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

Copy of the SI
Copy of the Report
Copy of the Report

Motion to Approve

6.01 pm

Moved By Lord Marland

That the draft regulations laid before the House on 18 October be approved.

Relevant documents: 4th Report from the Joint Committee on Statutory Instruments, 10th Report from the Merits Committee.



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The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland): My Lords, in moving the draft Justification Decision (Generation of Electricity by the EPR Nuclear Reactor) Regulations 2010, I shall speak also to the draft Justification Decision (Generation of Electricity by the AP1000 Nuclear Reactor) Regulations 2010, and the draft Nuclear Decommissioning and Waste Handling (Designated Technical Matters) Order 2010.

The House should consider these three instruments, which I laid before it on 18 October, together. Two of them contain the decision of my right honourable friend the Secretary of State for Energy and Climate Change, as justifying authority under the Justification of Practices Involving Ionising Radiation Regulations 2004, that the generation of electricity from two nuclear reactor designs-Westinghouse's AP1000 and Areva's EPR-is justified. The third, the draft Nuclear Decommissioning and Waste Handling (Designated Technical Matters) Order, specifies which technical matters, in addition to those already in the Energy Act 2008, are to be "designated technical matters".

First, I will consider the two regulatory justification decisions. Regulatory justification is derived from the recommendations of the International Commission on Radiological Protection, the ICRP, which are used around the world as the basis for radiological protection. The ICRP's recommendations form the basis of the European basic safety standards directive and, in the UK, of the Justification of Practices Involving Ionising Radiation Regulations 2004.

The regulations provide that the Secretary of State, as justifying authority, must decide whether a new class or type of practice resulting in exposure to ionising radiation is justified, in advance of it being first adopted or approved, by its economic, social or other benefits in relation to the health detriment that it may cause.

Regulatory justification is an initial, high-level process. It is the first step in the radiological protection regime and is made on a generic, not a site-specific, basis. Following a regulatory justification decision, there are further processes involving more detailed examinations by regulators of reactor designs and of the impact on specific sites of proposals to build nuclear power stations separately and after the regulatory justification process.

A justification decision does not mean that the reactor design and the nuclear power station will pass through these further processes successfully. These further processes are based on the principle of optimisation, a requirement to keep all exposures as low as reasonably achievable, and dose limitation, the principle that the total dose to any individual from regulated sources in planned exposure situations-other than medical exposure of patients-should not exceed the appropriate recommended limits.

Regulatory justification decisions are made in advance of full information on the benefits and detriments of the practice which might emerge from operational experience. They therefore seek to identify the potential detriment from the reactor designs by making assumptions based on the best information currently available, including information arising from the operational

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experience of similar classes or types of practice and the expert opinion of regulators and others. If new and important evidence about the efficacy or consequences of the class or type of practice comes to light, the 2004 justification regulations allow the Secretary of State to reassess any regulatory justification decisions.

Last year, my department published a consultation on proposed decisions that two reactor designs should be justified-Westinghouse's AP1000 and Areva's EPR. After considering responses to that consultation, on 18 October my right honourable friend the Secretary of State for Energy and Climate Change announced his decision that the two designs are justified. I will outline our reasons for making those decisions.

We see a clear need for the generation of electricity by the AP1000 and EPR through the contribution they can make to securing the UK's energy supplies, helping the UK decarbonise and meet legal low-carbon obligations and benefiting the economy more widely. Against this, the radiological detriment to health from these nuclear reactor designs and their associated waste facilities will be low compared to naturally occurring levels of radiation and effectively controlled by the regulatory regime. The AP1000 and EPR will be able to produce large quantities of electricity over an extended period, making a significant contribution to the electricity supply. Nuclear power has long been our most significant source of low-carbon energy and can continue to contribute to our energy mix.

It will be for companies to fund and build any new nuclear power stations and to determine whether they provide sufficiently attractive returns. Nuclear power is economically competitive with other forms of generating technology, and developments in the UK market have made clear that energy companies are investing significantly in the prospect of new nuclear power stations.

We are confident that there will be economic benefits for the UK from new nuclear power stations. Beyond direct investment and employment, we can benefit through the development of a globally competitive nuclear supply chain and improvement in the quality of a skilled UK workforce. Further, we believe that, if nuclear power stations are not part of the UK's future energy mix, the UK would face significantly higher costs in meeting the transition to a low-carbon economy.

