Ken Skates considers how Wales must now craft a new future in low carbon energy generation
As I made my way to the 46th British Irish Parliamentary Assembly meeting in Donegal last week I began to think about Wales’ relationship with Ireland. It struck me that though we have an historic cultural connection, we don’t talk enough about the important and strategic economic relationships we have, being close neighbours on the westward edge of the European Union.
This was particularly apt given that the theme of this year’s plenary sessions was ‘Energy across Borders’ and the ways in which we can deliver new and lasting economic opportunities through the new energy infrastructure of the future.
Tomorrow: Future of Wylfa
Carl Clowes argues that the high electricity prices being demanded by the nuclear industry are being overtaken by renewable technologies.
We all know the big climate change and energy security challenges that lie ahead. In terms of electricity generation, Wales was responsible for 9 per cent of generation in the UK between 2004 and 2010. Total electricity generation in Wales had fallen 10 per cent over the period, driven largely by a fall in production from our traditional coal and nuclear plants. Once a world leader in carbon-based energy, Wales must now craft a new future in low carbon energy generation as part of wider Europe-wide approach.
This is a challenging and exciting area and holds the potential to create a prosperous future for Wales. It could not only make low-carbon energy not only a key part of our domestic energy supply, but a vital plank of our export sector too. After all, we all know the competitive necessity of such an approach. The elephant in the room at the sessions was the USA where already has wholesale energy prices are significantly less than in the EU area. Further, it is working its way towards energy independence through shale gas technology, which could make the energy competitiveness gap even greater. So the question is no longer just about how we keep the lights on, but how we keep our competitive position in the global marketplace.
As our First Minister Carwyn Jones said recently, “Energy is a defining issue for our generation”. How politicians, and industry can work together to realise a low-carbon future and help create a significant amount of direct and indirect jobs in the energy sector? This is an increasingly important question in the context of the evolving role of the EU and the changing geo-political landscape globally.
One of the interesting issues we discussed was the potential for a new European Energy Supergrid, possibly including North Africa, which could transmit electricity along high voltage direct current cables and allow countries such as Wales to export wind energy at times of surplus supply, but import energy from other green sources such as geothermal power in Iceland or solar power from the North African desert at others. To implement this kind of thinking would require huge long-term investment in both political and economic capital. It is another reason why our membership of the EU is critical.
However, it is clear that local communities need to benefit from future energy development if we are to get buy-in for big strategic projects. Any significant infrastructure initiatives, whilst crucial to the transition to a low carbon economy, will have an impact on communities themselves so there needs to be clear community benefits built into the dialogue, engagement and outcome of projects with a large spatial impact.
The clear message I took back for us here in Wales is that we need a good energy mix for the future. There is no silver bullet solution to our energy dilemma and so politicians will need to be bold and brave. Wales has significant assets in virtually every energy source:
- Significant wind resources, both onshore and offshore.
- Enormous wave and tidal energy potential.
- One of the best solar resources in the UK.
- Scope for greater biomass and hydro.
- Sites and expertise in the nuclear industry that we must seek to maintain and renew.
These impressive assets could be squandered if politicians and communities fail to utilise them soon. Experts stressed repeatedly that we cannot secure energy security or independence without including in the mix at least two of the following three contentious sources of energy: onshore wind, shale gas and nuclear energy.
We regularly hear politicians oppose some of these without offering a viable alternative to any of them. The reality is that without developing at least two of these we will rely increasingly on energy imported from countries run by undemocratic governments we often find morally repugnant.
So in thinking globally we will need to act locally. And this will require tough decisions. I hope carbon capture schemes will lead to the long-term relinquishment of more contentious sources of energy generation. Until this is realised, however, we need to do something to keep the lights on at affordable prices. Doing nothing is not an option, nor is turning our backs on all three of the most controversial forms of energy outlined above.
Of course maximising our energy capital will depend heavily on wider constitutional change. A few weeks ago the Welsh Government submitted evidence to the Silk Commission calling for powers in relation to large scale energy consents (other than nuclear power) to be devolved to Cardiff. It also called for Welsh Ministers to be given extended powers in marine matters to encompass the Welsh offshore area as a way of creating more integrated and streamlined decision-making for infrastructure developments.
It is predicted that 250,000 new jobs could be created in the UK by 2020 in the energy sector given our energy resources and significant academic and operational expertise. We could certainly generate far more than a proportional share of these new jobs in Wales. We need to get our eyes fixed on this agenda as one of the bigger strategic challenges Wales faces over the next half century and beyond.