(5 days, 15 hours ago)
Lords ChamberMy Lords, Amendment 202 is in my name and that of my noble friend Lord Offord of Garvel. It addresses the pressing need to streamline and speed up the delivery of new nuclear power stations, currently burdened by heavy-handed regulations. It aims to correct this and ensure that our planning system facilitates rather than fetters the delivery of affordable, accessible and secure energy for the British people.
Energy is the fundamental deciding factor in the success of an economy and that has never been truer than it is today. Energy is indeed now the currency of AI. Progress is decided by whether innovation can be supported by a cheap and accessible supply of energy, and in the present day, with round-the-clock data centres, AI start-ups and an economy that runs non-stop, that is all the more important. If we want to be a growing and prosperous economy, we cannot resign ourselves to be a nation that accepts intermittent and expensive energy.
Unfortunately, we—I include successive Governments in that—have so far done just that. Our international counterparts have been busy reducing their costs and securing their domestic energy supply. At the same time, we have been busily engaged in a somewhat blinkered and self-defeating ideological pursuit. The result is that our costs are now some of the highest in the world, and our shackled planning system does not let us correct this.
This is not an attempt to play politics; the empirical evidence proves the point. Wind and solar energy now account for nearly 40% of our national grid generation. We have commandeered fields and tarnished the countryside to reach this outcome. The result is that even if wholesale prices halve in the next five years, electricity prices will be 20% higher. The policy costs of this Government’s initiatives add around £300 to the average annual bill and cost companies twice as much to deliver it as it does in France. This is not the result of an efficient energy system.
The obvious solution to this is to build more nuclear power plants. They may have large upfront costs, but that is offset by relatively small variable costs. There are potential economies of scale, and they are infinitely more productive than the sources of energy we currently rely on. Once built, they are entirely domestic and provide a secure and sovereign energy source. Replace wind with nuclear power and we have a source of energy that uses up 3,000 times less land—that is an environmental change that will have a noticeable effect on the people of this country.
The problem lies in the fact that we have not taken the necessary steps to realise nuclear’s benefits. The last nuclear power station to come online did so 30 years ago, and of the five in use, four are scheduled to close by the end of the decade, as it currently stands. Hinkley Point C, currently under construction, is set to become the most expensive power station in human history, at an exorbitant £44 billion in 2024 terms. It uses the same EPRs as counterparts in France and Finland, yet they pay 27% less per kilowatt hour than we do.
I spent yesterday in Finland at Olkiluoto 3, the first nuclear power station to have been opened in 15 years. It began electricity production in 2023. It is estimated to last for another 100 years and is the third-most powerful nuclear power generator in the world. It produces almost a third of all electricity in Finland, regardless of the weather or the time of day. It is the same design as Hinkley Point and that proposed for Sizewell C, so we should learn from the engineering challenges faced by the Finns.
The environmental lobby has undertaken a two-pronged attack on energy security, the first of which is the endless sprawl of wind and solar farms, the second being the endless stream of consultations, challenges and appeals that are now a given with every new planning application. This amendment would go a long way to answering that problem, putting progress over paperwork and allowing vital national infrastructure to be built.
If we seriously want lower bills, a dynamic and growing economy and a Britain that attracts investment, we must be brave in bypassing the self-sabotaging legislation which holds us back. This amendment would not dangerously free the market. It is a balanced approach that gives the Secretary of State the choice—it is a choice—on whether the benefits of nuclear power must outweigh discretionary environmental concerns. It would allow us to achieve energy security, embrace the new technologies that come with industrial development and enable the growth that this Government have for such a long time promised. I beg to move.
My Lords, I will speak to my Amendments 207, 220 and 230, which are all linked. I am grateful to the noble Lord, Lord Roborough, for supporting them. I am also grateful for all the constructive engagement I have had with the Minister and her teams between Committee and Report. I am sorry that the noble Baroness, Lady Hayman, cannot be here this evening and wish her a speedy recovery.
