Energy

Today I am setting out my vision of Wales becoming a global showcase for sustainable clean energy production and energy efficiency, building on my statement of 30 April last year; and against the background of the UK Energy White Paper, which the UK Government published on Monday.  

Our aim is to secure the right mix of energy provision for Wales to take us forward through the next two decades minimising our impact on the environment. Especially  by strengthening our renewable energy production, through a greater focus on energy efficiency and conservation and by seizing clean coal  and LNG opportunities.

We believe we have the right formula in this energy mix which will mean that we have secure, diverse and affordable energy whilst meeting environmental commitments without any new nuclear  power generation  in Wales in this time frame. And . simultaneously enhancing the considerable associated economic development opportunities.

Our policy priorities focus on five equally important strands:

Pursuing now, much greater energy efficiency, including small scale on-site chp and renewables plants, in our domestic, business and public sectors, working in partnership with local authorities.

Energy conservation offers special opportunities to meeting our sustainable development ambitions in Wales. However achieving these goals will require us to ensure that our energy efficiency, fuel poverty and associated economic development issues are addressed in partnership and in a very a coherent way.  .

Much is already happening in Wales. In the domestic and public sector, through programmes such as the Home Energy Efficiency Scheme.   We also have strong Energy Saving Trust and Energy Efficiency Commitment   activities supporting the commitment of the Assembly Government to energy conservation and attacking fuel poverty.  Carbon Trust Wales is developing a powerful suite of initiatives for our business and public sectors (NHS Wales/Assembly estate).  Our local authorities are taking an increasing interest, and bodies such as the WDA and NHS Wales are looking to be exemplars in energy efficiency best practice.  The new Assembly building in the Bay is to be built to the BREAM standard of excellence and we are seeking a transfer of some Building Regulation powers

However, we need to scale up and better integrate our efforts under the guidance of  an energy conservation strategy.  We are therefore proposing that a Wales energy conservation action plan be developed.  

This plan will include an enhanced role for local authorities and their energy managers and related officers.  There will be greater pressure on all our agencies (ideally with the support of the new Assembly Construction Forum) to be best practice exemplars.  It will encourage the implementation of green procurement plans and related conservation practices and skills in the private and public sector as outlined in our new Business and Environment Action Plan.  

We will try to devise effective specific schools and Assembly estates initiatives covering both building improvements and educational messages.    A range of planning related initiatives will also be introduced, including enhanced efforts to encourage best practice by the private house building sector in Wales.

a strong drive in Wales now, against appropriate benchmarks, for a sustainable mix of renewable energy developments.  

Wales already contributes 3% of its total electricity production of about 30 terra watt hours a year from renewable sources, primarily through on-shore wind and hydro. There are plans in the pipeline for more projects through a variety of renewable technologies. However, Innovation and R&D is essential to the future of the new technologies and the WDA and the Carbon Trust in Wales will be integral to developing these areas. The Carbon Trust for instance has just announced R&D projects in Wales of around half million pounds.

The Economic Development Committee’s recent report on renewable energy recommends renewables benchmarks for 2010 which look to be reasonable.  I will be giving a full response to the Committee’s conclusions next week.

In relation to planning policies, we want to see an integrated approach, that brings together views of developers, local authorities, community groups and our economic development and environmental agencies.   The Technical Advisory Group is developing detailed guidance in what is known as TAN 8. The  group is already demonstrating the greater willingness of these parties to engage in policy dialogue. The aim is to ensure that any developments will not impact on areas of high quality landscape but that equally the best projects demonstrating significant local benefits and best practice will be positively supported.

In the short to medium term, onshore and offshore wind  are the technologies most likely to contribute substantively to our ambitions.  We already lead the UK in the development of onshore windfarms and are closely involved in the exciting new offshore development; there are two offshore windfarms already consented off the North Wales coast and we are working with the UK Government on the next stages of off-shore development.

Tidal stream technology and biomass provide prospects for further development and we are working with our partners to drive this forward . There is real potential to attract a formative range of tidal technologies to Wales. On biomass, we are continuing to examine ways of developing this sector, but it is still an area of some uncertainty.   It is our intention to extend our Woodlands and  Biomass Strategy’ into a comprehensive biomass  development policy.

We believe in the longer term, that projects of the scale of the Severn  Barrage  could be desirable. It has enormous environmental as well as economic implications. We believe however, that further feasibility work is desirable.

Encouraging energy infrastructure  improvements and pressing for reform of electricity trading arrangements.

As North Sea gas supplies diminish  we anticipate an increasing role for liquefied natural gas (LNG) transported internationally by sea  with the benefit of producing a strengthened gas transmission infrastructure in Wales. There are currently two major projects which would make West Wales the LNG centre of the UK, thus reversing the situation where this area has been at the end of the energy network. We are also undertaking an analysis of the grid in Wales to provide us with a focus for seeking strategic strengthening.

The energy industry in Wales has revealed strong disquiet with current electricity trading arrangements. These concerns centred on financial confidence in the industry as well as the possibility of significant further curtailing of electricity generation in South Wales. I shall be discussing this further with the industry.

Encouraging now, the production in Wales of electricity from new clean coal power stations.  

There are enormous amounts of coal reserves in Wales and the technology now exists to use this resource in a more  environmentally friendly  way.  A 450 MW clean coal  project is currently seeking approval and could  secure nearly one thousand  coal jobs in South Wales with the possibility of the creation of many more if coal gassification is a commercial success.. Coal gassification is an exciting technology which holds the promise of supporting many jobs  while lowering emissions . We are firmly  supportive of further R&D work on the sequestration, or underground storage, of carbon which could reduce the carbon emission from clean coal plants to zero.

We must not forget that trapped within the coal resource, there are copious quantities of methane.   We believe more could be done to exploit this as a fuel and we will commission work to examine the available options.

the setting of achievable  and measurable carbon dioxide reduction targets for 2020.
Our energy intensive industries face potentially serious consequences if carbon reduction targets are over ambitious. We have a higher preponderance of industrial activity than the UK average and the most energy intensive industries are often concentrated in the more deprived areas.  Wales produces around 12. mega tonnes of carbon  through our carbon dioxide emissions in a year and we believe the measures I have outlined are capable of reducing that by about 20% or 2.5 mega tonnes of carbon by 2020.

Transport is likely to remain predominantly oil-based until at least 2020. Through to 2020, improved vehicle fuel efficiencies through the development of hybrid vehicles and in the longer term, transport systems based on fuel cells powered by hydrogen, look attractive.  We will be observing progress closely and seizing all opportunities to put Wales in the vanguard of hydrogen economy


This, then is our vision for the development of a unique energy strategy for Wales. I  believe it sets us firmly on the path towards a low carbon future and  provides a coherent and compelling   medium-term strategy which fits perfectly within our sustainable development duty..  

It eschews the nuclear option, but should put Wales in the forefront of clean energy generation which is more than sufficient for our needs and which drives forward a strong energy conservation ethos across all our public and private sectors.

We have already started work on a number of important initiatives that will help inform and support the implementation of this strategy.

I intend holding a second energy summit with the energy industry and its major customers later this year, to discuss the issues in this strategy and to reflect on the issues covered by the UK’s White Paper.