Energy in Wales

Ian Paisley Excerpts

Thursday 14th September 2017 Westminster Hall

[Ben Lake (Ceredigion) (PC)]

I echo the hon. Gentleman’s comments about the potential in Wales for hydro schemes. Dinorwig is a fantastic example of a larger hydro scheme. Does he agree that smaller hydro schemes—the potential of which we perhaps have not fully realised—are just as important for our energy mix in Wales? He also talks about the UK and Welsh Governments working in partnership. We desperately need to look at the revaluation of business rates, which is affecting many hydro energy schemes, particularly community energy schemes. Does he agree that we have an opportunity to fully realise the potential of hydro in Wales by addressing that revaluation?

[Ian Paisley (in the Chair)]

Order. I remind Members to keep their interventions as short as possible.

[Albert Owen]

I welcome the hon. Member for Ceredigion (Ben Lake) to the House—this is the first opportunity I have had to do so. He is a new Member and he will get used to making shorter interventions as he gets going.

The hon. Gentleman is absolutely right: we need to look at barriers and at whether the rates system deters such schemes. We are going back to basics with some of these smaller hydro projects. Many farms and small communities had their own hydro projects many years ago. We get an awful lot of wind and rain in west Wales and the west of the United Kingdom, and we need to harness that. Many of the windmills that produced food in the past were driven by both hydro and wind; we are only returning to that.

Wales and the UK’s west coast have enormous marine energy potential. Their tidal ranges are some of the best in the world. The Welsh Government and the UK Government have done numerous studies in Scotland, west Wales and the west of England, yet although prototypes have been set up, many have not been developed. Indeed, I visited Strangford lough in Northern Ireland to see some of the pioneering schemes there, but those have not reached the necessary commercial scale because of a lack of investment. There is a blockage, and it is in all our interests to undo that blockage and ensure that such schemes are successful.

Minesto, a Swedish company in my constituency, is moving forward a project, which the Minister knows about, 8 km off the coast of Holyhead that links with the port of Holyhead. Not-for-profit organisation Menter Môn, which the Minister also knows about, is involved in the grid connection there and will benefit from that. That project is up and going.

This Parliament and the Welsh and Scottish Governments have talked for some time about tidal lagoons; we now need to move forward with them. We could have a cluster in Wales because of the tidal range from Colwyn Bay to Swansea Bay—the potential is absolutely there. I am sure that colleagues will want to elaborate on the Swansea Bay tidal lagoon, but I mention it because it has been identified as a first-of-a-kind project that could go forward. The Government have taken it seriously and a lot of development work has been done on it.

This Government set up the electricity market review and capacity mechanisms that I talked about, and they also set up the Hendry review, which reported at the beginning of this year. Reports take time, and I understand the Government’s frustration when they get external issues. Brexit is dominant, and we had a two-month election period that everyone wanted—apart from the Conservatives themselves, when they saw the results. That election cost the taxpayer £140 million, excluding the figure for Northern Ireland, which we have not yet seen. That money could have been invested in some of these projects, which could have been moving forward as I speak.

Tidal lagoons could generate 250 MW to 350 MW of electricity. The tidal range allows some 14 hours of generation per day—it is huge. That would enhance the area, since it could be used for tourism as well as for producing much-needed low-carbon energy. Of course, we need great connections, which are controversial. I will come to connections for transmission and distribution; we need to handle them properly and have them underground so they are not unsightly.

I urge the Minister to give us a response to the Hendry review. It is no good the Government saying, “We’re looking at it”—they have been looking at it for many months. The civil servants were not involved in the election campaign; they were diligently doing their work in the BEIS office. They should come up with recommendations for Ministers, and Ministers should have the grace to make their mind up and come back to the House to say where they are going. Investors need certainty; they do not need the Government to abandon decisions after setting up a review. In my humble opinion, the only thing holding the project back, having looked at the potential mechanisms and the price—the first of its kind will be expensive—is the political will of the Government. It will be the job of the Minister to convince the House that that is not the case. The only way he will be able to do that is by announcing the date of an announcement. The Government should stop prevaricating and do that immediately. The Orkney isles, the west coast of England and south Wales have the potential for marine technology.

