Ken Skates considers how Wales must now craft a new future in low carbon energy generation
As I made my way to the 46th British Irish Parliamentary Assembly meeting in Donegal last week I began to think about Wales’ relationship with Ireland. It struck me that though we have an historic cultural connection, we don’t talk enough about the important and strategic economic relationships we have, being close neighbours on the westward edge of the European Union.
This was particularly apt given that the theme of this year’s plenary sessions was ‘Energy across Borders’ and the ways in which we can deliver new and lasting economic opportunities through the new energy infrastructure of the future.
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Tomorrow: Future of Wylfa Carl Clowes argues that the high electricity prices being demanded by the nuclear industry are being overtaken by renewable technologies. |
We all know the big climate change and energy security challenges that lie ahead. In terms of electricity generation, Wales was responsible for 9 per cent of generation in the UK between 2004 and 2010. Total electricity generation in Wales had fallen 10 per cent over the period, driven largely by a fall in production from our traditional coal and nuclear plants. Once a world leader in carbon-based energy, Wales must now craft a new future in low carbon energy generation as part of wider Europe-wide approach.
This is a challenging and exciting area and holds the potential to create a prosperous future for Wales. It could not only make low-carbon energy not only a key part of our domestic energy supply, but a vital plank of our export sector too. After all, we all know the competitive necessity of such an approach. The elephant in the room at the sessions was the USA where already has wholesale energy prices are significantly less than in the EU area. Further, it is working its way towards energy independence through shale gas technology, which could make the energy competitiveness gap even greater. So the question is no longer just about how we keep the lights on, but how we keep our competitive position in the global marketplace.
As our First Minister Carwyn Jones said recently, “Energy is a defining issue for our generation”. How politicians, and industry can work together to realise a low-carbon future and help create a significant amount of direct and indirect jobs in the energy sector? This is an increasingly important question in the context of the evolving role of the EU and the changing geo-political landscape globally.
One of the interesting issues we discussed was the potential for a new European Energy Supergrid, possibly including North Africa, which could transmit electricity along high voltage direct current cables and allow countries such as Wales to export wind energy at times of surplus supply, but import energy from other green sources such as geothermal power in Iceland or solar power from the North African desert at others. To implement this kind of thinking would require huge long-term investment in both political and economic capital. It is another reason why our membership of the EU is critical.
However, it is clear that local communities need to benefit from future energy development if we are to get buy-in for big strategic projects. Any significant infrastructure initiatives, whilst crucial to the transition to a low carbon economy, will have an impact on communities themselves so there needs to be clear community benefits built into the dialogue, engagement and outcome of projects with a large spatial impact.
The clear message I took back for us here in Wales is that we need a good energy mix for the future. There is no silver bullet solution to our energy dilemma and so politicians will need to be bold and brave. Wales has significant assets in virtually every energy source:
- Significant wind resources, both onshore and offshore.
- Enormous wave and tidal energy potential.
- One of the best solar resources in the UK.
- Scope for greater biomass and hydro.
- Sites and expertise in the nuclear industry that we must seek to maintain and renew.
These impressive assets could be squandered if politicians and communities fail to utilise them soon. Experts stressed repeatedly that we cannot secure energy security or independence without including in the mix at least two of the following three contentious sources of energy: onshore wind, shale gas and nuclear energy.
We regularly hear politicians oppose some of these without offering a viable alternative to any of them. The reality is that without developing at least two of these we will rely increasingly on energy imported from countries run by undemocratic governments we often find morally repugnant.
So in thinking globally we will need to act locally. And this will require tough decisions. I hope carbon capture schemes will lead to the long-term relinquishment of more contentious sources of energy generation. Until this is realised, however, we need to do something to keep the lights on at affordable prices. Doing nothing is not an option, nor is turning our backs on all three of the most controversial forms of energy outlined above.
Of course maximising our energy capital will depend heavily on wider constitutional change. A few weeks ago the Welsh Government submitted evidence to the Silk Commission calling for powers in relation to large scale energy consents (other than nuclear power) to be devolved to Cardiff. It also called for Welsh Ministers to be given extended powers in marine matters to encompass the Welsh offshore area as a way of creating more integrated and streamlined decision-making for infrastructure developments.
It is predicted that 250,000 new jobs could be created in the UK by 2020 in the energy sector given our energy resources and significant academic and operational expertise. We could certainly generate far more than a proportional share of these new jobs in Wales. We need to get our eyes fixed on this agenda as one of the bigger strategic challenges Wales faces over the next half century and beyond.
