Future of Energy in Wales

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Adam Price: My hon. Friend makes a strong point, as microgeneration and community-based schemes have an important part to play, particularly in rural areas. Combined heat and power is also an important factor that we need to employ, certainly in more urban areas, and I shall address that point shortly. Ground source heat pumps, which have been pushed in Sweden, can be used effectively in new housing developments, so an array of technologies can be used. It is good to see that the proportion of electricity generated from renewable sources in Wales is rising at a rate of 1 per cent. a year, which is considerable. If we continue on that path, we might even meet the target by 2010 or at least come close to it, which is very positive.
We also have the potential to use offshore wind, which is a considerable resource and one that is rising as technology improves and as engineers are able to take platforms further out to sea. One issue is that we currently use alternating current, and there is a significant distribution loss with longer connections. Theoretically, it is possible to use direct current, so that there is no loss whatsoever, and that would allow us to build offshore wind turbines possibly hundred of miles out to sea. That is on the distant horizon.
Mr. Jones: The hon. Gentleman mentions advances in technology that would permit the construction of wind farms further out to sea, but when the Select Committee considered that in its inquiry, it found that one of the major problems would be the constraints on shipping lanes, especially in heavily used areas such as the Irish sea. Shipping channels have to be kept free, and therefore it is more likely than not that wind farms will have to be built closer to the coast, rather than further away.
Adam Price: I am not an expert on the shipping lanes off the Welsh coast—I will have to look further at that—but I do not think that it is beyond the wit of man to deal with that. After all, we made the shipping lanes, so if new needs become paramount, it should be possible to find not only a technical solution, but a geographical one.
I am glad to see that the Crown Estate has announced three indicative zones for new offshore wind sites off the coast of Wales. Notwithstanding the fact that environmental concerns surrounding Cardigan bay need to be looked at carefully, the south-west and the north-west of Wales, in particular, have great potential for offshore wind farm development.
Marine power technology will be significant in the 21st century and has a large potential, as 44 per cent. of the world’s population live within 150 km of an ocean coast. Wales is well positioned for that, as the hon. Member for Preseli Pembrokeshire said. Lunar Energy has announced what could be the first tidal energy farm, as there is currently a competition. That farm will to be built off the coast of Pembrokeshire as a test construction, but it will produce enough power for about 5,000 homes. Marine Current Turbines is planning something similar off Holyhead. The Wave Dragon development has been attracted to Wales from Denmark, which was a pioneer in that area, so it is good that Wales is also beginning to develop a reputation. A wave energy converter is being developed, so interesting and great things are happening in Wales.
The largest biomass plant in the world is being built in Port Talbot, and it will deliver power to over 500,000 homes. We need to realise how well Wales is beginning to do in relation to the renewables agenda. We might still get the first tidal lagoon in the world. The Chinese have expressed some interest, but we could still build it in Swansea bay. That was first mooted in the 1960s; many of these things go back many years. My hon. Friend the Member for Meirionnydd Nant Conwy referred to hydro power, and the fuel cell was invented by a Welsh engineer, so we have been there for many years and now is the time to capitalise on some of that expertise and on our natural resources.
I have read the Welsh Affairs Committee report, and it is a shame to see that Whitehall has dragged its feet and prevaricated over the tidal lagoon project, but let us hope that that is behind us now and that, with a feasibility study, it will be possible to move on to that exciting prospect in Swansea bay. That brings us to the Severn barrage. The hon. Member for Brecon and Radnorshire referred to the report by Frontier Economics that showed, based on its figures at least, that the large barrage project—we should not forget the smaller project, which has less environmental impact associated with it—would appear to be more expensive than other renewable alternatives that are available currently. That is the debate that we must have.
The argument made by the right hon. Member for Neath could take us down a dangerous route by saying that climate change trumps all other considerations. Climate change is the biggest issue of our age, but that does not mean that there are no other environmental considerations. For example, trees are great as carbon sinks until they reach a certain age. After a tree is over 50 years old, it begins to emit carbon dioxide in some cases. Should we therefore cut down all trees over 50 years of age? No, that would be disastrous for woodland and habitat in Wales. We have to be careful; climate change is a key concern, but other legitimate environmental considerations must be factored in, and we must take a balanced view of them all.
