A plea for common sense

Jane Davidson says energy policy needs less politics and more common sense.

The UK Government has an unusual relationship with energy policy and delivery. On the one hand, we have the most liberalised energy provision in Europe, with energy generation having been sold to the market two decades ago – mostly to other countries’ national providers; on the other hand, it retains as much central control of energy policy as possible. Its aspiration, as it told the Silk Commission, which I was a member of, was to have ‘a single market and regulatory system’ and a ‘unified planning regime’ but in reality that disappeared in a puff of smoke when differential devolution of powers to Scotland, Northern Ireland and Wales took place in 1999. Interestingly, in the fifteen years since devolution there has been no serious discussion about how to optimise energy generation in the devolved context.

This week on Click on Wales

This week on Click on Wales we’ll be asking what type of energy policy we want for Wales.
This comes ahead of the IWA Energy Summit 2014 which will be held this Wednesday at Butetown Community Centre, Loudon Square, Cardiff.

The four countries of the UK now have very different energy consenting powers. Scotland has seized the opportunity with a clear policy focused on renewable energy, using its consenting powers and the ability to offer Renewable Obligation Certificates to developers. It has ambitions to be providing 100% carbon neutral energy by 2020 and already produces 26.9% of the UK’s renewable energy.

Wales by contrast only produces a 7.9% contribution. It has the least logical energy settlement of the four countries and there are probably only a handful of people outside politics who know that Wales’ energy powers are up to 50 megawatts on land (about 10 big turbines) and only 1 megawatt at sea (not even a demonstration project) unless the applicant has chanced upon the rather cumbersome Transport and Works Act where any project of any size would fall to Welsh Ministers. The current settlement is complex and difficult and since the key driver of the development of energy infrastructure projects is a long-term and stable regulatory environment, it is understandable that the economic opportunities from renewable energy, which Wales has in abundance, have gone north to Scotland.

Energy is contentious. Every source has a negative aspect, whether that be visual (wind/solar), toxic (nuclear), contribution to climate change (fossil fuels) or untried (fracking). As I write, there have been two key announcements today; the European Commission agreeing to support Hinckley C with its 35 year guaranteed funding package and the Austrian Government’s challenge of the same on economic and ecological grounds to the European Court of Justice. Yet, as a society we continue to want more energy. Whilst we might understand intellectually the consequences of continued fossil fuel burning on our current and future climate, warnings about future supply shortages fall on deaf ears to a generation brought up on electrically charged technology.

As a commission, we were particularly interested in Welsh opportunities for renewable energy generation but found that whilst Wales has great scope to develop further its energy resources, current arrangements on energy consents appear to have no rational or principled basis. These are important findings as they demonstrate that not only is there is a major economic opportunity for Wales that could contribute towards the wealth and resilience of the nation, but that the current arrangements are irrational and require urgent attention.

What was less clear was what to recommend. Options ranged from devolving all energy consenting powers to restoring them entirely to Westminster, with changing the threshold of devolved consents or fully devolving renewable energy consents falling in between. As a Commission made up of all these views, we had to navigate our own way to an agreed outcome. Returning powers to Westminster was neither practicable nor desirable as Scotland and Northern Ireland would have retained their additional powers. Devolving consents fully to Wales was rejected largely on capacity and expertise issues. While we were attracted to recommending that Wales had total authority over renewable energy, we were concerned that it would be difficult to change the balance of generation by controlling only one type of energy. Finally we were all able to come behind the idea of a threshold.

The threshold of 350 megawatts we suggest will increase Wales’ powers sevenfold. Bringing most renewable power stations within a Welsh system was also the preference of the people of Wales, as identified in our public research. But probably what clinched the level was the opportunity to recommend that Wales should determine projects like the innovative Swansea Bay Tidal Lagoon project currently in the system. Wales has been an energy leader in the past and can be again in the future with newer, greener technologies, but until the consenting process is addressed, it will not reach its full potential. Perhaps the time is right for a little less politics and a little more common sense.

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