Against these benefits, there is the potential for detriment. However, the safety features of the designs and the regulatory regime, which sets limits to the release of radiation and monitors compliance, will ensure that emissions will be minimised. The radiation to which members of the public would be exposed, as a proportion of the overall radiation to which they are exposed from all sources-including medical procedures and background radiation-would therefore be very small and the risk of health detriment very low.

The decisions apply to the operation and decommissioning of new nuclear power stations and also the management and disposal of the radioactive waste they will produce. In making the decision, we are therefore satisfied that the regulatory regime will limit health detriment from waste management and disposal, that the interim storage of waste can be

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carried out in a way that causes a very low level of health detriment and that a robust process is in place to identify a site for, and build, a geological disposal facility.

We also concluded that the potential environmental detriments arising from new nuclear power stations are likely to be avoided or adequately mitigated by the licensing and planning regime. We considered the risk of detriments from an accident or terrorist incident. This potential detriment already exists and the risk of such incidents would be seen in the context of the regulatory regime, which is intended to prevent accidents and protect against terrorist attack. We are confident in the regulatory regimes for safety and security of civil nuclear installations and materials in the UK and consider that the likelihood of an accident or other incident giving rise to a release of radioactive material is small. My right honourable friend the Secretary of State for Energy and Climate Change therefore concluded that these significant potential benefits outweigh the potential detriments, and that the generation of electricity by the AP1000 and EPR should be justified.

I now consider the draft Nuclear Decommissioning and Waste Handling (Designated Technical Matters) Order. The purpose of the draft order is to support the requirement under the Energy Act 2008 for nuclear operators to make financial provision in their funded decommissioning programmes for those designated technical matters. The Energy Act 2008 contains only one category of designated technical matters-decommissioning a nuclear power station and cleaning up the site. The Energy Act provides that the Secretary of State specifies by order the other matters which are to be designated technical matters. The order is, therefore, necessary to give operators clarity over what are the designated technical matters that they must provide for.

The order specifies that the construction and maintenance of an interim fuel store used for storage, any activity preparatory to the decommissioning of a relevant nuclear installation, and the cleaning up of the site are designated technical matters. This means that these costs also have to be funded through funds set aside as part of the funded decommissioning programme. It might be claimed that the operator could pay for these costs out of operational expenditure and that designation is unnecessary. However, this may put the costs in competition with other demands on revenue and if the operator was unable to meet these costs when they fell due, there would be a risk that they could fall to the taxpayer. It is therefore appropriate to designate these costs to limit the risk to the taxpayer by ensuring that funds are set aside to carry out the relevant work. The order will be complemented by the Nuclear Decommissioning and Waste Handling (Finance and Fees) Regulations, which will be laid before Parliament once this order completes its passage.

Following a consultation on the provision of the draft order earlier this year and responses received, the Government do not propose to extend the definition of "designated technical matters" beyond interim stores and activities preparatory to decommissioning and cleaning up the site. I believe that the order will benefit

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both industry and the public. It clarifies the obligations of the nuclear industry and therefore reduces uncertainty and helps investment. The order, together with the Act, ensures that the costs of waste management, disposal and decommissioning do not fall on to the taxpayer.

I commend these regulations and the two other instruments to the House.

6.15 pm

Lord O'Neill of Clackmannan: I start by declaring an interest as chairman of the Nuclear Industry Association. I do so for a number of reasons, not least because the NIA undertook the drafting of the justification report on which these statutory instruments are based. It was a lengthy process. Indeed, some of us thought that we would never see the end of it-first, in getting the reports right and, secondly, in terms of ministerial overview and the preparation of the SIs which we are debating today. It is fair to say that this is of critical importance to the realisation of the new nuclear build programme.

There are various elements. One could say that the building blocks, or the foundations, involve more than just the justification process in respect of the Areva and Westinghouse reactors. These reactors will also be subject to the rigorous generic design assessment programme being undertaken by the health and safety regulator and the Environment Agency. But these are of a different order, being almost exclusively technical in character and they do not concern us today. We have to satisfy ourselves and the country that the kit we are going to use is of a quality that can allay the fears of people in the UK. We have to recognise that there is not unanimity on the issue of nuclear power. There is certainly now, I think, what could be called a working majority and the consensus is probably a wee bit more robust than some of the elements within the coalition, but in order to reinforce and develop this consensus, we have to deal with the broad issue of the environmental concerns of the EU.

