I thank noble Lords for their contributions to what will hopefully be the final grouping on this Bill. I thank all the hardy souls who have lasted throughout the Committee and Report stages to get to this final stage.
Let me start with Amendment Neville—you can tell it is the final stage; the amendment of the noble Lord, Lord McNicol, is what I should have said. Why did I say that? In my mind, they sounded the same: Lord McNicol and Amendment 11.
Let me state to the noble Lord that I share his ambition to maximise the chances that a nuclear RAB project will commence or continue generation in the unlikely event of an insolvency, therefore preventing sunk consumer costs. It is for this very reason that we have introduced a special administration regime for nuclear RAB projects, with the aim of ensuring that consumers reap the benefits of the low-carbon electricity generated from a nuclear power station which they helped to build. In light of Amendment 11, I consider that it would be helpful to provide the noble Lord with
a clear explanation as to the exit routes available to a special administrator under this legislation, and how these would not impinge on the ability to bring a nuclear power station under public control, if that is in the best interests of consumers and taxpayers.
Let me first reaffirm that special administration is a court-administered process and a nuclear administrator would be an officer of the court. It is the nuclear administrator, under the supervision of the court, who would be tasked with exploring all viable options for ensuring that the objectives of the administration are met. This is supported by the Secretary of State, who is able to provide funding and does have options for bringing the administration to an end in certain circumstances, as I will now explain.
The first route available to the administrator is that the company is rescued as a going concern. This is the preferred option for achieving the objective, save in certain circumstances, and would ensure that normal service was resumed and the plant would continue construction or generation. If this is the case and the objective can be achieved, then the Secretary of State, Ofgem or the administrator may then apply to the courts to end the special administration order.
Should this not be feasible, the administrator’s second option would be to seek to transfer the company’s assets and liabilities to a privately or publicly owned company or companies. This is called an energy transfer scheme and is provided for by Schedule 21 to the Energy Act 2004, as applied by Clause 33 of the Bill. While the Secretary of State must approve an energy transfer scheme, the court retains overall responsibility for the process as it appoints the time from which a scheme would take effect.
It is considered that, as the nuclear administrator will need to achieve the objective of the administration order as quickly and efficiently as possible, in practice this may mean that an energy transfer scheme is explored immediately if this is the most viable means to achieve the objective of the administration. This may be supported by the Secretary of State where, amongst other matters, it is in the public interest.
Should neither of the options I mentioned be possible or in the best interests of taxpayers or consumers, Section 40 of the Energy Act 2004 would establish the option of a nuclear transfer scheme. This is subject to approval from Her Majesty’s Treasury and is intended to deal with circumstances where, for example, during the plant’s operational phase, for reasons of public safety or to minimise the costs to the taxpayer, the Nuclear Decommissioning Authority is given responsibility for decommissioning the plant.
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I hope that that has satisfied the noble Lord, that he has found the explanation useful and, most importantly, that it has reassured him that Part 3 of the Bill does nothing to prevent the Secretary of State bringing a nuclear power station under the control of a government-owned company, if this is considered to be in the best interests of consumers and taxpayers. The flexibility afforded to the special administrator ensures that the best option should always be taken, and this includes bringing the plant under government control, if that is in the best interests of consumers and taxpayers.
Amendments 13 and 14 were tabled by the noble Baroness, Lady Bennett. As I said in previous debates, there is already a robust and effective statutory regime in place under the Energy Act 2008, which addresses the decommissioning costs of new nuclear power stations. I am therefore happy to reassure the noble Baroness that it is a legal requirement for the prospective operators of all new nuclear power stations to have an approved funded decommissioning programme in place before nuclear-related construction can begin on site. I share the view of the noble Baroness that making provision for the costs of decommissioning should be a transparent process. It is therefore the intention, as was done for the Hinkley Point C project, that any approved FDPs for nuclear RAB projects will be published on the GOV.UK website, save for any material of a sensitive nature.
Amendment 12 was tabled by the noble Lord, Lord Ravensdale, and I also thank my noble friend Lady Neville-Rolfe for her contribution. Let me make it clear that, as the noble Lord, Lord McNicol, helpfully reminded us, the Government think that nuclear should play a crucial part in decarbonising the UK’s energy sector and supporting a resilient system, as I said in reply to my noble friend Lord Howell.
The Government have stated our commitment to new nuclear in the Prime Minister’s 10-point plan, the nuclear energy White Paper and, more recently, the Government’s net-zero strategy. I am particularly grateful—although it is obviously late on a Thursday afternoon—to the noble Lord, Lord McNicol, for approvingly quoting the Prime Minister, but the Prime Minister did state, in November 2021, the Government’s intention to consult on classifying nuclear energy as a green investment under the UK’s green taxonomy, which is designed to drive investment into key low-carbon companies and industries.
My noble friend Lord Trenchard talked about the green financing framework. Eligibility under the framework is not a determinant of what the Government consider to be green. That is the role of the UK taxonomy. Nuclear energy is a proven energy-dense technology, which can complement intermittent renewables by providing large volumes of firm power, while using very little land. Nuclear energy has a clear basis for making a sustainable contribution to the taxonomy’s objective of climate change mitigation. Classifying nuclear as a green investment would allow billions to flow into this essential technology. This consultation will be published in the coming months, ahead of the aim to legislate by the end of the year. I hope noble Lords accept that I cannot pre-empt the outcome of that consultation process. As such, it would not be appropriate to require taxonomy alignment under this Act.
Once again, I thank noble Lords and Baronesses for their scrutiny and engagement with these critical elements of the Bill and on nuclear’s broader role in meeting our decarbonisation targets. However, I hope I have alleviated their concerns and that they will therefore not press Amendments 11 to 14.