I reflected on the Committee debate which highlighted the contentious nature of these amendments. Of course, noble Lords are concerned about rolling back protections for nature for infrastructure build, and the delays we have seen to large infrastructure in the UK are a multifaceted problem, but we cannot get away or escape from the fact that poor interpretation of environmental regulations is causing excessive cost and multiyear delays to many of our large infrastructure projects. The evidence here is clear—I will not go through the examples again that I cited in Committee.
The root cause of the delays to many of our offshore wind and nuclear programmes, and the other examples that I cited, and their excessive costs, comes down to an overzealous interpretation of the habitats regulations. Ironically, those regulations are causing long delays to much of our net-zero infrastructure and much else besides. They are impacting our national security, because energy security is national security.
My amendments offer a way through that, while maintaining protections for nature, by attempting to take the regulations back to their original intent by reversing case law and clarifying interpretation of existing law. These changes would move the dial significantly by ensuring that regulators are guided towards a more sensible and proportionate interpretation of the regulations and compensation, streamlining the programme for getting infrastructure through the system.
Finally, these points relate to a substantive proposal that the Minister has offered related to these amendments, so I look forward to hearing her proposal in detail when she sums up.
(3 years, 1 month ago)
Lords ChamberBefore we continue, I remind noble Lords that the Companion asks noble Lords to make their speeches directly relevant to the amendments they are proposing and—please—to keep those comments as short as they possibly can. Thank you.
My Lords, I shall speak to Amendments 7 and 242. I declare my interests as a project director working for Atkins, which is in the energy industry, and as a director of Peers for the Planet. I thank the noble Baroness, Lady Worthington, who I have worked with to develop these amendments.
Amendment 7 has similar objectives to Amendment 1 in the name of the noble Baroness, Lady Blake, and spoken to by the noble Lord, Lord Lennie. I concur with his comments on the necessity of clearly setting out the purpose of the Bill and legislating for a strategy and policy statement on its implementation. Amendment 7 brings out two specific aspects that are further detailed in Amendment 242. These are the importance of a plan for delivering against the 2035 target to decarbonise our electricity system and for the electrification of energy use in the UK.
The reason that electrification is so important stems from the second law of thermodynamics. As my favourite physicist, Richard Feynman, said in his superb analysis of the “Challenger” disaster in 1986, “Nature cannot be fooled”. Whatever options we come up with for decarbonising our energy system, and whatever laws and policies we make, we run up against fundamental constraints from the laws of thermodynamics. For example, using hydrogen to fuel road transport will always be much less efficient and use far more energy than electrification, no matter what technical advances are made in hydrogen production. Similarly, using electricity to heat homes via a heat pump will always be more efficient than producing hydrogen for the same purpose. This is not to say that hydrogen production should not be pursued as a matter of urgency, as it will be vital in some areas, but its use should be focused on areas that are absolutely necessary. The efficiency gains and the reductions in primary energy use from electrification mean that this is a vital metric to consider as our energy system evolves.
The enabler of all of this is a decarbonised electricity system. We have a world-leading target to decarbonise our electricity system by 2035, but I worry about delivery. Atkins has undertaken a calculation of the rate of new capacity required to hit the 2035 target. This is not anything complex: it simply divides the capacity in the BEIS scenarios by 12 and a half years, allowing for an estimate of the capacity that will be decommissioned over that timeframe.
As I stated at Second Reading, this calculation results in a minimum of an average of 12 gigawatts of annual installed capacity being needed every year between now and 2035 to hit that target, so the next question is, with a baseline of 12 gigawatts, what have we managed in recent years? In 2019 we managed 2.8 gigawatts of new installed capacity. In 2020 we managed 1.1 gigawatts and in 2021 we managed 1.6. If we go on like this, it is very hard to see how we will meet the 2035 target. The upshot is that to replace ageing power plants and ensure that enough generation is built to meet peak demand requirements, the UK needs to build a minimum of 159 gigawatts of new generating capacity by 2035—the equivalent of building the UK’s entire electricity generation system one and a half times over in slightly more than 12 years. It is not only generating capacity but all the grid infrastructure to support it, as well as energy storage and data management.
