Philip Dunne backs the Government’s nuclear energy and Small Modular Reactor (SMR) programme, but reiterates the Environmental Audit Committee’s concerns that, in order for the UK to be a world leader in SMR technology, there is a need for further clarity in the Government's specific gigawatt roll-out expectations and the competition and contract awarding process needs to proceed at pace.
Philip Dunne (Ludlow) (Con)
I am grateful to the hon. Member for Kilmarnock and Loudoun (Alan Brown) for referring to the letter that the Environmental Audit Committee has just sent under my name to the Secretary of State. I am pleased that my hon. Friend the Member for Folkestone and Hythe (Damian Collins) allowed the letter to be tagged to this debate when he secured it, and I congratulate him on doing so. It is on an important subject and, from our Committee’s point of view, it is timely, because we wrote to the Secretary of State only a few weeks ago, before the recess.
Some members of my Committee—it is a very diverse Committee, with a complete range of opinions on this subject—have very strong reservations about the role and scope of nuclear energy in the UK, but I will start by placing on record my personal support for nuclear energy and the SMR programme, which was the subject of our letter and will be the subject of my remarks today. It is an important part of the path to net zero, contributing not just to baseload, but to the significant increase in electricity generation that will be required if we manage to decarbonise our economy, as is supported across the House.
I look forward to listening to the contribution from the Opposition spokesman, the hon. Member for Southampton, Test (Dr Whitehead), but the Labour party’s energy policy is in complete disarray. I therefore welcome the stark contrast that the Minister has provided—particularly in his new role as Minister for nuclear—by getting nuclear on the road to regeneration as a core part of our energy mix as we move towards net zero. It is precisely because the Labour party, during its last period in office, made no decisions and would not even debate the subject that we have such a skills shortage in the UK civil nuclear sector. That was picked up in an intervention by the right hon. Member for Warley (John Spellar). No new nuclear reactors have come online in the UK since 1995 because of that indecision, so I welcome the civil nuclear road map, which sets out the Government’s ambition to reach as much as 24 GW of nuclear power by 2050. The intent to deploy SMRs will assist the UK in reaching that target, as is set out in the British energy security strategy.
I ask the Minister to consider the concerns that I raised in the Committee’s letter of 13 February to the Secretary of State, among which is the fact that the investment decisions sought between 2030 and 2044 are likely, on current plans, to realise generating capacity of between 9 GW and 21 GW. The Minister, who is very good at maths, will recognise that that is quite a range: 12 GW, or half the Government’s 24 GW upper target for nuclear capacity by 2050.
Great British Nuclear told our Committee that the Government’s target of producing up to 24 GW of nuclear power was not sufficient to give industry confidence about the scale of investment that would be required and suggested that a specific programme should be required to facilitate industry confidence. Further clarity—this was the essence of my letter—would be welcomed. Despite the Government’s assertions in response to the Committee’s recent intervention, as it stands the road map does not offer as much clarity as industry and investors require.
Given the increasing international interest and competition in investment in building nuclear energy capacity, we need to recognise that the UK market for creating that additional capacity cannot be considered in isolation. We are in an international race to transition our economy into a decarbonised world in which many other countries are looking to build nuclear capacity. Those involved in delivering that capacity will have choices: where to invest, to build and to bid.
A key role for Government in achieving their objective of introducing SMR nuclear energy is to provide as much clarity as possible in the process for decision making, the timescale to which they are working and the manner of the procurement process, including funding and contracting models. I urge my hon. Friend the Minister to make the Government’s expectation on gigawatt roll-out as clear as possible, so that the contribution SMRs are expected to make to the electricity generation mix in the UK by 2035 is made available to industry. That will give it the confidence it needs to invest in the programme to the extent the Government would like and according to the timetable they have indicated in the road map. I assume Ministers are as convinced as I am about the future role of baseload generation in supplying electricity to the grid, alongside the power to be provided by renewables, and I am sure the Minister will need no further invitation to set that out in his response.
