On Tuesday (14 January) the EU’s regional policy Commissioner Elisa Ferreira revealed (https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_24) details of the €100 billion Just Transition Mechanism, a key financial component of the European Green Deal that should make the European Union climate neutral by 2050. One key political point made by Ferreira was: “Nuclear energy is excluded from the Just Transition Mechanism.” She revealed this very significant development ahead of the college meeting of the European Commission that approved the proposal for the fund aimed at supporting poorer EU regions achieve climate neutrality.
EU leaders had earlier agreed in December on an EU-wide objective of reaching climate neutrality by 2050. In order to convince Hungary and the Czech Republic to sign up, they also reaffirmed the right of countries to decide on their own energy mix, including nuclear. (Poland refused to sign up, saying it needed more EU funding to help phase out coal.)
The Just Transition Fund is intended to support regions that will be particularly affected by the changes brought by ‘greening’ the economy. (Euractiv 14 January 2020
On the same day in London, as the UK approaches its return to the deep dark ages post Brexit, the nuclear Neanderthals were out en masse in a House of Lords Q&A session on the future of nuclear power and climate change.
One of the beneficial characteristics of an unelected House of Lords was meant to be you could create peers who were expert in their field to better inform scrutiny and debate. You would not believe it if you read the collective ignorance on display from peers today on nuclear power, pasted in full below…
Here are some of the low lights:
“Nuclear power ..will have an important role in securing a low-cost, stable, reliable low-carbon system by 2050.” – Energy minister Lord Duncan
“I know—that we are never going to meet our carbon targets without a significant contribution from nuclear energy” - Lord Cunningham, former MP for Copland, in which Sellafield is located
“Nuclear will be a vital part, I believe, of the ongoing energy mix in this country.” – Lord Duncan
“the reality is that small modular reactors are vital. ,,,This may well be how we can move forward a whole new generation of nuclear electricity generation.” Lord Duncan
“nuclear energy is obviously essential to enabling us to combat climate change”- Labour Baroness Whittaker
“we have to ensure the development of the small modular reactors, which we believe will be key to the development of a workable global strategy.” – Lord Duncan
I offer no further comment on their utter and crass idiocy.
Nuclear Power: Emissions
14 January 2020
To ask Her Majesty’s Government what assessment they have made of the nuclear power capacity required to meet their target of net zero emissions by 2050.
I beg leave to ask the Question standing in my name on the Order Paper. In so doing, I declare my interest as an engineer in the energy industry, as set out in the register.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy and Northern Ireland Office (Lord Duncan of Springbank) (Con)
My Lords, a substantial increase in low-carbon generation will be needed to reduce our emissions to net zero by 2050. Nuclear power currently provides a fifth of our generation and will have an important role in securing a low-cost, stable, reliable low-carbon system by 2050. The Government will publish an energy White Paper in 2020, which will provide further detail of the necessary transformation of our energy system.
My Lords, I thank the Minister for his response. Our current nuclear fleet is approaching the end of its working life and only a single new station is being built. We need much more than that to provide additional zero-carbon firm power and reduce the risk of not meeting net zero by 2050. Does the Minister agree that a key means of doing this at least cost is to focus on replication: building a number of the same design to learn lessons and gain efficiencies, rather than using a wide range of designs, as per the previous strategy? Can he confirm that the Government are prioritising a decision on the financing of new nuclear to enable the industry to move forward?
The simple answer to that question is yes, but more details are required. The first thing to remember is that by 2030 all but one nuclear power station will be closed.
The noble Lord’s second point is correct: we do need replication on a common theme to help us, but there are other factors too, not least of which is experienced management in the construction industry and sometimes constructing nuclear reactors in greater numbers on the same site. Each of these can make a significant difference, and in order for us to increase capacity we need, in the energy White Paper, to give serious consideration to them, at which point the decision-making will be made clear.
My Lords, I welcome the Minister’s statement strongly in support of civil nuclear power. It is quite obvious to most people—not to everyone, I know—that we are never going to meet our carbon targets without a significant contribution from nuclear energy. For the first time in a generation we have the opportunity now, at Sizewell C, to use the learning curve and replication of design and construction to bring down costs and possibly the timescale involved in building the second nuclear power station, much more than the last Labour Government did, I must say—to my regret; I do not know about theirs. I hope the Minister will persuade his colleagues that we need to expedite these developments.
We must expedite these developments. The nuclear sector deal which the Government have invested in is worth £200 million. Its purpose is to reduce significantly the costs of the replication of these new developments, and the regulated asset base should be a new model for us to make sure that there is value for money as well. Nuclear will be a vital part, I believe, of the ongoing energy mix in this country.
