The Debate Over Nuclear Power and Steel Procurement
A significant controversy has emerged within the UK government regarding the plans to construct a new generation of nuclear power plants, which will be funded with £2.5 billion in taxpayer money. This initiative involves the development of three small modular reactors (SMRs), which have been promoted as a breakthrough in the country’s energy sector.
Energy Secretary Ed Miliband announced the project in June, describing it as a new ‘golden age’ for nuclear power in Britain. These SMRs are designed to be more compact than traditional nuclear plants, with parts that can be manufactured quickly in factories. Unlike conventional nuclear facilities, which often take over a decade to build, SMRs offer a faster and potentially more efficient solution.
The construction of these reactors is being led by Rolls-Royce, a major British engineering company. According to estimates, the power stations could provide enough electricity to supply three million homes. However, the project is now at the center of a heated debate, particularly concerning the use of steel in their construction.
The Steel Controversy
One of the main points of contention is whether to use British-made steel or cheaper foreign steel for the reactors. The Department for Business and Trade, under the leadership of Peter Kyle, is advocating for the use of domestically produced steel. In contrast, the Department for Energy Security and Net Zero, led by Ed Miliband, and the Treasury, under Rachel Reeves, are considering the use of foreign steel due to its lower cost.
This decision has raised concerns among industry leaders and politicians. There is fear that the cheaper steel could come from state-supported producers in China, which is the world’s largest steel producer and has been flooding the global market with low-cost steel. This situation has sparked outrage among Labour backbenchers, who question why the government would invest billions in supporting the British steel industry only to then import metal from abroad.
Clive Betts, a Labour MP whose constituency includes Sheffield Forgemasters, a taxpayer-owned steelworks that produces reactor parts for the Navy’s nuclear submarines, has called on Rolls-Royce and ministers to support British workers. He argues that Sheffield Forgemasters, which produces the correct grade of steel, should form the basis of the project.
Betts emphasized that when taxpayers’ money is involved, and there is potential supply from a heavily subsidised domestic sector, orders should not go abroad. He added that companies like Rolls-Royce, which receive government support, need to back British workers.
Sir Andrew Cook, a respected figure in the steel industry, expressed disbelief that such a decision could come from a government that owns the assets required to produce the very steel needed for the project.
Broader Concerns About British Steel
This issue is not isolated to the SMR project. It has also raised concerns about other clean energy initiatives led by Miliband’s department. In May, it was revealed that £21 billion worth of wind turbines planned for the next quarter-century would contain “next to no” British steel, despite the fact that 90% of the materials could come from the UK.
Additionally, a hydrogen plant in Teesside, also supported by Miliband’s department, is not required to use UK steel. This project recently faced challenges after BP pulled out.
In June, State-owned Network Rail issued a notice for a £140 million steel order on the open market without favoring UK suppliers. This has further fueled frustration among steel industry leaders, who have been waiting for the government’s promised strategy for the industry, which was expected this year.
Additional Challenges for the SMR Project
The SMR project faces additional hurdles beyond the steel procurement debate. Reports last week suggested that the plans to build the first reactor in Wylfa, on Anglesey, could be delayed due to a colony of 2,000 rare coastal birds. Despite this, it was announced last month that construction at Wylfa could begin as early as next year, with electricity production scheduled for the 2030s. The project is expected to create up to 3,000 jobs.
None of the three government departments involved in the SMR project commented specifically on steel procurement. A spokesperson stated: “We see a bright, sustainable future for steel-making in the UK and will set out our long-term vision for the sector in our steel strategy.”