5. Statement by the Minister for Climate Change: Public Sector Role in the Future Energy System

– in the Senedd at 4:00 pm on 25 October 2022.

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Photo of Joyce Watson Joyce Watson Labour 4:00, 25 October 2022

We'll move on now to item 5, a statement by the Minister for Climate Change on the public sector role in the future energy system, and I call on the Minister for Climate Change—Julie James.

Photo of Julie James Julie James Labour

Thank you, acting Presiding Officer.

We have spent a great deal of time in this Chamber talking about the cost-of-living crisis, which is directly related to the major increase in the cost of energy. Keeping British people locked into the price of fossil fuels is bad for bill payers and disastrous for the action that we all know we need to take to tackle the climate emergency. The rising costs and lack of certainty of supply both strengthen the case for energy resilience and the need for control over our energy system. Our Government has championed the need for greater energy efficiency and more renewable energy, along with flexibility measures to make sure that we can always meet demand. These are the right long-term solutions to deliver on the current cost-of-living crisis and on the climate and nature crises. This much more local system requires us to be much more engaged with the energy system than previously. Government at all levels will need to take an active role in designing the net-zero energy system, one that enables people to live and move, yet has the lowest possible costs and impacts.

I have been really pleased with the way that local authorities and regions have worked with us on energy plans that set out the changes that need to happen, and how those changes can deliver skilled jobs for people in their areas. Following the successful pilots in Conwy and Newport, I look forward to seeing the rest of our authorities developing detailed local energy plans, which will be the basis for the national energy plan in 2024. These plans don’t solve our immediate energy cost problems, but they do set a strong framework for us to collectively focus our action to protect ourselves in the medium term. In delivering these plans, we must think differently as a nation about how we manage public assets. We will only deliver net-zero obligations in ways that benefit communities by taking new and different approaches.

We have already used the major public asset that is the Welsh Government woodland estate to deliver on our policy on renewables and local benefit. Natural Resources Wales has overseen the installation of four projects totalling 441 MW of onshore wind, with a further 134 MW still in development. This has delivered not just income to the public purse from lease payments and direct to communities from community benefit funds, but opportunities for communities to take ownership of part of these developments. The projects have also funded improvements in natural capital, such as restoring and expanding areas where peat was in danger of releasing greenhouse gases.

It has been interesting to note that the companies winning lease competitions—those most prepared to deliver local benefits—are state-owned developers. We share the ambitions of these other nations, and we are determined to maximise the value that Wales receives from Welsh national assets used to generate energy. For the last two years, we have been working with NRW to assess the level of wind generation the woodland estate can support and to consider how to make sure that Wales keeps more of the benefits in a changing market. Public land presents a great opportunity, however, it is only fair to take a larger share in the risks if we wish to take more of the rewards for Wales.

So, acting Presiding Officer, I am absolutely delighted to announce, as I set out in Net Zero Wales last year, that we are going to establish a Welsh state developer. We will take more risks where these are reasonable, and will earn the returns to benefit Welsh citizens. We will take forward projects on Welsh Government land and develop them commercially, whilst respecting the views of people and managing our natural resources sustainably. We will be delivering directly on our aims to have over a gigawatt of locally owned generation by 2030, and our manifesto commitment to at least an additional 100 MW of generation by 2026.

This is a long-term approach, and we do not expect to see returns until towards the end of the decade. However, I expect significant returns compared to our investment. The income will help us support communities—as indeed we have already seen communities benefit during COVID and now the cost-of-living crisis—from the community funds from existing windfarms. But I am particularly keen to explore how we can link these developments with retrofitting homes nearby, using local businesses. This will involve working in a different way with the private sector. I hope that that sector will welcome another publicly owned member, working on an equal footing and returning profits to the public purse. We will be working with NRW to consider how, in future, we can offer up opportunities across the woodland estate that complement our own developments, opportunities for commercial and community developers to propose joint ventures with us.

We also hope that our approach will help reshape the market elsewhere in Wales. Our deepening understanding of the economies of large-scale developments will help us set expectations about the level of local social and environmental benefit that it is reasonable to expect of other windfarms across Wales. We have a lot more work to do to set up a new company by April 2024. Alongside setting up the developer, we will develop a portfolio of projects, engaging at an early stage with communities and local authorities. We will also be looking in detail at the benefits that this approach will deliver. We will work with those who live near projects to define community benefit proposals that really make a difference to their lives. We will also work with Natural Resources Wales to make sure that those projects contribute to tackling both the climate and the nature emergencies.

