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National Grid: Capacity

Volume 809: debated on Monday 11 January 2021


Asked by

To ask Her Majesty’s Government what assessment they have made of the capacity of the National Grid; and what plans they have to commission the construction of small modular reactors to address any capacity issues identified.

Capacity margins for this winter are healthy, and we remain confident that electricity security can be maintained under a wide range of scenarios. Through the capacity market, we have secured our main tool for ensuring security of supply—the capacity needed to meet forecast peak demand—up to 2023-24.

On the second part of the noble Lord’s Question, we anticipate that SMRs will be deliverable in the UK by the early 2030s, when we also aim to demonstrate the next generation of AMRs.

I thank the Minister for that Answer. According to the climate change committee, a quadrupling of low-carbon power generation will be required if we are to meet the 2050 target for decarbonising the economy, and a very substantial part of the power will come from nuclear. Do Her Majesty’s Government still believe that the construction of nuclear power stations can be led and financed by private consortia, or do they now conceive that, as in the case of the first generation of nuclear power stations, they must be financed preponderantly, if not entirely, by public funds? The best native technology for nuclear power generation is the Rolls-Royce project to develop a small modular nuclear reactor. Do Her Majesty’s Government have plans to increase their very limited financial support for this enterprise?

There was a number of questions there; I will do my best. Having consulted, we still believe that the regulated asset base model is the best way of financing large-scale nuclear projects. As we said in the energy White Paper, we are absolutely committed to producing at least one new plan for a large nuclear project. On SMRs, the £385 million allocated to advanced nuclear technologies in the energy White Paper is a significant amount; we are committed to it and we support the Rolls-Royce consortium wholeheartedly.

My Lords, I am a strong supporter of the need to develop and deploy small modular nuclear reactors, which should be designed and built in the United Kingdom. However, we also need some large nuclear power stations. Hinkley Point B and Hunterston B will both close in 2022, and time is running out. Nuclear is crucial for the provision of round-the-clock, weather-independent, low-carbon electricity as the demand for electricity soars. The building and commissioning of Sizewell C is now a matter of urgency; we need to proceed, but with minimal and reducing Chinese involvement. How many large nuclear power stations does the current energy policy plan for the UK? Bearing in mind the risks of Chinese involvement, can the Minister confirm that we will not proceed with Bradwell B—the Chinese reactor—but instead revive Japanese options such as Wylfa in Anglesey?

The noble Lord, Lord West of Spithead, is always a great proponent of large nuclear, and I agree that we are likely to need significant, large nuclear capacity in order to meet our carbon reduction commitments at the least cost. We will continue to engage with all viable companies and investors on their proposals for future projects, including all of the Sizewell C and other projects. The UK welcomes foreign investment in our infrastructure. However, all investment involving critical infrastructure, which includes nuclear, is subject to thorough scrutiny and needs to satisfy our robust legal, regulatory and, indeed, national security requirements.

Can I ask the Minister a little more about the timings for when small modular reactors, advanced modular reactors and fusion may come on stream? Is there a sufficient commercial time window for generation III before it gets overtaken by the advanced modular reactors if it is not actually up and running until 2030, which is later than some projections for other countries?

There is only one SMR that is scheduled for production before 2028, which is in Canada, and that may well slip anyway. As set out in the energy White Paper, our aims are operational SMRs by the early 2030s, a demonstrator AMR also by the early 2030s, and a commercially viable fusion plant by 2040. We see these advanced nuclear technologies as complementary, given strong synergies between their supply chains and the multiple roles they could perform in the energy system.

The noble Lord, Lord Trefgarne, is next. No? I call the noble Lord, Lord Ravensdale. Is the noble Lord there?

My Lords, I declare my interests as in the register. The energy White Paper commits to opening the generic design assessment to SMR technologies this year. Can the Minister say how many GDA slots will be available—by that I mean how many SMR designs will be able to be supported through GDA—and at what point in the year will SMR GDA open?

I cannot give a specific answer on how many designs will be expected to be announced, but we are currently finalising arrangements to open the generic design assessment. We will provide more information in due course. Our aim is to invite applications to BEIS in quarter 2 of this year. In the meantime, the Government have announced £40 million for developing regulatory frameworks and supporting the supply chains for SMRs in the United Kingdom.

SMRs have the potential to help reach the UK’s net zero targets. How many SMRs are typically needed to be operational by 2050 to make a meaningful contribution to net zero? What are the cost savings, as well as UK job creations, of SMRs and current nuclear reactors?

Analysis in BEIS released alongside the energy White Paper demonstrates that in a low-cost system, the UK could need between 5 and 15 gigawatts of nuclear capacity. However, it is for the market to determine the best solutions for very low emissions, and reliable supply at the lowest cost to consumers. On job creation, the Rolls-Royce consortium believes that a UK SMR programme could support up to 40,000 jobs, and that each SMR would be capable of providing power for 750,000 homes.

My Lords, the energy White Paper detailed many areas that will require legislation in order for them to go ahead. For example, to ensure that the grid has adequate capacity for the 40 gigawatts of wind power that the Prime Minister has promised by 2030, work needs to begin soon. Can the Minister say when an energy Bill will be before us?

The noble Baroness asks, on the surface of it, a perfectly straightforward question, to which I would love to be able to give an equally straightforward answer. The most I can say is that following the long-awaited but much-welcomed energy White Paper, an energy Bill will be introduced as soon as parliamentary time allows. The measures will intend to realise the ambitions and policy commitments set out in the White Paper, as well as to drive forward the transition to net zero.

Will the Minister confirm that the Government are standing by their earlier commitment—of central relevance to these issues—namely, to locate the proposed national thermal hydraulics facility in Anglesey?

The noble Lord is absolutely correct; the commitment to build the national thermal hydraulics facility was made when we launched the nuclear sector deal in November 2018. It remains the Government’s ambition to do so. The issues recently identified, which have resulted in conversations about this, relate to the need of the Rolls-Royce-led UK SMR consortium to have a slightly larger facility delivered sooner than had been proposed in Ynys Môn. The UK and Welsh Governments are in discussion about how to resolve the planning and timing issues quickly, and they may be able to start the construction of just the facility needed for the Rolls-Royce machine before they proceed with the rest of the site.

I draw the House’s attention to my register of interests. The UK Government are committed to a gigawatt-scale nuclear future, but there are now some 72 SMRs in 18 countries. What can we learn from the work that is being done elsewhere, and how can we facilitate the exchange to ensure that we are benefiting from the pace of the fastest in the moving camel train?

My noble friend is absolutely right that the UK is still one of the front-runners of the development of SMRs, because we acknowledge that SMRs and, indeed, advanced modular reactors will also play an important role as a low-carbon source. The Government announced a £385 million advanced nuclear fund in the energy White Paper, which will support the research and development of both SMRs and AMRs. Of course, we watch with interest the development of other research projects abroad.

My Lords, will increased electricity demand require a national grid to place greater reliance on existing submarine power supplies from France, Belgium, the Netherlands and/or southern Ireland? What impact on cost arises following the UK’s departure from the European Union? Will this lead to reconsideration of the future interconnector links planned with Norway and Denmark?

Interconnection remains an important part of the UK’s energy strategy, delivering lower costs, increased energy security and better integrated low-carbon generation. The UK-EU Trade and Cooperation Agreement provides for new, efficient electricity trading arrangements over these interconnectors, making electricity more affordable for consumers. Future projects to Norway and Denmark are under construction, with the North Sea link due to complete in autumn this year, and the Viking link due for completion in late 2023.