We have ceded to Brussels-probably correctly-a number of responsibilities in relation to environmental matters. I may be wrong, but I think that, apart from the reactor at one of London's universities, the nearest one to London is in France, so it is only appropriate that we are subject to rather broad environmental legislation which covers the continent and not just this island.

In considering the process of preparing the report it would be wrong of me not to pay tribute to the work of Peter Haslam on behalf of the Nuclear Industry Association and its members. He had the responsibility of herding the cats into the bag and it was not always easy getting the various players around the table, but consensus was established, agreement was reached, the document was prepared and it is in no small way due to the efforts of Peter Haslam.

We have to be careful, not only about the issue of building a consensus of tolerance of and support for nuclear power, but about taking account of the fact that there are those who are quite happy-with other people's money, usually-to seek access to the courts to have judicial review and things like that. It may

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well be that this will be the subject of a judicial review. I hope not and, indeed, I think that one way to ensure public confidence is that when those who are against nuclear power-they are perfectly entitled to be so- take the advice of their learned friends, they get the message that this document stands up to close scrutiny. The Minister and many of us across the House feel that to have got to this stage and to have these statutory instruments being discussed is evidence of our confidence in the robustness of the documents and, as time will go on, of the robustness of the case for nuclear power.

It is fair to say that issues relating to waste and decommissioning are worries. There is sometimes a wilful ignorance of the fact that other countries have accommodated waste, are treating it and dealing with it in a way which has, by and large, allayed public anxieties within those countries. We can look to Finland and Sweden. In Sweden, there has always been an anxiety about nuclear power, but there has not been the concern about storage, because Sweden has got on with the job. The funding of decommissioning and the treatment of waste and its storage are paramount and people have to be reassured that that part of it that has been created by private industry will be paid for by private industry. I make that distinction at this point because a lot of the waste that we have was created by nationalised industries and therefore is the responsibility of government. That part of the deal is not a subsidy but is the public purse meeting its historical responsibilities.

My second point is that not all of the waste is civil in character. It is waste that has come about as a result of the various forms of nuclear deterrent we have had. That again is a responsibility of the state. That is not a subsidy. It may well be that in putting together the three elements-the privatised waste, if I can call it that, the nationalised waste and the military waste-we create economies of scale that make the job that bit easier because the volumes will be such that critical mass will be created and we will be able to do it more cheaply, but that is not to suggest that we are talking about subsidies of one against the other.

It is important that these statutory instruments are dealt with today and that they get the support of the House. The industry can stand up to the challenge, "Well, they would say that, wouldn't they?". It does not want to be an unsafe industry. That is one argument, but the other argument, which is far more compelling, is that if these private companies do not get it right, it will perhaps cost people their lives, but it will certainly cost their shareholders a hell of a lot of money. Therefore, we realise the significance of the investments, the dangers of the materials that are being used and the problems that could be created if the reactors are not satisfactory. All these issues are being considered. Once we have this element out of the way, get the generic design assessment process completed and eventually get the planning applications going to the IPC in whatever form it finally emerges, we will be in a position to start building the nuclear power stations.

At the end of the day, even if we build no more nuclear power stations in this country, we will still have to decommission the existing facilities and handle the waste, so the three statutory instruments are relevant

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this evening. It is important that they are given the best support that the House can give them. I do not anticipate there being a vote as that is not our custom.

I have a commitment this evening so I have to leave the House and will not be here for the wind-ups. No discourtesy is intended. I was going to send the Minister a letter, but I thought that since there are not many people here I could just say it entre nous, as it were. It is important for the industry that we get this cleared out of the way. It is one of the important building blocks. It has been not tiresome, but time-consuming, and it is a necessity that no one would shirk from recognising has been central to the development of the nuclear industry and its regeneration in this country.

Lord Jenkin of Roding: My Lords, I add my voice in support of these regulations. The noble Lord, Lord O'Neill of Clackmannan, and I were fortunate to attend a briefing this morning by one of the potential investors that would be building these nuclear power stations. One word came out of that. The noble Lord used it; it is "confidence". He was talking about the billions of pounds that will be invested in the next generation of nuclear power stations. The investors will have to have confidence at every stage that this is going to go ahead and be successful.

We are discussing these regulations and the order. The whole process of justification has been very elaborate. I have here the justification report on one of the two designs of reactor. This has been a formidable step. The fact that the Secretary of State has now accepted that the justification process has been properly completed and that we now have these statutory instruments is one further step in the confidence of the industry.

