Third Report - Nuclear energy in Wales

The government's response

What the committee recommended 17

1. 1
   Broad consensus exists for new nuclear energy generation to achieve net zero and energy security. Conclusion · paragraph 21
2. 2
   Nuclear energy plays a strong role for net zero due to current renewable storage limitations. Conclusion · paragraph 22
3. 3
   Uncertainty and raised expectations for new nuclear build at Wylfa concern the local community. Conclusion · paragraph 28
4. 4
   Encourage Hitachi to sell Wylfa Newydd site or join a consortium for future nuclear development. Recommendation · paragraph 29
5. 5
   Wylfa is a prime site and should host the next gigawatt-scale nuclear plant. Conclusion · paragraph 30

See all 17 recommendations and conclusions

Sources

• Third Report - Nuclear energy in Wales ↗The committee's report, HC 240, parliament.uk
• Fifth Special Report - Nuclear energy in Wales: Government Response to the Committee’s Third Report ↗The government's response, 7 July 2023, parliament.uk

Recommendations and conclusions 17

1. 1
   Broad consensus exists for new nuclear energy generation to achieve net zero and energy security. Conclusion · paragraph 21 · addressed to Wales Office Conclusion (the committee's words)

   While we have heard dividing evidence on the role that nuclear energy should play in achieving the UK’s net zero targets and ensuring domestic energy security, there is a broad consensus between the UK and Welsh Governments, and the majority of our witnesses, in favour of new nuclear energy generation.
2. 2
   Nuclear energy plays a strong role for net zero due to current renewable storage limitations. Conclusion · paragraph 22 · addressed to Wales Office Conclusion (the committee's words)

   The storage technology required for an entire electricity system run on renewable energy is not there yet. Therefore, on balance, we consider that nuclear energy has a strong role to play, as part of a mix of low carbon sources, in achieving net zero and energy security.
3. 3
   Uncertainty and raised expectations for new nuclear build at Wylfa concern the local community. Conclusion · paragraph 28 · addressed to Wales Office Conclusion (the committee's words)

   The previous attempt to bring a new nuclear project to Wylfa by Hitachi has left scars on the local community. We are concerned that expectations are being raised again on Ynys Môn and question how long the uncertainty can continue about whether or not a new nuclear build will be delivered at Wylfa.
4. 4
   Encourage Hitachi to sell Wylfa Newydd site or join a consortium for future nuclear development. Recommendation · paragraph 29 · addressed to Wales Office Recommendation (the committee's words)

   Given that the land at Wylfa Newydd is owned by Hitachi, it is unclear what the current state of play is at the site. If there is to be new nuclear at Wylfa, the issue of ownership of the land needs to be addressed. We reiterate a recommendation of our predecessor Committee and call on the UK Government to encourage Hitachi to sell the Wylfa Newydd site or take part in a consortium of developers to allow future development.
5. 5
   Wylfa is a prime site and should host the next gigawatt-scale nuclear plant. Conclusion · paragraph 30 · addressed to Wales Office Conclusion (the committee's words)

   We have heard from a wide range of industry representatives that Wylfa is one of the best sites for nuclear development and it is difficult to see how the UK Government can deliver its nuclear ambitions without taking forward a project at Wylfa. We consider that Wylfa should be the location of the next gigawatt-scale nuclear generation plant after Sizewell C.
6. 6
   Pursue new gigawatt-scale nuclear plants alongside existing Small Modular Reactor policy. Recommendation · paragraph 35 · addressed to Wales Office Recommendation (the committee's words)

   While successfully developing a Small Modular Reactor (SMR) would present a huge opportunity for the UK, the technology is still in development phase. If the UK Government is serious about nuclear energy now it needs to pursue new gigawatt- scale plants alongside its policy on SMRs.
7. 7
   Include Trawsfynydd site as a potential SMR host in the Nuclear National Policy Statement. Recommendation · paragraph 36 · addressed to Wales Office Recommendation (the committee's words)

   The UK Government, and Great British Nuclear, should continue to engage with Cwmni Egino on its ambition for Trawsfynydd to become the first site to host Small Modular Reactors (SMRs) in the UK. We urge the Government to include the Trawsfynydd site in the new Nuclear National Policy Statement as a potential site for SMRs.
8. 8
   Financing new nuclear projects at Wylfa faces ongoing challenges despite the RAB model. Conclusion · paragraph 47 · addressed to Wales Office Conclusion (the committee's words)

   The introduction of the Regulated Asset Base (RAB) model is welcomed as a better alternative to the Contracts for Difference (CfD) scheme for nuclear developments. However, financing new nuclear projects is not straightforward and there will still be challenges under the RAB model. For a development to progress at Wylfa, important issues still remain regarding financial commitment.
9. 9
   Explain mechanisms for monitoring and reporting consumer risk during Sizewell C construction. Recommendation · paragraph 48 · addressed to Wales Office Recommendation (the committee's words)

