We move now therefore to the short debate, and the short debate today is in the name of Llyr Gruffydd. And I call on Llyr Gruffydd to speak on the topic he has chosen.

Well, thank you very much, Llywydd. It’s a privilege, if truth be told, to introduce the first short debate of the fifth Assembly. I have agreed to give a minute of my time to Lee Waters and Jenny Rathbone in this debate.

Now, ‘Delivering a Smarter Energy Future for Wales—Energy Policy Priorities for the New Welsh Government’ is the title that I have chosen, and that refers, of course, to this, namely a report from the Environment and Sustainability Committee of the previous Assembly. It’s a report that was published as a result of the committee’s inquiry, which outlined a vision that received cross-party support on the future of energy in Wales, which actually delivers on our ethical and legal responsibilities in terms of climate change, but also achieves the economic potential that would come from using our natural resources responsibly and sustainably and in a way that generates wealth for the people of Wales, and, indeed, creates all sorts of other opportunities in terms of tackling fuel poverty, empowering local communities to be more proactive in deciding their own energy futures, and all sorts of other positives that would come as a result of that.

Now, the report was published towards the end of the last Assembly, as I said, with the debate on the report taking place on the last day of the fourth Assembly, here in this Chamber. The intention of the report was not to look back, not to point fingers or cast any blame, but to be constructive, to be practical, and to offer a vision and to pose a challenge to the next Government, of course, by outlining the opportunities, the priorities and that sense of urgency that exists in terms of meeting the challenge that we are facing. There was clear consensus in support of the committee’s recommendations within the committee itself, of course, and the motion to note the report was passed unanimously in this Chamber.

Now, naturally, in responding to the debate, we heard very little from the responsible Minister at that time, and that was fair enough, of course, because the message was clear that it was for the next Welsh Government to tackle the agenda highlighted and outlined in the report. That’s why I have chosen this issue today for my short debate. I don’t want this report to be forgotten; I don’t want to lose the momentum, or the consensus that underpinned this report. I want to see the new Government understand that this is one of the major priorities that we have in economic, environmental and social terms, one of the greatest challenges facing us here in Wales. And this is the first opportunity, therefore, for the new Government, and the new Secretary—and I congratulate her on her appointment, of course—to respond to the recommendations made in the report and to tell us how she intends to meet the challenges and achieve the opportunities that we have and what her vision and her Government’s vision is in terms of delivering that smarter energy future for Wales.

Now, clearly, I can’t list everything contained within the report in my short debate today, but I do want to draw attention briefly to some of the main points. Now, one of the strongest recommendations emerging from the committee inquiry is the need for Wales to set out a co-ordinated and strategic vision for its energy policy in the future, and that includes clear targets in order to engender growth, and it also includes clarity in terms of the kind of energy mix that would come together to create the provision that we require, and, of course, how we’re going to ensure a central role for local energy in all of this.

The report makes it clear that Wales has to set annual targets to reduce energy demand and to help people to use energy more efficiently. The report asks that we set targets for increasing renewable energy production in Wales, and, in the context of the need to reduce carbon emissions by at least 80 per cent by 2050, then the report states that Wales should set a target date for energy self-sufficiency. That, of course, is entirely possible. Germany, for example, has committed by 2050 to ensure that 80 per cent of its energy comes from renewable sources, and, more than that, by that same year, that it cuts its use of energy in buildings by 80 per cent and creates millions of jobs and adds to its GDP in so doing. It’s a transformational programme that shows the way forward for many of us.

It’s also worth looking at a nation such as Uruguay, which has a population similar to Wales, and how they have succeeded in ensuring, in less than 10 years, that 95 per cent of their electricity is generated from renewable energy, reducing their carbon footprint, of course, but also reducing people’s bills simultaneously. They have demonstrated that, with vision and determined leadership, it is possible to make real and swift progress towards a low-carbon economy.

Now, we need to make some difficult decisions, of course, on the balance between major and small energy investments, and native and foreign investment, and we need to be confident enough to prioritise local energy generation systems for the benefit of our communities.