It’s great to see Ken taking an interest in the energy debate. But I can’t help feeling that there’s a series of fundamental disconnects in his treatment of the issues.
So he tells us that “we cannot secure energy security or independence without including in the mix at least two of the following three contentious sources of energy: onshore wind, shale gas and nuclear energy”, while at the same time stating that “a new European Energy Supergrid, possibly including North Africa… could transmit electricity along high voltage direct current cables and allow countries such as Wales to export wind energy at times of surplus supply, but import energy from other green sources such as geothermal power in Iceland or solar power from the North African desert at others”.
What’s it to be? Energy independence or energy interdependence?
Ken also suggests that Wales’ significant energy assets include “Sites and expertise in the nuclear industry that we must seek to maintain and renew”, without indicating why renewing our expertise in that field is imperative. And what about the legacy of high-level radioactive waste that’ll be sitting around on Môn for 160 years? A commitment that this will remain the purview of Westminster. It’s nice to see our “bold and brave” politicians taking responsibility for a problem.
And then there’s shale gas. Ken might benefit from viewing Friends of the Earth’s testimony at the Environment and Sustainability Committee last Thursday. One part of our submission stated: “We take the view that it is important that where new sources of fuel are being examined and drilled for, a precautionary approach should be taken”. But that wasn’t Friends of the Earth Cymru’s quote. It was straight from our First Minister Carwyn Jones.
Where I absolutely agree with Ken is that there is no viable future other than a low-carbon future. Friends of the Earth Cymru believes that Wales’ future can be 100% renewably powered, creating tens of thousands of jobs and making a massive contribution to tackling climate change. And it’s not just Friends of the Earth Cymru that believes Wales’ future must be renewable. After all, Welsh Government energy policy is for us to be generating double our total electricity use from renewable sources by 2025. I look forward to Ken joining the huge coalition in support of renewables in order to achieve the Welsh Government’s aim.
“Wales was responsible for 9 per cent of generation in the UK”
And yet Welsh population is under 5% of UK total … so where is the inherited wealth of all this surplus energy production?
I don’t see it
What a confused article. We can become energy independent by 2025 using only renewables, but we also need to include either shale gas or nuclear in that mix. Shale gas is not renewable and is certainly not safe, and Skates’ Labour Party doesn’t want power over nuclear.
Why until now has it been in the national interest for us to only have power over energy projects below 50MW and now it is in the national interest for everything other than nuclear? The fact is, if it was just about the national interest, we would have full control over everything. Not in any case, is it better for Wales, to let the Tories in London decide on whether we need nuclear or not.
When will Labour wake up?
As Rhodri Morgan made clear in his day, there is absolutely no need for nuclear in order to ‘keep Welsh lights on’. And any musing on Energy across Borders should surely refer to Radioactivity across Borders and the growing anger in the Irish Republic about having a Wylfa B imposed on their doorstep whether they like it or not. The proposed 150-year on-site storage of spent fuel that is twice as radioactive as existing legacy waste is surely a disaster waiting to happen. The vast amount of subsidies which will need to be paid to the operators will benefit the big corporations at the expense of consumers and taxpayers across Wales. It can be done without nuclear, as the so called Energiewende in Germany demonstrates.
Energy is one of the few obvious areas where we can produce more than we need (as we already do). The electricity stats out last week show us producing 7.4% of the UK consumption. A pretty good position to be in as we need to be ‘good’ at some things as a nation. But I’d like to see Ken’s views on how profits from this generation (or, from future generation) can be retained in Wales, so that communities benefit either directly (through community benefits) or indirectly (through revenue going to the Welsh Treasury). Perhaps this sounds unfashionable, but we should be looking at national, Government-led solutions. Wind farms are profitable developments. Why isn’t the nascent Welsh state looking to cash in? Either by launching it’s own vehicle or taking a share in a private venture. We need to seize these opportunities, yes, but also make some money from them. It is interesting that train services in Wales are run by a company owned by the German state. The Welsh state, if it wants to be a major player in the European economy, should be looking to do the same. I’d like to see more of a green energy market in Wales like Scotland is developing.
Martin Jones is quite right. It hardly matters how our energy is generated if all the profits flow abroad. Unfortunately the Welsh government lacks the commercial know-how to establish joint ventures. It consists of people with a local government or voluntary sector background who are suspicious of, yet overawed, by private enterprise. And the civil servants are similarly inexperienced. If you know nothing, you need chuztpah – not a Welsh characteristic on the whole.