Andrea Leadsom – 2015 Speech to the Nuclear Industry Association

Below is the text of the speech made by Andrea Leadsom, the Minister of State at the Department of Energy and Climate Change, at the Park Plaza Hotel in London on 30 June 2015.

It is a pleasure to address you today at this important Nuclear Industry Association event to showcase the UK’s new nuclear programme; and to have the opportunity to speak to you all – the people who are instrumental in turning that programme into a reality.

Your industry is key to delivering our vision of the clean, affordable, safe and reliable energy British consumers and businesses need and vital to keeping the lights on in the decades ahead.

Here in the UK, we face two big challenges – maintaining energy supplies that British businesses and homes can rely on, and keeping people’s bills as low as possible.

These cannot be treated as separate issues. That is why this Government’s priority is to set out a single, coherent energy policy that gets us to where we need to be – keeping the lights on, powering the economy with cleaner energy, and making sure people pay less for their bills.

We need to bring more capacity online over the next decade in order to avoid the narrowing of margins that we have seen in recent winters.

There should be no doubt that this Government is absolutely committed to nuclear power. We see new nuclear power stations as a vital part of the infrastructure investment needed in our electricity sector to ensure our future energy supply.

So its an exciting time for me to be overseeing the nuclear portfolio within Government.

Today I want to outline my plan for the future of British nuclear.

Nuclear energy plays a critical role in the Government’s security of supply and decarbonisation goals. The UK’s nine existing nuclear power plants generate around 20% of our electricity demand. But all bar one of these power stations are expected to shut by 2030.

Nuclear power is also one the cheaper forms of low carbon electricity, reducing pressures on consumer electricity bills, relative to a low carbon energy mix without new nuclear, while emitting similar levels of CO2 to renewables over the life of the plant.

So as we set out in our Conservative party manifesto, we are committed to a significant expansion in new nuclear in the UK.

Government has prepared the way for new nuclear power stations through a package of reforms and regulatory measures that remove barriers to investment and give developers the confidence to take forward projects that will help deliver secure, low carbon and affordable energy. We have also made sure that operators of new nuclear power stations put in place robust plans and finance for managing their waste and decommissioning right from the outset.

You will no doubt be aware of the recent progress for UK new build.

The first new nuclear power station in a generation moved an important step closer last year, as the European Commission announced on 8th October 2014 that it has approved the Hinkley Point C State aid case. We are continuing to work together with EDF to finalise the documentation for the Hinkley Point C project. The power station is expected to start generating electricity from 2023.

In total, industry has set out plans for five new nuclear projects in the UK, for a total of up to 16 gigawatts of new nuclear capacity, providing around 35% of electricity generation. That level of new build could, by 2030, lead to an estimated 40 million tonnes of CO2 emissions savings, gross private investment of £89 billion (2014 prices), and around 35,000 jobs supported at the peak of construction.

The Government is clear that the UK remains open for business. We welcome high quality investment from overseas. The nuclear programme represents a tremendous opportunity to establish the UK as a key nuclear country, with – importantly – the potential to export our capabilities to other countries: including in decommissioning, an area in which we are already a world leader. These international opportunities offer prospects of developing our domestic supply chain and realising economies of scale. It is also an opportunity to make the UK an attractive partner for international R&D collaboration.

Small Modular Reactors are an option we are investigating further. These have the potential to drive down the cost of nuclear energy and make financing easier through shorter construction times and lower initial capital investment requirements, in addition to high-value commercial opportunities. However, since SMRs are in the early stages of development, there are no commercially operational examples that can be used to validate this potential. So Government has initiated work to build a greater factual base on SMRs, following the feasibility study of last year.

The success of our nuclear programme is dependent on three key elements:

– working in partnership, and I look forward to working with you to further our ambition for a competitive and vibrant world-class UK nuclear industry.

– the successful delivery of the new nuclear fleet will be a strong domestic workforce and supply chain. The opportunities are huge. For example, Hinkley Point C will inject £16 billion into the economy – with the potential for British firms to get the majority of the work. Government is working closely with the developers to identify further opportunities for the UK supply chain. Also the standing of the Supply Chain Partnership will help engage UK Small and Medium Size Enterprises (SME’s) on some of the opportunities from the new build programmes.

In order to deliver this ambitious new build programme on time and on budget, a skilled workforce will be essential. The scale of the industry’s new build aspirations, the length of time since the last new build project and the high average age of the existing nuclear workforce mean that it is essential to take action now to prevent skills gaps developing over the course of the new nuclear programme. Government recognises that this is a significant challenge, particularly with the on-going need to maintain and decommission existing nuclear power stations.

There are a number of Government initiatives in place to help support industry fill the skills gaps such as Degree Level Apprenticeships, “Trailblazers” – an initiative which showcases talent and leadership in the sector to inspire the next generation of skilled nuclear engineers and the National College for Nuclear. Specifically, the National College for Nuclear will work collaboratively with the wider industry, skills bodies and training providers and will utilise international best practice to develop an industry-wide curriculum.

Turning now to the vital matter of a geological disposal facility. With plans for 16GW of new nuclear capacity in the UK, government is firmly committed to delivering geological disposal as the safest and most secure means of managing our higher-activity waste in the long term. We need a permanent solution following more than 60 years of producing radioactive waste from various sources including electricity generation from nuclear power.

Taking forward a geological disposal facility will also support new generations of nuclear power stations in the UK by providing a safe way to dispose of the waste they produce.

My department and our delivery body, Radioactive Waste Management Limited are currently delivering the commitments set out in our 2014 White Paper, including plans to engage the public further on the important issues of community representation and national geological screening over the coming months.

So in conclusion, I am confident that the key investment decision on Hinkley C will happen soon which will enable construction to start, and I recognise, of course, that the nuclear sector as a whole places enormous importance on reaching this significant milestone.

And as the new Minister of State for Energy, I want to assure you that I aim to see the UK nuclear industry flourish as a global leader, so that together we can achieve secure, low carbon and affordable energy that will underpin the future success of the UK economy.