Justification Decision (Generation of Electricity by the EPR Nuclear Reactor) Regulations 2010

My Lords, this has been a short but perfectly formed debate and I welcome the contributions from noble Lords. I note that the noble Lords, Lord O’Neill of Clackmannan and Lord Jenkin of Roding, may not be able to stay until the end, but I have probably benefited more from hearing them than they would from hearing me. I note also the comments of the noble Lord, Lord Teverson, on the technicality of the statutory instruments. In looking at the SIs today, I have been through more assessments, consultation documents, and justification orders than I have for any other SI I have ever spoken on in the other place. I am grateful to the Minister for the time he took in taking us through the process and the issues. The three instruments before us today are linked. We have two justification decisions on nuclear reactors and a further instrument on nuclear decommissioning and the handling of waste. In all cases the Merits Committee drew special attention to these SIs because of their importance and because nuclear energy is a high-profile and sensitive issue, as was acknowledged by all noble Lords who have spoken. I am grateful to the Merits Committee for its work and I am sure that when he comes to reply the Minister will want to address the issues that it has raised. The justification decisions are taken by the Secretary of State as the justifying authority; that is that the generation of electricity from the nuclear reactor designs, the AP1000 and the EPR involving ionising radiation, can be justified as the social, economic and other benefits outweigh the health detriments. The third statutory instrument relates to the costs of the decommissioning of waste and the funded decommissioning programme, which must be approved by the Secretary of State, setting out the likely costs of decommissioning and cleaning up the site and how those costs will be met. These three instruments strike at the heart of the issue, addressing, first, the need for new energy capacity and the ability of nuclear to provide low-carbon energy while assessing the level of risk, and secondly, the need to have a strategy and a policy for funding to deal with the waste that is created. I want to flag up to the Minister, as did the noble Lord, Lord Jenkin, the need to move quickly on the new arrangements for the regulatory regime. I appreciate that this is not his responsibility—although he will have heard the Questions in the House on this last week—but rightly the remit of another government department. However, if there is to be public confidence in the system, the new arrangements have to be in place as the Government move forward with decisions such us those before us today. The Minister will know that the regulatory arrangements and expertise in this country are recognised and admired around the world, and we all want that to continue. Will he assure the House that his department has raised and will continue to raise this with the relevant Ministers in other departments. We currently have 10 nuclear power stations in England, Scotland and Wales which provide 13 per cent of the total electricity used in the UK. All but one of these will be shut by 2025. If we are to maintain an energy mix using nuclear, then new stations will have to be built, as Secretary of State Chris Huhne announced on 18 October 2010 when he laid the instruments before us today. In his Statement he summed up the basis of his justification as, "““a clear need for the generation of electricity by these nuclear reactor designs ... because of the contribution they can make to increased security of energy supplies and reduced carbon emissions””." He added: "““Against this the radiological detriment to health from these nuclear reactor designs and their associated waste facilities will be low compared to overall levels of radiation, and effectively controlled by the UK’s robust and effective regulators””.—[Official Report, Commons, 18/10/10; col. 44WS.]" Both the justification decisions were subjected to considerable consultation and no changes were made as a result of the consultation that took place. There has been some concern that there was no inquiry or hearing relating to the justification process. Does the Minister consider that the process is in any way weakened by not having any hearings? These justification decisions are time-critical, given that the Government are committed to nuclear new build by 2017. The delays are regrettable. It would have been helpful if we had been able to get to this stage before the general election, and we have had nearly six months since then. I raise this not to apportion blame in any way but to seek the Minister’s views as to whether he considers that the Government are still on schedule for the new nuclear power stations to come into operation by 2017. A further issue that may cause delay is the HSE licensing programme, which we have heard about already this evening. In July 2009, it was reported that the Nuclear Installations Inspectorate had written to two French companies that want to build reactors in the UK to express its concerns about the control and instrumentation—the C and I—of the European pressurised reactor, the EPR, which is one of the reactors that we are discussing today. I shall not pretend to have any great technical knowledge on these issues, but I know that C and I is also known as the cerebral cortex of a nuclear power station. It controls performance, including temperature, pressure and power outlet levels. The NII raised other related concerns; similar concerns have been raised by other regulators. The HSE said that the EPR design in Britain could be rejected if its concerns could not be satisfactorily addressed. At the time, it was reported that, in addressing these issues, the design assessment stage could be delayed well past its expected completion date of 2011. As far as I am aware, none of the EPR reactors being built in other countries is yet in service, but the companies concerned engaged with the NII and were, and may still be, in discussion with it. The companies were confident that a solution could be reached. The NII rightly made it clear that it would not issue a licence unless it was satisfied that that design could be built and operated safely. Similar issues arise also with the AP1000 The Health and Safety Executive has announced that it may have to delay a definite decision on whether to approve the designs of both the AP1000 and the EPR reactors. My understanding is that the HSE considers that all the technical issues can be resolved, but that there may be some delay. I was encouraged to hear the noble Lord, Lord