Let me turn to new nuclear, because it is important that we keep these projects on track. Again, this is older technology that has been modernised for the 21st century. In my constituency, the Wylfa power station site generated safe nuclear power for a record number of years, which created jobs for many decades. In fact, it is the only industry I know where classmates who left school at the same time as me worked in the same high-quality, high-paid jobs in one industry, thereby contributing to the local economy. The supply chain is huge and the technical skills are high.

We need to move forward. The project that started in 2007 to 2009 is on track. We now have new developers in Hitachi with proven technology and capacity, and I know that, working with the Welsh Government, the local community, local government and the UK Government, we can move forward on the project and produce high-quality jobs. There is some £12 billion of investment, which I remind Members—I have raised this enough times—is the equivalent of the London Olympics being invested in north-west Wales. There is huge potential to develop the economies of Anglesey, Conwy, Gwynedd and the whole of north Wales. Indeed, it is the biggest project in Wales in terms of jobs—construction jobs and ongoing jobs as well.

The Minister is aware of this, but I also want to talk about small module reactors and the potential for them. I met with the Advanced Manufacturing Research Centre in Sheffield and have also visited. It has got all these companies together so that we can forge the modules for nuclear reactors with British steel in the United Kingdom and deliver the kits to different locations. Trawsfynydd is ideally located for that. It has a welcoming community that would play host, and it has the infrastructure in place. What we need, once again, is for BEIS to stop sitting on reports and papers and to start making announcements. That is what the business world and local communities want to hear: the trade unions and business working together to develop these high-skilled jobs.

I could also talk about many other projects. Orthios wants to develop an eco-park in my constituency. It was not successful in the auctions—the auctions are cumbersome, and it did not meet the criteria. We need to simplify those criteria. The threshold of 299 MW has, I think, been reduced to 150 MW, so it did not qualify.

We also have great offshore wind projects. My hon. Friend the Member for Vale of Clwyd (Chris Ruane) may interject, or he may wait—he is now a patient Front Bencher and statesman—and respond in his speech. Many people opposed the offshore project, including the previous Secretary of State, the right hon. Member for Clwyd West (Mr Jones), who I remember lobbying the Welsh Affairs Committee when we went to north Wales, saying, “Save our shore,” because the project was not wanted. It has now developed and was a flagship of the Conservative-led coalition Government in which he served. He suddenly changed his mind on that and then flew the flag for wind farm development. My point is that sometimes these projects are controversial and appear costly when looked at, but they are a worthwhile investment because they produce low-carbon energy off stream and jobs in localities. Celtic Array Rhiannon, just off my constituency, would have been the biggest offshore wind farm. That was aborted in many ways because of the mechanism as well as technology developments, but the potential is still there.

I am conscious that I have taken a lot of time, but I want to talk about distribution and transmission. Hon. Members will be aware that British Gas hiked its gas prices and that many other companies, including Scottish Power, have highlighted that the high cost of distribution and transmission has pushed bills up. I am sure, Mr Paisley, that you are diligent and look at your bill either online or in paper form, like I do. When we look at it, we see that 25% is for distribution and transmission costs. That is a huge amount of the bill.

If we are serious about reducing and capping energy prices, we need to look at distribution costs. The national grid is a monopoly—there is no competition in it—and it almost holds developers at ransom. I know it is regulated, but it does not work. Had there been a different result in the general election, the Labour party would have nationalised it or introduced a not-for-profit model, like we have for water in Wales. We are used to not-for-profit organisations, which reinvest all their money into infrastructure. Welsh Water—Dŵr Cymru—is an excellent example of that. Instead of paying directors in the United States of America and shareholders, it puts the money back into the communities in which it works.

The proposal for pylons across Anglesey and north-west Wales is controversial: 1950s-style pylons are to be attached to 21st-century nuclear power. National Grid needs to listen to the communities it is working with and look at undergrounding and subsea rather than pylons.

