Response of the Welsh Assembly Government to the report of the Economic Development Committee on Renewable Energy

I welcome the opportunity to respond to the Committee's Review of Energy Policy in Wales. I congratulate and thank them for the  depth of their enquiry and their valuable contribution to the development of  Welsh energy policy. 

The Committee has made six primary recommendations, which are embodied in the vision I have set out.

On carbon reduction, the Committee favours a zero carbon electricity system in the next twenty to fifty years. Last week I gave a clear lead on  and set an ambition to achieve a 20% reduction in carbon by 2020.  The development of renewable energy resources is integral to this.

But there needs to be a mixture of measures; embracing energy generation,   conservation, and efficiency. This is the  way forward which supports our industrial base and  complements our sustainable development duties.

The Committee recommends a benchmark for renewable energy production of 4TWh per year by 2010.  This is a realistic target. But we want to move on, by endorsing that, and building it into a 2020 benchmark, through the carbon reduction ambition I set out last week.  This would broadly equate to a renewable energy benchmark of about 7TWh for electricity production for 2020. And on the basis of wind replacing electricity from older, un-modernised coal fuel stations, will take us a considerable way to our CO2 reduction targets.

Renewable energy offers economic development opportunities in both urban and rural areas.  I am confident this can be done in a way that protects  environmentally sensitive areas and important tourist destinations. I have asked the Wales Tourist Board to consider how they could assist in assessing the effects of renewable energy and particularly windfarms on tourism. I want as many projects to proceed as possible with the full involvement of the local community.

Working with our partners will be an essential component in the progress of renewables policy in Wales.   This partnership approach is exemplified through the workings of the TAN 8 Group. The group is facilitating work to consider the spatial implications of renewable energy technologies and provide  planning advice on various technologies requiring different approaches.  We will set high standards and encourage best practice and exemplar projects.

In the short term, onshore and offshore wind are the technologies most likely to contribute.  We are exploring  options for repowering existing windfarms and we will be holding a seminar later this month to look at this further. The 2 offshore windfarms off  North Wales  have received approval.   At North Hoyle 80% of the onshore works have been completed and it is in line to be completed on schedule and begin operating from October 2003.   Rhyl Flats  is likely to proceed on a slightly longer timescale although it has been consented.   Scarweather Sands will be determined by the Assembly.

Future offshore is an exciting new area of development. We are working  with the UK Government and hope that further strategic areas off the Welsh coast can be considered.

Between 2010 and 2020, tidal stream , PV and biomass, and perhaps wave, are expected to begin to make significant contributions.

Biomass has the potential to be of  interest to Wales, but is currently  an area of  market uncertainty. We are investigating prospects  and already some biomass projects are being progressed with Objective 1 support. The Forestry Commission’s biomass capital grant scheme, part funded by Objective1 will, I hope, be a turnkey initiative. I am hopeful that structural funds will be effectively used to stimulate a wide range of renewable developments

Tidal stream, tidal barrage and wave power have considerable potential for Wales. A number of technologies are being supported, including the Pembrokeshire project by Tidal Hydraulic Generators Ltd. There is a real potential to attract this formative range of tidal technologies to Wales.  A number of developers are showing interest and the implementation of the Assembly Government's Innovation Action Plan which I launched yesterday,  will also help to support new technologies in the  energy sector. We are working  with the WDA to bring together the best ideas from the private and academic sectors.

In the longer term, special projects like the Severn Barrage may have tremendous potential.  Barrages , have environmental and economic implications and we see value in further studies  I will continue to press the importance of this on the UK Energy Minister.
Also in the longer term, energy systems based on fuel cells powered by hydrogen look attractive.   There are already research and development  opportunities becoming evident in Wales, and we will continue to look very carefully at every opportunity to put Wales in the forefront of hydrogen energy developments.

The Committee has recommended  development in the use of green energy in the Assembly estate and by other agencies and public bodies.
Latest figures indicate that a 100% green supply at Cathays Park and Cardiff Bay represents over 75% of the National Assembly for Wales’ total electricity consumption.  We will assess the feasibility of procuring clean electricity supply  throughout the rest of the estate.

The National Assembly for Wales has also developed a  “Greening Operations Policy and Action Plan”, which incorporates targets for reducing energy consumption.  This will form the basis of an Environmental Management System (EMS), which will be accredited to a recognised standard.  Although initially targeting the main buildings in Cardiff, we will aim to roll out the EMS  to other buildings in the estate where appropriate.

The Committee has recognised the association between renewable energy development and infrastructure strengthening. This is a key issue for the future development of distributed generation through renewable sources.  

This is one of a range of issues which has been made evident to me in the many meetings the First Minister and I have held with senior industry representatives. It is also an issue I have raised with the UK Energy Minister and will continue to do so.

The Energy White Paper sets out a number of actions being taken by OFGEM to help distributed generation, and we will of course be involved in these. We are talking with infrastructure providers and with the distribution network companies in Wales and OFGEM to establish a way forward.  As part of this work, we are  making a baseline assessment of the electricity infrastructures in Wales and their ability to accommodate increased levels of distributed generation.

The Assembly Government shares the Committee's views on the importance of planning , and sees advantage in holding the powers within Electricity legislation to determine large scale energy generation projects. You will know it is also an issue on which I have given evidence to the Richard Commission. We shall continue to press that it is anomalous that such powers are not within the Assembly, and we very much hope that the UK Government will share this view.  

Looking forward we are arranging a second Wales energy summit  to discuss with the industry strategic energy policy issues. Using the outcome from this, the Economic Development Committee’s excellent work, and our continuing dialogue with our partners, we are drawing up an action plan to implement our new energy policies. I can assure the Assembly, that our objective is to keep Wales at the forefront of renewable developments, in energy production and creating a new mainstream industrial sector.