Jenkin, say that at the EDF briefing this morning it was said that a slight delay is expected, but it would be helpful if the Minister could comment on that. Have the Government given any consideration to possible legal challenges to, or judicial review of, these justification orders? The noble Lord, Lord Teverson, also raised this matter. If it were the case, does the Minister consider that it could significantly delay the process? Both these issues have the potential to impact on the 2017 time scales, so any reassurance from the Minister would be appreciated. Perhaps I may also raise something that is not in the justification orders: the use of mixed oxide fuel or reprocessed fuel, known as Mox. Are there plans to bring this forward at a later date? No justification order for Mox could potentially limit the scope of the reactors. It may just be that the work is ongoing, but it would be helpful to know. I also invite the Minister to say something on any potential health risks and the level of any such risk. A number of respondents to the consultation raised concerns on this issue. It is difficult for any Government to balance risk to health and well-being against other factors. This justification order means that the Secretary of State, having examined the issue, considers that the social, economic and other benefits of proceeding with these two reactors outweigh the health detriments. The Secretary of State is charged with making an assessment not just for citizens at this point in time but for many years ahead. I know that the Secretary of State, the Minister and his colleagues are fully aware of the weight of this responsibility and I have read his considered view in the justification documents. The Secretary of State responded to the concerns raised by using evidence from a number of studies. I invite the Minister to say something further about the relative risk and the Secretary of State's assessment. In its submission to the Merits Committee, Greenpeace raised a number of issues about which I hope the Minister can say something, but I draw one specific issue to his attention; namely, whether decisions on justification are compatible with the European Convention on Human Rights, given they are ““practice as a whole”” decisions and have a wide ranging impact. On the third SI, on nuclear decommissioning and waste handling, the Minister will understand why I want to probe the amendments made to the impact assessment. I understood an impact assessment to be a statement of fact, so I was surprised to receive notice of a change. In the original impact assessment, at several points under what was then described as the ““do nothing”” option, which is now called the ““correct base case””, it was stated that the cost of verifying the information provided by operators in the funded decommissioning programme, or FDP, ““would fall on Government””. The new impact assessment states that there shall be no subsidy to new nuclear power stations and that operators should pay all costs. The reason for the change is that government policy is not to provide any subsidy to new nuclear power stations. The new policy is that the Government would seek to agree with the operator to recover reasonable costs incurred by the Secretary of State when verifying the information contained in the FDP. But the impact assessment adds: "““Although we would not be able to compel the operator to agree such terms, it would be likely to be in their interests and so we view it as quite likely that the costs of verification would not fall to Government””." Is the coalition Government's policy of no subsidy now reduced to ““quite likely”” and only with the agreement of the industry? What discussions have there been with the industry on this change? What is its view? How likely is ““quite likely””? I have raised this issue previously, following some confusion about the Secretary of State's view. I am therefore grateful to the Minister for the letter I received shortly before I came to the Chamber today, giving further advice and information on the issue of subsidy. I am trying to get an understanding of what the Government mean by ““no subsidy””, and the Minister’s letter is very helpful in that regard. He could help me further by explaining whether the change in policy still gives the industry the confidence it needs to progress. I would be grateful for the Minister’s guidance on this. I know he shares the commitment on this side of the House to ensure that the power stations are in place by 2017. Taking a broader examination of this statutory instrument, we need further clarification, over and above the Energy Act 2008, of what operators will be expected to provide in applying to build and operate nuclear power stations, which will clearly not be covered by the public purse. I listened carefully to the Minister’s comments today, and I admit to some confusion and not fully understanding a couple of points. On the funded decommissioning programme, I am not clear exactly what is involved. Is it the case that the operator must deposit and show that funds are available for the construction and the subsequent maintenance of a storage site—prior to eventual underground storage—and all the costs of preparatory activity before decommissioning? If this is the case, it is a substantial undertaking. I think the noble Lord, Lord Teverson, raised that point as well. On the storage issue, it would certainly outlast the lifespan of those giving the undertaking. I may be wrong—which is why I am seeking clarification—but it looks as if this is a tightening of what is defined as ““no public cost””. If it is, has it been discussed with the industry, and what was the reaction of the industry? The point I am trying to get back to is the confidence that the industry can have in the process moving forward. My final point—I saw the Minister raise his eyebrows then—is whether the Minister can provide an update on what comes next, including the energy market reform. We have the road map showing the date for new nuclear to be in operation by 2017. However, as I have outlined today, there are a number of hurdles still to be cleared, and market reform is not in the Bill to come before us shortly. Does the Minister think it will be necessary to amend the road map, or is he confident that the issues I have raised today have been fully addressed and that there will be no further concerns? I am sorry for having spoken slightly longer than I had intended, but there were a number of issues on which I wanted clarification. I know that the Minister has a personal commitment on these issues, and we all want to ensure that there can be confidence that they have been fully examined by your Lordships’ House.