Renewable energy in Wales Contents

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2Opportunities for Wales

Onshore Wind

9.Offshore renewable energy tends to dominate current discussions of future renewable energy development; however, onshore renewable energy projects have also made significant contributions to renewable energy generation in Wales. In their written evidence, EDF stated that “onshore wind and solar are very low cost, mature technologies which can be deployed at pace”. According to EDF, the development of these technologies has been proven “to create jobs, community investment opportunities and provision of direct investment into communities across the UK”. Their submission went on to contend that the “same economic benefits can be realised if further investment is made into onshore renewable development in Wales”.9

10.Onshore wind plays a major role in Welsh renewable electricity generation, accounting for 38% of renewable generation in 2019.10 Increasing turbine size and cheaper finance, as well as more efficient construction and operations, have been credited with substantially reduced costs. Ongoing onshore wind projects in Wales include the Garn Fach wind farm in Powys, which has been developed by EDF. The project is likely to consist of up to 22 turbines, each producing around 5MW. That’s 110MW capable of generating enough low carbon electricity for the domestic needs of 66,000 households.11

Solar

11.The Committee on Climate Change estimates the UK as a whole will need 54GW of solar PV by 2035 to achieve the Government’s net zero targets, representing a deployment rate of roughly 3.7GW per annum through to 2050.12 Wales is able to contribute to this effort, with 1.2GW in the planning pipeline and of this 250MW having already secured planning permission. Solar is also credited as being a powerful job creator and an inherently rapid technology to deploy, as well as one of the cheapest forms of power generation today, with costs of solar PV having fallen by over 80% in the last decade.13

12.Rooftop solar, particularly the residential sector, benefits from very short project lead times alongside minimal design and permitting requirements. Current projections show that due to the high labour intensity of solar as many as 1.5 million jobs could be created across the solar value chain throughout Europe by 2030. Workers can easily be up skilled to deliver the installation, operation, and maintenance of solar projects.14

Offshore Wind

13.Offshore wind plays a major role in Welsh renewable electricity generation, accounting for 29% of renewable generation in 2019.15 Floating offshore wind has strong deployment potential in Welsh waters, particularly in the Celtic Sea off the coast of South West Wales and England where wind speeds are high and deep seas are accessible from major strategic ports.16 In a recent report, the Offshore Renewable Energy Catapult advised that there could be as much as 50GW of electricity capacity available in the Celtic Sea in Irish and UK waters. It is estimated that the first GW in the Celtic Sea could potentially deliver over 3,000 jobs and £682m in supply chain opportunities for Wales and Cornwall by 2030.17

14.Welsh waters are already home to one of the largest wind farms in the UK: Gwynt y Môr, based off the north coast of Wales. Run by RWE, Gwynt y Môr, with an installed capacity of 576 MW, generated 1.9TWh of electricity in 2020. Gwynt y Môr created over 700 jobs during construction and over £90 million was spent within Wales. Since becoming operational, 100 long term, skilled jobs have been created with the wind farm typically investing around £8 million into the Welsh economy each year. A project is currently ongoing to double the capacity of the farm.18

Wave and Tidal

15.According to the Offshore Renewable Energy Catapult (OREC), the UK’s practical resource has been estimated at 15GW for tidal stream and 23GW for wave energy.19 Written evidence received from the Offshore Renewable Energy Catapult argues that tidal stream technologies are ready for pre-commercial deployment, having made significant progress in reliability and cost levels.20 The Anglesey Demonstration Zone has been designated by The Crown Estate for the deployment of tidal energy devices.21 This has been recognised by Welsh and UK Government in the funding of the Morlais Tidal Demonstration Zone off Anglesey, through the North Wales Growth Fund.22

