Nuclear New Build conference 2017
Speech by Energy Minister, Richard Harrington, to the Nuclear Industry Association on the nuclear new build programme.
Introduction
Good afternoon everyone. Thank you to the Nuclear Industry Association (NIA) for inviting me to be the keynote speaker today, and to Mary for that warm welcome.
I can see I am in impressive company this afternoon. Many of the speakers and guests here are working to deliver projects which are of clear importance for our plans for a secure, affordable, low-carbon energy future.
I can’t think of anywhere better to introduce myself as the new Minister for Energy.
I’m very excited that the Prime Minister asked me to take this role, working to my friend Greg Clark, the Secretary of State, as there are few challenges more important than securing a sustainable energy system for our future.
We are committed to following through on our department’s big initiatives, including the Clean Growth Plan and the Industrial Strategy, and the nuclear industry will have a big part to play in both, as we look to both expand and decarbonise our economy.
As we do so, having a diverse mix of energy sources will be a real asset. Nuclear has played a role in our energy system for the last 60 years and currently we rely on nuclear energy to provide around 20% of our electricity needs.
Over the next decades, many of our existing plants will be coming to the end of their lives, while the demand for low carbon electricity will surely only increase. That’s why new nuclear will have a key role to play in the years ahead, and why there are so many opportunities to be found in this industry.
New build
Our manifesto pledged to ensure that industry and businesses have access to consistent, cheap and clean power. That’s why we want to see a diverse range of sources for Britain’s energy production.
Diversity means we can take advantage of the best available forms of power, while continuing to innovate and improve as we go.
Our energy policy will be based on reliable and affordable energy, and this government recognises that new nuclear will have a part to play within this diverse energy mix.
In terms of projects, we will hear more from Humphrey Cadoux-Hudson of EDF about at Hinkley Point C, and the excellent progress that has been made since the final investment decision in September.
Meanwhile, the department continues to engage both regularly and constructively with NuGen and Horizon on their proposals. I note progress both have made, for example with their respective public consultations.
Small Modular Reactors (SMRs)
Progressing these large-scale developments mean our energy future is bright. But that’s no reason to rest on our laurels.
We recognise the potential of SMRs and are keen to see that they work both as a technology and as a business model. They could help us to meet our energy and climate change challenges at a lower cost, and create opportunities for new high value jobs.
But in order to successfully deploy SMRs, we know that vendors would need to achieve the cost-reductions associated with the SMR business model and deliver energy that is cost-competitive with comparable sources. And the right market conditions and regulatory framework must be in place.
The SMR competition, launched last year, has helped our knowledge base in several ways. In particular, it has:
- improved our understanding of the range of SMR technologies available
- given us an opportunity to consider the claims of vendors about the potential of their designs
- given industry an opportunity to discuss issues and concerns, including identifying potential barriers
- provided valuable insights into the wider conditions industry considers necessary to deliver an SMR in the UK
The government’s exploration of the potential of SMRs should also be seen within 2 other contexts:
First, our support for wider energy innovation, in nuclear and beyond. We have already announced £20 million to be invested to support advanced nuclear fuels; materials and manufacture; advanced reactor design; recycling and reprocessing; and strategic tools and nuclear facilities.
I am happy to say we recently awarded £12.5 million in contracts of this investment, under which work has already started. I am delighted that a number of leading UK organisations have secured contracts, including:
- The National Nuclear Laboratory
- AMEC Foster Wheeler
- Fraser Nash
- Cammel Laird
- NAMRC (Nuclear Advance Manufacturing Research Centre)
- Brunel and Sheffield universities
Second, our Industrial Strategy.
Lord Hutton will also look at the wider role that SMRs will play in the Industrial Strategy as part of the work he is leading on behalf of the nuclear sector. This could mean not just providing affordable, clean energy, but further investing in research and innovation, and developing skills too.
The government is grateful to all of you in the industry who submitted designs, ideas and wider evidence in response to the competition. I know we have gone beyond the original timetable and I am grateful for your continued patience.
But in my new role, I want to fully consider all the evidence to date, so that I and my colleagues can make robust decisions about the value of these emerging technologies for the UK.
Therefore, I hope you will not mind waiting just a short while longer while the government finalises its policy in this area.
