Although the closure of Wylfa power station is imminent, Wales will remain at the heart of energy production. Katie Prescott finds out why.
From Cardiff’s
imposing coal
exchange to
the vast cavern of Dinorwig
power station, the Welsh energy
industry’s rich and often controversial
history is hard to miss. And as the
industrial revolution created fresh
demand, climate change and diminishing
fossil fuel resources have underlined
the need to exploit new energy supplies.
The future of the industry in lies in three areas, according to Jeremy Williams, a partner at Cardiff’s M&A Solicitors. First, in improving the efficiency of our energy use; second, in the growth of small-scale renewable energy; and third, with large-scale projects to meet the government’s target of doubling the amount of electricity generated from renewable sources by 2025.
“It is impossible to pigeonhole one aspect of the industry which is more important than the others,” he says. But he believes the government should encourage more small companies that dominate Wales’ economy to enter the energy sector.
The latest energy strategy from the Welsh Assembly Government sets out the ambitious target of ensuring that all ofWales’ local energy needs are met by low-carbon energy sources by 2050. It estimates that £50bn of investments could be made in renewable and low-carbon electricity projects. Government sources say this could be even bigger thanks to demand for new technology and Wales’ rich natural resources.
Not everyone has been impressed by the detail of policy, however. Wind farm developer West Coast Energy describes the proposals as “more idealistic than realistic”. Development manager Richard Fearnall says the Assembly Government is vague about how planning delays to onshore wind farms can be resolved. And the company says the balance of support should be tilted towards proven forms of generation.
From Cardiff Bay and Westminster, the strategy is to reward those who make the greatest reductions in their carbon emissions. This year’s Budget unveiled UK Finance for Growth, which will direct £4bn into smaller companies, particularly those with a green tinge. And the Carbon Reduction Commitment scheme was introduced, ranking companies by their emissions.
David Emery runs Natural PowerWales in Barry, specialising in energy saving installations. His company profits from energy feed-in tariffs, which should stimulate demand for microgeneration. “It’s a mechanism for people to see a return on their investment in alternative energy,” he says.
More locally, community energy projects are starting to receive European grants, with 22 earmarked for funding. Phil Jenkins is a development worker at Cwmclydach Communities First. He wants to turn water running past the community’s buildings into energy to fund local projects, ensuring they are run “by the people for the people”.
A partnership was formed last year between the Environment Agency and Ronald Kear to redevelop a small power station on his land at Osbaston, in Monmouthshire. He diverts enough hydro power for his own home, before selling the rest to the National Grid.
But keeping Wales powered up will need large-scale projects, too. Here, renewable energy is also out in front. Wales has a long, ragged coastline, which is seen as suitable for marine energy projects. The daddy of them all would be a Severn Barrage, potentially generating 10 per cent of UK electricity needs – but the environmental pros and cons of that one have yet to be worked out.
In the meantime, Tidal Energy has been granted a licence to test a marine energy device in Pembrokeshire. The company is positive about the tests carried out so far.
“If we can continue our work around Pembrokeshire after our prototype trial is complete, and we achieve further consents to install the 10 megawatt array, we hope to be generating more meaningful levels of power by 2013/14,” says a spokesman.
Wales has been home to one of the UK’s biggest wind farms, at Cefn Croes near Aberystwyth, since 2005. Companies such as WindpowerWales are developing Wales’ wind potential even further. Owned by local people and businesses, the company invests £3,000 per megawatt generated in the local community. It has planning permission for a development at Llys Dymper in Denbighshire that will meet the needs of 22,000 homes when it opens in 2012.
Managing director Eryl Vaughan calls such energy: “The biggest opportunity that rural Wales has ever seen.”
ScottishPower Renewables has run a wind farm in Llandinam since 1992, and has an application pending to re-power the site. Wind farms can sometimes provoke opposition, and the Spanish-owned group has experienced problems getting agreement from the local council to transport turbines to the area. But a spokesman says the reaction from most local people had been positive. The company is in the early stages of planning another site, which could be ready within five years.
Renewable power is a long way off supplying as much power as Wales uses. There are no borders for electricity, of course, so nothing to stop Wales importing all its power. But with a strong wind and space for wind farms, crashing waves, the Severn Bore, reserves of coal and suitable sites for power stations, that shouldn’t be necessary.
More traditional forms of power are likely to play a part for decades yet. In late March, Horizon Nuclear Power said it would apply for planning consent in 2012 to build a nuclear reactor on Anglesey to produce up to 3,300 megawatts of electricity. It will go for a site near Wylfa nuclear power station, which will be decommissioned in December.
The UK Department of Energy and Climate Change (DECC) has started a 15-week consultation on the proposals, which could mean a power station is operating by 2020. Horizon Nuclear is in talks with Westinghouse and Areva, which are seeking licences for their reactors in the UK.
Then there’s coal – Conservative leader David Cameron suggested on a pre-election visit to Cardiff that the industry in South Wales could be revived. Parts of it still survive. Rhydian Davies runs Energybuild, owner of one ofWales’ last deep mines, at Aberpergwm in the Vale of Neath. He says: “The world will need fossil fuels for the next 20 to 30 years.” He believes that coal is an important part of making up the shortfall in our energy needs, especially as “carbon capture storage technology will change the public’s perception of the fossil fuel market”.
In April the £8m SEREN project was launched at Cardiff University to explore low-carbon energy production. Researchers will explore energy generation using heat from the ground and carbon capture storage. Experiments are being carried out to use defunct mines for carbon storage.
Aberthaw Power Station, just west of Barry, houses the UK’s first carbon capture and storage pilot. RWE Npower, which runs the plant, warns against relying too much on one source of energy to cut CO2 emissions. It plans to invest £10bn in development, including in a £1bn gas-fired power station in Pembroke, scheduled to open in 2012.
Nearby, Milford Haven’s waterway handles a quarter of the UK’s petrol and diesel, and is a vital centre for gas imports. Milford Haven Port Authority is preparing a masterplan for the next 30 years that includes exploring a £100m development at the Blackbridge site on the waterway.
With access to deep water and potential to create strong road and rail links, it is ideal for wave turbine and wind energy. Marketing manager David Griffin says: “There’s a tremendous opportunity to capitalise on the business of energy located on the haven and facilitate the development of affordable, renewable technology.”
Unlike the Scottish Parliament, the Welsh Assembly does not yet have full powers to control the development of large-scale projects. But it has a considerable role in shaping strategy. There is commitment on all sides to reform the market to provide clean, secure and affordable energy long term.
The surge in demand for energy is tackled in the latest Budget, which emphasises investment in green energy. As well as creating a Green Investment Bank, the UK has pledged to cut greenhouse gas emissions by 80 per cent by 2050. Much of this depends on the outcome of the election, but whoever is in No 10 after 6 May will be faced with the same potential shortfall in future capacity. With a combination of renewable resources, nuclear power legacy and fossil fuel expertise, Welsh companies ought to be banging on the door, offering to help.
Also in: May 2010
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