1. How is the Welsh Government supporting renewable energy projects in the Celtic sea? OQ58979

Llywydd, investment in physical infrastructure, and a workforce skilled for the future, are amongst the actions taken by the Welsh Government to support energy technologies in the Celtic sea.

Diolch, Prif Weinidog. And can I begin by welcoming the royal Welsh rural leadership group who are in the public gallery this afternoon?

Prif Weinidog, this evening, I have the immense honour of hosting a cross-party reception in the Neuadd on the Haven Waterway future energy cluster. It brings together the Haven Waterway's major traditional energy companies with new and exciting renewable developers, and the supply chain, to lead in decarbonisation. You'll be aware, Prif Weinidog, that I'm a big advocate for the opportunities presented to Wales from both the Haven Waterway and the Celtic sea, from floating offshore wind to tidal, wave and hydrogen initiatives, and even the progressive Celtic free-port bid. So, it does feel as if we're on the cusp of a green energy revolution in west Wales. So, given the strategic importance of the Haven Waterway and the Celtic sea, what assurances can you give to developers and groups, such as the future energy cluster, that Welsh Government and Natural Resources Wales will operate in a timely manner to ensure these opportunities aren't lost? Diolch.

Well, Llywydd, I thank Sam Kurtz for that question, and congratulate him on hosting the future energy cluster event today; I think it's a great event to have here in the Senedd. And I agree with everything that the Member said about the immense possibilities that renewable energy, including floating offshore wind and other projects in the Celtic sea, hold out for his part of Wales, but for Wales as a whole. And, in that, the Welsh Government is absolutely aware of the need to have a consenting regime that is robust, of course, as it must be, but is also streamlined, effective and enabling. I have been in discussions with NRW myself. I know the Minister has a meeting with NRW today to talk about the end-to-end marine licensing review, which the Welsh Government commissioned, carried out independently. The consultants said that there was nothing, fundamentally, that needed to be repaired in the current regime, but that there were ways in which it could be made to work more effectively. 

Developers have their part to play as well in all that. They have responsibilities to submit applications based on early engagement, best available evidence, and where the quality of the application itself doesn't hold up the process. Then, it is for NRW to ensure that they have the necessary resources in place to be able to deal with those applications in a way that respects the very important responsibilities they have as an environmental regulator, but also recognises the huge opportunities that renewable energy provides for Wales, and our contribution that we can make to tackling that great crisis of our time in global warming. 

I do think there's real benefit in thinking in a joined-up way about offshore wind off the west coast of Wales—the Celtic and Irish seas. I think the free-port bidding process offers an opportunity to do that. Now, as you can imagine, I'm confident in the quality of the Holyhead/Ynys Môn north Wales free-port bid for what it can offer in terms of growing that sector, as well as mitigation for post-Brexit losses that affected the port of Holyhead. But would the First Minister agree with me that the best way, perhaps, to ensure the growth of that sector, in a way that benefits the whole of Wales, would be to not only support our bid, but also to ensure a second free port, which could enable Celtic sea and Irish sea developments to work in parallel greater than the sum of their parts? 

Well, Llywydd, I must be careful in what I say, because there is a process and bids are being assessed objectively, as they must be, by civil servants both here in Wales and at the Department for Business, Energy and Industrial Strategy. I will just remind Members that the agreement we struck with the UK Government does not rule out there being two free ports here in Wales. One is the expectation, but two is not impossible, and the quality of the bids, and the assessment made of them, will, of course, be pivotal to deciding whether or not we're able to persuade the UK Government to go down that second route. 

I thank Sam for bringing this question forward, because the potential here in the Celtic sea is, of course, for west Wales, and for the whole of the south Wales seaboard as well, in terms of manufacturing, supply chain, and so on. And we have to have that rigorous consenting regime as well, to make sure this works. But, can I ask you, First Minister—? Learning from the past is important within this. We need the right port infrastructure, and, indeed, it would be great to see two bids going through from Wales as well. We need those local grid connections to actually bring this onshore, but what we've learned from previous iterations is that we need the National Grid to be strengthened as well. So, could I ask you what discussions you're going to have with the UK Government and the regulator about strengthening the market signals that say we must have this investment—Wales deserves its fair share of investment in the grid as well. We can do so much on our own, but we need the UK to step up as well.

Well, Llywydd, I think they're two very important points made there by Huw Irranca-Davies. We do need to learn the lessons of previous renewables. There is still no offshore wind industrial strategy out of the UK Government, despite the fact that we have been calling for one, and others in the industry have been calling for one. We do have concerns that, in the reliance on competitive processes to drive down the cost of projects, that will result in the cheapest supply chain solutions, rather than investing in the long-term value, which is to be had there for Wales by making sure not only that energy is produced in the Celtic sea, but that everything that goes into that has a local supply chain, creating jobs in the process.

As to the grid, I sometimes think, Llywydd, because it is called the National Grid, that people don't realise that this is a private company, listed on the stock market, distributing £1 billion every year in dividends to shareholders. Indeed, it distributed £4.5 billion in 2017 alone, directly into the hands of shareholders, when we know that there is not enough investment going into the vital connections that the grid provides. When I was in Ireland in the autumn, Llywydd, I took part in a round-table discussion with the foreign Minister of the Irish Government and developers interested in the Celtic sea from the Irish perspective as well. I was struck by what a major developer said there—that their greatest fear was that they would bring the energy all the way to the beach and then there would be nothing that you could do with it, because there would be no connection into the grid.

I saw an article just this week by Molly Scott Cato, the Green economist, saying that there are almost 700 renewable energy projects on hold across the United Kingdom, waiting for the National Grid to find them capacity. Well, my own preference would be to bring the National Grid under public control so that it was run in the public interest and where there was no leakage into private profit of the resources of that company. In the meantime, we work with the company and with others here in Wales. We were glad to see, last year, a move towards anticipatory demand in the grid system, glad to see that the latest energy Minister at the UK Government says that improving the grid is his top priority, in all his responsibilities. There is undoubtedly a need for a step change in making sure that the grid is fit not just for today, but for the future, so that when we put the Celtic sea to work, in the way that Sam Kurtz said in his original question, there will be the infrastructure there to take up the energy that will be produced.