15:57 The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)

Two weeks ago, on 19 October, the Government published their net zero strategy. It is our vision for a decarbonised economy in 2050 and the policies and proposals that will keep us on course to reach net zero emissions through our five-year carbon budget. It is a strategy that puts the UK on a trajectory to meet carbon budget 6, a 78% reduction in emissions compared with 1990 levels by 2035, as the Prime Ministers reminded us earlier today. These kinds of ambitious goals are vital as we host COP26. Integral to achieving carbon budget 6 is our new ambition to fully decarbonise the power sector by 2035. This will mean that the UK is entirely powered by low-carbon electricity, subject to security of supply. Of course our electricity system must be resilient and affordable, as well as low-carbon. It will predominantly be composed of wind and solar but, as last year’s energy White Paper made clear, a low-cost, reliable system means that renewables will be complemented by technologies that provide power when the wind is not blowing or the sun is not shining. Large-scale nuclear power plants are the only proven technology available today that is deployed at scale to provide continuous, reliable and low-carbon electricity. Our electricity system needs nuclear power.

I have good news for my right hon. Friend, which is that the regulated asset base model that we are introducing here can be used for further nuclear power plants, including small modular reactors and other key nuclear innovations. He will also know that, in the net zero review, we launched a £120 million fund for new nuclear innovations, which will allow us to increase our nuclear commitments and capabilities beyond the existing commitment to one new plant having its investment case in this Parliament.

I congratulate my right hon. Friend on this landmark Bill, which will help us to reach our net zero targets by 2050. Does he agree that it creates an incredible opportunity to replace the soon-to-be-decommissioned reactor in Hartlepool with a new advanced modular reactor, which could create the high-quality, high-temperature steam that we need for hydrogen production in Teesside?

I am very grateful to the right hon. Gentleman. We had many a good exchange at that stage, but I want to take him back a little further to when I was Chair of the Energy and Climate Change Committee. It was pointed out in representations that were made to me that, sometimes, the Government ask the wrong questions. When they say they want nuclear, what they really need are 6 GW baseload. That might be achievable with a mix of technologies and at a cheaper strike price. Hinkley, for instance, is £92 per megawatt-hour, index linked to, I think, 2012 prices. Had that question been asked differently, not stipulating nuclear but asking for 6 GW, the price achieved might have been around £70, saving bill payers, taxpayers and everybody an awful lot. I caution the Government against going down one route and prescribing the technology—the Minister did mention technologies. Perhaps he should say what he needs, which is 6 GW baseload.

“International climate objectives will not be met if nuclear power is excluded”.

Taken as a whole, the Bill will ensure that consumers across Great Britain will benefit from a cheaper, more resilient and lower-carbon electricity system that is funded in a fair and affordable way. I hope that Members will agree that this is an important and timely piece of legislation. Recent increases in gas prices have demonstrated the key role that reliable low-carbon power through nuclear has to play in our transition to net zero.

The Bill is a unique opportunity to deliver a trinity of benefits, as it will: help us to create a resilient low-carbon energy system; deliver value for money for consumers; and deliver and create thousands of well-paid jobs across the country. I hope that Members will take the next step towards net zero and levelling up the whole UK. I commend the Bill to the House.

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16:22 Dr Alan Whitehead (Southampton, Test) (Lab)

Labour believes that new nuclear has an important supporting role to play in the energy mix, alongside the decisive shift to renewables that we need to deliver the climate transition and secure our energy security. As set out by the Climate Change Committee, we need all the low-carbon power sources at our disposal to deliver the rapid and fair transition that is required.

Interestingly, the Climate Change Committee, which has looked into this matter in great depth, considers that in the overall long-term future make-up of our energy mix, about 8 to 10 gigawatts of standby power—therm power—is likely to be required in the shape of new or existing nuclear power stations. That is about the size of the difference with an overwhelmingly renewable but variable economy, with elements of firm power backing it up.