I'll keep the Siambr informed on progress as we work through the establishment of the developer. I hope that you will all welcome this announcement, as Wales becomes the first home nation to have a publicly owned Welsh renewables developer. Diolch.

Photo of Janet Finch-Saunders Janet Finch-Saunders Conservative 4:05, 25 October 2022

Thank you, Minister, for your statement. It's really good to see that you're going forward in terms of looking at projects that can actually help us towards our ambitions of carbon zero, as well as putting more money back into the local economy. Now, currently, you do have a Welsh Government energy service. This has supported 242 projects, saving 716,000 tonnes of carbon dioxide from being emitted, whilst generating £322 million in local income and savings. From your statement, that is the bit that really stood out for me about an announcement of a Welsh state developer and new projects on Welsh Government land that will be then commercially developed in 2024. I suppose, going back to the current Welsh Government energy service, how will this work with the new one that you're setting up, because, in 2021, only five renewable energy projects were supported by the service? So, do you agree with me that, this service, if that's going to keep running, should be challenged to increase the numbers of renewable energy projects that it supports?

Also, £5.34 million-worth of projects are being discontinued after securing finance, so the report actually states that the schemes were not built, but there is no clarity as to what has happened to the millions that were invested. So, maybe you could just elaborate on that further. Will you liaise with the service to establish what has happened to that? The auditor general published a report on the public sector's readiness to meet the net-zero 2030 target in August 2022, so there is uncertainty within the sector as to whether they can meet the net-zero target.

Now just 10.4 per cent of our public sector bodies in Wales are confident that they're going to meet the 2030 target, and a further 40 per cent of public bodies neither agreed or disagreed with this statement. So, how are you confident that they're going to meet the sector's target? And another question: two months have passed since the warning shot that 90 per cent of public bodies could miss the 2030 net-zero target, so what steps are you taking to address this?

Interestingly, the health sector are accounting for approximately a third of public sector emissions in Wales. The NHS Wales decarbonisation strategy delivery plan has set a target of 34 per cent reduction in carbon emissions, but the reality is that, if only a 34 per cent reduction from them is achieved, it will then be difficult for the public sector to deliver on its overall net-zero target. So, what steps will you do, how will you work with the Minister for health and social care to see a more challenging target set by NHS Wales? Others have warned that reaching the target will require additional financial resources, and, of course, the absence of these funds will be a barrier to progress. The main thrust of your statement was about this new development company, so how will that work with the energy service you had, and how will it actually deliver? How confident—?And, I suppose, my final question is: you say in 2024; we've got the climate crisis now, is there any way at all that that might be brought forward? Thank you.

Photo of Julie James Julie James Labour 4:09, 25 October 2022

Thank you, Janet. I think most of the thrust of your contribution there was around the energy efficiency service, which is obviously not what this statement is primarily about. We obviously work with the energy efficiency service to make sure that we can get energy efficiency. You quoted some of the very good stats that we've actually had by way of results there. I'm very pleased to be working with them.

We will also be developing a community energy developer, as part of our co-operation agreement with Plaid Cymru, who will pull together the community-level energy schemes that we need right around Wales—the small-scale schemes that we need right around Wales. And they will also be a combination of generation of electricity—so from your solar panels, from your small-scale hydro and so on, which I know you're interested in—but also work on the energy efficiency of the buildings that are part of that community project. So, obviously, what we also need to do is reduce demand for the generation of electricity.

What this statement is about, though, is a very large-scale developer owned by the Welsh Government, starting off on Welsh Government land, to take its place in a number of companies already working throughout Wales. Scottish Power, for example, provides, as I know you know, the grid in north Wales. This, acting Presiding Officer, is one of the old cliches come to life: so, the best time to do this was probably about 40 years ago, and the next best time is now. So, here we are—we are doing it. What we are doing as well is inviting a joint venture with private sector companies—I say 'private sector' with inverted commas around it, because most of them are the Swedish national power company, the Scottish national power company, the German national power company, the Danish, you know, these are companies that are already there, so they're not really private sector; they're state-owned operators—to work alongside us to make sure that, in generating the kind of energy that we need right across Wales from all kinds of renewables, although starting on the Welsh Government estate with wind, we return the investment in that, not just in community benefits but the actual investment back to the people of Wales, as those other companies are able to do to their national citizenry. In doing that, we will, of course, be able to redeploy that investment back into energy resilience and into energy efficiency, which are two sides of the same coin—I completely agree with you.

