(8 years, 6 months ago)
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Viscount Ridley
To ask Her Majesty’s Government what assessment they have made of the relative merits of different forms of nuclear technology.
Viscount Ridley (Con)
My Lords, it is a pleasure and an honour to introduce this debate on the merits of nuclear technologies, and I thank other noble Lords in advance for taking part in it.
I start from a position of great perplexity. I read and hear a lot about different nuclear technologies—fission or fusion, uranium or thorium, light water or heavy water, salt or metal, water or gas, pressurised or boiling. Although I can follow some of the details, I have not really the foggiest idea which one to recommend or champion. I do not expect the Minister to banish my perplexity, but I hope that this afternoon we may suggest a way to let the answer emerge through a sort of bake-off, if you like.
This topic is important because there is both a strong case and an urgent opportunity for the UK to regain its technology leadership in nuclear power. The only way we will bring down the cost of nuclear technology is with new designs and new ways of regulating them. New technologies change the world not when they are invented but when they get cheap. Computing and air travel have been around for a very long time, but it is only when they became dramatically cheaper that they noticeably increased living standards.
In this respect, nuclear power stands out as a glaring exception. It was invented 70 years ago but has failed to get cheaper. That is why it is currently declining—yes, declining—as a percentage of world primary energy. Imagine if we could make nuclear power genuinely cheap. We would make fossil fuels obsolete, we could stop spending billions of pounds a year on futile and regressive renewables subsidies and we would eradicate fuel poverty and all emissions.
Building stations such as Hinkley Point will not make nuclear power cheaper because we are locked into a very high price for a very long time for the electricity, a price that looked reasonable if you assumed very high oil prices, but in fact oil prices came down. Because Hinkley is one of a kind, there is virtually no chance to get the price down by learning by doing. However, this is not a debate about Hinkley, so I shall stop there.
How do prices come down in other areas of technology? In a phrase, innovation through trial and error. That is what brought down the price of shale gas, semiconductors and air fares. Therein lies the problem. We cannot allow errors in nuclear power, so we cannot allow trials. We build excessive safety in from the start and we overengineer and underinnovate as a result. However, that is not a problem unique to nuclear power. Aeroplane manufacturers have faced essentially the same issue and, thanks to complex system analysis, they have cracked it. They innovate without accidents. So something is wrong with the way we are regulating nuclear.
As Professor Eric McFarland of the University of Queensland wrote in the Wall Street Journal earlier this year,
“what holds back nuclear power is its high cost, which is almost entirely due to government regulations and restrictions that have kept the industry confined to minor yet expensive improvements to existing reactor designs. Out-of-the-box thinking on new reactor concepts that could be far cheaper and safer is systemically discouraged … Today’s light-water nuclear reactors are constrained by government regulations and agencies appropriate for the 1950s to look much like those built for the production of isotopes for weapons—not because these are the lowest-cost power-reactor designs or the best and safest fuel cycles, rather because these are what we have built a gargantuan regulatory framework to accommodate”.
That does not mean that we should lower our safety standards, but it means that the Government should recognise that misregulation is preventing the invention of inherently safer, as well as dramatically cheaper, designs. Whichever country unleashes that nuclear innovation will reap rich rewards. The world is awash with potential designs for better nuclear power plants—molten salts, accelerator driven, thorium, small modular, fast, and so on—but hardly any of them gets beyond the design stage. They remain PowerPoint reactors, in the joke terminology. That is because of the immense cost of getting to the stage of building a reactor, in particular the generic design assessment cost of about £100 million in this country.
I shall focus now on small modular reactors, which hold real promise of getting costs down because of the ability to roll them off the production line and not make each one a unique project. In theory they can slot into egg crates at sites, so as to build up a large capacity in small steps. They can be up and running within a few years, allowing a return on capital and bringing the finance costs within reach of normal capital markets. They can also be located inland rather than on coastal sites.
We are going to hear more, I think, about small modular reactors from a number of noble Lords this afternoon, including the noble Lords, Lord O’Neill and Lord Rees. In short, small modular reactors could do for nuclear what Samuel Colt did for firearms. Interchangeable parts have done amazing things for the affordability of other technologies and they could do the same for nuclear. They could also possibly allow us to experiment with other technologies, because in some ways small modular is not itself a technology but a vehicle for technologies.
However, here is the obstacle. A 300-megawatt small modular reactor faces almost the same general design assessment as a four-gigawatt leviathan, and the same ludicrously long time to qualify—four years or so. That is the hump that the Government have to help them to get over, and that is what is keeping small modular reactors in PowerPoint form. In their response to the House of Commons Energy and Climate Change Committee last year, the Government promised to look at the generic design assessment process for SMRs. What fruit has that investigation born?
The National Nuclear Laboratory, in a report last year, concluded that there is a significant global market for small modular reactors valued at £250 billion to £400 billion. It reckoned that there are four technologies for PWR SMRs that could be viable within 10 years. They require £500 million to £1 billion to reach production-level maturity over a period of five to seven years. The report identifies,
“an opportunity for the UK to regain technology leadership in the ownership and development of low-carbon generation and secure energy supplies through investment in SMRs”.
