Wales boasts enviable renewable energy resources but is the country making the most of its natural advantages? Insider sets the scene and looks in detail at the country’s tidal, wind and solar industries.
In case you missed it, renewable power is now a real industry with good prospects. Almost 1,500 renewable energy installations qualifying for the Feed-in Tariff (FiT) were installed in Wales in the year to March, generating 4,300 megawatts of energy – enough to power more than 1,300 homes. In the first three months of 2011 alone, more than £4.4m in FiT generation payments were made in Wales, and globally, the renewable energy industry is forecast to be worth £300bn by 2013.
“What was once a cottage industry is developing into something much bigger,” says Ben Robinson, director of Dulas Solar in Machynlleth. “And I’d considerWales to be at the forefront. Since the Centre of Alternative Technology was set up 35 years ago, which made people so much more aware of renewable energy, there’s been a better understanding in Wales than in England by a long shot, but we need to continue to be pioneering.”
Robinson says his corner of Mid Wales is a “Mecca” for renewable energy technology, noting its importance on the local economy. “From a local perspective, renewable energy’s effect on the economy is huge,” he says. “I would say that 20 per cent of the employed population here work for renewable energy companies or are involved in renewable energy in some way, and the number of organisations entering the market is growing in the north and south too.”
But since the Comprehensive Spending Review in October, and some confusion over installation figures, concerns about the continuation of the industry’s growth have been surfacing. “There is a booming market there,” says Robinson. “But I, like many other industry figures, have worries. There’s a lot of lip service and stumbling blocks. Companies that needed to respond to consultation on the government’s cut in FiTs (to provide the evidence of more jobs and expansion following its introduction in April 2010) have been too busy carrying out installations to find the time to complete the forms.
“We don’t want a boom and bust scenario – as has been the case in Spain – where people set up companies for this market because it is so buoyant and then the FiT was taken away and there was nothing left.”
In the meantime, Wales is also gearing up for more traditional energy production. Wylfa on Anglesey has been selected as a future nuclear power station site, and RWE NPower is building a gas-fired power station at Pembroke. Robinson is optimistic that the industry’s future remains bright. “The Renewable Heat Incentive will be coming into play this year,” he says. “So we’ll see a lot of activity surrounding that, for one.”
Ultimately, though, policy has dictated that the industry continues expanding. “Because of the ambitious targets set forWales, it has to happen,” adds Robinson. “Looking ahead to the 2020 and 2050 energy targets, there’s no way of achieving them without considerably more of these renewable technologies being deployed, and infrastructure needs to be in place so research is being continued, applications are being put in and building is going ahead. It will happen.”
Will the tide turn for the barrage?
When some people look over the Severn Estuary, they see dirty mudflats and muckbrown water. Roger Falconer sees almost unlimited power – enough to supply Wales’ hunger for electricity for decades, maybe centuries. And he imagines a £24bn engineering project that would transform life on both banks of the river.
“I’m confident that I will see Severn Barrage built within my lifetime,” says the director of Cardiff University’s Hydro-environmental Research Centre. “I have been working on this project since 2005 and it will be built by 2030. There are so many people committed to building this project, convinced that it needs to be done, and the arguments in favour are so strong.”
Tidal power’s great selling point over other renewables, particularly wind, is its reliability. Power companies can predict years, even centuries in advance, exactly when tides will rise and fall and when electricity can be generated. And a lot of that potential is locked in the mighty Severn, which has the second-highest tidal change in the world, up to 41 ft.
Many had assumed that the Severn Barrage project had effectively been killed off in late 2010 when UK energy secretary Chris Huhne said that the government was unwilling to commit £10bn of public funding to the project. He instead committed to building up to eight nuclear power stations, including one at Wylfa on Anglesey.
But almost a century after the first proposals were raised, the Severn Barrage is a dream that refuses to fade. Corlan Hafren, a private sector consortium including Halcrow, Ove Arup, KPMG and the university’s Falconer, was set up to promote the project as Huhne’s decision was made public. Corlan Hafren believes the project can be funded almost entirely from private sector finance. Members of the group say that negations with potential investors look positive.