So, I'm glad that you welcome this. It will take us a year to set the company up properly, because this is a major investment strategy, which we must do in order to get our just transition agenda really running. I know that you share our ambition that the people of Wales, in transitioning to a green economy, should not suffer the problems that we suffered in previous industrial revolutions. So, this is the first major step forward in making sure that we secure the wealth of our renewable industry for the people of Wales.

Photo of Delyth Jewell Delyth Jewell Plaid Cymru 4:12, 25 October 2022

(Translated)

Thank you, temporary Chair, and thank you, Minister, for your statement. It’s good to hear more about how the public sector can play an important role as we all tackle the climate and nature emergencies.

This has already arisen, but I think it's worth us discussing this. It did cause concern that Audit Wales said over the summer that it was not clear whether the sector would reach the goal of net-zero carbon emissions by 2030. The auditor general said that the public bodies needed do more, faster, and we heard that there are major challenges on the way for them, and that the Welsh Government needed to help them to overcome those challenges.

As we've heard, of the 48 public bodies that Audit Wales spoke to, only two had fully assessed the financial implications of meeting the 2030 goal. The public bodies said that they needed more investment, and that they needed to find new ways—agile ways—of using their funding. So, could I ask you, Minister, first, to respond to these financial concerns and say how the Welsh Government will support decarbonisation in the public sector, perhaps focusing on our energy system? Also, problems were revealed in terms of capacity and skills gaps in the sector. The bodies said that their resources were already being used at full capacity while they were dealing with core services, and that they didn't always have the specialist skills to deal with the complex nature of decarbonisation.

I'm sure that you would agree, Minister, that we need a workforce with these green skills so that we can see the change that is needed. So, could I ask you to set out your vision for the workforce? Further to that, how is the Government encouraging collaboration in the public sector on these issues? The auditor's report talks about the importance of sharing information, capacity and expertise, and I would like to hear your perspective on that.

Last but one, data is a significant challenge here. It's clear that the future of our energy system, and the role of the public sector in decarbonisation, depends on having reliable data. The auditor called on public bodies to improve their intelligence on carbon emissions. So, what is the Government doing to support that and what's being done to improve the Government's data collection in considering this issue? Finally, Minister, I’d like to ask: what did you mean by 'returns'? You said

Photo of Delyth Jewell Delyth Jewell Plaid Cymru 4:15, 25 October 2022

'we do not expect to see returns until...the end of the decade'.

(Translated)

The Llywydd took the Chair.

Photo of Delyth Jewell Delyth Jewell Plaid Cymru 4:15, 25 October 2022

(Translated)

Are you talking about projects through that, or returns on investment? And finally, in terms of the timescales, 'the end of the decade' is what you said. Now, do you agree that, certainly in terms of community energy projects, we need to act more urgently than that?

Thank you very much. I’m sorry if that was a bit quick for the translator.

Photo of Elin Jones Elin Jones Plaid Cymru

(Translated)

There’s no need to apologise to our interpreters. They are more than able in interpreting everything said in this Chamber.

Photo of Julie James Julie James Labour

And I for one am very grateful to them indeed, Llywydd, because I’m afraid my Welsh isn’t up to discussing renewable deep-dives at the moment, much as I wish it was.

So, Delyth, I’m very grateful indeed for those remarks. You covered quite a big area in quite a small amount of time there, so I’ll just do my best to answer some of it, but I’ll start from the premise of the statement, which is that this is the announcement of us making a state-owned, large-scale energy developer. So, this is a scale hitherto unknown in the projects that are owned by communities across Wales. This is a major developer. That’s why the returns will take a decade to come in, because it will take that long to build the first windfarm, which we have a plot already allocated for, but we will have to go through the whole development of that, including all the planning consent and the community engagement and all the things that we expect other developers to go through. So, obviously, we have to invest upfront to enable the developer to do that, and we won’t have a working windfarm producing its profits back for some time. So, that’s what the lag in this particular thing is.