Wales, by the way, doesn’t need to wait for more powers from Westminster before achieving most of the vision set out in this report; we can make a start on much of this work now. For example, reducing the demand for energy is the most important aspect of switching to a smarter energy future. Households in the UK spend 80 per cent of their energy costs in heating rooms and water in homes. We therefore need to ensure that homes are as efficient as possible in terms of energy usage.

Now, under the EU’s energy performance and building directive, every building, of course, has to be close to zero emissions by the end of 2020. Indeed, we have to construct public buildings to this standard by the end of 2018. It was a disappointment for many of us that the previous Government—and I’ve made this point on a number of occasions, I’m aware of that—missed an opportunity when building regulations were amended just a few years ago. Although they went out to consultation on the need for all homes to actually be 25 per cent or 40 per cent more efficient than the 2010 standard, they went for just 8 per cent ultimately. This must be changed as a matter of urgency; the current system, of course, locks energy inefficiency into the system for the lifetime of those new homes that are built.

Enhancing energy efficiency in our current housing stock is also crucial, of course, by retrofitting energy efficiency measures. Whilst programmes such as Arbed and Nest make contributions to this task, they are small contributions and they are nowhere near enough, given the scale of the challenge facing us and the level of investment that’s truly required. That’s why, of course, there was a commitment in the Plaid Cymru manifesto to invest billions of pounds over the next two decades to meet that challenge through a national infrastructure commission for Wales. And I do hope that the negotiations that have taken place between ourselves and the Government will ultimately facilitate that. Now, Wales needs to raise its game, there’s no doubt about that, and I’m looking forward to hearing what the new Government’s plans are to achieve that.

Now, across England, local authorities are also establishing not-for-profit energy supply companies. In Wales, we have a not-for-profit utility company, which is Dŵr Cymru, and we must build on that success in the field of energy. The committee heard how some local authorities in England, including Bristol and Nottingham specifically, can target fuel poverty by supplying energy to homes at a reduced cost in their areas. In Nottingham, Robin Hood Energy offers a tariff for the citizens of Nottingham alone, and also can set lower rates in areas where there is an enhanced level of fuel poverty.

Now, Bridgend county council does provide local heating networks, and Wrexham council has the largest solar energy scheme in the UK, but we must go further. We need to establish a not-for-profit umbrella energy company. Now, under that, local authorities or even local communities could supply locally. The ultimate aim, of course, would be for such a company to get all of its energy from renewable sources in Wales.

Now, we can’t discuss energy policy in Wales without mentioning the grid, of course, and I have said on a number of occasions in this Assembly that the time has now come for us to move away from the hub-and-spoke model of energy production in large power stations and then transfer across the nation through an ineffective, costly grid. We need to move to a model of smarter local grids, with the energy produced closer to where it is used. Networks that are more efficient offer more resilience for the energy system, which is less damaging to our landscape and cheaper in terms of maintenance. Now, a lack of capacity on the current grid in Wales is also a significant barrier in terms of local energy production. We therefore need the national grid, the distribution network operators—the DNOs—and Ofgem to play their part in responding to the progress that we want to see in a distributed energy generation system. And, in that regard, the report makes it clear that Wales must have a far stronger and meaningful voice on those specific bodies.

Now, the committee started their work at the start of the fourth Assembly by looking at energy and the planning system, and this was a very important consideration in the report that I am focusing on today. I won’t expand on that, but just highlight the fact that the planning system must be far more effective in terms of facilitating local energy and community energy projects, particularly in that there should be more priority given to that sector—extending permitted development, for example, so that these projects can proceed. We need to simplify the process, too, in terms of making planning applications and getting consent for projects of this sort, and also ensure that NRW, to be fair, has the necessary capacity to deliver their responsibility effectively and in a timely manner in this area.

One of the most important ways of supporting new energy generation is by enhancing security in the market, and we know that recent changes to the energy generation tariffs policy and other assistance for renewable energy has caused great uncertainty for investors, and that has chiefly emerged from the UK Government, of course. And London does have many of these powers. But there are entirely practical ways in which the Welsh Government can contribute towards making a difference. There are opportunities to provide land that is currently owned by the Government for energy projects. There is scope for us to take full advantage of all possible sources of funding. Now, this includes a number of European sources, and one would hope, following the events of next week, that we will be able to access European sources such as the European regional fund, such as Horizon 2020, the rural development programme and so on and so forth. There is perhaps scope for a lending scheme by the Welsh Government, and we know of the need for hand-holding services to assist local and community projects.

