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#UKPLC – New UK #Nuclear Sector “Deal” or “debt”? comments in #Westminster 11th July 2018

Westminster Hall

Wednesday 11 July 2018

[Albert Owen in the Chair]

SNIPS only (Full comments can be found here; https://hansard.parliament.uk/commons/2018-07-11/debates/aa24e4f6-edae-4281-a858-d7ce5ac753c8/WestminsterHall )

subs1111.jpg

Image of rotting nuclear submarines ignored by the MOD (Image source; https://www.plymouthherald.co.uk/news/plymouth-news/nuclear-submarines-left-rot-devonport-1043977 )

Nuclear Sector Deal

Trudy Harrison (Con Copeland)

NUCLEAR WASTE OR BRITAIN`S PRIDE?

“…...I am really pleased to see the potential for better collaboration between nuclear defence and nuclear civil, and many references to apprenticeships. It is a rare document, which both excites and instils pride, as this industry, which is equal to the automotive industry in economic output, is quite rightly recognised.

Moving to the content of the deal, the optimism for research and development across the industrial strategy is welcomed. The National Nuclear Laboratory is a world-leading centre in my Copeland constituency, based near Sellafield, where scientists, in collaboration with the University of Glasgow and Lynkeos Technology, have developed an innovation that uses cosmic particles to detect nuclear materials, which could revolutionise nuclear decommissioning and the storing of historic waste. It is being used to investigate the location of molten fuel within the Fukushima Daiichi plant in Japan. The technology is now being commercialised and is just one example of how Innovate UK R&D funding is being used to create commercially marketable, globally required products.

Recognition for better routes to market, retaining intellectual property and support for export and decommissioning, is long overdue. The techniques and skills for and innovative solutions to incredibly complex legacy challenges in difficult or impossible to work in environments are being met daily in and around Sellafield and the low-level waste repository. Being the world’s first to design, commission and operate, and then being the world’s first to decommission, brings unprecedented opportunities for UK plc…..”

HOPE, REDUCTION AND GREED

“…..To secure the future of the third large-scale reactor in the Generation III programme, Moorside requires the regulated asset base to be implemented as soon as possible to give certainty to investors. The sector deal aims for a 30% reduction in the cost of new build projects by 2030, alongside promoting a more competitive supply chain, with more UK companies using advanced manufacturing methods and entering domestic and export markets for nuclear goods and services than ever before.

The global nuclear new build economy is worth around £1.2 trillion. Harnessing the scientific and industrial capability within Britain across the sector while recognising the wider opportunities in the UK’s financial services and regulatory frameworks would mean that this country was geared up to take full advantage of such a huge international market……”

A SERIOUS EDUCATION SHORTFALL

“…The many references to people in both the industrial strategy and the nuclear sector deal signifies the huge importance of continuing to develop world-class skills. With an attrition rate of around 7,000 people each year and an anticipated requirement for 100,000 nuclear workers by 2021, it is essential to deliver on the proposed investment in maths, digital and technical education….”

BRIBING THE LOCAL POPULATION ( FUTURE WORKERS)

“….“Cumbria, a great place to work…an even better place to live”.

Delivering on the intentions in the deal, legislating for the regulated asset-base model, expanding the role of the NDA and taking a long-term approach to the industry will put us in the best position to create maximum economic impact with job and energy security for future generations……”

Luke Pollard  (Plymouth Sutton and Devonport Lab/CoOp)

“….I believe in a mixed energy policy with a greater focus on renewables and carbon-minimising generation from nuclear…..”

“….I am a fan of new nuclear, but my constituency is home not to civil nuclear jobs but to defence jobs. Our dockyard is the sole nuclear repair and refuelling facility for the Royal Navy….”

IGNORING THE COSTS

“……Nuclear jobs are not in the heart of the capital like financial services jobs. They are in the regions—the north-west and the south-west—and rightly so. Although I do not always agree with the high strike price for new civil nuclear, there is no doubt in my mind that civil nuclear has a bright future…..”

TAX PAYER HANDOUTS

“….Military nuclear matters. I welcome the, albeit brief, mention in the nuclear sector deal of greater co-operation between civil and defence nuclear. I believe we need to do much more to enhance collaboration and co-operation between those two sectors—not just in research, but in jobs, skills, training and, importantly, decommissioning. The civil nuclear decommissioning programme rightly enjoys cross-party support. The taxpayer has unlimited liability to clean up the nation’s civil nuclear legacy and the sites contaminated by our country’s exploration of civil nuclear and its mastery of nuclear energy…..”

OLD NUCLEAR SUBMARINES ARE PILING UP

“….Although there has been progress on the civil side of nuclear decommissioning, that has not been the case with defence nuclear. Hon. Members may not know that the UK still has every single nuclear submarine we have ever had. It is time that the legacy of old submarines was dealt with. Devonport dockyard in my constituency has 13 laid-up nuclear submarines awaiting recycling. Rosyth in Scotland has seven, and there are more to come. In Devonport, the oldest sub in storage is HMS Valiant. She is 54 years old, and was launched in 1963 at the height of the cold war. Many have been stored for decades, including the HMS Conqueror, which famously sank the Belgrano in the Falklands war.