This is not the last word: the industries have to continue to get further consents, not least the licensing of the designs through the generic design assessment process. We heard high praise this morning of the work of the Nuclear Installations Inspectorate in getting to this stage. There seems to be confidence that this will happen by the due date of July next year. That has to happen, but I say nothing about planning-we are not talking about planning tonight, and that is another stage to be got through.

The industry has been looking for a number of steps to generate confidence. The Secretary of State's statement last month was a major step along the way. There was no question about that: it made an extremely favourable impression on the industry and its potential investors and the supply chain as well.

Last week I asked a Question about the future of the Nuclear Installations Inspectorate and I raised with the Minister who was representing the Department for Work and Pensions-he is responsible for the Health and Safety Executive, and the NII comes under the HSE-that we are still waiting for the decision about the reorganisation and, I hope, the setting up, through a legislative reform order, of a new statutory corporation to take over the functions of the NII. I do not know whether my noble friend can say anything more about that. It is something to which great importance is being attached by the industry, particularly because of the need for the NII to be able to recruit the people

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with the very scarce experience and skills against a background of a global nuclear renaissance. These people are much in demand and this process, which has been under discussion for some time, is seen by the industry as another important step which, if and when it is achieved, will continue to generate confidence. I hope my noble friend will be able to say something about that, although the actual process-I entirely accept this-is not for his department but for the Department for Work and Pensions. If he can say something that would help this process of confidence, to which I have referred, I would be extremely grateful.

Like the noble Lord, Lord O'Neill, I too have an engagement. I hope I can stay until the end, but I offer my apologies to the House if I cannot.

Lord Teverson: My Lords, I have never felt such pressure to make a short speech, so I will see if I can do it. I thank my noble friend for his usual panache in introducing the subject. One of the things that strikes me while reading through these statutory instruments is that we have, once again, a problem of opaqueness with respect to this industry and sector. They are among the few SIs I have read in which, even after reading the Explanatory Memorandums, it is quite difficult to really get to the depths of what they are trying to say. No doubt we can blame that on EURATOM regulations or whatever. In terms of designated technical matters, this sounds innocuous but is obviously crucial to these documents and the meaning of "justification" is rather different from what I have known before. In particular, we talk about approval, but neither of these reactors is approved at all. This is just the start of the process and there is much more to go on further. I was particularly interested that in the justification SIs we have two useful definitions-on intermediate-level waste and on spent fuel-but they are never referred to in the documents. That is slightly strange.

6.30 pm

Unlike my noble friend Lord Jenkin, I did not manage to get through the large documents on the assessments, which I look forward to doing. Mainly health considerations are mentioned, but the documents refer to "environmental protection". I would be interested to understand whether environmental issues were taken into consideration in terms of the effective cost-benefit analysis that is taking place.

When you get to the bottom of this, the regulations are not approval of either of these designs. I would be interested to obtain clarity from the Minister on when that approval process might take place. I also note that these regulations deal with only two of four reactor classes that the Secretary of State has deemed necessary to go through those processes. Where are the other two? Will they come through your Lordships' House as well? Given that this is a requirement under the EURATOM legislation, I would be particularly interested to understand what has happened in terms of these two designs in other member states. Have they gone through the same procedure yet? Have any member states rejected them or hesitated in terms of justification? That would be useful and important to understand.



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I see from some of the Explanatory Notes that "justification" includes a much broader process than just the nuclear reactions that take place and nuclear generation. It can include the whole supply chain. Therefore, is the justification seen by the Government to include waste disposal? I suppose I ask from this half of the coalition whether you can really justify such reactors when we have not sorted out waste disposal in the longer term. I treat that more as a philosophical question. Certainly, as the noble Lord, Lord O'Neill, has said, I have no intention of bringing the matter to a vote this evening.

On decommissioning, I welcome very much the Government's repetition that there will be no public subsidy for nuclear power. I know that some of the papers answer why interim storage is included in decommissioning. It seems to me that it was already included effectively in the decommissioning of interim waste disposal sites. Obviously, interim waste facilities will have to be built anyway as these nuclear power stations are developed. What happens to the cost of building them to enable them to operate? Is that included in this scheme?

Although these instruments cover funding, and I know that we have further instruments to approve, I ask the Minister now when we are likely to have the detailed funding mechanisms. This caused considerable debate earlier in the year when the previous Government started to present this under one of the energy Acts. This is of the greatest importance. The Minister may not be able to answer these questions now, but certainly I would like him to in the future. How do we make sure that these funds, which will be very large amounts of money, are not affected by such issues as bankruptcy of the companies involved; are not sold on in the money markets to other owners; or, perhaps the biggest risk, are not consumed by the Treasury long before they ever reach decommissioning of the power plants? Given the fact that it is accepted that the nuclear industry will go ahead to meet our energy needs for the future, I welcome these regulations and hope that we will move forward in a well managed and effective way to achieve that.