There are opportunities in terms of training and skills and there are a number of other opportunities that are mentioned in the report. The energy agenda, of course, is substantial. It’s a broad area that touches upon a number of policy areas and many portfolios within the new Government’s Cabinet. The one thing that is clear, however, is that the opportunity for Wales in getting this right is exceptionally exciting: economic, environmental and social benefits that are extremely significant. The challenge is set in this report and in the recommendations made. The question now is: how will the new Government and the new Secretary respond in order to achieve this by actually delivering a smarter energy future for Wales?

Thank you to Llyr Gruffydd for the opportunity to speak tonight.

I’r rhai hynny ohonom sy’n cymryd y dystiolaeth wyddonol o ddifrif nid oes unrhyw ddadl fod angen i ni wneud newidiadau radical i’r ffordd rydym yn harneisio ac yn defnyddio ynni. Ac i’r rhai ohonom sydd o ddifrif ynghylch tystiolaeth economaidd, ni all fod fawr o ddadl fod angen i ni, er mwyn dechrau lleihau’r bwlch rhyngom a gweddill y DU, ddefnyddio ein manteision naturiol i greu cyfoeth a swyddi i’n cymunedau. Mae croesawu potensial enfawr ynni adnewyddadwy, ac arbed ynni, yn diwallu’r ddau amcan hwn. Dylem anelu at gynhyrchu ein holl anghenion ynni o ffynonellau adnewyddadwy, ac anelu i allforio ynni dros ben. A gadewch i ni ddod â’r cymunedau gyda ni. Ni chynhyrchir mwy na 1.5 MW o ynni sy’n eiddo i’r gymuned yng Nghymru, o’i gymharu â’r Alban, lle y ceir 504 MW o ynni yn eiddo i’r gymuned ac yn lleol. Mae angen i ni newid y ffordd y mae pobl yn meddwl am ynni, sut y maent yn ei ddefnyddio a sut rydym yn ei gynhyrchu. Mae yna heriau gwirioneddol i’w goresgyn, ond mae yna enillion mawr o fewn ein cyrraedd. Lle bo ewyllys, mae yna ffordd. Mae angen arweinyddiaeth gref gan Lywodraeth Cymru ac mae angen i ni weithio’n drawsbleidiol er mwyn sicrhau nad ydym, o fewn y pum mlynedd nesaf, yn pryderu ynghylch cyfleoedd eraill a gollwyd. Diolch.

First, I need to declare an interest as an investor in Awel, which is a social enterprise delivering onshore wind energy in the Amman valley. I just want to record that last month was the first month when we actually delivered more solar energy across the UK than coal energy, and therefore we are at a crossroads now. All the energy companies are beginning to wake up to that they need to change their models, and they are beginning to invest in renewables. The oil companies are also starting to invest in renewables. I’m really concerned that Wales could not seize the opportunity and get left behind rather than ensuring that we have locally-owned renewable energy. Obviously, tidal energy is for the big boys and girls—that is huge capital investment—but we could have locally-generated energy schemes across all our communities if only we can seize the moment. We need to support local communities to see this as an advantage, and we also do need to change our relationship with the grid so that we don’t have the energy distributors killing local community projects dead by demanding millions of pounds to connect them to the grid. We have to be able to sell that energy locally rather than sending it off somewhere to the national grid.

I also agree with Llyr Gruffydd that we must have another look at Part L of the housing regulations. There’s no point in building new housing that we then need to retrofit in order to make those efficiency gains that we need to do in all our existing properties anyway. We need to be grasping the opportunities that have come from the fact that new players are really interested in this and there is a market for everything that Wales could produce with all the wonderful, abundant resources we have.

I call on the Cabinet Secretary for Environment and Rural Affairs.