This says to me that there is a significant risk that the Government will not be able to meet their 2035 target. I work on the coalface, as it were—I am not sure that is the best analogy. The industry has a long way to go to gear up for this pace of delivery, so alongside the 2035 target we urgently need a strategy for delivery. This reflects one of the priority recommendations from the CCC’s 2022 progress report: we need a delivery plan to provide visibility and confidence for private sector investors, to reduce costs and to build up supply chains. There is a key gap here in comparison to other sectors. We have the Heat and Buildings Strategy and the transport decarbonisation plan, but we do not have a plan for electricity decarbonisation, despite it being so important as an enabler for those other plans. I would be grateful if the Minister could, in summing up, state that the Government will bring forward such a delivery plan for electricity system decarbonisation.
Amendment 242 details our approach to legislating for this strategy. The noble Baroness, Lady Worthington, pointed out to me that we already have a toolkit to approach this via the Energy Act 2013—the mechanism of a decarbonisation target range and decarbonisation orders. If we take these existing powers and modify them, we can set a range for carbon intensity of electricity production in the UK each year and targets for electrification of the energy system. The report must also include the expected volumes of installed capacity and energy produced by electricity energy source for each calendar year to 2035. This rigorous approach will deliver the required strategy and plan to give industry and investors a clear road map to 2035, which, lest we forget, is only slightly more than 12 years away.
There is a great opportunity in this Bill for the Government to legislate for a strategy to give industry and investors the confidence they need to reduce costs and build up supply chains for 2035, significantly reducing delivery risk, with efficiency and minimising primary energy consumption at the forefront. I strongly support the Government in their ambitions for 2035 and the target that they have set, but there is much to do in a short time, and I hope the Government will take this opportunity to ensure that there will be a clear plan for delivery to ensure the success of their ambitions.
My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I declare my interests as in the register.
My Lords, the energy White Paper acknowledges the important role that both nuclear energy and hydrogen can have in meeting our climate targets. I am aware of industry proposals showing how current nuclear technologies could play a role in hydrogen production during the 2020s, while small and advanced modular reactors could unlock further efficiencies in future hydrogen production. We will say more on the role of hydrogen production technologies, including nuclear, in our forthcoming UK hydrogen strategy.
I thank the Minister for that Answer. Nuclear is a low-carbon, always-on source of power that has the power to economically produce green hydrogen at scale, complementing offshore wind. Will the Minister agree to liaise with the Department for Transport to ensure that nuclear energy is added to the renewable transport fuel obligation following the consultation? This is a great opportunity to create demand and get green hydrogen production moving. Can she also assure the House that nuclear will play a role in her department’s forthcoming hydrogen strategy?
My Lords, the noble Lord, Lord Ravensdale, makes a very good point. The RTFO was created specifically to address the transport element of the EU renewable energy directive, but to be eligible hydrogen had to be produced from renewable energy. This year we are consulting on preferred long-term sustainable business models and the revenue mechanism to stimulate private investment into new low-carbon hydrogen projects. The UK will take a science-based approach to this whole area of taxonomy. I am sure the noble Lord will have seen the recent leaked report from the EU, which concluded that nuclear is actually no more harmful than any other technology, so we will watch this space.
The noble Lord, Lord Davies, raises an important point. The freeport bids for England are already in and an announcement is expected shortly. I know that the MP for Ynys Môn, Virginia Crosbie, has worked tirelessly with a group of qualified and interested local stakeholders to put together a bid for a freeport for Ynys Môn. This will be ready to go when we launch the competition for Wales, on which we will work together with the Welsh Government.
My Lords, I declare my interests as in the register. The national thermal hydraulics facility is a key part of the nuclear sector deal and will bring jobs and investment to Anglesey, making the most of the strong nuclear skills that exist in the area. Can the Minister say what progress has been made with this facility and, importantly, how it will align with the testing requirements of the UK SMR programme?