The other thing to say is that unless we decarbonise our grid rapidly—and, frankly, I’ve given up on the UK Government’s ability to act in this space; I hope I’m wrong and that they sort themselves out, but, at the moment, it’s not looking great. It remains to be seen who the new Secretary of State is. But unless we decarbonise the grid, of course public sector bodies right across Wales will struggle, including the health service, because decarbonising the grid from which they get their energy in the first place is one of the big steps forward, and that’s the same for housing and for commercial operators right across Wales. I think I’ve said in this Chamber before, Llywydd, that we were having a good discussion with the then Minister about having a planned grid for Wales, a network development arrangement that allowed us to plan out the grid and not react to market forces all the time. I really hope that survives the current turmoil in the UK Government, because of course that allows us not only to put our big renewable generators in place, but much, much more importantly, Delyth, it allows all the little community schemes across Wales to connect into the grid, both to pull energy out when they need it, but, much more importantly, to feed energy in when they have surpluses, thus helping with the whole cost-of-living crisis and with decarbonisation.

Clearly, as I said in response to Janet, this is one side of a two-pronged approach. You’ll know that, under the co-operation agreement, we’re looking to make Ynni Cymru. Ynni Cymru will be the community energy developer across Wales for all the small projects, pulling them together. It’s under discussion at the moment but probably—well, I hope—it will have a relationship with or even take over the Welsh energy service in order to get both sides of that—the decarbonisation, insulation, retrofit side and the energy generation side—coming together, because we both have to reduce the demand on our generation and make sure that we use that that we have generated very efficiently in order to get anywhere near net zero.

In terms of skills, we work very closely with both my colleague Jeremy Miles and my colleague Vaughan Gething to make sure that we have both the economic development opportunities highlighted and we have the skills production there, so we take on the right apprentices, we make sure that we work with our further education colleges to be producing the right kinds of apprentices to work on these projects, but actually we’ll also be working, of course, with our universities as well, because one of the big benefits of having a state-owned developer is that it will be designed and run here in Wales. We will not be importing something that has most of the big jobs back in whichever state operator you care to mention. So, I’m really excited by this prospect. This is a big step forward in a patchwork of things that we need to do together in order to get the greener and much better green economy for Wales that we all want.

Photo of Huw Irranca-Davies Huw Irranca-Davies Labour 4:19, 25 October 2022

Faced with the incredible scale of the climate change emergency that we face and the need to hit net zero, this is a very welcome statement today, and particularly the proposals around a Welsh state developer. What I want to ask you, Minister, is: you'll know that right on my doorstep—I'm not asking you to comment on the individual application, don't worry, and it's not to come to you until, I think, in 2023—we have the proposal for the Bryn development. This will be one of the largest in Wales, if not in Europe. It will also be some of the tallest wind turbines. I've been a consistent advocate, by the way, of wind power all these years. These are directly opposite my house; I remain a consistent advocate of them because of that challenge that we have. But it's really interesting that it just overlaps; the timing is just wrong. This could have been one of the state developer ones. Okay, so if it's wrong, you also put in your statement: 

'Our deepening understanding of the economies of large-scale developments will help us set expectations about the level of local social and environmental benefit that it is reasonable to expect of other windfarms across Wales.'

Well, this is one of those other ones. What shall I say to them when I next meet them on behalf of my constituents about the level of community engagement, interest, shareholding, payback, retrofitting, whatever, that we should expect of them if this is going to be one of the biggest onshore wind developments not just in Wales but in Europe? What should we be demanding of them? 

Photo of Julie James Julie James Labour 4:21, 25 October 2022

Thank you very much, Huw. So, obviously, I'm not going to comment on that particular one, but just in general, one of the reasons we want a state player owned by us, the citizens of Wales, is to put pressure on all the other developments across Wales to show what can be done in a joint venture between a state-owned developer and community engagement and the joint venture partner. We've done a really good job with the community benefits, but community benefits are limited; you're not getting direct profit back from that. It's a profit share of sorts, but it's not a direct profit. What we're looking to do is have windfarms across Wales—and I absolutely emphasise I'm not talking about any particular one here—we want windfarms across Wales to seriously engage with us in making sure that, in building whatever windfarm they're building, some of the turbines are directly owned by the local community. So, they get the community benefit from the entire windfarm, but they actually directly own some of the turbines—so, they're put up on behalf of the community.

What we want to do, in development with Plaid Cymru and our co-operation agreement plans—and this is, I emphasise, under development, this is not agreed, but it's one of the discussions we're having—is to see whether that company—so, not this one I'm talking about here, but that other company—will be able to facilitate that ownership on behalf of local people, because one of the big issues for us is that local people are unlikely to be able to buy into stocks in those companies. So, to facilitate that ownership. So, a much more direct relationship, and, of course, therefore, a much more direct relationship throughout the whole process—so, in engagement, in design, in build, in skills, in delivery of energy projects and retrofitting of homes, in upskilling whole communities. 