Diolch, Lywydd. I’d like to thank Llyr Gruffydd for bringing this short debate forward. As you said, it’s the first one of this fifth Assembly, and I think it’s a very important topic to choose for the first one.

The Environment and Sustainability Committee’s report on smarter energy is a very important contribution, I think, to the energy policy debate, and I do look forward to responding to it formally in due course. So, I want to assure not just Llyr but all Members that it won’t be forgotten, because it’s been one of the first things I’ve read, actually, since coming into the portfolio on the energy side of it.

The Welsh Government shares much of the committee’s vision for the future, and I think you’re absolutely right, Llyr—it is constructive and it does bring forward very practical solutions, which I think we need to consider very carefully. I think we also need to look at the recent publication of the Institute for Welsh Affairs report at the same time. Advice is also coming forward to me from the task and finish groups that were established by the Minister for Economy, Science and Transport during the last Assembly term.

I believe we should all strive to bring about a Wales where low-carbon energy is a key driver in a vibrant economy, the energy sector continues to grow strongly and create good quality jobs, and communities drive forward the energy agenda and benefit directly from the generation of local energy. Energy underpins our whole way of life in today’s society, and I think the point that Lee Waters made about you have to take the community with you—you have to get them to understand their use of energy, and how we can take that forward. I think throughout the inquiry the committee did receive a great deal of evidence on how the transition to a smarter energy system in Wales could be taken forward, and again, I think this is a really valuable contribution to this agenda.

Will you take an intervention, Minister?

Yes, Nick.

Thank you for giving way. I just heard what you said in terms of local communities receiving the benefits from local renewable energy schemes. Of course, that’s what they should get, and that’s what we want them to get, but there have been some occasions in my constituency where those community benefits haven’t been realised, and companies have tried not to give the full level of benefit they should have. So, can you look at ways that that can be addressed?

I’ll come to that bit in a moment. I had a meeting this morning, actually, with Carl Sargeant, who’s obviously now responsible for housing, where we discussed that very issue. But I will refer to that later on.

I think the energy system is already being transformed, and this is clear from the low-carbon generation report that we published last November. Wales had 2,280 MW of renewable capacity installed at the end of 2014, and that was up from 1,101 MW in 2012; 14,380 projects were delivered across Wales, from the 576 MW Gwynt y Môr offshore windfarm to nearly 11,000 solar photovoltaic arrays. We know that developments have continued in the 18 months since then, and I think there are opportunities for the future, and that includes the £12 billion Wylfa Newydd project in north Wales and, of course, the Swansea bay tidal lagoon.

We need to ensure we’ve got a very flexible and diverse energy mix here in Wales, and as we move forwards towards a low-carbon economy, our energy priorities need to support low-carbon jobs and skills, ensuring that energy developments benefit people in Wales and that the regulatory system protects their interests. In conjunction with the committee’s report, I see a very important and increasing role for local generation and supply based on renewable sources, with smart storage and local grid management, and again, over the last five years, I think we have now established a legislative and policy framework that will enable that change. We provided leadership through the groundbreaking set of legislation that uses the levers that we have. The Well-being of Future Generations (Wales) Act 2015 is designed to increase the well-being of Wales by ensuring that all of our actions provide social, economic, cultural and environmental benefits, and we’ve got to continue to drive forward action on energy, providing multiple benefits and helping achieve the well-being goals. This will mean taking forward the statutory climate change target and carbon budgeting required by the Environment (Wales) Act 2016. Local public service boards will have an important role in translating targets into local action, and low-carbon energy generation and energy efficiency will be core components in delivering them. Indeed, energy will need to be a fundamental consideration within LDPs. Local authorities have been reminded of this requirement to plan positively for renewable energy, and we will continue to support them in doing this.

The changes to the consenting regimes promised through the UK Energy Act 2016 and the Wales Bill, as well as the implementation of the developments of national significance regime, provide the opportunity for decisions on significant renewable energy projects to be taken for the benefit of the people of Wales. We’ve published an energy efficiency strategy and a local energy statement that set out a clear direction for Wales. However, energy policy and market regulation are not devolved, so we continue to work with the UK Government, with the grid operators and Ofgem to secure the transformation in regulation and in the markets that Wales needs.