Finally, we need to deal with energy prices. As I have said, Wales has high bills compared with the rest of the United Kingdom. Transmission is cited as one of the reasons for that. There are also higher levels of fuel poverty in Wales and pockets of fuel poverty. I know there are issues elsewhere in the United Kingdom, but we do need to address that. When we invest properly in new technology, we are creating a better country and high-skilled jobs. If I had more time, I would go into energy poverty issues, but we do need to deal with them.

The coalition Government changed the criteria for measuring fuel poverty. They were archaic in many ways—the Queen was in fuel poverty because a high percentage of Buckingham Palace’s outgoings were on energy—but the serious point is that many people in Wales, in areas that produce a lot of energy, are paying a higher price and are in fuel poverty. The Welsh Assembly and devolved Administrations have done good work in that area, and I hope that the Government are listening. There needs to be more work on that as we go forwards.

I called for the debate because I believe there is huge potential for Wales to be a huge contributor to the United Kingdom’s industrial strategy when it comes to energy and manufacturing. We have successful projects going forward, which is good for Wales, for the United Kingdom, for Welsh businesses and for the consumer. They will reduce carbon emissions into the environment and help to deal with climate change. The skills issue, raised by my hon. Friend the Member for Ogmore (Chris Elmore), is essential. These projects create clusters of high-skilled science parks and faculties for research and development, which link into higher and further education institutes. This is a win-win situation.

I support the Government’s principle of an industrial strategy. They talked about nuclear and energy as being part of that. Electric cars are a good thing, but we need to get on with it. We need to press the reset button and get these projects going. We need to invest in them and work together to produce the low-carbon economy that the Minister, the Department for Business, Energy and Industrial Strategy and everyone in the Chamber wants to see. Wales can be the pioneer, creating the jobs, the technology and the energy that the country needs.

I hope that the Minister is in listening mode and that he has some answers for us. If he does not, I hope he will pass these points on to the BEIS Minister, who may have the grace to come to the next debate with “energy” in the title. Wales is part of the United Kingdom and part of the industrial strategy, and Ministers need to be aware of that. Wales is a forward-looking country when it comes to many things, including energy. We want the best for the people we come here to represent and we want a better, clean environment, clean air, and climate change to be dealt with. We want to play a leading part in that.

--- Later in debate ---

[Carolyn Harris]

No comment. We were also waiting for Charles Hendry’s review on the Swansea bay tidal lagoon, which was published 10 months later. It was conclusive, and it provided the assurance that the Government sought on whether tidal lagoons could play a cost-effective role in the UK energy mix. It recommended moving forward with a pathfinder lagoon in Swansea bay

“as soon as is reasonably practicable”.

That was eight months ago, and once again we are still waiting.

Since the review’s publication, the Government have made no concerted effort to proceed. The Conservative party’s manifesto for the 2017 general election merely touched on renewable energy in Wales, with a promise to

“explore ways to harness Welsh natural resources for the generation of power”,

but failed to make any commitment to the Swansea bay tidal lagoon. By comparison, all other major political parties committed in their manifestos that it should happen as a priority. Since the election, we have heard nothing more from the Government about any plans to develop the project.

We all know that the tidal lagoon is the way forward; it harnesses natural power from the rise and fall of the tides, so offers an entirely predictable year-round supply. It is a guaranteed power source for generations to come, and the long-term cost benefits speak for themselves. The Welsh Labour Government, local councils and city regions all support a tidal lagoon in Swansea. Welsh businesses, community leaders and the people of Wales and Swansea support it. Swansea is ready for this now.

There are many benefits that will have immediate impacts on the economy and the community. The lagoon will bring an estimated 2,000 new jobs to the region, and there will be a demand for approximately 100,000 tonnes of locally sourced steel. The tidal lagoon already has 1,300 British businesses registered on its supply chain database. This is a golden opportunity to use British resources to develop British industry in Wales. Why are we stalling?

In his review, Sir Charles Hendry said:

“We can either stand back and watch other countries take the lead…or we can decide that we should do what the UK has done so well in the past—spotting an opportunity, developing the technology and creating an industry.”

