexibility, functionality or reduced costs to supplement its baseload availability. In a low-carbon green world, nuclear should have a big role to play, but it will have to be competitive with other low-carbon technologies.
My Lords, I am very encouraged by my noble friend’s reply and the fact that, as I understand it, the Government are committed to rejoin, after several years, the Generation Four International Forum. What we have seen is a great signal to the nuclear community that we are setting our aspirations once more at something that is ambitious and recognises the expertise that we have in our science base in this country in matters nuclear.
We have had a very interesting historical lesson from all parts of the House, not least the Minister, and I was expecting it from the noble Lord, Lord Hennessy, who is a great expert on these matters. It is not surprising that successive Administrations rather lost their way on nuclear when the public felt greatly disenchanted, for reasons we all understand.
Perhaps I am eternally optimistic, but from the Minister’s response just now, the clean growth strategy and the forthcoming industrial strategy White Paper, I do see some opportunities to have the question we posed—breaking the cycle of indecision—resolved satisfactorily.
It remains only for me to thank all noble Lords who have stayed to this very late hour, by my standards, to participate in what I have found a most interesting debate.
House adjourned at 10.46 pm.