Baroness Smith of Basildon: 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 ever spoke 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

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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,

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?



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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.



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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"?

6.45 pm

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

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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.

Lord Marland: My Lords, I am very grateful to everyone who has spoken. This is a great day for the nuclear industry, and I am delighted. Unfortunately, everyone who has spoken seems to have left, which says a lot for my winding-up speech. I am very grateful to the noble Baroness for sitting there and listening to what I have to say. Perhaps she can report it accordingly. It is a great day for the nuclear industry, and I am very grateful to the noble Lord, Lord O'Neill of Clackmannan, who is a terrific exponent as chairman of the NIA, for his kind words in saying that it is a great day. I think this clearly sends confidence to the industry that we are determined to get the nuclear show on the road. We have had 13 years without the nuclear show on the

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road. I am grateful to the previous Government for helping to change public opinion, but we have had no activity, and we now have activity. As always, the noble Lord, Lord O'Neill, makes good points in everything he says on this issue, because he is an expert. He is a pleasure to work with on this subject. He makes good points about waste, the economic benefit perhaps of economies of scale working with government and with civil waste, and I take those messages on board. The noble Lord, Lord Jenkin, again talks about confidence. The first two statutory instruments clearly demonstrate that there is confidence and that we are going down the road for it. Both he and the noble Baroness have asked questions on the subject of the NII. I take on board her comments, asking us to get on with sending a clear route map of what we need to do. The Government have been considering two options for the reform of nuclear regulation, as was said at Question Time last week-a discrete agency within the HSE or a stand-alone, statutory corporation. This is a discussion between two departments, and I assure the noble Baroness that we are pushing very hard for a conclusion on it.

The noble Lord, Lord Teverson, made a series of excellent points, as always. He talked about spent fuel and the levels of waste not being defined. They are defined in the regulations, in the companion instrument to this order, and I should be happy to have my staff take him through those pages, because I shall not be able to do it myself.

Lord Teverson: I hope the noble Lord does not mind if I decline that particular offer, certainly this evening.

Lord Marland: It is all very well the noble Lord asking questions, but he should know the answer to them.

One question is why we should designate interim stores. Operators must provide for interim stores during the life of a station and it is essential to ensure that the money is set aside. I was asked whether the funds were secure. Yes, there is protection in the funded decommissioning programme and in the Act itself. Funds must be remote from the operation of the Government. Neither party, including the Treasury, can get its hands on it. That was the concern.

The two reactors are hybrids and based on the foundation of reactors already in use. Obviously, they are not the same, because the people who make them are continually trying to improve on them and technology is moving forward on that. The noble Lord asked whether other reactors would require approval. Of course they would-as, indeed, would a Mox plant, as it does not fit within this legislation.

I thank the noble Baroness, Lady Smith, very much for her co-operation in this particular SI. She let me know in advance about some of the matters of concern affecting her Benches, and I am grateful for that level of co-operation. We are trying to build a consensus and get the ball rolling as quickly as we can, and it is very welcome that on all sides of the House we seem to have a common theme. I thank her very much for that.

The noble Baroness asked whether we have considered whether there should have been an inquiry. Over three

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years we have had the three consultation processes that her own Government instigated, which I think is pretty exhaustive in the current circumstances. She asked whether we were on track; we are, and we have published the timetable on the DECC website. If she has time available, we would be happy to show her how to get on to it. We can keep her posted through that means.

Baroness Smith of Basildon: I reassure the Minister that I look at the website every single day.

Lord Marland: That is very gratifying, because I do not. Perhaps she would not mind telling me about the changes that are going on at the moment.

Lord Myners: I congratulate the Minister on his honesty, which brings him great respect from the House.

Lord Marland: I am extremely grateful to the noble Lord, Lord Myners, whom I much enjoy bumping into on the street every now and then. I hope that his dog is fine, and all the rest of it. I admire his honesty for saying such honest things about me, so it is a mutual appreciation society here. On the last question, noble Lords say that they are concerned, rightly, that there may be a legal challenge. We obviously feel that our case is extremely robust, or we would not be here now trying to get these regulations through.

