Part of the debate – in the Senedd at 4:13 pm on 28 June 2017.
Thank you, Deputy Presiding Officer, and can I start by thanking the Members for tabling this debate this afternoon and all those who’ve contributed to the debate? Much of what we’ve discussed today does chime with my energy statement of December last year around using energy more efficiently, moving to low-carbon generation, levering in more resources, and gaining economic benefit from the new technologies and business models that now are emerging from the transition. This does include our highly successful flagship Welsh Government Warm Homes programme, which has been designed to ensure economic benefits for Wales in terms of employment and business opportunities. All of the energy efficiency improvements installed under our schemes have been delivered by Wales-based SMEs.
Between 2011 and 2016, we have invested over £217 million in Welsh Government Warm Homes to improve the energy efficiency of over 39,000 homes of those on low incomes or living in the most deprived areas of Wales, and I expect to publish the 2016-17 figures next month. So, it’s significant funding, but, as Lee Waters said, we really need to see how much more we can put in. I’d love to put £1 billion into our energy efficiency programmes, but I think we have to be pragmatic. Last year, the Nest scheme delivered estimated average energy bill savings of over £400 per household. If these estimated savings were realised for every home improved through Nest, it would equate to annual energy bill savings of over £9.5 million per year.
We also recently published the findings of research on the health impacts of Nest. The research shows that the scheme is having a very clear, positive impact on the health of recipients, with a reduction in the use of the NHS by those receiving energy efficiency measures through the scheme. Those findings have supported our decision to extent the eligibility criteria for our new Nest scheme to include householders on low incomes who have a respiratory or circulatory condition. So, we are making progress in tackling fuel poverty, despite the fact that some of the levers, as Vikki Howells said, for tackling fuel poverty are not devolved. Powers over welfare reform, for instance, and the regulation of the retail energy market, rest with the UK Government. I have to say that the plans that were set out in the Tory manifesto to get rid of winter fuel payment wouldn’t help either. Overall, fuel poverty has reduced from 29 per cent in 2012 to 23 per cent in 2016, which is a reduction of 6 percentage points in just four years.
Over the next four years, we’ll invest a further £104 million in Welsh Government Warm Homes, and that will enable us to improve up to 25,000 homes of those on low incomes, or, again, living in the most deprived areas of Wales. Our investment will lever in up to £24 million of EU funding in addition to funding from the UK energy company obligation. Our investment helps provide stability and certainty for the energy efficiency supply chain in Wales to grow their business at a time when the UK Government has undermined confidence in the industry with their stop-start approach to energy supplier obligations. I’m also looking to strengthen building regulations through our proposed Part L review this year. This will look at how we can control insulation values and reduce energy usage in homes. In addition, we’ve been exploring opportunities to lever in more resources and support from energy suppliers, local authorities, pension funds, and others, to accelerate investment across Wales to tackle fuel poverty and support our decarbonisation ambitions.
I’m looking at all opportunities for innovation, both in energy efficiency products and in financial models, which can then help support the uptake of energy efficiency improvements amongst able-to-pay households as well as those on low incomes. I will be making an announcement in the autumn on my proposals.
Energy efficiency in general terms will be included in the scope of the National Infrastructure Commission for Wales’s remit, although the commission will only consider economic infrastructure. We believe a modern, efficient, and reliable energy infrastructure is important for our businesses and communities, and we’re committed to supporting the development of new, renewable energy generation.
Renewable and low-carbon electricity and heat form an important element of Welsh Government’s approach to decarbonisation. To deliver secure and affordable low-carbon energy, we need that mix of different technologies and sizes, from community scale to major projects. The transition to a low-carbon economy not only reduces emissions, but brings opportunities around clean growth, quality jobs, and global market advantages. I’m committed to achieving a more circular economy in Wales and using the earth’s natural resources far more efficiently.
Energy is a key economic imperative that underpins our aims for a secure and prosperous Wales. In terms of opportunities, this means supporting large energy investments in on-shore renewables, marine, nuclear, and so on, including our two largest energy investment projects: Wylfa Newydd and the proposed Swansea bay tidal lagoon. Wylfa Newydd, for example, is estimated to create 850 permanent jobs, and thousands more for a temporary period. Arbed, too, has created more than 470 jobs and delivered more than 60,000 hours of training in green technologies to existing and new employees.
The no-carbon economy is one of the UK’s fastest-growing sectors, creating jobs and providing investment across each region. I’ve written to the UK Government on a number of occasions setting out the benefits from renewable developments. We are also committed to supporting community-led energy projects. As a result of Welsh Government’s support, 15 community schemes are up and running, providing benefit to the local area. I agree with Jeremy Miles: it’s very interesting to see some of the co-operative models that are coming forward, and I’ve been very lucky to not just visit, but to open, such schemes since I’ve been in this portfolio.
I’m also looking to set ambitious yet realistic targets for renewable energy in Wales. The evidence from the decarbonisation pathway will inform the setting of any targets and enable us to assess which pathways provide the best opportunities and outcomes for Wales. I’m committed to using all my powers to provide ongoing support mechanisms that ensure we retain the ability to deliver new-generation developments and efficiency whilst managing the cost to bill payers.