Renewable energy deep dive biannual recommendations update 1 - Finance

Recommendation    

We will set up an expert group to explore ways of drawing down additional investment in renewable energy generation in Wales. We will prioritise local and community ownership to maximise local economic and social value.

Key highlights / milestones    

Key highlights since the deep dive include:

• Establishing an Investment in Renewables subgroup, comprising deep dive members and experts in the field. The group held a series of meetings and a workshop aimed at exploring models for financing and seeking investment in renewables projects and how the scaling up of renewable energy projects might be achieved in a way that retains wealth and value in Wales;
•  Receiving input from the Development Bank of Wales and officials working on proposals for the Renewable Energy Developer to inform the range of options for financing renewable energy projects;
• Finalising a draft report to provide insight and recommendation on public, private and community financing of renewable developments.

Next steps towards completion

Outputs from the Investment in Renewables working group to be communicated once completed.

Recommendation    

We will seek to create an alliance with devolved Governments to ensure the UK Government’s Contract for Difference (CfD) process evolves appropriately to:

• reflect the primacy of supply chain development and
• to achieve a coherent and balanced development pathway for early commercial and emerging technologies.
   

Key highlights / milestones    

This recommendation is progressing although due to the risks around legal action by the EU, the focus has shifted away from an alliance of devolved governments instead towards seabed leasing rounds and actions that will secure local benefit for Wales.

Key highlights since the deep dive include:

• Holding meetings between WG Ministers and The Crown Estate (TCE) on the economic and social benefits to be secured for upcoming leasing rounds and the practical considerations of devolving the TCE to Wales;
• Holding meetings with officials and the UK government on the latest CfD proposals and the result of the latest leasing rounds for Wales.

Next steps towards completion

This recommendation will remain an ongoing priority for the Welsh Government ahead of each leasing round. Our priorities over the next six months include:

• Analysis of the Round 4 allocations to better understand the outcomes for Wales.
• Ensuring a ringfenced wave and tidal pot with sufficient capacity is provided for in the next leasing round.

Recommendation    

We will look at the options to support local and community renewable energy generation through Non-Domestic Rates.

Key highlights / milestones  

We have agreed to continue providing relief to community scale hydropower schemes in Wales. This intervention will ensure the schemes remain viable and deliver social and environmental benefits to communities in Wales.  

Next steps towards completion

This recommendation will be progressing over the next 6 months. We are consulting on the reform of non-domestic rating in Wales.

Recommendation    

A working group will be set up to review options for how procurement can support the acceleration of renewable energy generation in Wales to maximise local economic and social value to include but not limited to:

1. Improve procurement policy to incorporate social value including exploring with commercial developers how they can best meet local need.
2. Options for utilising the buying power of the public sector in Wales to support reliable routes to market for community and public sector energy projects, including through long term Power Purchase Agreements.
3. How advice and support services can better assist community energy developers access market opportunities.
4. How to better engage the community energy sector in the Wales funding Programme.
5. How best practice can be disseminated including feeding into the Welsh Governments best practice group or the Procurement Centre for Excellence if established.
    

Key highlights / milestones    

The value of a designated working group to pursue this recommendation is being considered following the conclusions of the Investment in Renewable Working Group. Completion of several elements of this recommendation have been achieved through current Welsh Government work.

Key highlights since the deep dive include:

• Recognising the progress already underway through WGES and CEW to disseminate best practice on procurement and ongoing support for renewable energy projects;
• Interrogating these themes through the Investment in Renewables group and the actual barrier that some of the suggestions pose.
   

Next steps towards completion

This recommendation will be progressing over the next 6 months with officials and members of the deep dive analysing the options in relation to Power Purchase Agreements (PPAs) alongside wider support for procurement.

This will also feed into recommendation 16 on opportunities for community enterprises on access to the public estate.