Carwyn Jones should head up Wales’ energy strategy

Hywel Lloyd urges the First Minister to motivate a long-term approach to Welsh energy production and conservation

The news is full of energy related stories – rising energy prices, freezes and windfall taxes, the closure of old coal and nuclear plant, and the many new investments, from wind and solar to nuclear and potentially shale gas.

Sadly, the great majority of these stories, even when they occur in Wales, bare little Welsh imprint as much energy policy, especially for investment and incentives, lies with the UK Government, or further afield with the big multinational energy companies that dominate UK generation and supply.  Our present input is restricted to planning policy, for example. TAN 8, and the potential that might lie in the Future Generations Bill.

Of course, greater devolution of powers could change this, but they might not. Either way I would suggest Wales could do more regardless of the nature of the powers held by the Welsh Government.

I’m assuming that we would want to have more of a say in how energy works in and for Wales – the corollary being it will require a greater effort, perhaps a little aggression and certainly changes to a few consensus views. Not least it will need a determined new strategy, led from the front by First Minister Carwyn Jones.

More of a say should mean a less extractive approach to energy, so that more benefits directly accrue to the people and businesses of Wales in terms of jobs, security of supply, less volatile bills and more opportunities to add value to the supply and use of energy.

In practice Wales has to think harder and more holistically about how it uses energy, and where that energy comes from. We also need to work harder to own more of that energy infrastructure.

Working with a number of local authorities across the UK I have been exploring with them their use of energy– how much they use and on what, and where it is or could be supplied from. In some cases these discussions are prompted by a concern about climate change. In others the main concern is fuel poverty. In yet others it is about resilience – in the broadest sense of helping their place to thrive, or even to continue.  That often means getting the right balance between jobs and the local economy, and the wider impacts of using energy.

In each case we have found it important to take a holistic view of what was possible, often with the help of an external provocateur. This has helped us identify underused assets, or what were once seen as liabilities that actually have energy potential. For instance, the environmental services of one city collected 3,000 tonnes of grass cuttings a year. Twenty years ago that might have gone to landfill. That is clearly not an option now with landfill tax at £72 per tonne, which would mean a disposal cost of over £200,000. In practice they currently send the cuttings to composting with a contractor. But that still costs about £50,000 a year.

What this authority has now have realised is that technology such as Anaerobic Digestion (newish to the UK but otherwise proven in Europe) can convert those cuttings from ‘waste’ to energy – in this case 150,000 therms of grass-gas.  In the week of 14 October natural gas was trading at about 66pence per therm, making the grass-gas worth almost £100,000.

How many public authorities in Wales produce this much renewable bio-energy from their grass cuttings each year? How many still pay for composting, or worse landfill as their means of disposal?

And, of course, we ought to think about the potential of the wood waste generated by day-to-day management of public urban trees, readily convertible into renewable bio-mass.

Then there is the potential of food wastes, processed by Anaerobic Digestion. And also the potential of otherwise wasted energy, such as heat produced by factories. In one authority area the exhaust gas from a heat treatment process left the factory roof chimney at over 800o C. They have calculated that the factory produces enough waste hot air to heat 9,000 homes a year.

Of course, Wales still has some heat based industrial processes.

Even if there wasn’t a review of local government in Wales, the geography and geology mean the right scale for such a place-based energy conversation is almost always going to be a bigger scale than a single authority area. It could be at the scale of the recently announced Cardiff (and associated authorities) ‘ city region’; it could be south-east, south-west, north and central.

In doing so we should reflect the different needs and opportunities of these areas, not least the impact of being off-grid in some places, the nature and density of urban environments, and the different opportunities that occur in coastal or upland areas. Some of the differences will be down to what opportunities or energy assets exist locally, from the coastal assets of wave and lagoon, to the in-land opportunities of solar.

We should also consider Coal Bed Methane and shale gas, with the important provisos that they are regarded as transition fuels, deployed as a part of wider schemes that promote bio-gas, and that significant ownership is retained in Wales.

Coal Bed Methane helps the transition to bio and renewable fuels, such as from grass cuttings and food wastes. Shale gas ensures some of the wealth builds Welsh economic activity rather than being extracted for the benefit of others.  And rather than help provide ‘Ferraris for the Qataris’, as a colleague once put it, we could use some of the Welsh gas infrastructure to provide ‘Health for the Welsh’.

Much of the energy ‘news’ is about electricity.  However, electricity supply is less important than most people think. It is a relatively small part of our energy mix (a quarter), responsible for a smaller share of emissions, and probably not the answer to the future heating of our homes, given how much heat demand fluctuates between summer and winter (by a factor of five).

The most pressing energy issue for Wales is the dreadful heat inefficiency of our housing stock. Too many people pay too much to heat their home. Too much energy is wasted through poor insulation, design or build, and worse – every year many people die unnecessarily.  And more Welsh households are predicted to be fuel poor as prices rise.

Over time a significant energy efficiency programme for all Welsh homes would reduce the need for gas by 10, 20 or even 30 per cent. Moreover, such a programme can be delivered using local labour and skills.

What we need is a national Welsh effort to work with local authorities alongside the big energy companies to persuade them to deploy their Energy Company Obligation to a greater extent in Wales. This is is the energy efficiency programme, introduced into at the beginning of this year, that replace two previous schemes, the Carbon Emissions Reduction Target and the Community Energy Saving Programme. It places legal obligations on the larger energy suppliers to deliver energy efficiency measures to domestic consumers. It operates alongside the Green Deal which is designed to help people make energy efficiency improvements to their homes by allowing them to pay the costs through their energy bills rather than upfront.

Improving the local supply of heat and making sure it is used efficiently could create between 10,000 and 20,000 local jobs in Wales. That would give a significant boost to the Welsh economy while improving quality of life for many. The First Minister should convene a meeting of all those involved with energy conservation, starting with the local authorities and main energy companies, to devise a national implementation plan.

Hywel Lloyd is an independent policy advisor. He previously advised both Hazel Blears MP and Hilary Benn MP in the 2007-10 Westminster government.

4 thoughts on “Carwyn Jones should head up Wales’ energy strategy

  1. Once again another common sense report via the IWA.
    At present, unfortunately, we seem to have a National Government in Wales who seems preoccupied with commenting on spending cuts and lack of powers. However, as most people in Wales would agree, as the article suggests, they should be using the tools available to them in creating a viable Welsh renewable energy industry. This could then be used to assist the current energy users in Wales, by cutting their costs and, of course, then make Wales more attractive for other employers to invest and locate here.

  2. “Much of the energy ‘news’ is about electricity. However, electricity supply is less important than most people think.”

    Absolute rubbish! Without electricity non of the other heating technologies involving process control or pumping actually work. And neither do many of the computerised systems we rely on for nearly everything… And don’t get too ill during a power outage – hospital stand-by generators are pretty good but not infallible…

    With policy advisers this logical we might as well go back to living in caves!

  3. Shale gas as an intermediary is a mistake. It risks leaveing us a legacy of environmental damage and will take a great deal of investment that could go elsewhere. Renewables are seeing only low levels of research support but then perhaps that links to them possibly not providing so much income now through licence sales.

  4. Economics? What is the cost in energy and cash of transporting urban tree cuttings to a dedicated power station? Would burning them pay those costs back?

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