I have mentioned that one plant only that would be included in the suggested 8 GW to 10 GW is in prospect for a start before the late 2020s, because every other proposal has fallen away. However, it is not financed and is probably not financeable by private capital. It is only part financeable by a state financer, with which we do not now want to do business. Let us be clear before we go any further: this Bill is about finding a formula to fund and build Sizewell C power station. Whatever its generic pretensions, that is the issue we should be concentrating on. Even so, getting that plant going would cover most of what the Climate Change Committee considers is the presence in the mix needed.

This plant, if it goes forward—we hope it will go forward with something like this kind of financing—would cover a substantial part of what the Climate Change Committee considers necessary in the mix of low-carbon energy to drive power towards net zero by 2050. I have mentioned that it thinks about 8 GW to 10 GW of new nuclear power would be needed to complement a predominantly renewable power line-up so that firm power considerations are met, without being in such numbers that it puts the development of renewables into jeopardy. That 8 GW to 10 GW includes new nuclear power, but also the one existing power station that will probably last beyond the 2030s in Sizewell B.

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16:41 Chris Skidmore (Kingswood) (Con)

Nuclear power currently provides just under 20% of the UK’s energy needs, but almost half that capacity will be retired and lost by 2025. For the UK to achieve its net zero obligations and beyond, expanding our nuclear energy fleet will be paramount as it provides emission-free energy without the need for the wind to be blowing or the sun to be shining. The case for nuclear energy as a clean source of power should be evident. It may have done more for decarbonisation and reducing carbon emissions in the past 70 years than any other industrial sector.

I believe that we do not have a choice. We must look at every form of renewable energy, nuclear energy, carbon capture and storage and hydrogen to reach net zero. We cannot make the perfect the enemy of the good. Equally, in looking at how to decarbonise, there are no good and bad actors; the most important thing is outcomes. We have a target set for 2050 but cannot ignore that we wish to reduce our carbon emissions now. I therefore welcome any technology that can achieve that sooner rather than later.

Yet the real advantages of this new funding system will come in relation to emerging innovative nuclear energy technologies. As anyone who is interested in reaching net zero will be aware, plans to develop third-generation nuclear reactors are well under way, with British companies such as Rolls-Royce leading the way. Some of those innovations—I have mentioned small modular nuclear reactors—have been designed to be able to be mass-manufactured at one site, powered by an SMR nuclear power plant, and then shipped domestically or internationally, massively reducing the cost. That brilliant technology will have the added benefit, I believe, of helping to power hydrogen electrolysers, which are highly more efficient if they are given a supply of heat. In turn, those will be able to decarbonise sectors that are the most difficult to decarbonise—the hard-to-abate groups that energy cannot touch, which need liquid fuel. The potential for nuclear heat and energy to generate hydrogen I think has the potential, in turn, to generate a clean energy revolution.

Those exciting technologies look to radically shake up the international energy supply system, but it is only through an adequate and appropriate funding model that we can take full advantage of their possibilities. As we have seen with the recent rise in global energy prices, energy security must be at the forefront of all our minds when debating policy. One of the best ways to avoid the situations that the world currently faces is by having a diversified energy supply, nuclear included. Additionally, it is only through the correct development and deployment of innovative technologies that we can both secure our energy supply system and achieve our net zero obligations. Net zero by 2050 is the ultimate mission for our generation and one that we must achieve as quickly, efficiently and effectively as possible. The RAB funding mechanism provides a clear path for nuclear to play its part in that mission.

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16:50 Alan Brown (Kilmarnock and Loudoun) (SNP)

The hon. Gentleman highlights the value of marine energy in Scotland and elsewhere; he and I are absolutely on the same page on that. Does he agree that one thing it would be very helpful for the Minister to take away is the need to clarify the precise size of the pot that will be available specifically for marine energy in the next contracts for difference auction round, CFD AR4? There is a danger that unless there is a specific pot, the marine energy providers will be rather crowded out by other forms of renewable energy.

There needs to be much greater investment in carbon capture and storage. The Government need to reverse their disgraceful decision not to have a Scottish cluster as part of their track 1 CCS projects. A Scottish cluster would also deliver hydrogen production, which is vital on the pathway to net zero.