On current estimates, it seems unlikely that SMR deployment will be contributing generating capacity to the grid until 2035, the date by which the Government expect the GB electricity grid to have been decarbonised, with both Hinkley and Sizewell likely to be operational in the early 2030s. Quite how the Labour party believes it can decarbonise the grid by 2030, a full five years ahead of that, against all consensus of prevailing expert advice, is a matter for Labour, but it seems wholly fanciful and frankly misleading to the British public.
So what will the additional generating capacity to be delivered through an SMR fleet provide? There are strong suggestions in the road map and its supporting papers that a fleet of SMRs based on advanced nuclear technologies will have applications beyond power generation, but until those technologies are proven to be viable for deployment in SMRs, with the benefits that a modular approach to construction is expected to provide, which were highlighted by my hon. Friend the Member for Folkestone and Hythe (Damian Collins) in introducing the debate, they remain some way off being ready for investment.
Not only is nuclear, and the SMR approach to deployment, a crucial component of reaching net zero, but there are significant economic benefits to the UK if we are a leader in this technology, including a large potential export market for SMR units. The UK’s SMR programme is in an advanced position among western countries. It has the potential to facilitate a nascent export market and deliver new skilled jobs across the UK.
Along with my right hon. Friend the Member for West Suffolk (Matt Hancock), in 2015, when I was Minister for defence equipment, science and technology and had responsibility for defence nuclear procurement, I was proud to launch the coalition Government’s programme for sustaining the UK’s nuclear skills. The competitive advantage we have in this field is potentially huge, if properly resourced and incentivised.
However, all of this requires the Government to flesh out the road map in ways that further demonstrate a long-term commitment to the UK’s nuclear future, and to learn from the issues in procuring gigawatt-scale nuclear when developing its strategy to deliver nuclear through SMRs. Simon Bowen, whom I commend for his clear leadership of Great British Nuclear, explained to the Committee that between one and four SMR designs are to be selected for Government contracts, with at least one SMR project to be taken to final investment decision by 2029.
On the issue of the timetable, I was disappointed that the road map removed reference to clarity of the timeline for the conclusion of the current design competition, signalling that the Government may push back awarding contracts to winners of the SMR design competition beyond summer 2024 as originally intended. I hope the Minister will use this opportunity to clarify when he expects to announce the outcome, and hopefully that will be prior to the summer recess. Any of us who have held responsibility for procurement in Government will know that time is a constant pressure, so I encourage the Minister to do all he can while in post to put in place the right processes early, so that deadlines do not slip.
Our Committee has said that, in the interests of parliamentary and public confidence in both the expenditure of public money and the timely delivery of expected benefits, the SMR programme should be fully subject to a value for money audit by the National Audit Office, provided that this in itself does not add delay to the delivery. I recognise the pressure to streamline planning and regulatory processes, but the Committee thought it vital that robust governance and safety arrangements were maintained. This is not an area where Ministers will want to cut comers.
While I am on my feet, I ask the Minister to comment in his closing remarks on media reports that Great British Nuclear is in discussion with EDF to purchase a part of the existing nuclear site at Heysham as a likely location for one of the first SMR facilities. My hon. Friend the Member for Morecambe and Lunesdale (David Morris)—a neighbour of yours, Mr Deputy Speaker—in whose constituency Heysham sits, cannot be here for this debate, but he has told me that the site in his constituency has grid and rail connections, a supportive community, and, clearly, a highly skilled workforce—the largest of any generating nuclear site in the UK—which could support the operation of any future nuclear development at Heysham. In order to help accelerate deployment once the successful designs have been selected, which other speakers in this debate have called for, can the Minister confirm whether GBN could make a start on preparing one or more sites for the eventual successful bidders, once the Government have announced which sites they have designated for initial deployment?
Finally, the fact that every nuclear power plant started life under a Conservative Government demonstrates our willingness to make important decisions for the long- term future of this country. I welcome the Government’s plans, as they represent the biggest expansion of nuclear power for, I believe, 70 years—my hon. Friend the Member for Folkestone and Hythe said 50 years—which will lead to a quadrupling of nuclear capacity by 2050. The UK can once again become a leading nation in providing civil nuclear energy, and this Government can take credit for taking the key decisions to bring that about. It would be great to expedite those decisions as soon as possible.