One of the things I often say in conversations with the renewables—and this is why the grid part of this is so important—is that all over Wales there are homes that can look out of a window and see a windfarm but who are on off-grid oil, who cannot upgrade their houses in order to be able take advantage of things like air-source heat pumps because the investment is too much for them. Those windfarms can make a direct contribution to that. We need to upskill our communities to be able to ask for the right thing in community benefits. We need to get them the direct profit from owning some of the turbines, and this large-scale developer will be a big player in helping that conversation go along the joint venture lines.

I hasten to say again I'm not discussing any particular application here, but, clearly, what we're trying to do is put pressure into the whole system to make it behave in a particular way, and I hope this will not only be for onshore wind, but will also be for offshore wind. We've had very good conversations with the Crown Estate so far. We are very much hoping to have a similar conversation about the ownership and operation of offshore wind as well, because then we are talking serious amounts of energy being generated. 

Photo of Peter Fox Peter Fox Conservative 4:23, 25 October 2022

Thank you, Minister, for your statement. As I'm sure you will remember, Minister, Monmouthshire County Council, back when I was leader, took the initiative to establish its own solar farm on council-owned ground in Crick. The intention was to generate renewable power for around 1,400 homes and to reduce carbon emissions. The council asked the then Welsh Government to join the project as a partner, and we received welcome support and funding via the invest-to-save green growth fund to help deliver that. I'm sure there are many other great examples across all authorities and you pointed out a couple I know, and I hope that local government will bring forward very detailed energy plans, and I welcome the initiatives you have announced today so that we can scale up energy projects and deliver them at a greater pace at local level. 

The renewable energy deep-dive carried out last year recommended that we needed to look at ways of improving access to public land and local energy projects, as well as building additional capacity within the community enterprises, to help kick start those new schemes. Minister, I just wanted to know roughly how you are working with the Minister for local government to develop additional knowledge and capacity within local authorities and regional structures to help scale up existing and new renewable energy schemes, so that we can create a larger, more sustainable sector. Thank you.

Photo of Julie James Julie James Labour 4:25, 25 October 2022

Thank you very much, Peter. I very much do remember that, with great pleasure as well. And one of the things we want to do is to assist councils to bring forward renewable energy schemes that do a number of other things as well—so, for example, enhance biodiversity, encourage tree planting around the edge and so on, all the things we discussed in Monmouthshire's bid, and, actually, with a large number of other authorities across Wales.

So, we have a regional energy strategy—I'm sure you remember this; it was a subject of much conversation—and we've supported each region to identify the scale of change needed to reach a low-carbon energy system for its region. The regional strategy set that ambition. They don't have enough detail in them at the moment to inform the actual delivery stage, but they will form the basis of our energy plan for Wales. We'll then be doing a lot more detail through the local area energy planning—we've piloted with Conwy and Newport, I think I mentioned already—and then we'll be rolling that out for similar support to all local authorities, delivering on our commitment for all areas of Wales to have a detailed local energy plan by March 2024. That will help us talk to the grid operator, who we hope will now be a planned grid operator, about what the energy requirement in each of those areas is and what the energy efficiency requirement in each of those areas is, through the energy service and through the area plans, done with our local authority partners, without whom we wouldn't be able to do any of this, of course. And then that will provide the skeleton plan for the national energy plan for Wales, which will be the blueprint to guide a coherent grid—hallelujah, the holy grail of a coherent grid—planned for now and for the future, with both upgrading for the grid lines along north and south Wales, but also to fill in what is effectively no grid right across very large parts of central Wales.

So, we are putting in place those plans, with our local authority partners, and Rebecca and I have had many conversations about this with local authority leaders. In fact, it's a standing item in the partnership council to address net zero and the climate and nature emergencies. So, we are absolutely reliant on them to do this, but they are very happy to do it with us, to get that coherent planned system in place, so we understand what we need, we understand what our ambition is, we can deliver it both locally and at this new, big national level in order to get the best return for the people of Wales out of our abundant natural resources.

Photo of Jenny Rathbone Jenny Rathbone Labour 4:27, 25 October 2022

I very much welcome the initiative to set up a new state-owned company. We need to learn from the experience of Norway, which, when they discovered oil there, they set up what is now the largest sovereign wealth fund in the world. And what were we left with? Nothing; it's all gone up in a puff of smoke and the private companies have gone off with all the money.