   We recognise the high cost of construction of nuclear energy plants and the large upfront investment needed to get a project to final investment decision. We hope that the Regulated Asset Base (RAB) model will help overcome these investment challenges. However, there are valid concerns about the risk to consumers, which needs to be closely monitored in order to be better understood as the RAB model is used for the first time for a nuclear project at Sizewell C. The Government should explain the mechanisms it will use to monitor and report to the House during the construction of Sizewell C.
10. 10
    Inclusion of nuclear energy in green taxonomy will unlock new private investment. Conclusion · paragraph 53 · addressed to Wales Office Conclusion (the committee's words)

    We welcome the UK Government’s announcement that nuclear energy will be included in the green taxonomy, subject to consultation. We consider that this will unlock new avenues of private investment for nuclear development and send the signals needed to the financial sector that nuclear energy is an attractive investment.
11. 11
    New nuclear developments could significantly boost the North Wales regional economy and job creation. Conclusion · paragraph 57 · addressed to Wales Office Conclusion (the committee's words)

    New nuclear developments at Wylfa or Trawsfynydd could be a game-changer for the north Wales regional economy. Such projects would play an important role in the UK Government’s Levelling-Up agenda by bringing high-skilled, well-paid, long-term job opportunities to a rural area of the UK. It is vital that north Wales has the opportunity to benefit from the developments that arise from the UK-wide strategy to deliver net zero and achieve greater energy security.
12. 12
    Collaborate with Welsh Government to develop a national nuclear skills strategy for Wales. Recommendation · paragraph 67 · addressed to Wales Office Recommendation (the committee's words)

    If the UK Government is going to realise its ambitions for nuclear energy, investment in skills is essential and serious work needs to be done on how the required skills can be developed. We call on the UK and Welsh Governments to work closely together to support the skills sector to invest in training for nuclear jobs in Wales. We recommend that the UK Government collaborates with the sector, and Welsh Government, in the production of a nuclear skills strategy to provide certainty to the sector on the skills required, when and where to allow providers to plan investment in training programmes in Wales.
13. 13
    Require developers of new nuclear projects in Wales to meet minimum local content levels. Conclusion · paragraph 68 · addressed to Wales Office Conclusion (the committee's words)

    The contribution of businesses based in Wales to current nuclear developments at Hinkley Point C and Sizewell C demonstrates that, at least in part, the skills and supply chains for such projects are available in Wales. There should be investment in scaling up the Welsh nuclear supply chain to ensure that new nuclear projects in Wales employ the maximum local labour so that the local areas feel the benefits. If there is a new nuclear development in Wales, the UK Government should place a requirement on developers for a minimum level of local content during the project.
14. 14
    New nuclear development at Wylfa remains uncertain without further concrete government commitment. Recommendation · paragraph 73 · addressed to Wales Office Recommendation (the committee's words)

    While we welcome what feels like small steps in the right direction towards new nuclear at Wylfa, we do still question how much further down the path we are now to seeing a successful development than we were when Hitachi withdrew from the site. There will remain risks associated with both the UK and Welsh Governments’ political commitment to nuclear power and we believe the UK Government needs 28 Nuclear energy in Wales to make further commitments within this Parliament. Our overarching view is that new nuclear at Wylfa is not certain despite progress being made and more concrete commitment is required to deliver a project at Wylfa.
15. 15
    Publish a medium to long-term nuclear energy generation programme, including Wylfa and Trawsfynydd. Recommendation · paragraph 74 · addressed to Wales Office Recommendation (the committee's words)

    We welcome the UK Government’s announcement that it will deliver a programme of new nuclear projects. We recommend that the Government publishes a medium to long-term programme for nuclear energy generation. The programme must set out how it will achieve its ambitions of up to 24GW of nuclear energy by 2050 and must state which technologies (gigawatt-scale or Small Modular Reactor) the Government wants to be built, where and on what timescale. The programme should also include clear statements of the Government’s intentions for the Wylfa and Trawsfynydd sites.
16. 16
    Mandate Great British Nuclear to plan and deliver a programme for nuclear generating sites. Recommendation · paragraph 79 · addressed to Wales Office Recommendation (the committee's words)

    We have heard strong representations from the nuclear sector for greater clarity and commitment from the UK Government on its ambitions. We put these representations to the UK Government ahead of the Spring Budget and welcome the launch of Great British Nuclear, as we called for. However, we are yet to see the detail of how this body will function. We recommend that GBN is given a mandate to plan and deliver a programme for nuclear generating sites in order to provide much needed clarity to the whole industry.
17. 17
    Require UK Government to explain plans for resolving the lack of utility developers in nuclear. Recommendation · paragraph 80 · addressed to Wales Office Recommendation (the committee's words)

    One of the significant missing parts of the future of nuclear development is the lack of a utility developer in the UK, other than EDF-related companies. We recommend that the UK Government explains its plans to resolve this problem and whether there is a role for Great British Nuclear to play.