As Candida Whitmill of Penultimate Power wrote in a paper for Civitas last year, we should look at what the US is doing. In January 2012, the Department of Energy in the US announced a competition to incentivise the first commercial SMR, offering $452 million over five years on a 50% match-funding basis for successful projects. It also provided the site at Clinch River free of charge.
Instead of spending £100 billion by 2030, forcing poor people to disproportionately subsidise the incomes of wealthy investors in fringe technologies like wind and solar—I know that the noble Baroness, Lady Worthington, was expecting me to say that—let us spend a chunk of money on bringing forward SMRs and on proper, well-funded research into the alternatives, including molten salt reactors, thorium and accelerator-driven designs. We could potentially win a commercial jackpot for the British nuclear industry.
I add one final note on fusion. I know that fusion has been 40 years away for 40 years, but there is good reason to think that may be changing. There is exciting new science, which we heard about at the Science and Technology Select Committee, suggesting that a far lower field strength is necessary because of spherical tokamaks and high-temperature superconductors. Here again, the vital thing is surely to let a thousand small flowers bloom. There is a rash of exciting new start-ups, which threaten to do to public sector fusion what Craig Venter did to genomics 17 years ago—that is, dramatically cut the costs and accelerate the progress. I suspect that we will hear more about this from the noble Lord, Lord Hunt of Chesterton, so I will not go on. We are as well-placed as almost any nation to benefit if we take the plunge into new technology in nuclear, but we must consider taking that plunge.
Lord O'Neill of Clackmannan (Lab)
My Lords, I am happy to follow the noble Viscount, Lord Ridley; I do not always say that, but on this issue there is a fair measure of agreement. There is a sense of hand-wringing on the nuclear issue. Somehow Britain has lost its way in respect of reactors. I just want to make the point that we are still among the leaders in safety—although it was suggested that we may be overegging the pudding. We are also probably better placed than anyone else to offer decommissioning services. In matters of regulation, you might say that the Nuclear Installations Inspectorate has a status akin to the FDA in the United States in relation to medicines and drugs. We are regarded as the gold standard.
There are therefore a number of positives. The UK produces reactors and our nuclear submarines use Rolls-Royce reactors. They are not necessarily the ideal reactor for what we are talking about in terms of small, modular kit but I am sure that the company’s skill base reflects its ability. If Rolls-Royce was put to the task, I am sure that it could respond. I think we are all aware that a very active part of the longer-term Rolls-Royce strategy is to get involved in this area. It is also an interesting strategy because it addresses one of the fundamental concerns that people have about nuclear power—namely, that it is somehow linked with nuclear weapons. We would be talking about an exclusively civilian technology. In the case of Rolls-Royce, it would be a classic example of turning swords into ploughshares. For these reasons, it would be a great opportunity.
We have this capability. The Chinese have recognised our regulatory capability, which is one of the reasons they want to get involved. If we can produce kit that is meeting our standards, it will be acceptable pretty well across the globe. Let us face it, we are not talking here about UK consumption of this kit in a big way. We are talking about an export market, which at the most fundamental level could transform sub-Saharan Africa. We could have these small pieces of nuclear equipment placed beside the sea, for example, where it could be used for desalination purposes, which could assist in the transformation of the agriculture of the area. They could be placed as they are in remote communities. At the moment, the Russians put reactors on ships. In the area south of Vladivostok they link them into isolated communities that are not capable of being linked to any Russian grid. There are a lot of opportunities, and there will be some for use in the United Kingdom of a limited character.
In conclusion, the nuclear industry is normally associated with gigantism. Frankly, I favour large 3,000 megawatt stations, which can do a very important job in sustaining baseload electric requirements in this country, but the fact is that we need to have a diversified portfolio of production. For my money, this affords us a great opportunity. I should like to hear what the Government have to say about the medium term in this area. I do not think that at present there is any great political divide on the issue. We had the anxieties at the beginning of the coalition period over the lost opportunity at Sheffield that a number of us felt, but the foundry issue is a thing of the past. We are now looking at taking advantage of the new metals and the new carbon technologies to bring together high-quality engineering that can be placed at the service of the power industries. Today’s very short debate gives us an opportunity to give an airing to this, and I hope that in the course of the Session other opportunities will arise.
Baroness Scott of Needham Market (LD)
My Lords, I should make it clear that I am speaking in an entirely personal capacity, neither as chair of the EU Energy and Environment Sub-Committee nor as a spokesman for my party. Energy policy clearly needs to be based on three pillars, the so-called energy trilemma: the balance of security of supply, affordability and environmental considerations. As my committee’s 2013 report made clear, the interests of all those are best served by having diversity in sources of supply. Unlike the noble Viscount, I am a fan of renewables and I should like to see much more emphasis on energy efficiency, but I believe that non-renewables will have to provide the baseload for our electricity supply well into the foreseeable future.
As a councillor in Suffolk in the 1990s, I opposed new capacity at Sizewell but in the intervening years I have changed my view. I am far more worried now about the threat of climate change, and I cannot see a decarbonised future for this country which does not involve nuclear. For me, Fukushima and the subsequent stress tests which were carried out across Europe have made me more confident about UK capacity in nuclear, not less.