As a proud janner and a Plymouth lad, I have grown up knowing about those subs, but far too many people do not know about them. “Don’t they just go away?” was how one person responded when I told them about the old subs. Well, no, they do not. Those nuclear submarines get stored because the UK has no funded programme to recycle them. Eight in Devonport still have nuclear fuel rods and have not been defueled yet…..”

UK MILITARY STILL IGNORING THE PROBLEM AND PASSING THE BUCK?

“….Members for Copeland and for Dunfermline and West Fife (Douglas Chapman) to deal with our nation’s military nuclear legacy. We sent a joint letter to the Prime Minister and other party leaders asking them to commit to fund a proper programme of recycling the UK’s legacy and retired Royal Navy submarines. Successive Governments have refused to act, but that is not an option anymore.

Recycling old submarines is not cost-free, and given the Ministry of Defence’s current battle with the Treasury, there seem to be more pressing priorities for the limited funding. We cannot wait any longer, so I am looking to Ministers in the Department for Business, Energy and Industrial Strategy, in particular, and the civil side to help us solve this urgent problem…..”

THE PROBLEM THE MOD “FORGOT”

“…..The taxpayer is rightly paying to clean up old nuclear power stations around the nation, but at the moment the same funding streams and principles—the unlimited liability, set out in law—have not been extended to old nuclear submarines, and they need to be……”

THE NEED FOR NUCLEAR POWER BECAUSE OF MOD FORGETFULNESS

“….I welcome the nuclear sector deal. Clearly, it is not a panacea, but it is an important and significant deal which will undoubtedly help the sector—in many respects it is a signpost for the industry. The implications will not only be positive and raise the profile of the sector, but demonstrate to a wider audience the worth of the nuclear industry and its significance

A key part of the Government’s industrial strategy has, without doubt, to relate to energy: energy is vital to ensure that the industrial strategy works for the country. It also relates to energy security, and importantly, to ensuring that we have a proper base supply of nuclear energy, but with the right price so that the industry can be competitive and residential users can benefit…..”

MONEY MONEY MONEY

“…..I have some direct questions for the Minister. Will he confirm his support for NuGen and the development of a new build in Cumbria? Will he indicate when legislation on the RAB will be introduced?…..”

Drew Hendry Scottish National Party
Commons, Inverness, Nairn, Badenoch and Strathspey

THE SPANNER IN THE WORKS

“…..We have heard a lot of enthusiasm for new nuclear, but I will change that, because I do not share that enthusiasm. In fact, the Government have many questions to answer on their path towards new nuclear, in particular on new developments.

The disastrous Hinkley Point C project exemplifies the Government’s regressive energy strategy and lack of a long-term plan that could cost taxpayers billions. The project at Wylfa is no different: total project costs are unclear, but have been trailed to be about £20 billion—more expensive than Hinkley’s £19.6 billion—a figure that could rise with inevitable delays. The direct investment represents a reversal of decades of opposition to investing taxpayer money in new nuclear.

The Government must fulfil the Public Accounts Committee’s recommendation of a full value-for-money assessment before signing any deals, and they must consider the National Audit Office’s report on Hinckley Point C. Consumers already face the impact of a bad deal made by the Government. Hinkley Point is set to cost consumers a fortune because of the appalling strike price deal that the UK Government made with EDF. As a result of the bad deal, consumers are set to pay at least £30 billion over the 35-year contract through their electricity bills…..”

ANOTHER SPANNER IN THE WORKS

“……My second question concerns financial liability for nuclear power station safety. Liability for nuclear developers is capped at €1.3 billion in the event of a nuclear incident, as agreed in the Brussels and Paris conventions. An event such as the one at Fukushima, however, would cost hundreds of billions of pounds. Moreover, The Times reported that Hitachi “won’t pay” for nuclear accidents at Wylfa and that, according to Nikkei reports, some of Hitachi’s directors want

“safeguards that reduce or eliminate Hitachi’s financial responsibility for accidents at the plant”.

Hitachi has already had two serious safety breaches at its nuclear developments, one of which resulted in a $2.7 million fine by the US Government.

Decommissioning costs ate up around half the budget of the now disbanded Department of Energy and Climate Change after the liabilities for cleaning up old nuclear plants were in effect nationalised in 2004 and 2005, when British Nuclear Fuels Ltd and British Energy faced financial problems. At the moment Hinkley C’s decommissioning costs are estimated at between £5.9 billion to £7.2 billion. Dr Paul Dorfman notes that given that decommissioning costs have been consistently underrated, and the precedent set by the Government’s taking ownership of liabilities of these companies more than a decade ago, it is highly likely that the Government will be forced to shoulder further costs if Hinkley developers have a shortfall. Again, will the Minster give an urgent assurance that taxpayers will not be left liable for safety failures at the Wylfa nuclear plant? That is wrong headed, especially for Scotland.

