6. Debate on the Climate Change, Environment and Infrastructure Committee Report: Renewable energy in Wales

Part of the debate – in the Senedd at 4:20 pm on 19 October 2022.

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Photo of Julie James Julie James Labour 4:20, 19 October 2022

Diolch, Dirprwy Llywydd. I very much welcome the opportunity to respond to this debate today, and I very much thank the Climate Change, Environment and Infrastructure Committee for their very valuable report. The crisis that the Chair identified in his foreword has clearly deepened, as he said, and the cost-of-living crisis perpetuated by the absolutely shambolic UK Government's economic mismanagement is something that we've already debated a number of times just today. I keep having to check my phone to see who the Minister responsible is. 

But, the UK Government has belatedly introduced some help with energy costs, but the certainty around those measures has evaporated as one of the slew of u-turns that followed the Tories' shambolic budget last month, as we debated just earlier. Energy costs are still considerably higher than last winter, even with that help. Many households and businesses are not being offered the help that they need, and we now have higher interest rates and a weaker pound, fuelling inflation to levels not seen since the 1980s and the last majority Conservative Government.  

The UK has seen some of the biggest increases in energy costs, despite a relatively limited direct reliance on gas supplies from Russia, and that's directly because of the failure of the UK Government to reform the UK energy system over the last decade. The failure does risk locking in fossil fuel dependency, reflected in the desperate announcements by the UK Government on its intention to expand new oil and gas licences in the North sea, and to facilitate new fracking in England. Just to reiterate once more, we are vehemently opposed to both of these measures, and our policies will continue to use all powers available to us to oppose any new extraction in Wales. 

The current system has allowed major businesses in the energy sector to generate unprecedented windfall profits, and it is the windfall gains across the whole energy sector that the UK Government should be targeting to fund the support for households and businesses. It's difficult to fathom what's possessed the UK Government to rule out taxing windfall profits in the oil and gas sectors. I can't fathom whether it's ideology or that they've just painted themselves into a political corner, and now don't know how to get out.

Given the recent u-turns and the dismal state of public finances as a direct result of decisions they've made, I really do hope that the UK Government will urgently reconsider its position on the extraction of fossil fuels, because, Deputy Llywydd, this crisis is not an excuse for scaling back ambitions for a fairer, greener energy system. The crisis, in fact, demands that we take further action to address the failings of the last decade, while we do everything in our power to protect the most vulnerable from this Tory economic turmoil. 

The renewable energy deep-dive was set up to identify opportunities and address the barriers that risk our ambition for Wales to at least meet our own energy needs from renewable sources, although obviously we'd very much like to be a net exporter as well. And I'm extremely grateful to members of the deep-dive for their considered work, and for their continued support as we implement the recommendations. 

With a clear ambition in place, we will be consulting on revised renewable energy targets later this year, in line with our commitments, as set out it in 'Net Zero Wales'. The committee's report rightly recognises the role that targets can have to help bring greater clarity to industry, stakeholders and to all citizens on the pathway to a net-zero energy system. We absolutely acknowledge that Wales has an abundance of natural resources that mean we are capable of generating energy to meet demand elsewhere. But, if we are to utilise our resources, we must do so in a way that protects our natural heritage and retains as much benefit and value in Wales as possible, sharing the costs and rewards fairly, as a large number of Members have commented on during this debate. 

We've already delivered on a number of commitments from the deep-dive; we've published our guidance on ownership to support the discussions between developers and communities to meet our local and community ownership ambitions; we have scaled up the resources to Community Energy Wales and our funding available through the Welsh Government energy service to provide community renewable energy projects; and we continue to progress work on a publicly owned renewable energy developer, committed to in 'Net Zero Wales'.

I just note, Janet, from your contribution your scepticism about a state-owned company for the UK or for Wales, but, of course, the grid is delivered by Scottish Power in north Wales, and the irony of what you think of as a private company being owned by a different country—the same for energy, the same for rail, the same for what you call the private sector—I really do wish that you would get a grip and understand that those countries benefit from our Government's lack of an ambition for its own people. We do not share that lack of ambition. We will be bringing forward details on our plans for a large-scale publicly owned developer next week, and how we will develop new relationships with the private sector to deliver that goal. 

We want to support a thriving private renewable energy sector that delivers the economic and social value that investment can bring to Wales. We will work in partnership, where we have a shared vision for how investment will directly benefit the people of Wales. I must say at this point, Rhun, that I had a very enjoyable trip out to Gwynt y Môr, but we had a very constructive discussion with a developer there about how we can get community energy arrangements embedded in that system, and that will improve the whole system right across north Wales. We must absolutely ensure that the supply streams, both for the building and the operational stages of those private sector developments—though, again, 'private sector' in inverted commas—come to Wales, so I'm very determined to do that. But, we are also determined to drive a community ownership programme into those private developments by way of a large-scale developer.

Our consenting and planning and licensing arrangements are there to support appropriate developments and to avoid unacceptable impacts on people and the environment. We need to make sure that the processes that determine applications are fit for purpose and do not delay decisions unnecessarily, but also do not impact unnecessarily on our environment. Our programme of work to streamline consent processes and ensure that there are sufficient resources available to support developers is well under way. We'll be setting out the conclusions of the independent review of marine consenting arrangements by the end of this year, and as many Members have commented, we are committed to an infrastructure consenting Bill to be introduced before the end of next year.

A key part of the infrastructure that we need is sufficient grid capacity, as pretty much everyone has acknowledged. The current system, responsibility for which is reserved to UK Government, is clearly not fit for purpose. Rather tragically, and just before the real shambles that ensued over the border, I had just spoken to the then Minister, Greg Hands, and they had finally accepted the need for a planned grid and a higher network system operator. I spoke with the head of the National Infrastructure Commission for the UK this morning, to emphasise the fact that we want that commitment to stay. Contact with the current UK Government is impossible, it seems to me, because they don't stay in post long enough for you to be able to get their address. But if we do ever get any sense of who is responsible for it, we will be pushing that. I do have an inter-ministerial group scheduled for Monday. It was to be in person in Edinburgh; it's now virtual, because we do not know who the UK Government Minister coming to it is. But we will be pushing the continuation of the commitment to a higher network system operator and a planned grid, because that is what we need. We have been pushing that for the last I don't know how long; I've been talking about this for 40 years just personally. How we can have a grid, driven by the market, in circumstances where there is no functioning market, I mean, just beggars belief. So, we will be pushing for that. We're not just hoping for the UK Government, though, to take that forward; we have a future grid Wales project in Wales, so we'll be taking the lead in that. We're taking a strategic approach to grid infrastructure, as we deliver the empirical evidence for what the grid needs are in Wales, to inform the needs of a system operator.

The deep-dive recognised the continued need for a strategic approach for Wales in the recommendation for that system architect; we see that as one component in the wider set of reforms needed at UK level, to regulate the energy system to become a more dynamic, efficient and sustainable area. We are working separately [Interruption.]—I will not have time now, I've run out—with NRW on the budgets and the planning infrastructure Bill, and I just want to say to Janet that I was delighted to see that she supported the devolution of the Crown Estates, and I look forward to being copied into her letter to the Minister.