Mr. Jones: The hon. Gentleman makes an important point about trees and the fact that they are natural carbon sinks. Does he agree that it seems perverse that the wind farms that are identified for the strategic search areas appear to be almost exclusively on Forestry Commission land?
Adam Price: I walked into that one, did I not? As I understand it, the Forestry Commission maintains that those sites are being cleared as part of its natural forestry management and no additional forestry is being lost as a result, but I am not an expert; I can only read what is being said by the Forestry Commission.
Mr. Roger Williams: I am never one to underestimate the power of a conspiracy, but I do not think that a single tree has objected to a wind farm proposal yet. Wind turbines and trees seem to live harmoniously together.
Adam Price: I am not so sure. If trees had votes, they might vote Liberal Democrat; they might vote Plaid Cymru, but I think that I should move on.
Mrs. Cheryl Gillan (Chesham and Amersham) (Con): Will the hon. Gentleman give way?
Adam Price: Of course, the tree is the symbol of the Conservative party.
Mrs. Gillan: I think that it is a sessile oak in the case of the Welsh party. I hope that the hon. Gentleman’s guarantee is correct and that such proposals will not reduce our forestry in any way, shape or form, although the number and size of the projects that have been put out to licence would decry that. As his party is part of the Labour-Plaid Government in Cardiff bay, will he tell us what price has been bid and paid to the Assembly for those sites? Does he agree that selling the licences on those sites, when the power actually rests with Westminster, is at best an interesting prospect for those people who are buying the licences?
Adam Price: I am looking to the officials in the corner. I do not have the information to hand, but I am happy to write to the hon. Lady. Despite the strong potential for renewables, the strong start that we have made and the laudable carbon emissions target, we are still a poor performer. That is part of the legacy of our past. We are one of the worst-performing countries in the EU for emissions in terms of carbon intensity; only one country is worse than Wales: Estonia. There seems to be a contradiction between the different energy policies in Wales: the energy policy of the Welsh Assembly Government on the one hand and the energy policy of the UK Government in Wales on the other.
For example, the consents for the gas-fired projects in Pembroke and, to some extent, for the biomass plan in Port Talbot should have required the use of combined heat and power—that was a tremendous lost opportunity, but it may be recoverable. The Pembroke plant, to which the hon. Member for Carmarthen, West and South Pembrokeshire referred, will produce waste heat equivalent to half of Wales’s entire electricity demand. That waste heat could have been used, at least in part, in a CHP system, in the LNG terminal and in the oil refineries, although I am not sure how, but more qualified people tell me that that is possible.
The expansion of open-cast mining in Ffos-y-Frân is the wrong way to go. We saw the exchange of letters from the Department of Trade and Industry, putting pressure on the Welsh Assembly Government to go easy on the developers. Coal is a precious resource, with new technologies coming on stream that could make it more appropriate to use. The Welsh Assembly Government say that they want to lead the transition to a low-carbon economy, yet the UK Government have awarded the Aberthaw power station a licence to emit 11 million tonnes of carbon dioxide a year. That is more than a quarter of Wales’s entire carbon dioxide annual emissions in one stroke.
We want to see a renaissance in deep-mined coal, particularly in conjunction with carbon capture and storage, but we need to be careful about going down the open-cast route, because our communities have suffered enough of that kind of environmental depredation. We have a new policy of 500 m buffer zones. I hope that it will not be necessary in future for other communities to suffer in the same way.
We should look at the potential of coal-bed methane and underground coal gasification, as I have already said. Three boreholes for coal-bed methane have already been set up in south Wales and the initial results are very positive. Eden Energy, an Australian company, issued a statement to the Australian stock exchange saying that the reserves found in the south Wales coalfields are at least as good, if not better, as those in Australia, which is leading the world in coal-bed methane. That is very exciting; we have incredibly substantial reserves.
New technology and techniques from the oil drilling industry—lateral drilling—will allow us to access the reserves that were not thought recoverable. That could be massively important. Similarly, underground gasification technology is at more of a pilot stage—there is substantial interest and a speculative investment bubble around that as well—but five or 10 years down the line, Wales could find itself with a modern and carbon-neutral coal industry with carbon capture and storage. So we could become energy leaders once again, but I hope that, this time, the profits will be reinvested in Wales, for the people of Wales.