So, I've long been frustrated that NRW hasn't been able to develop renewables itself, rather than giving concessions to foreign companies of one sort or another, because the communities who reside in the areas where we have such potential do not understand the value of the renewable activity that is going to go on in their area and, frankly, these companies have been allowed to get away with offering peanuts. There are so few renewable energy schemes that have actually directly benefited the local communities themselves. The Bethesda hydro scheme, which was supported by the National Trust, is one where there is direct benefit to communities, and Awel Aman Tawe, which I'm an investor in, has also benefited local communities directly. But it's a complicated story, is it not, to try and invest in new energy. But we've got so many possibilities of developing renewable energy in Wales and we know that we can sell it to any number of countries abroad, once we've satisfied our own needs. So, I suppose I want to understand a bit more about the timescales, because I appreciate that caution is required to get the terms of any joint venture project right, but, in the meantime, we have this raging energy crisis. How quickly can we be, in parallel, developing potential schemes that are going to be oven-ready once you've got the financial terms right with whoever your joint venture partner is going to be?

Photo of Julie James Julie James Labour 4:30, 25 October 2022

Yes, thank you, Jenny. Absolutely right. I completely agree with all of that. There are some really good examples, though, around Wales, that we direct people to. So, Pen y Cymoedd, I don't know if you've managed to go up there, but it's well worth a visit. The increasing biodiversity around what they call the 'spotting' of the turbines has been exponential. It's actually quite astonishing. The engagement with local people who are now using the forest, where they didn't before, has been extraordinary, and the community benefits package has delivered real benefit to that community. That's a state-owned operator, of course, and that's the point, isn't it? But the real profit is going back to the state operator and that's the bit that we want to get our hands on, if you like.

This is just one strand of a large number of things that I've been trying to set out today. So, this is the large energy generator that we have had missing so far. But, that will not work unless we have the holistic network design—to use the jargon—so, the planned grid, as I describe it, so that we can feed it in properly, so that we can get the grid that we need to deliver people's needs and we can get people off off-grid oil, for example. We also need community engagement to make sure that the communities understand what is necessary for them. And that's not being paternalistic; I would have not the faintest idea unless somebody was able to help me understand what is possible in my particular home and my particular area for energy efficiency and so on. So, that's the area plans I was talking about; that's holistic planning for the future needs of the community, for its energy generation and for its efficiency—we need to do all of those things.

We need to have the small renewables right across Wales at the moment, very particularly, because they can sometimes avoid the problems of the energy market. Just to be really clear, right at the moment, with the ridiculous way that the energy market works at the moment, even if we had a state-owned renewable operator, it would still be charging its energy at the marginal price of gas, which is clearly nonsensical. The UK Government needs to move to change the market and it's been sadly very lacking in doing so. And, in the new Bill going through Parliament, which I brought an LCM on very recently, I was very clear that although we needed that to make sure that the people of Wales got some of the benefit, it does not do to the energy market what is required to be done to make it work. So, just to be clear, community renewables can deliver that because they can do it off grid, but we have to do that in a way that's both resilient and capable of joining the grid once we get a more sensible energy market running. So, sorry to be really technical about the different strands of it, but it is important that we try to operate in what we've got now in the best way, but also plan for the future, so that when we do have a better market system we're able to benefit from it in a way that makes the most difference to the people of Wales.

Photo of Jane Dodds Jane Dodds Liberal Democrat 4:33, 25 October 2022

Good afternoon, Minister. This sounds amazing. Thank you so much for the statement—a real, long-term vision of where we see our energy going, when it's so tempting for political parties to just look at the short term. So, thank you so much.

Just two really quick points, if I may. Just looking at small renewable community energy projects, just trying to understand how this new renewable developer for Wales will actually support and help those people who want to develop their community energy. How will it support them? We know that the Scottish Government has a really good scheme, and I'm just wondering if there will be parallels.

Secondly, this week, I'm sure we all know, is Wind Week. So, great to hear all the commitment to wind energy, which I also totally support, and I've been hearing a lot about the potential for offshore wind in the port of Milford Haven. But, one of the issues they raise is speeding up our commitment and our ability to get those wind platforms in, and the issues around planning. So, I just wondered if you could just help a little bit more with that. Thank you very much. Diolch yn fawr iawn.