Despite the fanfare of recent days, I am not at all convinced that Hinkley Point C will ever lead to new plant at Sizewell and Bradwell. I think that they are too large, too expensive and too uncertain. Similar designs in France and Finland are now years overdue. There are also questions around whether it is sensible to put all your energy security eggs into one foreign country’s basket. It is a questionable policy, particularly in a country that is lacking in transparency. It seems that, in this as in a number of other things, we have become beguiled by size. Projects on this scale require huge capital investment and are difficult to control in terms of their costs. Local people have to endure an enormously disruptive period while construction takes place.
Last week the Institution of Mechanical Engineers published the results of some polling. It was encouraging from our perspective to note that 56% expressed themselves as being in favour of nuclear energy, but 44% said that they would protest if anything was built within 10 miles of their homes. I have often wondered whether people would feel quite so strongly if we could think about these things on a rather smaller scale. So, like other noble Lords, this has brought me back to the question of small modular reactors, which have already been mentioned. The 2015 World Nuclear Association report describes how SMRs are built in factory settings in modular forms, and I think that that is where the real economies of scale come in; they are economies of volume rather than of size. The Nuclear Industry Association describes the delivery of 16 gigawatts of new build as its key priority. The fact that SMRs can be co-located with existing nuclear structures is a huge advantage in terms of working with communities that are used to nuclear facilities; there is a local and regional supply chain and skills base; and of course there are big cost advantages in being able to connect to the grid. As a win-win, the significant amount of heat that is generated can be used to supply local district heating for the community. Moreover, the “passive safety” features, which mean that little human intervention is required in the case of an accident, are a real plus.
For decarbonisation, particularly as our coal-fired stations come out of commission, light water reactors have the potential to be a really important replacement. I note key developments in the United States from Babcock and Wilcox with a 180 megawatt pressurised water reactor and Holtec with a 140 megawatt plant. I would be interested in the Minister’s comments about integral fast reactors, which in effect reprocess existing waste not just from plants but also from weapons. Hitachi has told the Government that it could have a plant up and running in Sellafield within five years, and I would like to hear a little more about that. I am also very interested to learn how the Government are moving forward with regard to small modular reactors. The chief scientific officer at Rolls-Royce believes that they could come onstream in five to seven years. The Chancellor recently announced a £50 million research programme and I would like some more detail about that, particularly with regard to the development of a robust regulatory framework and design assessment. There really is no need for us all to keep reinventing the wheel.
Lord Blencathra (Con)
My Lords, I congratulate my noble friend on initiating this important debate in the week we have signed a deal with China to permit the EDF nuclear reactor at Hinkley Point to go ahead. If we are to reduce carbon emissions by 80% by 2050, as far as electricity generation is concerned, it means doing away with all hydrocarbon-based generation: coal, gas and oil. The only carbon-free electricity generation is from renewables, which means wind farms and solar, and from nuclear. Currently, nuclear supplies 20% of UK electricity. Some 16 gigawatts of new nuclear is being planned by the Government, but that is largely to replace our existing nuclear power stations. We therefore need a large influx of new nuclear to provide for our needs. Renewables cannot do it on their own.
I welcome the deal to build the huge 1,600 megawatt behemoth at Hinkley Point. The design is based on the reactor being built at Flamanville in France, which was initially costed at €3.3 billion and due to open by 2012. Earlier this year, EDF said that it would be operating by 2018 and would cost €10.5 billion, but it has now said 2020 and we have no idea what the cost will be. When I first looked at Hinkley Point, it was costed at £10 billion; then it was £12 billion, then £16 billion. The latest reports all state £24.5 billion, but yesterday the deal officially stuck with the figure of £18 billion. This is not a criticism of EDF in any way but an inevitable consequence of trying a new design for a massive reactor and of a nuclear inspectorate in France rejecting many of the build components. Nor will Hinkley be built any faster than Flamanville in my opinion, since our nuclear inspectorate will also, rightly and naturally, be slow, careful and ruthless in checking the build. I am afraid—if I may say so mischievously—that we might be in the era of President Corbyn of the British Islamic Republic long before Hinkley Point is ever opened.
Small modular reactors are the only nuclear resource we can call upon to solve this problem, by providing reliable, relatively cheap power from about 2025 onwards. They can be factory built and installed where we need them, as well as exported into European markets and into Africa, Latin America and Asia. They will be built using the UK nuclear supply chain, unlike wind turbines. They will provide UK jobs, not French, Japanese or Chinese jobs, and long-term contracts for businesses, giving them confidence to invest in people and resources. Andrea Leadsom, the Energy Minister, said last year that these SMRs,
“have the potential to drive down the cost of nuclear energy and make financing easier through shorter construction times and lower initial capital investment requirements”.
I agree entirely, so I say to my noble friend the Minister, “Let’s get on with it”.
I understand that DECC is undertaking a second phase of work to establish the evidence base to inform government policy decisions. This includes commissioning a technical economic assessment that will run until March 2016. The assessment would be used to inform any decision on SMRs, the various designs and the commercial approach to developing them. That sounds all very well and good, but all my experience of government is that every research project concludes that more research is needed as bureaucracies seek to protect their back by never making a decision. There is a generic design slot for one SMR which could start in 2017. We must not waste too much time and we should crack on and get that slot.
