Speech

UKTI Civil Nuclear Export Showcase

Speech by Baroness Verma to promote UK nuclear supply chain capability to senior decision makers from a number of important overseas markets

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Baroness Verma

Introduction

I am delighted to have the opportunity to join you today at the UKTI Civil Nuclear Export Showcase and to talk to you about the UK’s new nuclear programme.

These are exciting times for our nuclear industry, and this conference takes place at a pivotal time for nuclear power in the UK.

I’m delighted to welcome our overseas delegates to today’s event and hope you have an interesting and productive time in the UK. Your presence here in the UK is a fantastic opportunity to see what we have to offer and provides possibilities for us to develop new partnerships and forge stronger links with your countries in the future.

Why does the UK need new nuclear?

It is worth taking a moment to remind ourselves why new nuclear is important. It is without doubt, a safe, proven low carbon technology that can contribute to the UK’s future energy security, helping to ensure a diverse mix of technology and fuel sources over the long term.

And it will do this in a way that doesn’t pump harmful carbon emissions into the atmosphere.

Nuclear is vital for our energy security now and the Government wants it to be part of our energy mix in the future, alongside renewables and clean coal and gas.

Nuclear is an important part of the £110bn of investment in our electricity sector that is required over the next decade so the Government has prepared the ground for new nuclear power stations in the UK 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.

The UK has already demonstrated its ability to deliver major construction projects - the Olympics, Heathrow Terminal 5, the Shard and the Royal Hospital London to name but a few. So we are building on firm foundations.

Here in Britain we are seeing significant progress towards a nuclear renaissance. Three consortia, NNBGenCo (EDF), Horizon Nuclear Power and NuGen, are taking forward projects to build new nuclear power plants.

In addition to helping the UK meet its energy needs and its environmental commitments, new nuclear power stations will create outstanding opportunities for the UK economy, both investment and jobs, at Hinkley Point C and the follow-on developments.

Civil nuclear is a key growth industry that provides highly skilled jobs. The full 16GW of new build capacity planned by industry could support an estimated 29,000-41,000 jobs across the nuclear supply chain at the peak of construction activity, with industry investment equating to around £60 billion.

New nuclear opportunities

So, I want to emphasise that this conference takes place at a critical time for nuclear power in the UK.

And, I am delighted to mention, perhaps the biggest recent achievement – the agreement reached with EdF on key commercial terms for a potential investment contract for Hinkley Point C.

Following a tremendous amount of work from many parties we can now look forward confidently to the first new nuclear power station in a generation being built at Hinkley Point.

What we’ve agreed represents a very good deal for Britain. It’s a good deal for UK consumers providing value for money - and also provides an attractive proposition for EdF and its investors - offering a reasonable rate of return for the risks they are taking.

Hinkley Point C would generate enough power for nearly six million homes, a city nearly twice the size of London, or 7% of Britain’s electricity supply by 2025. In addition it is estimated that around 25,000 jobs will be created during construction with a massive investment by EDF Group and its fellow investors of around £16 billion to build the plant.

But there are still hurdles to overcome on the path to a final investment decision.

It is dependent on a number of factors, such as a positive decision on State Aid from the European Commission and EdF’s progress with potential investors to secure the capital investment needed to deliver the plant.

We are working closely with the European Commission on their state aid investigation and a public consultation will be launched by them shortly. This will be an important step forward in the consideration of the case and I urge you to participate in the consultation and submit your views to the Commission.

Nuclear renaissance

But Hinkley is not the only project making real progress.

At the end of last year, HM Treasury signed a co-operation agreement with Horizon Nuclear Power Wylfa Ltd, to promote external financing for a new nuclear power station at Wylfa, Anglesey.

This agreement will enable access to the UK Guarantee Scheme that will underpin the establishment of external project finance for the ‘Wylfa Newydd’ project, expected to come on-stream in the first half of the 2020s.

And Government has made further progress over the last 12 months to make new nuclear happen in the UK.

We’ve successfully completed the first generic design assessment for Areva’s UK EPR and starting the process for Hitachi’s UK Advanced Boiling Water Reactor design. Regulators announced on 6th January that they are progressing to the next phase of Generic Design Assessment of the UK ABWR and I understand that they expect to complete GDA by 2017.

We’ve also introduced a community benefit regime which recognises the contribution of local populations surrounding new nuclear power stations to the long term provision of clean and secure energy for the nation.

In addition to these milestones – the Energy Bill received Royal Assent on 18th December giving investors the certainty they need from Government to invest in low carbon energy.

The Energy Act 2013 will bring unprecedented levels of inward investment into our energy infrastructure, on a scale that will dwarf the Olympics and indeed many other projects in the UK’s infrastructure pipeline from transport, water and telecoms.

UK’s expertise in nuclear and throughout the whole lifecycle

The United Kingdom has a proud and long history as one of the early nuclear pioneers. We have led the world in early reactor design, and operation, many of which set world records for their safety and operation.

I have talked a lot about new nuclear but let’s not forget that the majority of this industry is currently occupied with the vital work of existing power generation and decommissioning which make a significant contribution to the economy today.

As the Parliamentary Under Secretary of State within the Department of Energy and Climate Change I have formal responsibility for managing the nuclear legacy.

It is within these parts of the nuclear sector and the wider construction industry that we have developed a strong and globally respected workforce– and this will also provide the foundations on which the new nuclear programme can prosper.

Earlier this year the Government published our Nuclear Industrial Strategy which, with its many supporting documents, covers our commitment and vision for all elements of the nuclear sector.

The Strategy sets out a number of goals and actions that will support the supply chain: from an increased focus on fundamental R&D in our universities and the National Nuclear Laboratory; to ensuring that we can develop and maintain the necessary skills for both the home market and exporting our knowledge to the rest of the world.

Our UK nuclear industry can provide a significant contribution to overseas civil nuclear programmes, particularly in decommissioning and waste management where, over many years, our companies have developed an extensive array of specialist expertise and technology.

That’s why I am committed to supporting events such as this and doing all I can to enable UK companies to share their nuclear expertise globally.

Conclusion

As the UK continues to build on its proud heritage as a nuclear pioneer it is clear that this is a sector with a long, bright and prosperous future ahead of it. By working together, we can take advantage of the opportunities for the nuclear sector both locally at home, and internationally in the global race for jobs and growth.

I hope you have an enjoyable and productive day.

Thank you.

Published 30 January 2014