We heard earlier, as we always do, the argument that nuclear is required for when the sun does not shine and the wind does not blow, but as I have tried to point out to the Minister, there is an existing technology that can address that issue: pumped storage hydro, a renewable energy source that utilises surplus grid energy to fill the reservoirs and can then dispatch electricity when required. Pumped storage hydro is the perfect foil for intermittent renewables, rather than big, inflexible nuclear power stations that invariably pump energy to the grid when it is not required. An Imperial College report suggests that there could be system savings of £700 million a year from using pumped storage hydro technology instead of nuclear.

As I touched on earlier, we have been told for five years that Hinkley is good value for money, but now the Government have come back to the House to say that actually that is not the case and they have a new plan for how to deliver nuclear. I therefore cannot possibly support this Bill, especially as the electorate of Scotland have consistently voted to elect a Government on a “no new nuclear” manifesto. Why should Scottish bill payers be forced to pay for nuclear energy that they do not want or require? This is another democratic deficit for Scotland, especially when so much of our renewable energy is not being supported at the moment and we are stuck with the highest grid charges in Europe. It really is time that Scotland had control of its own energy decisions, but in the meantime I will be proud and pleased to vote against this Bill.

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17:18 Sarah Olney (Liberal Democrat)

If we did not already know that decarbonising our energy supply is one of the most urgent challenges facing not just this country but the whole world, the ongoing discussions in Glasgow at the COP26 summit have certainly informed us. There is now worldwide consensus on the need to phase out the use of coal and other fossil fuels in energy production, transport, heating and industry, and it is encouraging to hear some of the commitments made by delegates towards that goal. We have quite a good story to tell already on that in this country. In the UK, energy production accounts for approximately 15% of all carbon emissions. One significant challenge we face is how to replace the role of coal and fossil fuels in energy production with carbon-free alternatives, but we have already made great progress in decarbonising our energy supply. Carbon dioxide emissions from power stations were 75% lower in 2020 than in 1990, and this change has come about largely from the introduction of new energy sources, particularly renewables, such as wind and solar. The use of coal in our power supply fell sharply from the mid-2010s onwards, after which the use of renewables expanded rapidly. Wind power is now the cheapest form of electricity generation, and it was Government policy that made the substantial difference to this change, notably the decision of the then Secretary of State for Energy and Climate Change to introduce contracts for difference to incentivise private sector investment into the renewables sector. That Secretary of State was my right hon. Friend the Member for Kingston and Surbiton (Ed Davey), whom, I gather, went on to more exalted roles.

The legislation has strong precedents. Unlocking the barriers to private sector investment into carbon-free alternatives in our energy market has catalysed the changes we need to see. We need to go further to make sure that we can completely decarbonise our energy sector, supporting renewables and household and community energy.

Does the hon. Lady not prefer France’s decarbonised electricity model to Germany’s model of ever-increasing emissions and air pollution because of its decisions to close down nuclear power stations and go back to burning lignite, the dirtiest form of coal there is?

My remarks are about the UK power sector, but I take the hon. Gentleman’s point about Germany. Clearly, as I think I have clearly stated, we want to move towards carbon-free alternatives to coal. I also want to make it clear that it is not our position that we should be closing down nuclear power stations; we support the ones that are currently operational and where contracts have been signed to open new ones. As I want to go on to make clear, our position is very much that there should not be new nuclear power stations. We need to go further to make sure that we can completely decarbonise our energy sector. We want to support renewables and household and community energy. It will create jobs. To pick up on the point made by the hon. Member for Morecambe and Lunesdale (David Morris) about jobs in the nuclear sector, let me say that the advantage of jobs in the renewables sector and in other alternative energy supplies is that they can be spread over a much larger area of the country. I believe he said that there are probably 18 viable sites for new nuclear power stations, many of which are concentrated in his part of the world. I am interested in job creation right across the country, and renewables offer much better opportunities for us on that.