If the ten-mile barrage between the Vale of Glamorgan and North Somerset is built, it would generate nine gigawatts, about 5 per cent of the UK’s electricity, orWales’ entire need, through 7,500 turbines. The barrage would capture energy from the tide four times a day as the water rushed back and forth from a lagoon covering 200 sq miles. The planned lifespan of the barrage would be 120 years, and Falconer says that its contribution to the nation’s energy needs would be measured in centuries. But he believes its potential impact on the region’s economy would be ever greater.
The building of the barrage would, Falconer says, create 100,000 jobs and lead to an economic boost for Port Talbot as it becomes the project’s main port and the place where its steel is produced. The barrage could act as the bridge for a high-speed rail route connecting Wales with London and Europe, the huge lagoon created would attract investment, and taming the Severn’s incredibly strong tides could encourage tourism industry along the river’s rather sullen, muddy banks.
But the barrage has split politicians and the green lobby – groups including the RSPB and Friends of the Earth were strongly opposed because of the huge disruption to nature in the area. Proposals to build smaller barrages on otherWelsh rivers, notably the Dee and the Conwy, have been stymied because of EU environmental legislation.
“The government’s decision not only put the big barrage development on the shelf, but other projects that would have been feasible,” says Llewelyn Rhys, head of RenewableUK Cymru, the trade body for the wind and marine renewables industries. Tidal fences that would store water in lagoons are also on hold now.
“The environmental lobby has been at odds with itself over this,” says David Harries, partner and expert in sustainability at law firm Aaron & Partners. “The RSPB was dead against it even though the Severn is kept in permanent muddiness because of the speed of the river, which prevents bird life. Jonathon Porritt (the environmentalist) was tearing his hair out over objections from parts of the green lobby.”
There are plenty of other schemes for harnessing the power of water, though. They include micro-hydro projects in hilly areas, with energy drawn from streams to power individual homes or even small communities.
First Hydro, which runs the Dinorwig and Ffestiniog pumped storage stations, is a natural partner for wind power generators. Cardiff’s Tidal Energy (TEL) and Bristol’s Marine Current Turbines (MCT), are looking at separate projects to tap the tidal power of the sea offWales. In April, TEL was given the right to go ahead with plans to generate undersea power at Ramsey Sound in Pembrokeshire. A full-scale prototype turbine will be built in 30 metres of water that could generate 1.2 megawatts.
If the year-long project is a success, TEL will look at building up to nine turbines at Ramsey, at a cost of £30m, that will produce ten megawatts. “We’re looking at full-scale development from 2015 onwards, with plans to build up to 100 turbines a year by 2020,” says TEL’s managing director Martin Murphy. “The big pluses of tidal are its predictability and the lack of visual impact – it’s underwater so we don’t get objections from residents.”
MCT, meanwhile, is working with RWE NPower at a site at the Skerries rocks, near Holyhead, to build and sink turbines capable of producing 10 megawatts. This is more than prototype testing – MCT already has a commercial project operating at Strangford Lough in Northern Ireland.
“The joy of tidal is its total predictability, and its high energy content,” says chief executive Martin Wright. “Tidal can be twice as efficient as offshore wind power. The problem is that while the energy may be free, the capital cost of getting it is expensive – it has cost us £1m just to get permission to start at the Skerries, before we’ve even started building a turbine.”
Blown offshore
Wales has wind, lots of it. Hills and exposure to westerly airstreams mean that few places in Europe are better placed to capture air currents. Yet, despite being by far the most advanced form of renewable energy technology in Wales, many in the sector are questioning its commitment to wind power.
“We were set up as a wind energy company in 2002, but we’ve largely pulled out of wind farms in Wales,” says David Williams, chief executive at renewable energy business Eco2 in Cardiff. “Wales is the most difficult area in which to do business for wind power. The average planning decision in Wales takes three times as long – about two years – as in the rest of the UK, with only a 50 per cent success rate.”
Steve Salt, planning and development director of wind farm developerWest Coast Energy in Mold, is also disappointed: “Wales lags behind other parts of the UK when it comes to delivering on renewable energy generation. The onshore wind sector is a major contributor to renewable energy generation in Wales but installed capacity has fallen 80 per cent behind what was envisaged by 2010.”
But he adds, more hopefully: “There is large potential capacity in the planning system and hopefully a large chunk of this capacity will be consented in the next few years.”
The irony is thatWales had a head start in wind generation compared with the most of the UK. The 103 turbines at Llandinam near Newtown, Powys were part of Europe’s biggest wind farms when they began turning 20 years ago.