It is not as if this is a radical or dangerous concept. As the noble Lord, Lord O’Neill, said, Rolls-Royce has been building off-the-shelf small nuclear reactors since 1965 for our nuclear submarines—the PWR1 and now the PWR3, which is roughly 50 megawatts. The latest US aircraft carriers will have two Bechtel A1B nuclear reactors, each capable of producing 300 megawatts. That is phenomenal power for a big boat. In other words, the new US aircraft carrier, the “Gerald R. Ford”, will produce 600 megawatts of power—36% of the output of Hinkley Point—at a cost of $10 billion for the whole boat, not just the engine. Surely to goodness that tells us something about off-the-shelf small modular reactors.
In over 60 years, there has never been an accident with either a US or British nuclear ship or power plant and they are all modular. I am told that we cannot just hoick one of these engine designs and stick them on land, because the ships use 95% enhanced uranium—near nuclear bomb level—and our land-based civilian reactors use about 5%. I do not know whether those figure are right, but my point is that we have more than 60 years of experience of building small modular reactors using one type of fuel. We would simply be asking Rolls-Royce to change from making diesel engines to petrol if we ask them to make a different type of fuel reactor. It should be a piece of cake for our engineers to build those.
Finally, I must make this point to the Minister. As Conservatives, we have gone out on a limb in backing nuclear power. If we want to deliver on this policy and show that we can create new nuclear power stations within a reasonable timescale, we have to crack on with small modular reactors. We can deliver these quickly and cheaply. It will be a huge political embarrassment for the Government I support if we do not get our first new nuclear power station operating before 2030. I commend my noble friend’s Question.
Lord Hunt of Chesterton (Lab)
My Lords, I thank the noble Viscount, Lord Ridley, for introducing this debate. I am very pleased to be sitting next to a Lib Dem espousing the nuclear case, on which we have had different debates in the past.
Nuclear power makes a vital contribution to the electrical power around the world. At Dunkirk it also provides heat, which I believe helps the fish farming company of the noble Baroness, Lady Wilcox. As has been said, the heat from nuclear power stations is also important in the Arctic.
The IAEA estimates that nuclear fission provides 50% of all non-fossil power in the world, excluding hydro-electric. In France, 80% of the electrical power is nuclear, although for political and environmental reasons they want to reduce that to 50%. However, it is still a very high percentage.
Over the past 10 years, there has not been strong public pressure in the UK to maintain the UK as a country with advanced fission technology. That is a great pity. Now, the question for the Government is whether they want to choose nuclear fission for the future. In a sense, they have done so with the announcements made this week. However—this has always caused difficulty for many people who are concerned about nuclear power—they have not been very clear on the question of what to do with the radioactive waste. The current position is that, as in Sweden, radioactive waste will be stored in such a way that it can be retrieved and transformed into a state with a short lifetime. That would be the ideal solution. We should also recall that, as the noble Lord, Lord Blencathra, said, there have been remarkably few casualties from nuclear accidents around the world, and the number is absolutely minuscule compared with the endless effects of coal, sulphur and particles.
Meanwhile, other technologies with lower levels of waste are being developed. Fusion is the favoured option supported by the UK and Europe. The ITER project is going to cost a lot of money, at $10 billion or $15 billion, but it will be an enormous device. Last week a presentation was organised by the French embassy at the Royal Institution, where we saw a film of this extraordinary great structure already being made. The inner core measures something like 30 metres by 30 metres by 30 metres, and it will produce many thousands of megawatts of power. However, as Professor Cowley, director of the Culham Centre for Fusion Energy, said at this public occasion, this is an experiment. Of course, it has to be an experiment when it is supported by our German colleagues, who do not want nuclear power. Professor Cowley went on to say, as did his French colleague, that this experiment would turn into practical generation in around 2040 or 2050, which of course are the dates being cited by colleagues in Europe.
An alternative is to produce modular fusion. The early idea from Culham is to have a spherical reactor with a radius of the order of 1.5 metres. To answer the question about power, new physics shows that, as a device, this should be able to produce positive power before 2020 and practical power generation perhaps by 2025. We should remember that there are now a number of small companies in the United States and Canada which are aiming in the same direction, so it is not as though this is a strange British brainchild.
In the UK we have Tokamak Energy Ltd, and I declare an interest as an advisor. This is funded by largely private investors, including, recently, the Institution of Mechanical Engineers. This is not a PowerPoint; it is a real project which can be found at the Didcot industrial park, where there are two devices. It is an experiment which is running continuously, thanks to the use of high-temperature superconductors. The point about the ITER project is that it involves low-temperature superconductors, and the amount of energy required to keep the device at an incredibly low temperature is much higher. If a high temperature can be used, the dynamics are very different.
I have a major point to make to the Minister. It is extraordinary that here we have a world-beating British company but DECC does not allow this to be displayed at the IAEA annual conferences. There will be a big one next year on fusion and we are asking him for support, particularly as it is supported by the Government. Of course, there are sensitivities attached to this in that it is a small device compared with the larger ones, but I hope that the Minister can get round it.
The other point that everybody is concerned about is the fact that the UK has a very large amount of fissile material or radioactivity. I believe that in the future we should be motivated by the possibility of having hybrid fusion-fission.
