Wales could be a leader in renewable energy but clear strategy for the sector is missing, says report

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Wales could be a leader in renewable energy, with strengths in onshore and offshore wind, solar, wave and tidal energy, and new potential in floating offshore wind, but a clear strategy for the renewable energy sector is missing, according to a new report by the Welsh Affairs Committee.

As a result, the Committee recommends a specific ‘Ten Point Plan’ for Wales should be developed and published this year.

Stephen Crabb MP, Chair of the Welsh Affairs Committee, commented on the report: “With the UK hosting COP26 in November, there has never been a more important moment to recognise the potential that exists in Wales for much greater renewable energy output.

“It is clear there is no shortage of ambition within Wales but we need to see a clearer strategy from UK Government if Wales is to capture all the opportunities that are emerging.

“Our Committee has identified constraints ranging from skills gaps to grid connection issues, and seabed licensing to funding disparities. Overcoming these hurdles will require the UK Government to work closely with the Welsh Government with urgency and purpose.”

According to the Committee, a current funding gap between innovation funding and the Contracts for Difference (CfD) scheme also risks holding back wave and tidal energy projects.

The Committee argues that failure to address this funding gap would risk impacting development for a sector which could generate £4 billion to the UK economy.

Further, the UK Government should explore re-introducing generation tariffs to the Smart Export Guarantee, building on the success of Feed-in Tariffs which attracted investment to small-scale renewable electricity generation.

The Committee believes that if the barriers holding back renewable energy are overcome, then there is significant potential for an interconnector given the renewable strengths of Wales, with the nation ‘exporting energy rather than curtailing it.’ This could not only export renewable energy to the rest of the UK, but also further afield.

The Welsh Affairs Committee’s recommendations include:

  • The Crown Estate should continue to work proactively with developers to ensure that adequate seabed leasing rounds be offered on a regular basis in the future. There should be alignment between timeframes of The Crown Estate for its leasing rounds and the timeframes which underpin developers’ investment decisions.
  • The UK Government must address the funding gap for emerging marine technologies or risk negatively impacting their development. UK Treasury ministers, with Welsh Government ministers, should meet with representatives from the marine energy sector to investigate the feasibility of introducing Innovation Power Purchase Agreements.
  • A Wales-specific Ten Point Plan should be developed that provides a detailed route map and aspirations, including in terms of job numbers. Parliamentary time should be set aside for this Wales specific plan to be debated by MPs, and be published by the end of the year.

The full ‘Renewable energy in Wales’-report is available on the UK Parliament website.