For new buildings, improving energy performance through building standards is important in achieving our well-being aims. I just mentioned to Nick Ramsay that I met this morning with Carl Sargeant, within whose portfolio house building now is, and we talked about how we need to build houses for the future. We’ve got to raise standards in a cost-effective way that recognises the economic importance of house building in Wales, and we’re going to continue to work with the industry to ensure we balance the need to reduce energy demand in new housing with the need to meet housing demand. I don’t think we can just carry on building the same sort of houses expecting low-carbon energy not to be part of them, because clearly as energy costs rise, the houses that we have been building are not going to be what people want going forward.

Will the Minister give way?

Can you just hang on? I think also we need to streamline planning, and Jenny Rathbone and Lee Waters both referred to community energy benefits. And someone—I can’t remember who it was—referred to land. And again, Welsh Government has got land and we’re looking to what we can to do, maybe, to have a pilot to see what sort of houses we can do. I’ll give way.

Thank you. On the economic model of persuading house builders to build to a higher standard, we really have a significant challenge on our hands of exploring a different economic model to allow this to happen, because currently the private sector volume house builders simply won’t play ball with anything innovative that adds to the cost of the volume that they build. So, what thinking can you do with your ministerial colleagues to explore different ways of financing housing?

That’s exactly what we were discussing; we’ve got five big developers in Wales who perhaps would not be persuaded to build the sort of houses that we are talking about. So, what I did with the Cabinet Secretary for Communities and Children this morning, and officials, was talk about how we can perhaps identify a local authority, maybe, that we could do some sort of pilot with. There would be a lot of risk involved—we accept that—but I think if we are going to be serious about doing this, that’s the sort of thing that we have to do.

Going back to community benefits, I have a farm in my own constituency in Wrexham that has an anaerobic digester, and going back to community benefits, it was quite difficult for the farm owners who built the anaerobic digester to engage with the community. I mean, this was several years ago now, and I think going forward it probably is much easier now.

We’ve also developed a public sector pipeline of energy efficiency, renewable energy and heat projects with a capital value of over £400 million. To deliver this opportunity, we’ve developed the invest-to-save green growth finance package, which has committed £13 million of repayable funding to public sector green growth projects this financial year, building on more than £20 million previously committed. This funding will be recycled into further projects as it’s repaid.

We’ve also set up our Re:fit Cymru service to deliver retrofit that guarantees energy savings for public bodies. This programme alone is expected to deliver £30 million of energy efficiency and renewable energy measures in the next three years.

We will need to ensure that power networks are fit to meet the changes we expect to occur over the coming decades. We need to see more local ownership of generation assets, and more investment in the updating of the energy infrastructure to enable us to balance local supply and demand more effectively. And we do need to be very clear about the challenges that local energy would bring, including the capacity and resource needed to manage the system effectively, and the need for significant changes in the way the industry is currently regulated. However, this will have many benefits, creating decent jobs and keeping costs down through local ownership.

Energy storage should be particularly valuable technology in deploying more renewables, particularly in areas of Wales that have significant grid constraints, and it’s likely to play an increasingly important role in the energy system. Storage does form part of our approach to innovation at a local level, and our smart living programme is supporting a number of innovative projects that will provide learning, as well as putting us on the map in the world of smarter energy use.

The Welsh Government local energy service is also supporting innovative local projects. The service helps communities to make well-informed decisions about the right energy options for them, based on their needs and the available resources.

We do already provide a higher level of grant support than in Scotland or England for the earliest, riskiest stages of project development, and our recirculating loan fund is more flexible than Scotland’s CARES programme. The fund can provide loans for both development and capital construction, and we currently have £4.5 million available for investment.

I think we all accept that if we are to transform the way we think about energy, we do need to work with a range of partners to share the need for, and benefits from, the transition. As I said at the outset, the committee’s report I really do think will be important in assisting me and the rest of Government in bringing about this transition, and I very much look forward to working with a wide range of people, including all Members, in taking forward this important policy area within my portfolio. Diolch.

I thank the Cabinet Secretary. That brings today’s proceedings to a close.

The meeting ended at 18:25.