Lord Rees of Ludlow (CB)
My Lords, we should be grateful to the noble Viscount, Lord Ridley, for introducing this debate. It is timely because the medium-term need for nuclear power is becoming more evident and because new reactor designs are attracting more worldwide interest. It is a timely wake-up call because the UK’s indigenous expertise in relevant technologies is becoming dismayingly thin. There is strong advocacy now to enhance R&D into other kinds of low-carbon energy generation—solar, for instance—so that these become more economical and come on stream more quickly. However there is surely an equal imperative for more research, development and demonstration in the nuclear power arena, in hopes of rendering it a more economical and acceptable base-load generator than it now is.
Fifty years ago, the UK was a world leader in nuclear technology. We developed Magnox reactors in the 1950s and gas-cooled systems during the 1960s and 1970s. Thereafter, the UK played a minimal part in developing new reactor designs. Our first PWR, Sizewell B, came on line in 1995, but it was also our last. In the mid-1990s the nuclear industry was privatised with the break-up of BNFL. Government funding for nuclear R&D then fell precipitously. Research on advanced reactor designs was shelved. Indeed, the focus narrowed to maintaining the existing fleet, decommissioning and waste management. Moreover, as we are all too aware today, any of our currently commissioned power stations will be state owned—but by the French or Chinese state and not by us.
There are some bright spots. As the noble Lord, Lord O’Neill, said, we have ongoing expertise to build nuclear-powered submarines and we are international leaders in fusion research, which involves many issues in advanced materials, irradiation damage and so on that are relevant to fission as well.
Overall, however, the picture that emerged from the House of Lords Science and Technology Select Committee’s report four years ago was a deeply depressing one. The UK has a small and ageing population of experts. Our committee was told that it would be hard to replace the present generation of safety experts, who are highly regarded and widely consulted internationally, as the noble Lord, Lord O’Neill, emphasised. Even worse, we were told that our scientists and engineers would have a mere “watching brief” over developments of SMRs and Generation 4 designs—hardly an inspiring enticement to young people making a career choice. It would surely seem imprudent, and a missed opportunity, for the UK to be so sidelined. There must surely be a step-change to reverse this trend. This is in large measure because, if we are serious about achieving 80% reductions in CO2 emissions by 2050, as mandated by the Climate Change Act—as I think we should be—then nuclear power should be part of the mix. In fact, this conclusion is strengthened because the prospects for large-scale carbon capture and storage from fossil fuel-powered plants seem less bright than many of us hoped. Indeed, the DECC projections indicate that 30 to 40 gigawatts of nuclear power may be required—far more than the 16 gigawatts that current plans envisage. Were that to happen, the economics would surely need to improve. Standardisation would help and so, perhaps, would a revision of the presently over-stringent clean-up requirements.
Surely, however, innovation is key. I am not competent to assess the rival claims of the various designs; but there is no other high-tech area where one would be satisfied with 30 year-old designs. Even though the UK is one of many players, we should surely aspire to spearhead some of the developments. If we are to expand nuclear power by mid-century, we will need to make the optimal choices among the options. We are spending £2 billion a year in decommissioning Sellafield’s dreadful legacy of nuclear waste. In that perspective it is surely imprudent that the National Nuclear Laboratory cannot spend more than the current few tens of millions on R& D.
In its report the Science and Technology Committee described as “troublingly complacent” the ministerial view that the need for R&D capabilities and associated expertise in the future can be met without government intervention. I hope the Minister will comment on this.
Adapting Churchill’s famous aphorism about the Americans, one can surely hope that having made almost all possible mistaken judgments on nuclear issues over the decades, this country will at last do the right thing. This would be to spearhead enhanced R&D into fourth generation technologies so that when we really need them there is a chance that there will be an acceptable and safe option available.
Viscount Hanworth (Lab)
My Lords, the demand for electricity is highly variable. It varies throughout the diurnal cycle of 24 hours and over the weeks, the months and the seasons of the year. The need to satisfy a demand on a large scale first arose in this country in the 1920s and 1930s. The nation responded rapidly by gathering the electricity generators into a centrally controlled system that was supported by an integrated network of electricity generation known as the national grid. The result was an ample generating capacity that was exploited effectively by the ability of the grid to supply power to the places where it was most needed, by transmitting it at high voltages with minimised losses.
Our national system served us well in this manner until the 1990s and became the envy of the industrialised world. In the 1990s, our electricity supply industry was privatised with the intention of creating a competitive market. The perverse outcome was that, very soon, the industry fell into the hands of a few large producers and into foreign ownership. In this era, the problems created by the variable demand were met by a new technology of gas-powered generation that was sustained by an ample supply of North Sea gas. It seemed to the proponents of privatisation that a centralised control of the nation’s electricity supplies was no longer needed and that the market system was appropriate to the purpose.
These fortunate circumstances are at an end. We no longer have an ample and cheap supply of gas that can be relied upon to fuel a flexible electricity supply. If we are to meet our targets for decarbonisation, we cannot continue to satisfy the base load demand with the output of coal-fired power stations. Nowadays, our demand for electricity is being met increasingly by the intermittent supply of wind power and by other renewable resources, including solar power. The problems of intermittency might be overcome if we could expect the sun to shine when the wind ceases to blow. However, the inverse correlation between these two sources is a weak and an insufficient one. Moreover, this Government seem to be intent on destroying our solar-powered resources by the removal of the subsidy incorporated in the feed-in tariff.
