Lee Waters, Deputy Minister for Climate Change
In the lead up to COP26 we published Net Zero Wales which set out the actions we need to take in Wales to meet our second carbon budget (2021-2025) and lay the foundation for longer term emissions reduction as we respond to the climate and nature emergency. Net Zero Wales reaffirmed our commitment for a significant transformation of energy generation moving away from fossil fuels to sustainable renewable generation.
In doing so we are clear that we must learn from previous industrial revolutions where Wales’ natural assets where utilised with little lasting long term benefit to our communities.
The terms of reference for the deep dive group were simple: to identify barriers to significantly scaling up renewable energy in Wales and identifying steps to overcome the barriers. We looked at short, medium and long term steps, and in doing so we will have a particular focus on retaining wealth and ownership in Wales.
Our vision is clear, we want Wales to generate renewable energy to at least fully meet our energy needs and utilise surplus generation to tackle the nature and climate emergencies. We will accelerate actions to reduce energy demand and maximise local ownership retaining economic and social benefits in Wales.
The Welsh Government is already providing the strategic leadership in Wales through our commitments in Net Zero Wales, and our work on strategic planning of grid infrastructure requirements for Wales. We recognise the need to develop solutions at the local level with our communities and citizens in Wales. We will scale up local energy plans to create a national energy plan by 2024, mapping out future energy demand and supply for all parts of Wales. Alongside this planning we need to bring citizens with us and explore how changes in the use of energy can bring greater flexibility in the energy system. This will need the involvement of households and businesses in the significant opportunities from matching renewable generation in Wales to energy use. Our Net Zero Wales public engagement and behaviour change plans will help citizens to take action to reduce demand, improve energy efficiency and use energy in a way which supports our vision. But this will require easy to access advice services and a functioning supply chain to help households and businesses make the changes. We want to see this and our heat strategy will set out actions to achieve this informed by our forthcoming Warm Homes consultation.
There is consensus that a major barrier to scaling up renewable energy generation in Wales is insufficient capacity in the networks responsible for connecting homes and buildings with electricity and gas. This is a barrier to investment impacting across technologies and across private, public and community sectors in Wales on all scales, though it is also driving innovation in local energy systems. While the network operators and the energy regulator, Ofgem, have plans in place to bring forward investment in Wales, both in flexibility mechanisms and in new infrastructure, there was agreement that more action is needed to improve transparency on constraints and opportunities within the network and bring greater clarity and certainty on where strategic investment in the networks is needed.
We have already committed to lead the development of a strategic plan for the future energy grid to 2050. We will use the information and evidence gathered in the Future Energy Grid project to proactively engage with Ofgem on network investments that support Wales and retain value here. Building on this work, we will work with Ofgem to consider the creation of a Wales System Architect to oversee offshore and onshore investment to support the Celtic Seas developments, supporting business cases for whole system planning and bring together of plans across South, Mid and North Wales and the development of a detailed whole system plan for gas and electricity transmission and distribution networks.
Consenting, licensing and supporting advisory arrangements
It is clear across all forms of technology, on land and in the sea, that further action is needed to improve consenting, licencing and statutory advisory arrangements in Wales to bring forward appropriate investments.
We will bring forward a Welsh National Infrastructure Consenting regime to ensure Wales has efficient and effective consenting arrangements for both on and offshore renewable development, as well as other infrastructure, in Wales.
While the planning system is well established for developments on land in Wales, and evidence and actions to improve the system are well built in to the development of national and local policy, the marine planning system is less developed. As more major offshore and marine energy projects come forward, we need to ensure the marine planning system is fit for purpose. While significant work has been progressed through the Consenting Strategic Advisory Group (CSAG) and associated Science and Evidence Sub-Group (SEAGP) we will undertake an end-to-end review of marine licencing and consenting to improve the process. The review will also include the process for obtaining an environmental permit, with a particular focus on emerging technologies.
The review will look at the resource needs and options for consenting and advisory processes to keep pace with the growth in renewables. In addition we will provide greater spatial direction and prioritisation to support marine renewable energy development by identifying strategic resource areas by 2023 to signpost appropriate and inappropriate areas for development. This will take into account our energy needs and the needs of our ecosystems, the environment and needs of other sea users. This needs to support a pathway for marine renewable developments, seeking win-win outcomes and supporting projects to contribute towards positive outcomes for marine biodiversity.
In many of our discussions, including with developers, we recognise that nothing happens without sufficient finance and application of in-depth expertise and these are considered to be significant factors in scaling up renewable energy in Wales. We will set up a working group to consider how Wales can attract new investment to support the scaling up of renewable energy generation in Wales. This will prioritise specific action to attract new investment to support local community ownership and to maximise local economic and social value. The Welsh Government will facilitate the work, which will involve financial, renewable energy and community energy expertise.
Alongside the work to consider options to bringing in new sources of finance we also seek to create an alliance with devolved Governments to ensure future subsidy rounds through the Contracts for Difference reflect the primacy of supply chain development and achieve a coherent and balanced development pathway for early commercial and emerging technologies.
We also recognise the opportunities to maximise the buying power of the public sector and will review options for how our procurement policies and practices can accelerate renewable energy generation in Wales and incorporate social value.
Opportunities in Wales
We want investment in Wales to support jobs in the supply chain and investment in our communities. To enable this we will build on the excellent industry collaboration in Wales to upskill our workforce through the development of a net zero skills action plan.
As more projects are developed at sea we recognise our ports provide a gateway to retaining value in Wales. Building on the work underway through the Marine Energy Programme, we will work with ports in Wales to identify opportunities for specialisation and collaboration to support renewable energy investments. We will also work with the UK Government, alongside the Crown Estate as a key land owner, to support strategic investment in ports in Wales.
Alongside a thriving industrial sector, Wales also has an impressive community energy sector. We have committed to expanding renewable energy generation by public bodies and community enterprises in Wales by over 100 MW between 2021 and 2026 as we look to meet our longer term target of 1 GW of renewable energy generation capacity to be locally owned by 2030.
We want to go further, and in addition to the working group set up to look at how we can bring lower cost finance and new financing models to support renewable generation in Wales, we will involve community enterprises in the future development and design of the new Welsh Government Energy Service to include how we resource the sector in Wales.
Finally, as we look to the future, we recognise the role that innovation will continue to play in driving forward new renewable technologies and smart solutions to manage demand in a flexible way. We must continue to support innovation in Wales, focussing on our strengths and acting to address specific challenges where innovation will help provide solutions.
We recognise there is a need to push the boundaries and test what is possible with greater flexibility around our regulatory frameworks. We want to work with Ofgem to trial approaches to regulation which are better suited to achievement of the more flexible and localised energy system we need to create.
I am extremely grateful for the members of the deep dive group, the participants in the 3 roundtable discussions and the input from individual submissions.