Tidal and Nuclear Power

Business, Energy and Industrial Strategy – in the House of Commons at on 16 November 2021.

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Photo of Bob Seely Bob Seely Conservative, Isle of Wight

What plans his Department has to support the growth of (a) tidal and (b) nuclear power generation.

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

Our most recent contract for difference allocation round is the biggest ever. Tidal stream will be eligible to compete in pot 2 of the round. With regards to nuclear power, this Government see a vital role for new nuclear. We have just started considering the Nuclear Energy (Financing) Bill in Committee and, of course, we understand that net zero needs nuclear.

Photo of Bob Seely Bob Seely Conservative, Isle of Wight

I congratulate the Secretary of State and his team on putting in place a long-term energy strategy, because we have seen from Germany’s example how disastrous it is not to have that long-term strategy. Very quickly, on tidal, is the financing generous enough, because I understand that some tidal producers are saying that it is not? Secondly, on nuclear, will the £210 million for small-scale reactors—a brilliant thing to do—get us to a position where we are actually producing those reactors, or is this just an initial round of research?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

My hon. Friend has dextrously managed to get in two supplementary questions there. On tidal, of course we set the allocation round in September. That round will open on 13 December. Project developers can declare an intention to bid. May I commend his Perpetuus Tidal Energy Centre on the Isle of Wight for its brilliant work on tidal energy?

With regard to small modular reactors, the announcement made by my right hon. Friend the Secretary of State and his visit last week made it absolutely clear that there is strong support for British technology and British SMR design, and we want to see that move forward and make the UK a world leader in small modular reactors.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Energy and Climate Change)

In the Budget, £1.7 billion was allocated just to develop Sizewell C to a final investment decision. The Government are putting through the Nuclear Energy (Financing) Bill to enter into a 60-year contract for that project, and yet, in terms of tidal stream, there was no Government support whatsoever. Without a ringfenced pot of money, tidal stream will not be able to compete in pot 2, so will the Government urgently reconsider the request for a £71 million pot of ringfenced money?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

Since 2003 successive Governments have provided innovation funding of £175 million to wave and tidal sectors, and there has been £80 million since 2010. We are strong supporters of tidal stream. The Prime Minister was explicit from the Dispatch Box yesterday, reiterating his support. What we now need to do is work with the sector to demonstrate cost reductions and the potential for this technology.

Photo of David Jones David Jones Conservative, Clwyd West

Like nuclear, tidal range has the capacity to deliver predictable large-scale generation with none of the problems of intermittence associated with other renewable technologies. The proposed Colwyn Bay tidal lagoon would have a generating capacity of more than 2 GW. There is considerable local support for the project, and the proposed developers are anxious to proceed. Is my right hon. Friend willing to meet with me and my hon. Friends the Members for Aberconwy (Robin Millar) and for Vale of Clwyd (Dr Davies), who also have an interest in the project, to discuss a way of taking it forward?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

I would be delighted to have the opportunity to meet my right hon. Friend and his colleagues. I am always delighted to see so much energy in north Wales when it comes to questions of energy. I remind him that, when I say that we need to demonstrate cost reductions, the most recent reckoning on prices is that tidal stream is around £220 per MWh, wave is about £280 per MWh, and offshore wind is only about £40 per MWh. With scaling up and investment in the technology, we would expect those costs to come down, but I stress the current disparity between those sectors.

Photo of Alistair Carmichael Alistair Carmichael Liberal Democrat Spokesperson (Home Affairs), Liberal Democrat Spokesperson (Northern Ireland), Liberal Democrat Spokesperson (Cabinet Office)

In order to get those costs to come down, though, we first have to have the ringfenced pot for tidal stream energy. At the Dispatch Box on 3 November—in column 926 of Hansard—the Prime Minister undertook in response to me that he would look again at this question. There is a hard deadline approaching at the end of the month with the contract for difference. When will we hear the outcome of the Prime Minister’s further look again at this question?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

The right hon. Gentleman will have heard the Prime Minister’s words on this matter yesterday from the Dispatch Box, when he was asked about it in relation to his COP statement. I have nothing new to say on the allocation round. We announced the parameters for allocation round 4, which will open in just a few weeks’ time, on 13 December. Project developers will be able to declare their intention to bid, and the round very much includes technologies such as tidal and wave, and other pot 2 emerging technologies.