Baroness Smith of Basildon: The question I was asking about judicial review or possible legal action was not on whether the case were robust. I have read all the documents and I am sure the Minister is convinced that his case and the work undertaken have been robust. The point was specifically whether legal actions would significantly delay the process beyond 2017. He may want to check on that. If there were legal actions, would that delay the process?

Lord Marland: Clearly they would delay the process. A legal challenge is what it says, and would delay the process, but there is no sign of it at the moment so we hope that it will not happen. As the noble Lord, Lord O'Neill, said, not everyone agrees with nuclear as being the future and we know who some of those people are. Through a consultation process over three years, with three types of consultation at least, you try and get to a hard edge on it.

I turn to the human rights issue that the noble Baroness raises. We believe that all human rights issues are compatible with legislation. On her point about no subsidy, I will repeat what my right honourable friend the Secretary of State has said-that no subsidy means,

That clearly gives opportunity for a watering-down, because if similar support is made available more widely to other types of generation then obviously we will consider it from a nuclear standpoint. I hope that answers her concern in that area.



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Baroness Smith of Basildon: I apologise for intervening again on the noble Lord; he has been generous in giving way yet again. He goes a long way to answering the point. The point I was asking was particularly on the waste disposal area and on the funded decommissioning programme, because no other process of energy generation allows for waste in that way. I was particularly referring to the order and the FDP. It seemed to me that it was tightening up the issues around any subsidy available and all costs would fall on the operator. Has this been discussed with the industry and what is its reaction?

Lord Marland: If I understand the noble Baroness correctly, the cost for provision for waste falls on the operator, who has to-as I have answered the noble Lord, Lord Teverson-provide funds at all stages of the decommissioning. That includes storage and the final decommissioning. They are fully aware of it. Clearly, we have not got to where we are now without consultation with all the operators. They understand the rules of engagement-I am not going to say they are happy with them, as I cannot immediately tell you that-and these rules are the way we are intending to proceed.

I hope the noble Baroness feels that I have answered the majority of her questions, if not all of them. As always, it is good to have a lot of questions as this is an important step change that we are making for the future of the nuclear industry.

Lord Teverson: I think my noble friend may be about to move off the questions. I did ask about these types of approvals in other European member states and how they had seen these reactors. I should have given the Minister notice of that question and I apologise that I did not. If he could write to me with any information on that I would much appreciate it.

Lord Marland: I felt that I had answered the noble Lord's questions. These are obviously hybrids and there are similar types of reactors in Finland and France, which form the basis of these operations. If he feels that is not an adequate answer, however, I shall write to him later on the subject, if I may.

We face major changes in moving to a low-carbon economy. There is an urgent need for a diverse range of new energy infrastructure with a massive expansion in renewables, as well as more new nuclear, clean coal and gas. All of this will help us to reinforce our domestic security of supply. Regulatory justification is one of the facilitative actions necessary to enable new nuclear power stations to be built in the UK. It requires an assessment of whether the benefits of building these nuclear reactors in the UK outweigh the radiological health detriment that they may cause.

These instruments give effect to our decisions that the benefits, including the contribution which new nuclear power stations can make to ensuring secure, low-carbon energy supplies, outweigh the detriments. For that reason, they are very important measures. The provisions in the draft Nuclear Decommissioning and Waste Handling (Designated Technical Matters) Order 2010 are an important part of the statutory framework for the financing of nuclear waste and

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decommissioning, and another of the facilitative actions necessary to enable new power stations to be built in the UK. I commend these regulations to the House.

Motion agreed.

Justification Decision (Generation of Electricity by the AP1000 Nuclear Reactor) Regulations 2010

Copy of the SI
Copy of the Report
Copy of the Report

Motion to Approve

7.01 pm

Moved By Lord Marland

That the draft regulations laid before the House on 18 October be approved.

Relevant documents: 4th Report from the Joint Committee on Statutory Instruments, 10th Report from the Merits Committee.

Motion agreed.



17 Nov 2010 : Column 834

Nuclear Decommissioning and Waste Handling (Designated Technical Matters) Order 2010

Copy of the SI
Copy of the Report
Copy of the Report

Motion to Approve

7.02 pm

Moved By Lord Marland

That the draft order laid before the House on 18 October be approved.

Relevant documents: 4th Report from the Joint Committee on Statutory Instruments, 10th and 12th Reports from the Merits Committee.

Motion agreed.

House adjourned at 7.02 pm.


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