As Britain moves into a post-Brexit world, we need to ask whether we want to be leaders or followers. Today, I ask the Minister that very question. Are we ready to be world leaders and develop this new energy source in south Wales, or are we going to be left behind waiting, this time for someone else to steal our lead? We cannot afford to let this slip through our fingers. We need an answer. We need the lagoon, and we need it now.

[Ian Paisley (in the Chair)]

I call Tonia Antoniazzi.

--- Later in debate ---

[Chris Ruane]

The Minister will have a chance to respond. David Cameron then went down to Notting Hill and put a giant bird blender on top of his chimney. [Interruption.]

[Ian Paisley (in the Chair)]

Order.

[Chris Ruane]

It was an example of the way the Conservative party has crudely used renewable energies to change its image. As well as the wind turbine on the Prime Minister’s house, there was “Hug a Husky”, but we all know that it was superficial. As soon as the Conservatives got into power, the worm turned—the winds of change turned. The Minister will know that many in his party were climate change deniers. My hon. Friend the Member for Ynys Môn pointed out that some of them have come around, but there is still a deep, ingrained resistance to green, renewable energies in his party.

I would like to compare and contrast the position of the Conservatives with the support that Labour gave, both in the Welsh Assembly and in Westminster. Labour supported this nascent renewable energy, wind energy, and it was a great success. We are seeing the benefits of that support today—last week, in fact—with prices per kilowatt-hour tumbling as the economies of scale take hold, research improves and manufacturing costs are reduced. It was a sound investment then, and we are looking for sound investments now and in the future in renewable energies.

Labour attempted the same level of support for the solar industry in the UK. In 2009-10, we set feed-in tariffs, in conjunction with listening to Japanese and British manufacturers, at a level that would result in investment in and actual manufacture of solar panels in the UK—not in China, but in the UK, and specifically in Wrexham in north Wales. There was a plan by the Japanese manufacturer to build the biggest solar panel factory in the whole of western Europe, but when the Conservative-coalition Government got in, they reduced the feed-in tariff rates and the Japanese factory pulled out.

My hon. Friend the Member for Ynys Môn said several times that what these new industries, and established industries, need is continuity—certainty for the future. Industries that will require billions of pounds of investment need consensus and continuity, to ensure that their investments will be sound and solid and the plug will not be pulled on them with a change of Government or on a whim.

We see the same measures being employed right up to today with tidal lagoons. The Labour politicians in south Wales, the Labour Welsh Assembly Government, are engaging with those companies because they realise that of the six tidal lagoons proposed for the UK, four will be in Wales. One is proposed off the coast of my own constituency, off Rhyl and Prestatyn, and one is proposed off Conwy as well. I have had a briefing from the two companies that want to take the project forward. It will be fantastic: it will create jobs and tourism; it is futuristic; and it will have a road all the way round it. That is the type of project that needs to be supported by the Government.

I pay tribute to my hon. Friends the Members for Swansea West (Geraint Davies), for Swansea East (Carolyn Harris) and for Gower (Tonia Antoniazzi) and, even though he is from 200 miles away, my hon. Friend the Member for Ynys Môn, who talked about tidal lagoons in his speech because he recognises their importance.

There is the tidal pilot project planned for Swansea bay. That will be the first purpose-built tidal lagoon in the world and it needs extra care, nurturing and attention, because it could change the way energy is delivered or harnessed on the whole of the planet. That is worth investing in. The investment that we put into wind in 2003-04 looked as though it was a bad investment at the time, because it was at a high rate, but we are reaping the benefits now, 13 or 14 years later. That is the kind of long view that we are looking for from the Government for lagoon energy in the UK, because good things will flow from it.

I am talking about research, building skills and manufacturing expertise, and all those could be exported around the world. The Government have shown little enthusiasm for this sector, and it is beginning to dry up. There is lots of enthusiasm all over Wales and especially around the Swansea area. Can I ask the Minister a question?

--- Later in debate ---

[Geraint Davies]

I do not mean to take my hon. Friend off track, but I will just take him back to what he mentioned a moment ago about the cost of rail electrification to Swansea being put somewhere else. I just make the point that there are many of us across Swansea who want to hold the Conservatives to David Cameron’s promise to bring about electrification, and to keep that money in that project and deliver electrification for Swansea bay.