16.A study commissioned in 2006 by the Welsh Government concluded that Pembrokeshire has the highest concentration of wave resource in Wales equating to an indicative capacity of up to 5600MW. Pembrokeshire is home to one of the sites identified by The Crown Estate as being suitable for wave demonstration activities. Located 13km offshore and covering an area of 90km2, the Pembrokeshire Demonstration Zone offers a Mean Wave resource level (annual mean power density) of 19.3kW/m to wave array developers.23 Organisations such as Marine Energy Wales have argued that wave energy could add a net cumulative benefit to the UK of £4 billion and 8,100 jobs by 2040. Predictions for the whole of the UK see the sector supporting a total of 22,600 jobs by 2040.24

The work of the Crown Estate

17.The Crown Estate is an independent commercial business, created by an Act of Parliament, with a diverse portfolio of UK buildings, shoreline, seabed, forestry, agriculture, and common land. The business generates valuable revenue for the government and over the last 10 years has contributed £2.6 billion to the Consolidated Fund. The management of The Crown Estate in Scotland was devolved in 2017.

18.The Crown Estate has played an important role to date in expanding offshore renewable energy capacity in Welsh waters. It is effectively the landlord of the seabed and is responsible for balancing a range of maritime and stakeholder interests when exercising its duties.25

19.In their written evidence, The Crown Estate firmly emphasised its belief that Welsh waters offer a significant economic and environmental opportunity for the country, as well as that there is potential to generate a substantial proportion of the nation’s clean energy needs by developing established technologies, such as offshore wind. According to The Crown Estate, in light of the UK’s net zero target, and the Energy White Paper, the scale of development that we are likely to see across Welsh waters has grown significantly. The seabed is getting busier, and The Crown Estate has recognised that a new approach is needed to optimise the environmental, economic and social potential of the seabed.26

Seabed licensing

20.Seabed licensing has been cited as key for developing offshore wind in Welsh waters. In its written evidence, RWE advised the “UK Government to work in collaboration with developers like RWE to ensure that there are adequate seabed leases available from The Crown Estate in Welsh waters at an appropriate scale to deploy innovative projects”.27 In our previous oral evidence session, Rhys Wyn Jones from RenewableUK Cymru singled out resolving issues with seabed licensing as one of the key determinants of renewable development success for the decade ahead.28

21.A recent report by the ORE Catapult, suggested that a key enabler to cost reduction of floating offshore wind in Wales would be a Crown Estate leasing round within the Celtic Sea within the next two years, with clear commitments to future rounds.29

22.In March 2021, The Crown Estate announced that it was commencing work to design and deliver a new leasing opportunity for early commercial-scale floating wind projects in the Celtic Sea. According to The Crown Estate, this new leasing process will focus on projects of circa 300MW in scale, “up to 3 times larger than any rights previously awarded to floating wind in the UK”.30

23.The Crown Estate plays a crucial role in the management of the UK’s seabed and in ensuring that economic development arising from leases to developers works in tandem with the conservation and protection of our natural resources. We recognise that this is not an easy balance and we thank The Crown Estate for their hard work and the judicious way in which they discharge their responsibilities.

24.Over the course of our inquiry we heard significant demand from energy companies for additional seabed leases to be made available. These leases are essential to the development of offshore energy generation in Welsh waters. We therefore welcome the recent announcement from The Crown Estate of a new leasing opportunity for early commercial-scale floating wind projects in the Celtic Sea. This new leasing opportunity will be particularly significant for the marine sector in Wales and, through its focus on projects of circa 300MW in scale, will be an important step towards the UK Government’s ambition to deliver 1 GW of floating wind by 2030.

25.We encourage The Crown Estate to continue to work proactively with developers to ensure that adequate leasing rounds continue to be offered on a regular basis in the future. Of most importance is that there is, as far as possible, alignment between the timetables being used by The Crown Estate for its leasing rounds and the timeframes which underpin developers investment decisions. The Department for Business Energy and Industrial Strategy should work with The Crown Estate and energy developers to explore how there can be greater alignment of timeframes for, as well as clearer communications of, leasing opportunities. We also recommend that the UK and Welsh governments should explore mechanisms for more effectively distributing wealth generation from renewable energy projects to communities in Wales.