Welsh Assembly Government: Response To Uk Energy Review

Yesterday the UK Government published the results of its review of Energy in
the UK.The Review report makes around 50 recommendations for energy in
the UK. The Welsh Assembly Government in general welcomes its findings
which have emerged  after a wide ranging consultation including submissions
from the Welsh Assembly Government. We will continue working closely with
the UK Government in the coming months on the detail  in particular  on
planning, climate change measures, and through Liaison Groups which will be
established.

I applaud the Review’s aims and the recognition that the challenge lies in delivering cuts in emissions without compromising our energy requirements and our economic ambitions.  We look forward to working  with the UK Government to ensure that opportunities for Wales to assist in delivery of the Energy Review aims are maintained.  

In the submission  I made to the Energy Review I reiterated our belief that addressing energy needs and energy consumption, as well as identifying economic opportunity should be at the heart of the holistic and strategic approach by the Welsh Assembly Government.   Our policies are aimed at creating the best environment to enable this to happen as well as meeting our wider environmental commitments on the wider environmental horizon.

I welcome the fact that the Review report highlights the need for a diverse and
secure range of energy generation in the UK.  Much of the attention has
inevitably centred on whether new nuclear power station plants are to be
given the go-ahead; but the  review is about far more than that.

I am particularly pleased to welcome the continuing strong support for renewable technologies. The proposals to reform the Renewable Obligation will provide a strong framework for all renewable technologies but especially providing the essential encouragement and support for the development of new technologies as we look to the future. Our sea and coastline offer great opportunities for marine renewables and this further support together with our full examination of the Welsh marine energy resource will, I hope, further encourage new projects in Wales.  

The review also recognises the importance of grid reinforcement and the crucial role of the planning system in facilitating the delivery of energy projects.  Our Technical Advice Note 8 (TAN 8), which is a step change in national planning guidance, is intended to facilitate the measured development of renewable energy with the commitment to facilitate grid reinforcement.   The Welsh Assembly Government has pressed for inclusion of further work to examine the scope for a Severn Tidal Barrage.  I am pleased therefore that the review recognises that this, the single largest renewables project in the UK, deserves further study. We intend to play a full part in taking this work forward to its next stages.

Coal-fired power generation is an integral part of Assembly Government energy policy and the Welsh energy mix.   Large-scale fossil-fuelled stations will remain the mainstay of electricity production in Wales in the medium term and therefore new high-efficiency coal and gas-sourced, and carbon capture and storage (CCS) technologies, could greatly assist us in fulfilling the Assembly Government’s sustainable development duties.  Pursuing these opportunities at the research, demonstration and full commercial levels should be a high priority.

I fully support the Review’s recognition of the vital role played by coal generation and its commitment to the formulation of a Carbon Abatement Technology (CAT) strategy.  This, combined with the UK Government’s promise to create the international legal framework for the opportunities presented by carbon capture and storage, has great potential,  particularly if ways can be found to capture carbon from existing power stations at reasonable cost.  I believe the Coal Forum proposed by the Review, which will bring together producers, power generators and other interested parties, will aid the long term interests of the UK coal industry.  

The Review identifies a major role for new nuclear development. I believe that sufficient other new non-nuclear electricity generation will come on stream in Wales over the next 10-15 years to make the pursuit of new nuclear build unnecessary in this timescale.   Projects  proposed in Wales include  major gas-fired stations located around Milford Haven based upon the LNG terminals now under construction;  a new gas fired plant at Uskmouth;  major proposals for biomass generation, for example at Margam,  and co-firing and massive investment committed to extend the life of  the Aberthaw power station.  With Wyfla nuclear power station due to close at the end of the decade, the Assembly Government’s Energy Wales is looking for alternative power generation to meet the needs of Anglesey Aluminium.    

With regard to the Review’s recommendation on nuclear power, we have long argued that any subsidy of this sector could seriously skew energy markets and de-stabilise investor confidence in other electricity production technologies.  Nuclear energy is a long established industry which should need no pump priming from government.  Hence, the Review’s recommendation that the UK Government provide no subsidy for any new nuclear programme is to be welcomed.  