Finally, my third point is that we are not authors of our own destinies. My hon. Friend the Member for Meirionnydd Nant Conwy will say a little more about that, but it is incongruous that decisions on power stations over 50 MW are made in London. We need a holistic energy strategy in Wales. The Welsh Assembly Government have shown the breadth of their thinking and their ambition for Wales—Wales is already beginning to achieve great things—but they have been doing that with one arm tied behind their back.
Would it not be better, as is the case with Scotland, if Wales could have the right to decide the future for energy in Wales? We are competent and capable of doing that.
Mrs. Gillan: How would the hon. Gentleman envisage dealing with the decommissioning costs in Wylfa B?
Adam Price: I do not think it would be fair to burden the Welsh Assembly Government, who were not even dreamt of at that point, with those decommissioning costs. Obviously, if the Welsh Assembly Government were to decide to go forward with a new nuclear power station, that would be a different matter entirely. That decision should also be made in Wales. We should have our hands on the levers of power, literally and metaphorically. That is the best way to have a holistic, integrated strategy for the people of Wales.
3.1 pm
Nia Griffith (Llanelli) (Lab): Hon. Members have made many excellent points this afternoon. I will try not to repeat too much of what has already been said.
I am pleased that we are talking about energy and that the Welsh Affairs Committee has spent considerable time looking into the issue. More than 30 years ago, when I was a teenager, I was one of the first visitors to the Centre for Alternative Technology, whose work has been absolutely splendid.
As we have seen on our visits around Wales, very little investment went into any sort of power station in the 1980s and 1990s and that was very disappointing. We seem to have a lot of infrastructure from the late 1960s, but not a great deal after that time.
One of the current crises we face is that, not only have fuel prices shot up but it is beginning to become obvious that, in spite of what my hon. Friend the Member for Carmarthen, West and South Pembrokeshire says—and I fully endorse his comments about price speculation—the fundamental issue behind all this is the finite nature of some of the fuels on which we rely at present.
The main issues are how to combat climate change and how to reduce emissions, and renewables have an extremely important role in both those areas. I welcome the Welsh Assembly’s commitment to renewable strategies. In 2005, I had the honour of supporting my hon. Friend the Member for Edinburgh, North and Leith in his private Member’s Bill on microgeneration. We have come a very long way since then and the terms “microgeneration” and “carbon footprint” have become commonplace and what we do about microgeneration is spoken about much more widely.
I was extremely pleased today to hear the Minister for Energy talk about mechanisms such as feed-in tariffs, to try to look at ways to make it more viable for home-producers to export to the grid. There are other issues involved in facilitating that such as connection and helpfulness, or lack of it, from some of the energy companies.
We need to go much further and encourage many more community generation, community projects, which provide energy for their own communities but can also export to the grid. Such schemes give a much greater sense of independence and are much better for energy security. Small projects that feed immediately in to local communities lose much less energy in transmission. Again, there are issues about grid connections and the willingness of energy companies to participate, but that is the way we need to be going.
We can even consider wind turbines on individual farms, which can be seen in many other countries, but we do not seem to have gone down that route. I am sure that Welsh Assembly colleagues would be keen to look at the idea of community development. We need to think imaginatively about the sort of schemes that would be possible under those rules.
We need more investment and more research. The Welsh Affairs Committee has highlighted the importance of skills and research in our development, particularly in our economic development, and I welcome the comments of my hon. Friend the Member for Aberavon about the Welsh Energy Research Centre. I should like to draw the Committee’s attention to the new south-west Wales environmental research forum at Swansea university. It aims to combine the skills of research with the needs in the local community, whether in the public or private sector, and work towards the development of environmentally friendly things, which will often have an impact on energy, whether through energy saving or energy generation.
Mark Williams (Ceredigion) (LD): The hon. Lady will recall that during our inquiries she spent a morning on a boat with me and several others looking at tidal technologies in the Severn estuary. Does she agree that the fundamental problem encountered by that scheme was Government funding? We heard from the hon. Member for Chesham and Amersham about the lack of Government funding for marine technologies.
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