Keynote – Delivering New Energy Projects in balance with the environment and the economy – Prys Davies, Welsh Government

Published on April 27, 2017 in 2017 Forum Reports, Economy, Energy, Environment

Sustainable Severn Forum 2017Prys Davies, Deputy Director – Decarbonisation and Energy, Welsh Government.

A transcript of the keynote speech by Prys Davis on Delivering New Energy Projects in balance with the environment and the economy at the conference.

Introduction

Thank you for the opportunity to speak at what is the third Sustainable Severn Conference. Grateful for the opportunity attend and speak on behalf of the Cabinet Secretary for Environment and Rural Affairs, Lesley Griffiths.

This is an important forum to engage on the complex issues relating to the sustainable development of the Severn estuary. Much has happened since the forum last met – and I want to touch on some of those issues during the course of today.

We are all aware of the significant potential opportunity for renewable energy generation in the estuary. There is a clear commitment, at all levels of Government, both nationally and internationally, to tackling the causes of climate change and decarbonizing our economy. There is also a recognition that we need to be mindful of the existing economic and environmental interests as we consider future opportunities. This is the context for today’s discussion, building on previous Conferences.

I’d like to present some thoughts on some of the key issues and challenges of delivering – from the perspective of the Welsh Government – new energy projects in the Severn Estuary.

Strategic Framework

The first key step to delivering energy projects which balance the competing needs of the Severn Estuary is to have a clear strategic framework, for both policy and regulation, in place. We need to be able to articulate, consistently across Governments, the place of energy in the future of the Severn Estuary, whilst also setting out how we will balance potential devsolopments alongside the other range of important existing economic. activities – for Instance, through ports, aggregate sourcing. fishing and tourism – as well as issues relating to environmental and ecological sensitivity. Establishing this strategic: framework and creating a development pathway for the estuary is a key step in de-risking potential projects but it is equally important that our regulatory frameworks – where particular decisions bite – also reflect this context.

What has WG done to develop that strategic framework?

Since the Forum last convened, the Welsh Government has put in place three ground-breaking pieces of legislation: the Wellbeing of Future Generations Act 2015, the Planning (Wales) Act 2016 and Environment (Wales) Act 2016.

The principle that connects them is the commitment to Sustainable Development as the best way to improve the well being of Wales now and for future generations. Each piece of legislation focuses on different areas of law – from establishing the duty on public bodies to work towards achieving well-being goals to putting in place a framework for planning and managing our natural resources in a more joined-up way.

Why are these important in this context, particularly in the context of the Severn? Well, they are helping to change the strategic narrative in which Government and other public bodies make decisions. There is now a clear focus on securing the long-term well-being of Wales – but also a clear requirement to ensure that decisions should now be much more integrated. By way of example, we have updated NRW’s statutory purpose in line with the Wellbeing agenda. So we should not focus exclusively on developing the economy to the detriment of the environment or vice versa, but rather address complex policy challenges in a much more holistic manner. This goes to the nub of what we are discussing today.

How are we building on this?

How are we building on this in the context of the Severn Estuary? There are already plans in place, which have a 100 year horizon, regarding how we manage flood risks on our coastlines. The Severn Estuary Flood Risk Management Strategy is informing operational decisions – and the Welsh Government has invested heavily in recent years in areas of Monmouthshire and Newport, protecting our communities and infrastructure.

Building on this long term approach, we are now in the process of developing our first National Marine Plan, which will set out the Government’s policy for the sustainable development of the Welsh Marine planning area, both inshore and offshore. This Plan, which we will consult on this summer, will mirror the National Development Framework, currently being developed for onshore land use planning, and will set out our ambitions for the future use of our marine natural resources. This will effectively move us to a proactive, plan-led approach to managing our seas. We will want the Plan to support sustainable economic development in the marine environment, including making provision for marine renewable energy, ensuring proportionate and risk-based consenting decisions. In particular, the plan will identify areas for future use and include policies to support and safeguard areas already allocated for development from activities that may constrain the growth the marine renewable energy sector.

Alongside this, the Environment (Wales) Act’s framework for decarbonisation, establishes statutory carbon budgets and emission reduction targets. The Clean Growth Plan, the first of which the Welsh Government will need to publish by 2019, will need to articulate not only how we reduce emissions but also how we will actively support the transition to a low carbon economy – including how (marine) renewable energy as well as the sustainable use of our natural resources can support that ambition.

