Hinkley Point C — House of Lords, 2016-09-15
Topic: Energy
Lucy Neville-Rolfe (Conservative, Centre-right): I thank the noble Lord, Lord Grantchester, for his support. I agree that we do not want any further delays, although I take comfort from the fact that the costs are borne by the developer. Under the contract for difference, if the plant is not generating by 2029, the period in which the developer has increased price security will decrease and the Government have an option to cancel if it is not generating in good time I shall try to answer some of the noble Lord’s testing questions on the legalities. He asked about the legal basis of letters. Clearly, letters are not legally binding in the same way as the contract for difference, but they provide a clear political reassurance that we trust EDF will stick to. We have a mutual interest in this important project Perhaps I might go through the protections and thus respond both to the questions of the noble Lord, Lord Grantchester, and to those of the noble Lord, Lord Teverson. We will have a special share which would allow the special shareholder to intervene in any transaction where there were national grounds for doing so. That will not apply to Hinkley, which is being dealt with by an exchange of letters, but it will apply to future reactors. We have the Office for Nuclear Regulation which is a world-class, independent regulator that has a range of existing powers to intervene in developments. Under our proposals, we will require notice from developers or operators of any change of ownership or part-ownership. Most significantly, we will make proposals to establish a legal regime that allows us to consider the national security implications of all significant investment into our critical infrastructure, including nuclear. That will be the subject of widespread consultation on the details and will require legislation, so there will be opportunities to consider the proposals as we go forward For the Hinkley arrangement, we have tried to reach an agreement with EDF which—subject to its agreement to the project going forward—puts us in an improved position compared with where we were in July. That is what the Government have now decided, in part also because of the benefits in terms of security and reliability of supply. With a nuclear baseload—this will provide 7% of the UK’s energy needs—the advantage is that the energy continues to be produced whether the sun is shining or the wind is blowing As has been said, 26,000 jobs is a lot. The £30 billion figure that was mentioned is an NAO construction which used a different discount rate of 0.7%, which is much lower than our own 3.5% and is equivalent to the top end of our projections, which of course I covered in the Statement The noble Lord, Lord Grantchester, compared this proposal to the French situation. Perhaps he would like to know that the French figure is a regulated price for electricity generated by all the power stations; there is a mix of both new and old in the French nuclear fleet, so it is not just Flamanville. The British price is a CFD for a specific new-build project, and furthermore it reflects the fact that the construction risks in Hinkley are borne by the developer alone and not the British consumer. I very much agree that the ONR is well respected and we are lucky to have that body The noble Lord also asked why the Statement is being made today. I thought that noble Lords would welcome the fact that, having said that we would make an announcement in the early autumn and then that we would do so in September, we have been able to get to the line today, so that it is possible for us to have a short debate on this ahead of the Conference Recess The noble Lord, Lord Teverson, in his inimitable way, made a lot of interesting points. I can confirm that we are looking at the small nuclear reactors he mentioned. He will recall that we are looking at an innovation competition in that area, with funding having been earmarked The noble Lord was right to say that the decommissioning of nuclear waste is an important issue, but he is wrong in that we do have a good system in this country. One of my earliest visits was to Sellafield, and I was impressed by the progress that is being made there. We are making a large public commitment—£2 billion at Sellafield alone—and of course we have built decommissioning into Hinkley, and we will do the same with the new nuclear fleet so that we do not get landed with a large legacy of decommissioning for which the public sector has to pick up the tab. However, a lot of good work is going on at Sellafield on nuclear waste from 30, 40 and 50 years ago, including defence waste as well as civil waste.