We might be able to mitigate these problems of an intermittent supply if we could depend on supplies from beyond our national boundaries. For these to be available, there would need to be a super grid that could transmit the power from remote locations at very high voltages. Under the conditions of a free market and given the difficulties of international co-operation, such a facility is unlikely to materialise within the foreseeable future. In such circumstances, it is difficult to see how we can easily satisfy our demand for electricity. Nevertheless, we can speculate about the ways in which the Government are intending to address the problem.
To supply the base load, they appear to be relying on the new nuclear facilities which they are hoping the French and Chinese will create for us. To meet the peak demand, they may be hoping to rely on supplies of gas that might be purchased on the international market or magicked out of the ground on which we stand by the process of fracking. At present, neither of these recourses seems to be viable. The gas from fracking is not yet available and it is doubtful whether it ever will be available in a significant quantity.
The plans for the French nationalised electricity company to build a massive nuclear power station at Hinckley Point is mired in problems, both of a political and of a technical nature. The project is exorbitantly expensive and it is likely to be affected by considerable delays. We are told that we may have to wait until 2033 to see the commissioning of the power station at Hinckley Point.
The proposals to place our nuclear future in the hands of the Chinese fills many people with grave anxiety. What other recourses are available to us to meet the demand for electricity and for power more generally? It is plausible that we should be able to meet the needs by deploying our own technical resources and by reinvigorating our nuclear industry. With sufficient government support, and possibly in collaboration with the industry of a partner nation, we should be able, within a reasonable period of time, to realise a programme for developing a small modular reactor that can be manufactured in a central location and installed on the sites of existing and defunct nuclear plants. It has also been suggested that, if these reactors were more widely dispersed and located close to centres of population, they could provide district heating via pipelines of up to 30 kilometres in length. This would greatly reduce our reliance on gas for heating, thereby contributing significantly to the process of decarbonisation.
The ability to design and construct small modular reactors within the UK has existed for many decades within Rolls-Royce and its supply chain. Rolls-Royce has produced nearly 100 reactor cores for UK submarines with an outstanding record of safety and performance. These have been conventional pressurised light-water reactors of a tried and tested design. We need to embark upon the development of such a reactor immediately while there is an opportunity to do so in advance of our competitors.
If time were available, I would also talk of the need to embark upon the development of a further generation of reactors capable of disposing of the nuclear waste of the previous and of the current generations of reactors. These would be fast breeders and thorium molten salt reactors. The next speaker might touch on these matters.
Baroness Worthington (Lab)
My Lords, I am extremely grateful to the noble Viscount, Lord Ridley, for securing this debate; at the time he could not have known how timely it would be. However, as he said, this should not be a debate about Hinkley, despite the temptations.
The title of the debate is very appropriate. It concerns how we assess the merits of different nuclear options. Like the noble Viscount, I have come to know about a whole range of different nuclear fuels and reactors in the time that I have been interested in this topic, and I certainly do not feel qualified to make decisions about their relative merits and which ones UK plc should pursue. It is a task for the Government to work out a way of doing this. I am intrigued by the noble Viscount’s suggestion of a nuclear bake-off; we could even get that televised. It is a very good analogy for something that needs to happen: some real-world experience with some of these reactors to see which ones can prove that they can safely bring down the costs and deliver a sustainable and competitive nuclear industry.
Like the noble Baroness, Lady Scott, I have a conversion story of having once been anti-nuclear. In fact, I was Friends of the Earth’s anti-nuclear campaigner for a period, until I realised that that was a silly idea. I then became very interested in nuclear power and deeply explored the different options, and I then became interested in novel or alternative nuclear. I am currently a patron of probably the world’s first pro-nuclear charity, the Alvin Weinberg Foundation, which I declare as an interest in this context.
I believe that there is a version of nuclear out there that has not yet been made commercially available to us and which we as a country, with such a rich heritage in R&D, ought to be involved in bringing into being, not just for our sakes but on a global scale. It is clear to me, as again the noble Baroness, Lady Scott, said, that the risk of climate change is so great that it should now be our overriding focus in decarbonising our energy systems. It is absolutely clear that nuclear can play a huge role in that. In fact, the two countries in the world that have demonstrated huge decarbonisation successfully have been France and Sweden, yet we seem to ignore that and instead look to Germany, which, through shutting down its nuclear, has made the carbon intensity of its power worse. It is evident that nuclear should be part of this.
The role that the UK can play is very important. In this case, the UK must see itself as part of Europe. Unfortunately, it does not appear that we will ever get consensus across Europe to pursue nuclear, because Austria and Germany have certainly set their minds against it. However, there will be at least nine other countries that we can collaborate with, and I think that we should now be asking Europe to enable us to do a process of co-ordinated co-operation with those member states which have pursued nuclear, to bring about harmonised regulatory standards.