A further point I wish to make is that it will take 20 years to build a new nuclear power station, however it is funded. We have very ambitious net zero targets. As the Minister said, we want to be net zero in our power sector by 2030, which is much sooner than in 20 years. We need to move considerably faster than that, and we already have the tools and technology to cut carbon significantly in our power sector in a much shorter period, so we need to accelerate the deployment of renewable power. We need to remove restrictions on solar and wind. We need to build more interconnectors to guarantee the security of supply. If we did that, we could reach at least 80% renewable electricity by 2030, which would be consistent with the Government’s aims to achieve net zero.

The current issue with renewables is one of storage, but the technology to address some of the problems is being developed at speed. It is clear that by putting our energies, investment and ingenuity into answering some of the questions in relation to storage in particular, but other things as well, we can achieve net zero much faster through renewables. It would be much more productive to invest in storage solutions than to invest in nuclear power.

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17:38 Anthony Browne (South Cambridgeshire) (Con)

If we believe that climate change is the biggest threat to the planet, we have to use every tool in the toolbox to combat it. We have a moral obligation not to campaign against the one technology that can probably help more than almost any other to get to net zero.

I absolutely agree. As I said, we have had nuclear for 70 years and we know that it works. The point I was about to come to, which my hon. Friend touched on earlier, is that the French have 70% of electricity produced by nuclear and they have a very well-established industry. It is not politically controversial at all. They have made it work and made it cost-effective. That is one of the reasons why France has far lower carbon dioxide emissions that we do in the UK. We should change to other technologies. We heard mention of tidal power earlier—yes, absolutely. However, there have been many projects to try to make tidal power work over the past few decades and none of them has yet quite succeeded, although we should still carry on trying.

As I have said many times in this House, the UK has had a really good track record in reducing carbon dioxide emissions, roughly halving them. Our per-capita emissions are now lower than those of many other countries, including green icons such as Denmark and Norway, but France has had lower emissions than us for decades because of nuclear power. I used to live in Belgium and got my electricity bills from France, and they used to have to say where the electricity came from: “nonante-neuf pour cent nucléaire”, which is—in Belgian French, not French French—“99% nuclear power”. That was always a delight for me. Driving around France, nuclear power stations are all over the place. It is not a political issue; people are very comfortable with it.

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17:49 Alun Cairns (Vale of Glamorgan) (Con)

The Bill is a major positive and significant step to help to meet our net zero carbon agenda and to secure our energy supply, which has come into clear focus in recent weeks. The challenge of the gas supply and the variability in renewable sources have led to a sharp rise in energy costs, the bankruptcies of many providers and an alarming worry for constituents. Some businesses have even been forced to operate at reduced capacity because of energy supply challenges. Europe as a whole has been exposed as vulnerable to other states’ decisions.

I want to support the Minister and the Bill’s proposals. This is a welcome, major and positive step in satisfying our energy demand, achieving our climate goals and securing our energy needs and supply. Assessment of the risk is central. As I mentioned, despite challenges we sought to overcome with fair and generous offers, challenges will remain, but RAB will play a big part in overcoming them. The detail of how we assess and cost the risk as part of the RAB model will be fundamental to giving confidence to investors and the nuclear industry.

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17:56 Mr David Jones (Clwyd West) (Con)

It is a great pleasure to follow my right hon. Friend the Member for Vale of Glamorgan (Alun Cairns). As the hon. Member for Richmond Park (Sarah Olney) pointed out, all the events of COP26 are proceeding in Glasgow as we speak, which reminds us forcibly of the need to reduce still further greenhouse gas emissions from our energy-generating sector. While recent years have seen a notable increase in energy from renewable sources such as wind and solar, it must be recognised—as many hon. Members have—that such forms of generation are intermittent, so other sources must be pursued to produce the reliable, predictable baseload of generation that a modern economy needs.

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18:02 Peter Aldous (Waveney) (Con)

I am pleased to speak in support of this Bill, which facilitates the provision of a secure energy supply, will ultimately keep down consumers’ bills, and is crucial to achieving our net zero obligations. Specifically, along with the announcement in last week’s Budget, the Bill paves the way for the construction of Sizewell C in Suffolk, which can bring enormous benefits to the county, to the Waveney area and to Lowestoft.