These two key policy developments will further help to develop the strategic framework which informs how decisions about managing and utilising our natural resources are made. Alongside, these developments, and reflecting the non-devolved nature of large scale energy infrastructure above 350MW, we believe that the UK Government should be developing a National Policy Statement for tidal range developments. There is a significant policy gap at an UK level which we now need to address – a point which we have raised in our response to the Hendry Review.

Supporting innovation

Alongside setting the strategic framework, Government has a critical role to play in providing practical support, through various means, and in supporting innovation.

The current Programme for Government sets out the Welsh Government’s commitment to increase the deployment of renewable energy developments -including tidal lagoons.

We recognise the need for the marine energy sector to have a strong voice in promoting Wales and instill confidence, and we are providing financial support to Marine Energy Wales (formerly Pembrokeshire) to this end.

We have secured over one hundred million Euros of EU funds to invest in innovative wave and tidal stream projects throughout Wales – a significant signal alongside the establishment of demonstration zones, that Wales is serious about developing a leading marine energy capability. We have also financially supported, on a project specific basis, the Swansea Bay Tidal Lagoon Project. And in relation to tidal lagoons, Ministers are supportive of the proposal set out in the Hendry review for a pilot for a tidal lagoon to better understand the issues and impacts, particularly the environmental impacts, associated with these types of developments.

We are also working with existing businesses, such as those in the Milford Haven area, to recognize the opportunities that exist in relation to marine energy developments, supporting them in developing new skills and capabilities to ensure welsh companies benefit from the transition to a low carbon economy.

Of course, innovation comes in different shapes and forms. Alongside our innovative approaches to natural resource management, we are looking at ways that we can make renewable developments viable. For instance, we are working with our National Procurement Service to see if we can further develop Power Purchase Agreements (PPAs) between developers and public bodies in Wales to stimulate projects which might not be viable – and this approach might have applicability to projects in the Severn. And in light of the additional legislative competence for energy which now fall to the Welsh Assembly, we will be looking at options around establishing a Welsh consenting regime – learning lessons from existing projects to ensure that we have streamlined and joined-up arrangements, without compromising process requirements.

Of course, one of the key ways in which Government can support innovation and the deployment of renewable technologies is through the establishment of appropriate financial incentives. Unfortunately, the current structure of the CfD mechanism militates against the deployment of support for tidal stream and wave devices whilst we await the response of the UK Government to the Hendry Review in relation to support for tidal range. These are issues which we have raised with the UK Government.

Plan and deliver benefits – to build a coalition of support

The third and final element that I would like to touch is that of focussing on planning and delivering benefits, as a way of building an effective coalition of support. If we are to develop projects which achieve the right balance between the economy and the environment, we need to work across the various interests that exist, as envisaged by the Wellbeing Act, to take a genuinely integrated view of potential developments and understand their impacts. This doesn’t mean that we’ll always reach agreement – but we should strive for as many win-wins as possible.

What might this mean in practice? Well, it probably means significant meaningful engagement with environmental interests, listening to concerns, and working together to identify appropriate mitigation or new opportunities.

It means striving hard to secure as much economic benefit and community benefits, retaining as much value as possible locally. The Pen y Cymoedd onshore wind development in south Wales, which has put in place a significant annual community benefit fund but more importantly, built up the skills and capabilities of local companies and supply chains as part of the construction process, is a good example of this – and this has helped to anchor the development in the community.

It also means actively involving and engaging with local communities, public bodies and elected officials.

It is important to understand the views and feelings of these communities but also to consider their active involvement -not only through engaging but through becoming joint owners or investors in the project. There is significant support for renewable energy developments and actively designing community ownership schemes can be a way of recognizing and engaging.

Underlying all of these is the importance of planning and thinking for the long-term – not just for the construction phase.

Conclusions / Next Steps

To conclude. Taking control of our energy destiny at a regional level, and making that part of the economic strategy for the region along with ensuring that as much as possible of the benefits are retained locally, talks to both Welsh Government priorities as well as those of the UK Government as put forward in the UK Government’s draft Industrial Strategy.

Many of the elements that we need to progress this agenda, ensuring that we strike the appropriate balance between the economy and the environment, are already in place or are being developed. Reflecting on today’s conference, I think there is more that we need to do in certain areas, for instance, in assessing the potential cumulative impact, rather than individual impact of developments. This further reinforces the need to work across agencies, public bodies and both sides of the estuary. But the Conference today is an important opportunity to drive that dialogue and consider what more we might need to do.

Thank you / Diolch yn fawr.
Prys Davies, Deputy Director – Decarbonisation and Energy,
Welsh Government.

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