Justification Decision (Generation of Power by the RR SMR) Regulations 2026

Lord Roborough Excerpts

Tuesday 7th July 2026 Grand Committee

[Lord Roborough (Con)]

My Lords, I am grateful to the Minister for this statutory instrument following the Government’s consultation on the application for the Rolls-Royce small modular reactor. The decision obviously confirms that the small modular reactor is justified in principle, and we support that. This is an encouraging step in the right direction to enable the UK’s first small modular reactors and ensure that new nuclear reactor technologies form part of our future energy system.

Our domestic nuclear reactor industry needs a supportive Government in order to be globally competitive. There are many rivals around the world that benefit from such a situation, and we must not handicap our own. This is a strategic industry where the research and manufacturing capabilities are critical, not just to our energy security but to our national security. That support is critical also to the export success for Rolls-Royce SMRs in Sweden and the Czech Republic and its current European leadership. Rolls-Royce itself describes the need for volume to drive industrialisation and reduce unit costs.

As the Minister and the noble Baroness, Lady Grender, have pointed out, this is just a first step. The construction or operation of a reactor still has to go through all the hurdles of environmental permits, a nuclear site licence and planning consent. The Government must be consistent in their backing, and I would be grateful if the Minister could set out a timeline for the delivery of the first UK SMRs.

I have a few further questions related to the issues in this SI, which may well be outside the brief that the Minister and I usually inhabit so I will be completely happy with replies in writing. There is considerable evidence of the favourable carbon emissions intensity of SMRs, but what assessment have the Government made in coming to this decision about the cost of this electricity and how that will compare to other electricity generation sources? We appreciate the importance of this project but we would welcome the publication of more information on the impact of future electricity costs in the UK.

When making these calculations, can the Minister confirm whether they rely to a greater or lesser extent on the Government’s internal calculation of current carbon emissions, last published at a central cost of £273 per tonne? By contrast, the UK Woodland Carbon Code units trade at £30 to £40 and our own ETS price is £60 per tonne. I asked the noble Baroness’s colleague in the debate on the carbon orders two weeks ago whether this really was an appropriate cost and whether this leads to faulty decision-making about the appropriate energy investments in this country to create an affordable energy transition; I am yet to receive an answer. I should also, in that context, declare my interest as a developer of Woodland Carbon Code forests.

When we debated the creation of GB Energy in your Lordships’ House, we were assured that it would not crowd out private sector investment. Now, it has been selected as preferred bidder for the Wylfa SMRs. How can we be confident that it has not done that by using the UK’s low sovereign cost of borrowing to out-compete the private sector? How can we be confident that this government body has priced risk effectively when competing with the private sector?

Furthermore, this Government scrapped the previous Government’s plan for two SMR projects and have refused to honour the commitment for 24 gigawatts of electricity to be generated from nuclear by 2050. We are all aware of the need for energy infrastructure, as well as the economic opportunities it brings. Can the Minister give any indication of whether the incoming Prime Minister will be more ambitious and may at least match the ambitions of our previous Conservative Government? I look forward to hearing her response.