The Review emphasises the importance of energy efficiency which is instrumental in meeting our energy objectives specifically reducing carbon emissions and contributing to security of supply as well cutting costs and increasing competitiveness.  The Review makes some valuable proposals for taking the efficiency agenda forward including changes to energy bills to make it clearer how much energy households use, real-time electricity displays in every home and smart metering. In Wales, as part of the drive to encourage technological improvements, we have also had discussions with manufacturers about the benefits of reducing the amount of energy used by electrical products when on standby.

In Wales, our Environmental Goods and Services Programme supports companies in the development of new processes and products.   “Design Wales” has been commissioned by the Assembly Government to work with a group of SMEs to analyse and design out energy waste and other resource inefficiencies.  This Welsh ECO Design initiative will enable SMEs to embrace energy efficiency while gaining a competitive advantage

One of the challenges that we face is raising the awareness of the benefits of energy efficiency.  Its profile will benefit from the requirements in the recently launched Low Carbon Building Programme which ties certain energy efficiency measures into eligibility in accessing funds available for renewable energy installations.  In addition, we sponsor Carbon Trust Wales, which offers awareness raising and training events at all levels

Applications for funding under the new EU structural funds programmes from 2007 will also require energy efficiency and renewable energy to be promoted.  A consultation on the draft Operational Programme will be published for public consultation later in the year.

We want to see a wide range of other technologies developed both at the large and small scale. We are making progress on biomass - especially in locally supplied heating systems for public sector buildings such as schools, leisure centres and the new Assembly building - and with wave and tidal systems utilising current EU Structural Funds support. In addition we already have substantial hydro power/pumped storage systems, with some limited potential for more.

The Review recognises the long term potential of  Microgeneration.   The Wales Microgeneration strategy has recently been the subject of a wide-ranging public consultation exercise.  We are looking for the most effective ways of:

 Policies which raising public awareness and knowledge;
 increasing the capacity of installation businesses and easing the installation process;
 further developing  a microgeneration sector in Wales, and  
 encouraging relevant technology developments.

The responses to this consultation are currently being analysed.  In addition, ways to enhance a more environmentally friendly transport system are under review.

The full details of the Review’s planning proposals have to be worked out. Planning is a devolved function and we will engage in dialogue with the UK Government on what is being proposed.  In the coming months we will also continue discussions with DTI on the transfer of  consenting powers.

Planning guidance in Wales promotes and facilitates the uptake of microgeneration and we are keen to support initiatives in this area where possible.  This has also been addressed by many responses to the Microgeneration consultation which we are currently analysying.

The Wales Transport Strategy, which will be published imminently for consultation, sets out the Assembly Government’s desire to encourage sustainable modes of transport and minimise the need to travel.  Some examples of good practice in Wales produce just a twentieth of the harmful emissions of a petrol or diesel engine and are significantly quieter.  We are supportive of greater use of bio-fuels and hybrid vehicles, and will work with others to see how best their uptake can be promoted.
We are also working with the automotive industry and others to support to a range of developments, including the NARO vehicle project which is both fuel and congestion friendly, the Q-electric vehicle project and we are working with Corus and others on the development of gas/diesel blend technology which will result in a quieter and cleaner environment. We are also engaged in commissioning research into low emission technologies and investigating the provision of alternative fuel infrastructure in Wales. In addition, there is a project with the University of Glamorgan which focuses on the development of a hydrogen bus.

Our detailed energy policy aspirations are highlighted in the Wales Energy Route Map, which has been through its main consultation stage.   The Route Map will now be finalised this year with continued emphasis on diversity of supply and strong stakeholder engagement.  The UK Energy Review recognises that the latter will only be achieved if there is  long-term investor confidence in each of the diverse components.    The Review goes some way towards achieving these aims but we are still at the start of a long process of identifying the winning energy technologies for the UK in the twenty first century.