The Bill and the hive of activity over the past 10 days are extremely welcome, although some might say 20 years too late. Subject to the development consent order being approved, let us get on with it and, in doing so, enhance our energy security, help to propel us along the road to net zero, and bring enduring jobs and prosperity to local people in Suffolk and in my constituency.

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18:12 James Daly (Bury North) (Con)

It is also fair to say that many jobs in the north of England have been revitalised by Hinkley Point C. Those jobs, skills and investment across the supply chain in the north of England come from investment in nuclear, but we also have clean growth, with low-carbon, always-on power to support renewables and facilitate the development of other clean tech such as hydrogen, direct air capture and small modular reactors to accelerate clean growth and new industries across the region, including decarbonisation clusters in Teesside and in Yorkshire and the Humber. There is energy security, with firm, clean base-load power to the grid that will support renewables and give us greater control in our transition to net zero while helping to wean Britain off its reliance on energy imports.

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18:17 Matthew Pennycook (Labour)

Several Members, including the hon. Members for Kilmarnock and Loudoun (Alan Brown) and for Richmond Park (Sarah Olney), argued that nuclear should not form any part of the UK’s future low-carbon energy mix. We on this side of the House respect their strongly held views on the subject, but we take the view, as does the Committee on Climate Change, that a limited amount of new nuclear is required to achieve the decarbonisation of the UK’s electricity system within the next 14 years, and to meet our longer-term net zero target. Since Sizewell C is the only power station that can now feasibly come online within that timeframe, we want to ensure that it does, in order to provide the necessary amount of firm power to support a predominantly renewable energy mix.

I think we will need a range of technologies. Let me return to a point that has been made by several Members. I think we must take a lead from the Committee on Climate Change, which made its view very clear in its balanced pathway scenario for the sixth carbon budget. It estimates that we will need 10 GW of nuclear power by 2035. We will have a predominantly renewable energy system, but we do need the firm power that comes from a limited degree of nuclear to support that.

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18:25 George Freeman (Conservative)

In the seven minutes available to me to wrap up the debate, I want to try to deal with as many of the points that have been made as possible. First, I would like to remind the House of what the Bill really signifies and what it does. The net zero strategy, published earlier this month, sets out our vision for a decarbonised economy by 2050. This will see the power sector fully decarbonised by 2035, with nuclear power playing a key role alongside renewables. As the Prime Minister set out from the Dispatch Box earlier today, he and the Cabinet are putting every effort at COP into delivering that international leadership to that end.

“International climate objectives will not be met if nuclear power is excluded.”

If that is not good enough for SNP and Liberal Democrat Members, Zion Lights, former Extinction Rebellion activist and founder of Nuclear for Net Zero, said:

“to keep the lights on… we are in a climate emergency and need all the clean energy we can build right now”.

“As Greens we trust the science on climate change. As Greens we should also trust the science on nuclear”.

Across the board, there is recognition that we will not hit net zero unless we accelerate our investment in new nuclear. This Bill provides the framework for reducing the cost of capital and increasing our options for private investment, which makes it all the more extraordinary that we have had the opposition we have. The hon. Member for Southampton, Test (Dr Whitehead), in a thoughtful speech, mentioned a decade of dither and delay. I assume he means from 1997 to 2007, when the then Labour Government completely turned their back on the nuclear industry.

The hon. Member for Richmond Park (Sarah Olney), in a thoughtful speech, set out the importance of supporting net zero, which makes it all the more strange that the Liberal Democrats seemingly have an almost religious objection to nuclear energy. I was a Parliamentary Private Secretary in the Department of Energy and Climate Change when both the right hon. Member for Kingston and Surbiton (Ed Davey) and Chris Huhne were Secretary of State, and it was they who put in place the contracts for difference funding mechanism for nuclear, which did not work and which we are now having to sort out. It is easy to oppose with the benefit of hindsight, but the truth is that this is urgent and the Bill provides the basis for it.

The hon. Member for Richmond Park is right that household insulation is important, which is why we provided an additional £1.75 billion in the Budget to upgrade the homes of those on low incomes through the social housing decarbonisation fund and the home upgrade grant. The Government are consulting right now on raising the standards for home insulation in new houses that are built.

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