Since then another 32 wind farms have been built here, turning out 383 megawatts, enough to power a city the size of Newport. As the number of farms has increased, so has the typical size of turbines doubling to more than 300 ft, and their efficiency has risen five-fold. Plans have been drawn up to increase Wales’ onshore wind output another four-fold.
The issue of where to site wind farms was meant to have been resolved by the Welsh Assembly Government seven years ago when it designated seven areas for development under a plan called Tan 8. But development has been slowed by a planning and consent system that many see as bogged down by overlapping and competing authorities. Applicants must get past a selection of local councils, national parks, the Assembly Government, UK national government and vocal protestors. There are only three onshore wind farms under construction in Wales, with consents for another 12. “It’s not so much the system as the way it’s applied; Welsh politicians seem to be more sensitive to local objections than in England or Scotland,” says Williams. “The other issue is that most of the best sites have already gone, so we’re fighting over what’s left. Although we’re proud to be a Welsh company and want to keep our expertise here, our future in wind technology lies in Scotland, England and mainland Europe.”
But Wales is tapping into the wind power industries in other ways. For example, Mabey Bridge’s £38m wind turbine tower factory in Chepstow, was formally opened in May. At full tilt, it will make 300 towers a year. Two wind farms in Yorkshire were its first named customers.
Jones Brothers, the civil engineering company based in Ruthin, is also winning work. “Building infrastructure for wind farms has turned into a major source of income for us,” says contracts director John Dielhof. “It accounts for somewhere between a quarter and third of our turnover. But wind farms are no longer being built in Wales – the big market for us is in Scotland, where these things actually get built.”
This year, plans by NPower for 19 turbines, each 216 ft tall, at Mynydd y Gwair at Felindre, near Swansea, were rejected by planning inspectors, even though they would have created enough power for more than a quarter of the city’s homes.
“There’s a fear among Welsh politicians of being seen in favour of wind farms,” says David Harries, partner at law firm Aaron & Partners. “A lot of applications have been made on the back of Tan 8, but progress has been slow and unpredictable, it can take years and years to get a decision.”
Salt adds: “The public perception of renewable energy, and specifically wind energy, is “not in my backyard.” This is a serious issue and has been a major barrier to onshore wind deployment in Wales. Given that energy policy is not a devolved power, and that most decisions on wind energy developments are either taken by local councils or in Westminster, there’s a tension between these respective levels of government in terms of aspirations for delivery of renewable energy in Wales.”
Attention is turning to offshore turbines – at least objectors don’t live in the sea, although some may look at it. They are more expensive to develop, but sea-based wind farms are more reliable in generating regular power, can be built on a far grander scale and are subjected to fewer objections from residents and environmentalists. Planning is also far simpler because developers deal with one body, the Crown Estates, which owns the seabed for 12 miles beyond the shoreline.
North Wales has two offshore wind farms, at North Hoyle and Rhyl Flats, which are both owned by NPower Renewables. Their combined 55 turbines can produce a maximum of 150 megawatts. These were meant partly as test runs for the far larger developments to come, the first of which will be the nearby £2bn Gwynt-y-Môr with 160 turbines. NPower starts work on installing the turbines this year and, when ready in 2014, they will have the capacity to produce enough electricity to power the equivalent of 40 per cent of Wales’ homes.
More are planned in a third wave: Centrica is looking to build a mega-wind farm in the Irish sea that’s capable of producing up to four gigawatts of power – enough for three million homes. Meanwhile, NPower is looking at the Atlantic Array – up to 250 turbines in the Bristol Channel producing 1,500 ten times the output of the current combined wind farms in North Wales. The company hopes to get permissions in 2013.
Noting that the project is at an early stage, Rhys Jones, a spokesman for Centrica, says: “In the longer term, the key to the success of offshore wind will be the development and maturing of a high availability mobile supply chain, which can service the requirements of a growing industry. The main constraints will be the interplay of the favourability of the investment climate and supply chain development.”
Also in: June 2011
-
Is Hart in the right place?
If you fear change, please look away now. It may be less than a year since the last big Assembly Government policy change on economic policy, but there is a fair chance that we will get another revamp soon.
-
Stars in the ascendant
Insider picks out 25 promising young entrepreneurs to join our Rising Stars every year. Here’s the latest batch of high achieving, ambitious individuals from across Wales.