The announcement comes at a time when the prices of offshore wind, other renewables and storage solutions have dropped dramatically. Let us remember that the UK Government made the shameful decision to pull the rug out from under their long-term carbon capture and storage scheme in Peterhead. By cancelling the £1 billion competition just six months before it was due to be awarded, after spending £100 million on it, they broke their own election manifesto promise and left Peterhead—a key candidate for support—behind. The decision left a huge and damaging legacy to investment incentives and consumer confidence in the UK……”

Alan Brown Scottish National Party
Commons, Kilmarnock and Loudoun

TAX PAYER SCRUTINY REARS ITS UGLY HEAD

“…..The nuclear sector deal, at £200 million as well as the £32 million kick-start for research and development, is small beer in terms of overall Government expenditure. Hon. Members have said how good that funding is, but it is really just a signal of intent, rather than absolute hard cash. Indeed, compare that funding with the £586 million in sunk costs of three major contracts that have been cancelled at Sellafield since 2012, because the Nuclear Decommissioning Authority found more cost-effective strategies. The real hidden cost of nuclear power is the cost of decommissioning.

A National Audit Office report states that the cost of decommissioning will be £121 billion, and £6 billion is the total expected spend on major projects that are currently in design or under construction at Sellafield. Sellafield Ltd’s spend on major projects in 2017-18 was £483 million. I understand why constituency MPs welcome that spend and the jobs in their constituencies, but taxpayers across the UK are picking up the bill to support those local jobs, and we need to take a closer look at the issue. I will conclude my remarks by urging the Government to end the folly of their nuclear obsession, start reinvesting in renewables, and allow onshore wind and solar to bid for future contract for difference options. That is the future, not nuclear……”

Dr Alan Whitehead Labour
Commons, Southampton, Test

CONFUSING COSTINGS AND THE SMALL NUCLEAR REACTOR BOONDOGLE

“…..Inevitably, documents have strengths and weaknesses. The weakness of the sector deal document is two-fold. Perhaps the first part of that is not a weakness but a recognition of what needs to be done in the nuclear sector in the next period. I note from the executive summary that there is to be, by agreement,

“a 30% reduction in the cost of new build projects by 2030”

and

“savings of 20% in the cost of decommissioning compared with current estimates by 2030”.

That reflects the fact that as things stand a lot of nuclear activity is just too expensive. Hon. Members have mentioned that the costs of new nuclear build and perhaps the process of bringing new builds into operation are still apparently far too high. Indeed, the national infrastructure assessment for 2018 has recently come out, and it suggests that only one new nuclear build should be signed up to before 2025, because of its analysis of the current relative costs of new nuclear and new renewables. It also suggests that, even with arrangements such as the regulated asset base that the Government are looking at in relation to new nuclear build, costs would be transferred rather than reduced. Certainly if that arrangement meant that consumers bore the same costs, but in advance of the plants coming into operation, which appears to be one mechanism of the regulated asset base arrangement, it would be an evasion of the task ahead, rather than implementation. It seems to me that the commitment in the nuclear sector deal to bring those costs down is important, and that it is an essential element of the way nuclear build would compete in the future with other forms of energy production. That is an important component of the nuclear sector deal.

Finally I want briefly to draw attention to the advanced nuclear reactors that have been discussed here this morning—small modular nuclear reactors. There is a cost element problem attached to them, too, but they have substantial advocates, for a variety of reasons. There is a suggestion that their modular nature could bring down costs considerably. The document includes a commitment to £44 million, as the hon. Member for Copeland and others have mentioned, to underpin developments on small modular nuclear reactors. That is a bit of a surprise to me, as I recall hearing a suggestion in the 2016 Budget that there should be £250 million of support for them and, indeed, a competition to sort out the best designs. I also recall that in the following two years I did not hear any news about the competition or its outcomes, or about the expenditure of the £250 million, other than a statement by the Minister at the end of 2017 that there might be up to £100 million, not for a competition but for the development of small modular nuclear reactors. As it turned out, the Minister then made a statement that £56 million would be available.

Now, in the nuclear sector deal, the figure is £44 million. That is not to my mind exactly a great deal, from the Government end, for small modular nuclear reactors in the future, bearing in mind what was previously promised and what is in place now. I wonder if the Minister would comment on whether that is because of efficiency gains or the allocation of the money for other purposes—or perhaps because the Government are simply cooling towards the idea of supporting small modular nuclear reactors and have put a reduced sum in the nuclear sector deal. Whatever the reason, Government support for a promising and interesting development seems to have been substantially downgraded…..”

Richard Harrington Conservative
Commons, Watford

THE MINISTER RESPONDS (VERY SHORT VERSION)

“…..I will finish my comments now, Mr Owen, because you have asked me to leave time for my hon. Friend to make a few winding-up comments. I thank everybody; I am sorry I have not had time to go into more detail on some points, but I am always available to talk about them with any hon. Member here…..”

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July 11, 2018 - Posted by | Uncategorized

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