Photo of Julie James Julie James Labour 4:34, 25 October 2022

Thank you very much, Jane, for that. I'm very pleased, as I say, delighted, to be announcing this, what is a really long-term investment for the people of Wales. I'm sure it won't be controversial, no matter who comes after us as the Government, because we should have done this a long time ago, but the next best time is now. So, here we are, going for it.

This is complementary to community energy. So, it won't feed directly into community energy. But, we need large-scale renewables as well, and, as I've been talking, the way that we see this working is that the profit from this will directly come back to the people of Wales. It's not just community benefits like it is elsewhere. And then, that profit can be reinvested into a large number of projects, other large-scale renewables, but, of course, community renewables as well. It also gives us a real foot in the planning for the grid, which is very important, and I keep emphasising that. And it gives us an exemplar project, effectively, for how this could be done across Wales. So, in answer to Huw Irranca, I was saying that this will be about the best kind of engagement, the best kind of joint venture with private sector partners, and the best kind of shared community ownership, even on a large renewable project. So, we've a lot of ambition for this project before it's even got off the ground.

And then, on the other part of your question, we've done an end-to-end review, as the deep-dive recommended, of marine licensing in Wales, with NRW. That's just coming to a conclusion now. We will be informing our infrastructure consenting Bill, which will be coming to the Senedd by the end of this Senedd year—so, 'summer term' in normal parlance. That will, of course, inform our consenting process, but it is essential that we have a continuation of the habitats regulations because the whole point here is to hit the sweet spot between speed of deployment, so that we act on a global stage, and protection of the environment, so that we do not have unintended consequences. So, the next piece of work will be making sure we get that sweet spot just right.

Photo of Alun Davies Alun Davies Labour

I'm grateful, Presiding Officer. Like others, Minister, I very much welcome the statement you've made this afternoon. I very much welcome the initiative that you're taking. I'd like to follow on from other Members in the approach this afternoon, and perhaps take a different view to you. The statement you've made has outlined that this state-owned entity will be focusing on larger scale initiatives, and I welcome that—it's an important part of the overall mix. But, my real interest is on a somewhat different scale. The public estate is huge across Wales, and owns a variety of different facilities, buildings and land, and my interest is in how do we, in an urban environment, deliver renewable energy generation. We've seen examples in Germany and France, for example, where the state has intervened to ensure that there's a mixed economy of delivery of different generation opportunities. Do you see this wholly owned company delivering in a more agile way, if you like—delivering for an urban environment as well as for a larger scale, more rural environment?

And how do you see the energy company, Ynni Cymru, delivering the finance required for small-scale community development, the expertise that will be required to provide the advice to people on how they do it, and then the investment that you've already described in the grid? Because it seems to me that those are the blockages, and if we are to overcome the blockages and deliver the sort of distributed energy generation that I think we would all agree on, then we need to be able to unblock those issues. I think the announcement you're making this afternoon is very much designed to, and I think it will, deliver the sort of approach to energy policy that I think all of us would want to see.

Photo of Julie James Julie James Labour 4:38, 25 October 2022

Yes, absolutely, Alun. So, as I say, this is one of the strands of things that we need to do to come together to be able to deliver the kind of energy grid across Wales that we want. So, the urban initiatives are really interesting. We expect a large-scale renewables developer to have a look at whether there are large-scale opportunities in some of our urban environments, for example, the utilisation of roofs on buildings and so on, as you’ve seen elsewhere. There are some real issues around solar, which I won't go into now—the Llywydd will be telling me off for the amount of time I'm taking—but it would be really interesting to make sure that we can exploit technologies being developed in our universities here in Wales at the moment to have home-grown solar panels, manufactured here in Wales, in a much better and more carbon-neutral way than is often the case. I'm very interested to make sure that some of the roofs that are being generated with the photovoltaics already in them in steel plants around Wales will be utilised in those kinds of builds. There is, perhaps, a role for this large-scale developer in that. I actually think it's much more likely to be part of Ynni Cymru, the co-operation agreement developer, which is likely to be pulling together community effort to do that kind of thing with small groupings. For example, a bid district in a city would be perfect for pulling that kind of stuff together. But we would expect them to co-operate, of course, and to cross-fertilise and to make sure that the profits are properly reinvested in the right kinds of projects. We have a project in mind to start us off, and then one of the big tasks for us will be to make sure that we have a pipeline of projects going forward that are probably a mix of all of those things.