My Lords, I wonder whether my noble friend’s brief really reflects the full position. After all, Hinkley is now £3 billion over budget and delayed by a year or two, Wylfa has been suspended, Moorside has been abandoned, and the Chinese and French are struggling to raise finance for Sizewell C. It is not a very good picture. Should we not be focusing rather more on prospects for small modular reactors, which can be built much more quickly, and perhaps more cheaply, and might make an even bigger contribution when it comes to global climate change, which is the real problem?
My noble friend is, of course, absolutely correct. If we get to the stage where Hinkley comes online according to its timetable in 2025, it will in due course supply 7% of our electricity needs. However, the reality is that small modular reactors are vital. That is why we have invested £18 million in development thus far—£18 million that is matched by the private sector. This may well be how we can move forward a whole new generation of nuclear electricity generation.
My Lords, I think all your Lordships will welcome the fact that an energy White Paper is going to be published. This country has lacked a joined-up strategy on energy for many years. Can the Minister confirm that this White Paper will include not only generation of all kinds but the storage of energy and the flexible, or more flexible, distribution of energy? Clearly those will be key in how we go forward.
The noble Lord has raised these points before; he was right then and is right now. Storage is absolutely vital in this area. Without it, we run the risk not just in nuclear but in our renewables more widely that we cannot capture and hold the energy that we create. Storage needs to be in the White Paper.
My Lords, nuclear energy is obviously essential to enabling us to combat climate change, as my noble friend Lord Cunningham just said, but what are the Government doing to enable the public to move away from the other fossil fuel, gas, which is so widely used in domestic heating?
There will also be a strategy next year examining gas in the domestic heating system. There are options available to us and decisions will be required. Shall it be electrification, use of hydrogen, or indeed a hybrid of the two? We need to consider that, and the White Paper will help inform our decisions going forward.
My Lords, what discussions has my noble friend had with friends and partners internationally on the potential for using UK nuclear expertise and technology in the fight to deal with climate change?
As part of my responsibilities as Climate Change Minister, we have engaged with a number of countries to examine what prospects we have to ensure the development of the small modular reactors, which we believe will be key to the development of a workable global strategy. We commit to continuing to do that at a greater pace.
How will the Government ensure that any new offshore wind capacity during the 2020s will not simply replace retiring nuclear plants rather than push carbon-emitting gas power plants off the grid?
The noble Lord is quite right: each of our ambitions in these areas has a finite lifespan, and it is important to make sure that, each time we replace them with the next generation, the carbon footprint decreases. We would like to see it significantly decrease, which is why offshore wind remains vital and why nuclear has a significant part to play.
My Lords, the Wylfa project on Anglesey has been suspended, as we have heard. Would my noble friend agree that it is clear that Governments will need to invest in new nuclear? Will the Government look at promoting that project with Hitachi through a government commitment to invest sovereign capital, thereby reducing the cost of capital and offsetting some of the risk?
Yes, indeed. We will be looking at exactly this through the regulated asset base approach. The Wylfa site is at the moment still owned by Hitachi. There are still opportunities to build on that site, and we are in discussions to make sure that we can move this matter forward.
In considering the position of the small modular reactors, can the Minister give an undertaking that the medical dimension will be taken on board so that any possible synergy between the development of the two can take place, possibly at Trawsfynydd?
The noble Lord is absolutely right. We often think of nuclear only in terms of energy generation, but in fact our health service depends significantly upon the isotopes that are created by the system. Yes, we need to recognise the synergy and work with it.
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Financing the green transition: The European Green Deal Investment Plan and Just Transition Mechanism
Press release14 January 2020, Brussels
The European Union is committed to becoming the first climate-neutral bloc in the world by 2050. This requires significant investment from both the EU and the national public sector, as well as the private sector. The European Green Deal's Investment Plan - the Sustainable Europe Investment Plan - presented today will mobilise public investment and help to unlock private funds through EU financial instruments, notably InvestEU, which would lead to at least €1 trillion of investments.
While all Member States, regions and sectors will need to contribute to the transition, the scale of the challenge is not the same. Some regions will be particularly affected and will undergo a profound economic and social transformation. The Just Transition Mechanism will provide tailored financial and practical support to help workers and generate the necessary investments in those areas.
The President of the European Commission, Ursula von der Leyen, said: “People are at the core of the European Green Deal, our vision to make Europe climate-neutral by 2050. The transformation ahead of us is unprecedented. And it will only work if it is just - and if it works for all. We will support our people and our regions that need to make bigger efforts in this transformation, to make sure that we leave no one behind. The Green Deal comes with important investment needs, which we will turn into investment opportunities. The plan that we present today, to mobilise at least €1 trillion, will show the direction and unleash a green investment wave.”
Executive Vice-President for the European Green Deal, Frans Timmermans, said: “The necessary transition towards climate-neutrality is going to improve people's well-being and make Europe more competitive. But it will require more efforts from citizens, sectors and regions that rely more on fossil fuels than others. The Just Transition Mechanism will help support those most affected by making investments more attractive and proposing a package of financial and practical support worth at least €100 billion. This is our pledge of solidarity and fairness.”
Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, added: “For Europe to transition to a climate-neutral economy, we need both political commitment and massive investments. The Green Deal shows our determination to tackle climate change, which we are now backing up with a funding plan. First, we will use the EU budget to leverage private funds for green projects across Europe and support the regions and people most affected by transition. Second, we will create the right regulatory incentives for green investments to thrive. Last but not least, we will help public authorities and market players to identify and develop such projects. The European Union was not built in a day. A Green Europe will not happen overnight. Putting sustainability at the heart of how we invest requires a change of mindset. We have taken an important step towards achieving this today.”
The European Green Deal Investment Plan
The European Green Deal Investment Plan will mobilise EU funding and create an enabling framework to facilitate and stimulate the public and private investments needed for the transition to a climate-neutral, green, competitive and inclusive economy. Complementing other initiatives announced under the Green Deal, the Plan is based on three dimensions:
- Financing: mobilising at least €1 trillion of sustainable investments over the next decade. A greater share of spending on climate and environmental action from the EU budget than ever before will crowd in private funding, with a key role to be played by the European Investment Bank.
- Enabling: providing incentives to unlock and redirect public and private investment. The EU will provide tools for investors by putting sustainable finance at the heart of the financial system, and will facilitate sustainable investment by public authorities by encouraging green budgeting and procurement, and by designing ways to facilitate procedures to approve State Aid for just transition regions.
- Practical support: the Commission will provide support to public authorities and project promoters in planning, designing and executing sustainable projects.
The Just Transition Mechanism
The Just Transition Mechanism (JTM) is a key tool to ensure that the transition towards a climate-neutral economy happens in a fair way, leaving no one behind. While all regions will require funding and the European Green Deal Investment Plan caters for that, the Mechanism provides targeted support to help mobilise at least €100 billion over the period 2021-2027 in the most affected regions, to alleviate the socio-economic impact of the transition. The Mechanism will create the necessary investment to help workers and communities which rely on the fossil fuel value chain. It will come in addition to the substantial contribution of the EU's budget through all instruments directly relevant to the transition.
The Just Transition Mechanism will consist of three main sources of financing:
1) A Just Transition Fund, whichwill receive €7.5 billion of fresh EU funds, coming on top of the Commission's proposal for the next long-term EU budget. In order to tap into their share of the Fund, Member States will, in dialogue with the Commission, have to identify the eligible territories through dedicated territorial just transition plans. They will also have to commit to match each euro from the Just Transition Fund with money from the European Regional Development Fund and the European Social Fund Plus and provide additional national resources. Taken together, this will provide between €30 and €50 billion of funding, which will mobilise even more investments. The Fund will primarily provide grants to regions. It will, for example, support workers to develop skills and competences for the job market of the future and help SMEs, start-ups and incubators to create new economic opportunities in these regions. It will also support investments in the clean energy transition, for example in energy efficiency.
2) A dedicated just transition scheme under InvestEU to mobilise up to €45 billion of investments. It will seek to attract private investments, including in sustainable energy and transport that benefit those regions and help their economies find new sources of growth.
3) A public sector loan facility with the European Investment Bank backed by the EU budget to mobilise between €25 and €30 billion of investments. It will be used for loans to the public sector, for instance for investments in district heating networks and renovation of buildings. The Commission will come with a legislative proposal to set this up in March 2020.
The Just Transition Mechanism is about more than funding: relying on a Just Transition Platform, the Commission will be providing technical assistance to Member States and investors and make sure the affected communities, local authorities, social partners and non-governmental organisations are involved. The Just Transition Mechanism will include a strong governance framework centred on territorial just transition plans.
On 11 December 2019, the Commission presented the European Green Deal, with the ambition of becoming the first climate-neutral bloc in the world by 2050. Europe's transition to a sustainable economy means significant investment efforts across all sectors: reaching the current 2030 climate and energy targets will require additional investments of €260 billion a year by 2030.
The success of the European Green Deal Investment Plan will depend on the engagement of all actors involved. It is vital that Member States and the European Parliament maintain the high ambition of the Commission proposal during the negotiations on the upcoming financial framework. A swift adoption of the proposal for a Just Transition Fund Regulation will be crucial.
The Commission will closely monitor and evaluate the progress on this transition path. As part of these efforts, every year the Commission will hold a Sustainable Investment Summit, involving all relevant stakeholders, and it will continue to work for promoting and financing the transition. The Commission invites the investment community to make full use of the enabling regulatory conditions and ever-growing needs for sustainable investments, and authorities to take an active role in identifying and promoting such investments.
For More Information
- Investing in a Climate-Neutral and Circular Economy
- The Just Transition Mechanism: Making sure no one is left behind
- EU-funded projects to green the economy