When we think about novel nuclear and bringing new reactors to commercial reality, there will be absolutely no point in doing that if the total market for those reactors is in the region of 60 gigawatts in the UK. We have to have shared regulatory licensing so that we can sell into a bigger market, and we must be able to sell into other European countries. What can the Government do—and what are they doing—to pursue common regulatory standards across Europe so that we can open up a market that is far greater? The UK’s regulatory arrangements are world-class, which has been referenced by a number of noble Lords. We have a great reputation, which is why countries such as China want to come here to prove their reactors, and we have a wonderful regulatory system, which is based on outcomes, not on a tick-box approach to what a nuclear reactor ought to have, as is the case in the United States. The United States finds it very difficult to bring new designs forward because it has very rigid tick-box regulatory standards, so in fact US vendors are now looking to the UK as a place to have their new reactor designs tested. That is probably after they have done a prototype far more cheaply in China; but if they do it in China, they will still want to have it signed off and approved by a country such as the UK, which commands such international respect.
Therefore, I think that the UK has a huge role to play in bringing about a new wave of nuclear reactors. It is not fair to say that it is just regulation that has held this back. There has been quite a high level of conservatism within the industry and a tendency to stick with what it knows. The attitude of “if it isn’t broken, why fix it” has prevailed for a long time. It is now evident that certain things about the nuclear industry are not optimal. There is definitely a need to bring the cost down and to think again about the right scale on which to build our next fleet of nuclear.
I think that we have still not answered the question posed by the noble Viscount, which is so important—namely, how we are going to evaluate our options? I hope that this Government will start to do so, and that they will do so in a transparent and open way, and not start with any pre-judgment about what the answer might be. When it comes to scale, we can do anything from 3.5 gigawatts down to 10 megawatts if we want to, but what is going to be the optimal scale? Let us not rule out something at around a scale of 500 to 600 megawatts, which would slot in nicely behind coal units as they are coming offline and, indeed, would stick with the same scale as that of the Magnox reactors that we have seen closing. I do not want us to rush down to micro-scale in a vain hope that that will answer our problems. There is a whole range of options that we should evaluate. Indeed, there is a whole range of coolants that we can look at, including molten salts. In such a short time, we cannot get into the delights of molten salt coolant, but I am a great fan and I believe that it has huge merits.
I look forward to hearing from the Minister what the UK is doing to bring on R&D. I have one specific question. In the discussions with China that took place this week, was R&D mentioned? China is undertaking a huge amount of R&D. Can we collaborate with China on that?
I thank all noble Lords for an extraordinarily rich debate.
Lord Bourne of Aberystwyth (Con)
My Lords, I thank my noble friend Lord Ridley for bringing forward this debate. It is good to see so much consensus on some of the important issues that we face, particularly after yesterday. I also welcome his idea of the nuclear bake-off; I shall be speaking later to the noble Baroness, Lady Worthington, because I see a definite commercial possibility in going forward with what she suggested on television.
I will first say a little bit about Hinkley and then try to deal with the contributions made by noble Lords. At the outset, I will say that given the time constraints, I would like either to make a Written Statement on the nuclear position or alternatively, if that is not possible, to write setting out the position of what we have touched on today, and on things we have not, given that there is an awful lot that we have not touched on. I want to be able to update noble Lords on what the department is doing, which is a considerable amount.
As has been said, the debate is timely given the signing of a strategic investment agreement this week in relation to Hinkley. Let me say a little about that because it is a significant step forward in the development of the first new nuclear power station in the United Kingdom for two decades. However, that is just the beginning. As has been suggested by some noble Lords, and in particular by my noble friend Lord Ridley, this is not an either/or situation. We can have Hinkley, and, indeed, we do need Hinkley, and we can have small modular reactors. It is my belief that they are not mutually exclusive in any way. The technologies for the next tranche of nuclear power are coming forward with Hinkley, Bradwell and Sizewell.
I thank the noble Baroness, Lady Scott, for what she said about her personal view on nuclear energy, and I also thank the noble Baroness, Lady Worthington. As I say, it is very good that at least within this forum we are able to have such unity, which is important. I say that, but I will not say any more about what is happening down at the other end. Clearly, it would be very useful to have some investment certainty on the nuclear power programme as we go forward. That is important.
The decommissioning and clean-up of the United Kingdom’s civil nuclear legacy also remains a national priority. Many noble Lords touched on this and, indeed, touched on the high hazard of Sellafield and the very high costs associated with it. I believe that we have learnt the lesson of that. It remains a massive part of the budget of the Department of Energy and Climate Change, and will do so for a considerable time into the future because of the particular hazards associated with it.
Many noble Lords also raised points about research and development, including the noble Lord, Lord Rees. That is crucially important. Research and development in this area was largely halted in the middle of the last decade. The department regards this as a high priority and views it as money well spent. I will say something about that in a minute in the context of the spending review. As noble Lords are aware, the spending review process is under way and we are at a crucial period. More will be able to be said when we are on the other side of it, but substantial work has been undertaken by officials in the Department of Energy and Climate Change, the Department for Business, Innovation and Skills, the Treasury, and the Nuclear Decommissioning Authority in relation to the nuclear decommissioning issue. We are also, of course, looking at the position of research.