Euratom
Of course, you will be aware that last week, the government formally entered Brexit negotiations with the European Commission. Given the Euratom Treaty, the nuclear industry will have a special interest in these negotiations.
Rest assured that during the election period, my department has been continuing its work across government on preparations for leaving the Euratom Treaty.
We are determined to avoid any interruption to our civil nuclear regime, and we remain absolutely committed to the highest standards of nuclear safety, safeguards and support for the industry.
Our aims are clear and the UK’s withdrawal from Euratom will in no way diminish our nuclear ambitions.
The nuclear industry remains of key strategic importance to the UK, and government is committed to delivering a world leading nuclear sector in close collaboration with Euratom and our international counterparts.
As announced in the Queen’s speech last week, the United Kingdom will set up a domestic nuclear safeguards regime, in consultation with the Office for Nuclear Regulation (ONR), to enable us to continue to meet international safeguards and nuclear non-proliferation obligations after we leave Euratom.
There is a clear common interest between international parties in maintaining close and effective co-operation on nuclear issues, and we are confident that we will reach the right agreement with our European partners.
To that end, we will also be agreeing a new voluntary offer agreement with the IAEA.
This will be supported by the introduction of a Domestic Nuclear Safeguards Bill, which will ensure that the ONR can establish an appropriate domestic safeguards regime.
The exact arrangements for the UK’s nuclear safeguards after we leave Euratom is being developed with input from the regulator, industry and international partners being sought; however we remain committed to continuing to meet international standards for nuclear safeguards.
Maintaining the continuity of our mutually successful civil nuclear co-operation with Euratom and international partners is also a key priority.
We already have bilateral Nuclear Cooperation Agreements in place with several countries, and we expect these to continue.
To ensure that civil nuclear trade and cooperation with non-European partners such as the United States, Canada, Australia and Japan is not disrupted by the UK’s exit from Euratom, we are negotiating with these partners so that appropriate nuclear cooperation agreements which will be in place.
And there are other issues of great importance, such as access to skilled workers and continued R&D collaboration which we are focused on as we seek to establish our new relationship with Europe’s nuclear community.
Industrial Strategy
While our relationship with international partners will be important in the years ahead, we are focused on creating a strong, supportive economy at home. This is why we’re working to deliver a successful and lasting Industrial Strategy, built with – not just for – industry.
A successful strategy requires competitive and affordable energy costs, both for businesses and households.
In the January green paper we announced that we would work with a select few industries on early sector deals to a select few industries. The nuclear industry was among amongst them. This is in recognition of the UK’s expertise across the full nuclear lifecycle, and the potential for the sector to contribute significantly to the economy in the decades ahead.
This will not be business as usual packaged up and presented as new: we really do expect innovative ideas for continued success.
The sector deal will be industry led, supported by government putting in place the systems and frameworks required.
Under the leadership of Lord Hutton and the NIA, the industry has done some excellent work over the last few months and I know a large team of industry leaders are developing an ambitious approach to ensure continued success and competitiveness in the sector.
I have seen some really promising ideas which could form the basis of a sector deal, including some focused on cost reduction to ensure competitiveness and value for money, with proposals which will deliver real benefits.
It is key that Industry now crystallise these into a compelling package to make the deal a reality – these are, after all, deals – so we want to receive an offer that we can’t refuse.
In terms of next steps, I look forward to the upcoming Nuclear Industry Council meeting, planned for July, which I will be co-chairing with Lord Hutton, where industry leaders will be presenting developments to date.
This will continue to be worked up over the summer, and we hope to be in a position to set out further progress in the autumn.
Thank you.
Before I conclude, I want to just say a few words of tribute to John Clarke, chief executive of the Nuclear Decommissioning Authority, who recently retired after 30 years in the nuclear industry.
Also to Vincent de Rivaz, who we heard last week has decided to step down as chief executive of EDF. I congratulate them both on their significant achievements and wish them the best for the future.
This morning I have touched on the progress industry has made in recent months as well highlighting some of the many opportunities available going forward.
This is a truly exciting time to be involved in the nuclear sector and energy sector as a whole, which is why I am so excited to be in this role.
Once again I appreciate this opportunity to address the industry for the first time today, and rather than answer questions today I look forward to being able to meet many of you personally over the next few days, weeks and months. Thank you.