Minister assures security will not be sacrificed for investment

The government will not compromise the UK’s national security in its search for investment in critical infrastructure like nuclear power stations, an energy minister has pledged.

During a House of Lords debate earlier this week, held to scrutinise the government’s bill to implement the RAB (Regulated Asset Base) model to nuclear power projects, Lord Callanan was repeatedly pressed on concerns that the legislation contains insufficient safeguards against hostile foreign states taking stakes in such key infrastructure.

CGN, which is backed by the Chinese government, has a one third share of the EDF-led Hinkley Point C nuclear development and a one-fifth stake in the French-owned company’s project to build a new plant at Sizewell in Suffolk.

Responding to fellow peers’ fears, the energy minister said: “The government emphatically do not support investment in our critical infrastructure at the expense of national security. There is no compromising on that point.”

He added that provisions in the National Security and Investment Act give the government “strong oversight” of foreign ownership in nuclear projects, including a “wide-ranging ability” to call in and assess acquisitions that raise concerns.

Lord Callanan also told peers negotiations about the final configuration of investors in the Sizewell project are “still ongoing” and “no decisions” have yet been made.

In both projects, he added, no major equipment is being or would be supplied by a Chinese company, including control systems.

The Financial Times reported last week that the government is exploring moves to take over CGN’s 20% stake in the Sizewell project.

Lord Howell of Guildford, who was secretary of state for energy in the early 1980s, said during the debate on national security case that the for nuclear has “never been stronger than it is now.”

The latest debate on the legislation to introduce the RAB, which is already used for other types of major infrastructure projects such as the Thames Tideway super sewer, preceded the publication on Wednesday (9 March) of the Climate Change Committee’s response to the government’s Heat and Buildings Strategy (HABS).

It said that recent record increases in energy bills and “heightened” concerns over energy security “reinforce” the need for “urgent action” to deliver the the strategy’s goals to improve the energy efficiency and decarbonise the heating systems of the UK’s buildings.

The response warned there is a lack of a “clear” policy and “significant” funding gaps for around a third of the emissions reductions which will be required from UK buildings by 2035 and it is “unclear” how the government plans to deliver these targets.

But while the CCC said the costs of delivering energy efficiency upgrades have not changed since issuing its sixth carbon budget advice in December 2020, higher energy prices mean the benefits of carrying out such work have “increased significantly”.

“If gas prices are sustained at current levels, there is a case for accelerating this programme even further, and for deeper energy efficiency retrofits, than we have previously recommended,” the CCC said.

“Delivering on these goals will help to protect UK consumers from future price spikes and increase energy security by reducing energy needs and shifting demand from gas to electricity, which in future will be predominantly supplied from UK-based renewable generation.”