Energy: Civil Nuclear Power

Viscount Trenchard Excerpts

Thursday 9th December 2021 Lords Chamber

[Viscount Trenchard (Con)]

My Lords, I am grateful to my noble friend Lord Howell of Guildford for introducing this timely debate. I declare my interest as a consultant to the Japan Bank for International Cooperation and a member of the advisory board of Penultimate Power UK Ltd.

Those of us who regret our surrender of the leading position we once held in nuclear energy technologies and had eagerly awaited the publication of the oft-delayed energy White Paper, Powering Our Net Zero Future, in December 2020 were disappointed at the rather reluctant and understated recognition of the part that nuclear energy needs to play in our future energy mix. It appeared almost as though the paper’s authors hoped that people would not notice that nuclear forms any part of our energy plans at all. Indeed, the ministerial foreword by my right honourable friend Alok Sharma, the Secretary of State at the time, does not mention nuclear even once. Nuclear is first mentioned on page 9 of the White Paper where, together with renewables and hydrogen, it is described as “clean”. At least nuclear power is mentioned as one point in the Prime Minister’s 10-point plan, which states:

“We are pursuing large-scale nuclear, whilst also looking to the future of nuclear power in the UK through further investment in Small Modular Reactors and Advanced Modular Reactors.”


However, the section headed “Transform Energy” on page 16 of the White Paper commits only

“to bring at least one large-scale nuclear project”,

beyond Hinkley Point C,

“to the point of Final Investment Decision”

within the current Parliament, as mentioned by my noble friend Lord Goodlad. The main section dealing with nuclear is on pages 48 to 50 of the White Paper, but the tone in which the strategy regarding nuclear is explained seems to lack enthusiasm and does not stress enough nuclear’s key advantage over other forms of green energy; namely, its reliability as a core part of a baseload energy supply.

Under the section “Advanced Nuclear Innovation”, the White Paper informs us that the Government will provide up to £385 million in an advanced nuclear fund for the next generation of nuclear technology, aiming by the early 2030s to develop an SMR design and to build an AMR demonstrator. By “SMRs”, I think the Government mean reactors employing generation 3 technologies based on pressurised water reactors, such as the UK SMR based on Rolls-Royce’s technology. Rolls-Royce’s long experience as the manufacturer of the nuclear reactors powering our Trident submarine fleet well qualifies it for the £210 million grant announced by the Secretary of State during the COP 26 conference. This grant will unlock a greater amount of private sector funding.

The Government’s approach to nuclear energy has moved in a positive direction since the White Paper. Besides the Rolls-Royce announcement, they deserve credit for the leadership on nuclear they displayed during COP 26, especially given the intransigent opposition to nuclear still deployed by Germany and some other countries. I ask my noble friend the Minister: are the Government now willing to reverse the specific exclusion of nuclear from their green financing framework published in June? This unfortunate decision raises the cost of financing nuclear energy projects and prevents developers accessing funds raised by the issuance of green gilts and green savings bonds. The Government need to show leadership on this matter, because the exclusion of nuclear does not encourage those investors who might otherwise be moved to change their ESG policies to include nuclear.

However, the speech made by my right honourable friend the Energy Minister on 2 December at the annual conference of the Nuclear Industry Association was most welcome. Mr Hands clearly stated that “net zero needs nuclear.” He explained that, following evaluation of the responses to the call for evidence on the AMR research, development and demonstration programme, the Government have decided to focus on high-temperature gas-cooled reactors as the technology choice moving forward, with the ambition for this to lead to a demonstration by the early 2030s.

This technology, which would be complementary to Rolls-Royce’s SMRs, has been operated safely and efficiently in Japan for some 10 years. This is the high- temperature gas-cooled reactor—or HTGR technology —developed by the Japan Atomic Energy Agency. The JAEA switched off its prototype reactor, called the high-temperature engineering test reactor, following the Fukushima incident in 2011, but was permitted to restart operations in July.

The National Nuclear Laboratory has had a technical collaboration agreement with the JAEA since 2001, and in October 2020 this was broadened specifically to cover the HTGR technology. This technology is categorised as a generation 4 technology but is already developed and walk-away safe. Does the Minister agree that, since it is already fully developed, it can be rolled out much sooner than the White Paper suggests? I understand that the Japanese Government are waiting for ministerial endorsement of the Government’s backing for the early introduction to the UK and commercialisation of this technology.

There are, of course, other HTGR-type technologies, but I think that JAEA’s is the most suitable, for a multitude of reasons. It is based on an early British design, the Dragon reactor, which was developed by the former United Kingdom Atomic Energy Authority at Winfrith in Dorset in 1965. As my noble friend Lord Howell explained, both major new nuclear power station projects on which we had intended to collaborate with Japanese companies—the NuGen project at Sellafield Moorside with Toshiba, and the Horizon project at Wylfa, Anglesey, with Hitachi—collapsed due to a failure to raise the large amounts of equity finance required. Does my noble friend the Minister not agree that it would be a very encouraging development if we could work with the Japanese on this HTGR project, which would mitigate the disappointing setback resulting from the cancellation of the two large nuclear projects?

Furthermore, this technology has several advantages, even over Rolls-Royce’s technology. The reactors are very much smaller—producing 50 megawatts thermal or 22 megawatts electric—and therefore much more flexible. They also should provide much better value for money. Importantly, their output is expected to produce industrial heat energy, now largely supplied by natural gas as well as electricity. Renewable energy cannot replace fossil-fuelled industrial heat. In the past, policy errors have arisen as a result of the incorrect assumption that energy and electricity mean the same thing. Energy describes the work and heat available from all energy carriers, from the point of supply to consumption, whereas electricity is only one of those carriers. Currently, electricity represents only around 20% of the UK’s energy demand. While laudable progress has been made with reducing electricity emissions, less than half of that 20% is low carbon. Energy, transport and industrial processes take up 80% of the UK’s energy demand and account for 50% of the UK’s emissions.

HTGRs have yet another advantage. They will produce large quantities of green hydrogen. As announced in the Prime Minister’s 10-point plan, the Government will work in partnership with industry to evaluate hydrogen as an option for heating our homes and workplaces. The rollout of HTGR reactors should assist the Government in their aim to create 5 gigawatts of low- carbon hydrogen production capacity by 2030.

I look forward to the Minister’s winding-up speech and very much hope she will agree with my suggestion that we should speed up our discussions with the Japanese on introducing this technology to our country, as it can play a very important part in achieving a clean energy strategy. Can she also tell the House how the Government will determine which HTGR technology will be supported and when? HTGRs can make a significant contribution to industrial decarbonisation, as long as timely decisions are made both on support and on an enabling policy framework.