The national thermal hydraulics facility is a key part of the nuclear sector deal and would indeed bring jobs and investment to Anglesey. The issue is very live at present. Collective and separate discussions are taking place between BEIS, the Welsh Government, the UKAEA, Rolls-Royce, whose SMR design is pivotal in this decision-making process, and the Menai Science Park, which would host the hydraulics centre. The technical needs of the Rolls-Royce SMR are being worked into a redesign of the proposed facility, but issues still remain over the height-planning restrictions, extra funding and future financing requirements of the facility. Perhaps all the parties can dig deep.
(4 years, 9 months ago)
Lords ChamberMy noble friend will be aware that EDF is estimating a 20% reduction in cost for using the same technology that it has been using at Hinkley Point C, which is why we are proceeding with Sizewell C. We need a mix of all these technologies. He is right to point out the potential of advanced nuclear technologies: that is why we are investing in them. The Rolls-Royce SMR is likely to be operational by 2032. Investment in AMR technology, which has the potential to help us in our hydrogen ambitions, will follow shortly thereafter.
My Lords, I declare my interests, as shown in the register. We are losing a large amount of low-carbon firm power capacity by the end of this decade. Much of the debate on future generation has been based on comparison of levelised costs of electricity metrics between technologies. Does the Minister agree that this does not recognise the system costs of intermittent generators, and that an alternative model should be developed which accounts for this and positively incentivises renewable generators, such as equivalent firm power auctions?
The noble Lord makes an interesting point. He is right that we should take all costs of the energy system into account when making choices about our generation mix. The latest departmental modelling does this. It is not as simple as calculating firm power equivalence. A system’s cost depends on what is available across the sector, rather than focusing on each type of generation separately.
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.
My noble friend speaks with great authority on this point. He is right that various modes of transport are already able to use hydrogen fuel cells to provide zero emissions at the tail-pipe. He will be aware of hydrogen pumps sited alongside petrol pumps at some service stations already. However, while hydrogen can also be combusted in internal combustion engines without greenhouse gas emissions, it does produce nitric oxide, so would not count as zero emission. My noble friend can be reassured that the Government’s intention is to phase out new petrol and diesel cars by 2030 and for all new cars and vans to be zero emission at the tail-pipe by 2035. Every effort is being made to support innovation and scale-up of low-carbon hydrogen across the value chain.
I draw the attention of noble Lords to my entry in the register. There remain significant technical risks with the use of hydrogen. For example, capture rates of carbon capture and storage technology used in the production of hydrogen could result in high residual carbon emissions. Therefore, does the Minister agree that mature, low-carbon heating technologies, for example heat networks and heat pumps, should be deployed at a rate commensurate with the 2050 target, in case hydrogen does not prove viable at scale?
I do agree with the noble Lord. He is right that proving the safety case through rigorous testing and trials is critical to the success of any new technology or fuel source. That is why the 10-point plan sets out plans for a series of incremental trials, potentially leading up to a hydrogen village by the end of this decade. Alongside this, it also sets out plans to implement the future home standard in the shortest possible time, so that new buildings can have high levels of energy efficiency and low-carbon heating, including the aim for 600,000 heat pump installations per year by 2028. The truth is that we need all these technologies to be developed at scale.
I acknowledge my noble friend’s concerns in this sector. The energy White Paper will still be published at the end of this quarter and will address some of those concerns. We have also been investing in new technologies for small and advanced modular reactors, which have significant potential to support a secure, affordable and decarbonised energy system. Although Horizon has suspended plans for Wylfa in Ynys Mon, the consent order is still live until the end of March and we are working hard to develop models that could work for Sizewell C and Bradwell, which would be a different form of reactor altogether.
My Lords, what assessment has been made of the possibility of further extending the life of the advanced gas-cooled reactor fleet beyond 2030? There is the potential to further extend the life of the three newest stations, which would help provide much needed low-carbon electricity until new nuclear capacity can be brought online.
I assume by the question that the noble Lord means extension of those that currently have problems? They are obviously under investigation by the Office for Nuclear Regulation. Certainly, the ones at Hunterston in the north of Scotland are expected to be back online by the end of April.