Nuclear: Small Modular Reactors

Question

14:47:00

Asked by

To ask His Majesty’s Government when they expect to make an announcement on the award of contracts for small modular nuclear reactors.

My Lords, Great British Nuclear is overseeing the small modular reactor competition for UK deployment. Following a period of detailed negotiation, bidders have now submitted final tenders, which Great British Nuclear is evaluating. Final decisions will be taken shortly.

My Lords, I convey my best wishes to the Minister on his birthday today. Can I just press him a little further and ask him to celebrate by bringing some good news to the energy, nuclear and engineering industries and their workers and consumers by finally announcing or even giving a clearer date as to when a decision will be taken on small modular nuclear reactors? Is this to be yet another great British development lost to overseas suppliers due to bureaucratic inertia, dither and delay?

My Lords, I am most grateful to the noble Lord for his congratulations. What better way to spend my birthday than answering his Question? I understand his frustration. Of course, we want to get this SMR programme over the line. Great British Nuclear is coming to the end of its evaluation process. I expect an announcement to be made within the next few weeks. I believe we have a great opportunity in this country to develop small modular reactors and a UK supply chain and to get us towards net zero, because of the essential contribution that nuclear power will play in the baseload we require.

My Lords, I welcome the fact that the Government hope to quadruple the amount of nuclear capacity by 2050—the same target that the Conservative Government had—and it is very welcome in terms of baseload. Can the Minister give us some indication of what percentage of that increase in capacity is going to come from SMRs and AMRs as opposed to big nuclear, particularly given how long it takes for decisions to be enacted?

My Lords, the noble Lord is referring to the road map issued by the last Government. He will know that unfortunately it was not backed up by any concrete plan or resource, so we are having to pick up the pieces. I cannot yet give him the answer on the mix between SMR and major-gigawatt plants. We are clearly alongside the SMR programme. We are moving rapidly towards final investment decision on Sizewell C, which is 3.2 gigawatts. That follows Hinkley Point C, where EDF says the first unit will open between 2029 and 2031. Over the next few months we will work very hard to look at the potential of SMRs, gigawatts and the advanced modular reactors and give industry a sense of where we are going in order to give it the security and certainty it needs to develop the supply chain we want to see.

My Lords, I declare an interest as a resident of Suffolk. I mention that because to understand the context of small nuclear reactors, it is worth while understanding the progress being made—or not—on the large nuclear reactors. Is it true that the new Sizewell nuclear reactor is not yet funded and that, while it is throwing concrete around north Suffolk, there is no contractual basis for doing so?

My Lords, I congratulate the noble Lord on living in Suffolk. Only a few weeks ago I had a meeting with Suffolk local authority leaders to discuss these very matters. He is right in the sense that, as I have already said, we are moving rapidly towards final investment decision on Sizewell C. I very much hope we will be able to get that over the line. We have committed £2.7 billion of funding through the Sizewell C devex subsidy scheme to support the project’s development during the current financial year. It consolidates the Government’s position as the majority shareholder in Sizewell C and is laying the foundations for final investment decision and, we very much hope, a 3.2-gigawatt nuclear power station that will power 6 million homes for 60 to 80 years.

My Lords, this Government are clearly committed to making progress on SMRs, primarily to help power AI. AI will be a great consumer of power but equally has great opportunities to bring huge energy savings and efficiencies. I welcome the recently launched AI Energy Council, but are the Government doing enough to bring about the required AI energy efficiencies? I ask the Government to publish a full AI energy efficiency strategy for making the best use of AI that sets out clear targets for AI to be better than carbon-neutral before 2030.

My Lords, we are well aware that both AI and data centres will lead to a major increase in electricity demand. We are also aware of experience in the US, and interest in this country, in linking these AI data centres to nuclear development. The EN-7, the siting policy for nuclear sites, which we are debating in your Lordships’ House on Wednesday, gives us a more flexible siting policy as a result. We are well aware of the potential. We are working very hard to consider how we can encourage this development with private sector funding. I take the noble Earl’s point about the need for us to be very clear about where we are going in this area; I very much accept that.

My Lords, I thank my noble friend the Minister for the positive discussions he has had with colleagues in the public and private sectors with regard to the manufacture of small modular reactors in South Yorkshire, but I am very aware that it is not just his department but the Treasury. Will he impress upon the Treasury the fact that the Czech and Korean Governments are forging ahead with design and technology of SMRs and that unless we get our skates on about the urgency of this, we will be buying SMRs from overseas and not making them in this country?

My Lords, I need no encouragement from my noble friend to knock on the doors of the Treasury. That is what we have been doing over the last few weeks, and having, I hope, very constructive discussions. I pay tribute to our former colleague Richard Caborn, the work he is doing in South Yorkshire in relation to the nuclear supply chain and the developments he is encouraging. I had a very good meeting with him and colleagues only a few weeks ago, and we are certainly very much apprised of the need for urgency. I am confident that we have a real opportunity in this country to develop SMRs and to see a strong UK supply chain. We should not be pessimistic. We have a great opportunity here.

My Lords, please allow me to quote the noble Lord, Lord Howell, former Secretary of State for Energy: “some of us have been talking to the main SMR producers … delay and obstruction are their findings in dealing with the British Government … the order books are rapidly filling up in all other countries”.—[Official Report, 29/4/25; cols. 1095-96.] The chief executive of Rolls-Royce has also warned that the Government run the risk that critical supply chains to support the development of SMRs will be built elsewhere if they fail to select the companies to build them by the end of June. Time really is of the essence. Will the Minister also commit to urgently addressing the regulatory, planning and environmental concerns that have caused the cost of nuclear in this country to soar?

My Lords, we inherited the regulatory and planning infrastructure that the last Government left. Indeed, we have set up a time-limited task force to look at regulation to see how, in the experience of Hinkley Point C, we can find ways, without comprising safety, to speed up the regulatory process. We have the Planning and Infrastructure Bill coming to your Lordships’ House very shortly; I look forward to the support of the Opposition in taking it through. As for what SMR companies are saying, I have had the opportunity of meeting very many companies that wish to develop SMRs. I have been to a number of international fora. The UK’s position, which, after all, the noble Earl’s party set up—the Great British Nuclear exercise that we are currently going through—is of considerable interest. We are going through a transparent and robust process. I believe that we will have decisions very soon and that they will set this country on a very good pathway on small modular reactors.

My Lords—

My Lords—

My Lords, we will hear from the Cross Benches.

My Lords, can the Minister give us an assessment of the availability of the relevant skills for building SMRs? If there is going to be a skills shortage, what training programme do the Government intend to put in place?

My Lords, that is a very important point. We have a national strategic skills task force, and a plan. We reckon that we already need 40,000 extra people in the industry between now and 2030. We will need many more with the SMR programme. We are working very hard with the industry. I believe the kind of jobs it offers—well paid, in a stable and exciting environment—will bring people in, but we stand ready to support industry in that regard.