How Welsh energy is being spirited away

Madoc Batcup says we should control our own renewable energy resources

Madoc Batcup is a Director of Wales in London and a barrister working in financial services.

The UK government’s consultation on the energy potential of the Severn estuary and the recent announcement of the Gwynt y Môr wind farm off the north Wales coast has focused attention on the degree to which Wales’s renewable energy resources are being exploited for the benefit of others.

This has certainly been the case in the past. Although the exploitation of coal and slate created jobs for hundreds of thousands of people, the great majority of the profits were spirited out of the country by the mine and slate quarry owners. The magnificent edifices of Cardiff and Penrhyn Castle stand as testimony to the enormous wealth that Wales and its people generated for others.

Wales’ water has been exploited in much the same way. The drowning of the Tryweryn valley in 1965 to provide water for Liverpool became a turning point in the realisation of the way in which the resources and people of Wales were subject to the priorities of England. In one of the ironies of the devolution settlement, the Government of Wales Act 2006, which bestowed additional powers on the National Assembly, specifically provided the Secretary of State for Wales with a veto in respect of water resources, their supply and quality to England not once but three times (sections 101, 114 and 152). This will ensure that even after next year’s referendum on more powers, the supply of water from Wales to England will remain a matter for London not Cardiff.

The UK government is now undertaking another project to exploit Welsh resources, and on the largest scale since the 19th Century. This time it will be taking the benefit of the salt water resources of Wales rather than its fresh water, and in a way which will dwarf Tryweryn in its implications for the people of Wales. The potential for producing electricity from renewable resources from the offshore waters is huge, and comes from two sources. The first is the exploitation of the wind through offshore wind farms and the other is the exploitation of maritime energy through tidal and wave generated power.

The UK government has recently made an announcement in respect of a huge new offshore wind farm off the coast of north Wales called Gwynt y Môr. This has a planned capacity of 576 Megawatts – equivalent to about 60 per cent of Wylfa’s capacity and sufficient to supply 400,000 households.  This is about 8 per cent of Wales’ total current electricity production.  An even bigger wind farm, part of which is in Welsh waters, is planned further out into the Irish sea. This will be up to eight times the size and capable of providing electricity for three million households – that is, far more than the entire population of Wales.  Another large wind farm is also planned for the Bristol Channel.

In addition the UK government has been consulting on the generation of electricity through tidal power in the Severn estuary, and is now reviewing a shortlist of proposals. The amount of electricity that could be generated in the Welsh waters of the Severn estuary alone could be enough to supply another three million households or more. Yet in the economic consultation paper Wales was not mentioned once.

Does Wales need such an enormous increase in its capacity to generate electricity? Even now it exports about 20 per cent of the electricity it generates to England. In addition a new gas fired power station at Angle in Pembrokeshire has been approved. This is due to be completed by late 2012, and provide 2,000 Megawatts of electricity. It will be the biggest and, according to its developers, one of the most fuel efficient of its kind in the UK.  Another 800 Megawatt gas fired power station is nearing completion at Uskmouth.

The hillsides of Wales are increasingly being covered in wind turbines and there are proposals to build a new nuclear power station at Wylfa and many other electricity generating projects as well. These huge new energy facilities are being built to feed England’s need for additional electricity, not our own.

Who benefits? The new Gwynt y Môr wind farm is owned by three German companies: Siemens, which will be building the turbines in Europe; RWE the German power company; and the municipal utility company of Munich, a publicly owned body that believes in renewable energy.

Who is the owner and who decides? The Crown Estate owns the seabed around the UK out to the 12 nautical mile territorial limit, and 65 per cent of the Welsh foreshore. It also owns the mineral rights on or under the seabed from the coastline out to the edge of the UK continental shelf, not including oil and gas. The Crown Estate not only owns the seabed of Wales but decides on who can have the licences to exploit them. The Welsh Government has no planning powers for power stations above 50MW. Electricity generation, transmission and supply of electricity are also specifically excluded from powers that would be transferred under the forthcoming referendum.

The Crown Estate is a quango created in 1961, whose excess profits go to the Treasury. It is this body, together with other departments in Whitehall, which decides how the natural resources should be parcelled out, how they should be exploited and who should get the benefit. Energy sales from these power stations are worth many hundreds of millions of pounds a year once their development costs have been paid off. Ownership and control of these assets would transform the finances of the Welsh Government and provide a springboard for the development of new renewable energy job opportunities in Wales.

Wales is being stripped bare of its natural resources for the benefit of England’s power needs. The power installations in the Severn estuary are designed to last for 120 years. Once they have been sold off by the British state the ability of Wales to benefit from its own natural wealth will have been removed for many generations to come. The Crown Estate and the Department of Energy and Climate Change are even now selling the future of Wales for England’s current financial needs, and the consequences are extremely far reaching.

Ownership of maritime renewable power resources is the single most important issue facing Wales today. The value of these resources is capable of transforming the Welsh economy. It would enable the Welsh Government to decide where, when and how to develop its energy resources in a way that would benefit Wales most. It would mean that the Welsh Government could decide whether it was necessary to build another nuclear power station or additional fossil fuel power plants.

Effectively exploited, Welsh maritime energy resources, could make us self sufficient in renewable energy over the long term. Their control by the Welsh Government would enable it to shape the opportunities for developing tidal and wind power in Wales much more effectively. Moreover, would provide it with an important source of income in the future without the need to increase in taxes.  However, if these resources continue to be sold out to private companies by an undemocratic London quango and the Department of Energy and Climate Change, their benefit to Wales will be lost for generations to come.

The Crown Estate’s property rights in respect of Wales can in principle be transferred to the Welsh Government relatively easily.  Section §4.1 of the 1961 Act provides (my underlining):

“s.4 (1) For the development, improvement or general benefit of any land of the Crown Estate, the Commissioners with the consent of Her Majesty signified under the Royal Sign Manual may dispose of land, or of a right or privilege over or in relation to land, without consideration or for such consideration as they think fit, where the land is to be used and occupied, or the right or privilege is to be enjoyed –

(a) For the purpose of any public or local authority, or for the purposes of any authority or person exercising powers conferred by or under any enactment for the supply of water;”

The Commissioners of the Crown Estate could therefore be ordered to transfer their rights in Wales to the Welsh Government, as a public body, for no consideration under this provision. The Welsh Government would also need to have planning powers of large power stations transferred to it from the Department of Energy and Climate Change.

As a matter of urgency the Welsh government needs to demand the transfer of ownership and control of Welsh maritime seabed resources as well as general planning powers for electricity generation as soon as possible. Otherwise Wales may become little more than power station for some of England’s electricity needs for generations to come, with precious few jobs and little benefit to show for it.

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