Looking to the longer-term future, while technologies such as fast reactors and molten salt reactors and vehicles such as small modular reactors are still a significant time away from commercial deployment, we maintain a very close interest in their development. We are not starting from scratch. The United Kingdom, as has been indicated, has a rich research and development history which covers many of these reactor technologies and fuel types. We have previously designed and operated a diverse range of research and demonstration reactors, from the fast reactor programme at Dounreay to a number of interestingly named research reactors at Winfrith in Dorset. These include Zebra, Nestor, Zenith, Hector, Juno and, indeed, Dimple. Winfrith was also the home of the high-temperature Dragon reactor which provided some of the earliest experimentation with thorium-based fuels. I know that the noble Baroness has an interest in this.
The United Kingdom is also a leading nation in fusion research, which was touched upon by the noble Lord, Lord Hunt. I will get a specific answer to him about the position regarding the International Atomic Energy Agency. I was unaware of that, as officials were as well. If there is any particular information that the noble Lord could give us after the debate, we will certainly look at it to see what is holding up or preventing a demonstration at the annual event next year. If the noble Lord could come forward with that we would be very pleased to look at it.
There is also the Culham Centre for Fusion Energy. That part of Berkshire is becoming a sort of nuclear energy hub and it is very important to foster that. The Culham Centre is the United Kingdom’s national fusion research laboratory and forms a crucial part of the worldwide fusion research programme. It hosts the Joint European Torus, which is currently the world’s largest and most powerful fusion reactor and the focal point of the European fusion research programme.
The Government can help to create the environment and the frameworks required to support nuclear development and deployment, and the department is keen to do that. We also need to underpin the regulatory framework. I note what my noble friend Lord Ridley said about the long periods of time it takes to get these projects off the ground, but I also note the comments made by the noble Lord, Lord O’Neill, in relation to our first-class safety record. Clearly, we would not want to prejudice that, so we need to try to get the right balance between the two. Safety must come first.
However, I agree that we need to march forward, specifically on small modular reactors, which was mentioned by all noble Lords and has wide backing. The Government recognise that these could offer cost reduction and massive commercial benefits to the United Kingdom, particularly through factory production processes—the egg box point—and the reduced cost of capital needed to finance projects. There is also a big advantage with siting them. Potentially they do not need to be near the sea and the process of selecting sites could therefore go forward very quickly.
An initial feasibility study was completed in December 2014 and this made a start in building the evidence base we need to take it forward. This is being further developed, as my noble friend Lord Blencathra said, through a more detailed techno-economic assessment which is to be completed in March 2016, so that is not long to wait. I know that there is an urgency about this and I will ensure that as soon as we have the information, it is relayed on to noble Lords. This assessment will enable the United Kingdom Government to understand the opportunities for delivery, including industry views on strategic partnerships if Ministers decide to support small modular reactors. The department is sympathetic to the case. We are waiting for that evidence and then we will clearly assess it. This evidence will help to crystallise the Government’s objectives for SMRs by building our understanding of how the potential for SMRs could be unlocked.
Picking up on the point made by the noble Baroness, Lady Worthington, about the need for agreement on the harmonisation of regulation, we are engaged in discussions with our European partners about this and I will try to cover it in more detail in the letter that I send to noble Lords. It is a point well made in terms of the market. Obviously we need to march forward hand-in-hand and with the same considerations.
On the points about small modular reactors made by my noble friend Lord Blencathra in relation to marine nuclear propulsion reactors, certainly they are a part of the evidence base for looking at how they could be deployed However, there are particular problems with them. As the noble Lord said himself, they are not an automatic translation to land base. They have shorter serviceable lifetimes and the relative size of individual marine reactors is much smaller—they are at the smaller end of the scale of small modular reactors. Nevertheless we are looking at that and considering it.
As to the other points that have been made, I have picked up the point about the safety standards. I should perhaps have covered earlier a point relating to Hinkley. There will be what I understand is at least a 60% supply chain for UK business, which is important. I have covered the research programme. I have covered the point of the noble Lord, Lord Hunt, on Tokamak and the position with the IEAA. If the noble Lord could bring forward more detail on that we will certainly look at the conference in 2016 to see whether we are able to help. It sounds like a very good point.
The issue of CCS was raised and it is an important part of the mix. We spent a long time on it in the Energy Bill and there has been a degree of consensus around the Chamber and with the different parties which I am anxious to keep. However, again, it is not mutually exclusive with nuclear power. It is understood and agreed that we need a diverse mix.
The noble Viscount, Lord Hanworth, quite rightly talked about some of the challenges faced and the very good record of Rolls-Royce, with which I definitely concur. The noble Baroness, Lady Worthington, raised the record of France on nuclear, which, at the moment, as other noble Lords, including the noble Lord, Lord Hunt, have pointed out, is 80% nuclear. This is declining a little to diversify but what France does is significant and we are studying that.
Perhaps I may undertake to write with more detail on some of the points that have been covered and on some of the points that were not covered on the different technologies. In closing I should thank the Nuclear Innovation and Research Advisory Board for the advice it gives to the department. It is chaired by Dame Sue Ion and provides the Government with assistance and expert advice on the R&D needed for nuclear energy, which is significant. We need R&D in order to develop our nuclear future and to be competitive. It published its first annual report in January, which recommended an R&D programme of up to £250 million over the next five years. We are considering its advice. It is a vital part of the current spending review and I hope that the Chancellor will see a copy of the record of our proceedings today.