[Ian Paisley (in the Chair)]

Order. I call Chris Ruane. I encourage you to bring your remarks to an end and to start to wind up. I want to give the Minister time to respond.

[Chris Ruane]

I will do that, Mr Paisley—absolutely. Our No. 1 fight in Wales at the moment is to ensure that electrification from Cardiff to Swansea takes place. We have not given up. We will still be pestering. We tabled questions last week and this week, and are organising meetings. We have not given up on that.

In conclusion, we have two great opportunities to return Wales to her former glory as a provider of the nation’s energy, this time with cleaner, greener technologies that will last hundreds of years, create tens of thousands of jobs and, most importantly, save the planet. I urge the Minister and his Government to rise up to the challenge, do their bit for Wales, the UK and the planet, and get these projects moving.

--- Later in debate ---

[Geraint Davies]

On a point of order, Mr Paisley. Is it in order for the Minister to refer directly to a comment that I made about the Government’s prevarication over three or four years about the cost of energy, which has created massive uncertainty in the business community, but not to allow me to intervene on that point?

[Ian Paisley (in the Chair)]

You have made a point, but I do not believe that it is a point of order.

[Guto Bebb]

I highlight again, therefore, in response to the comments that this Government have not supported energy generation in Wales, that the facts speak for themselves. The opportunities for further development have been discussed by the hon. Member for Ynys Môn and other hon. Members. I turn particularly to Anglesey’s potential for nuclear.

I think that everybody who is committed to the economic regeneration of north-west Wales is aware of the potential in nuclear. The hon. Gentleman has been rightly applauded by colleagues from all parties for the work that he has done to ensure that the development of nuclear does not happen in a vacuum but is fully integrated into the further and higher education sectors. We in north Wales can only be proud of how the HE and FE sectors are investing, in advance of any decision on the nuclear station on Ynys Môn, in order to ensure that the economic opportunities that come along with it are available for local people as well. We should be proud of that integration. Similarly, he highlighted that renewable energy is a success story in Wales. One of those successes, as I mentioned in an intervention, is the way that the FE sector in north Wales has tried to ensure that work opportunities servicing wind farms off the coast are open to local people.

North Wales is taking an integrated approach. The Government—both the Wales Office and the Department for Business, Energy and Industrial Strategy—recognise that as a positive sign of an area that is looking constructively at how we can contribute to the UK energy mix. Nuclear offers great opportunities as well as great challenges. This Government are the first to have commissioned and agreed to a new nuclear power station, but that was also a long-drawn-out process, because the sums involved and the implications of the investment are significant. The same will be true of the new Wylfa Newydd. It is imperative, in my view, that we reach a successful conclusion. In Horizon, we have significant partners willing to work with Government, but the decisions have to be right.

As a Minister in the Wales Office, I am pleased. I take with a pinch of salt the view of the hon. Member for Ynys Môn that I should not be in my place today, but I would have attended this debate regardless. Since taking my position at the Wales Office, I have been pleased to visit the current Wylfa station before decommissioning started, I will be pleased to visit the new proposed site and I have been pleased to visit Trawsfynydd, because the Wales Office knows full well how the energy mix in Wales can contribute to our economic redevelopment. That is why so many Conservatives in south Wales support the lagoon.

The small modular reactor opportunity is also an exciting prospect. The hon. Member for Ynys Môn mentioned the cabling systems that will be required to transfer electricity from Wylfa Newydd; my understanding is that the potential site of a small modular reactor in Trawsfynydd already has enhanced connectivity to the national grid. I take seriously the opportunity to build a small modular reactor in Trawsfynydd, and I am pleased to say to the House that I will visit there on Tuesday with a Minister for the northern powerhouse. We understand that although the consequences of a decision on Wylfa Newydd or a small modular reactor in Trawsfynydd would benefit the economy in north Wales, they are far more significant than that. As hon. Members have said, they have the potential not just to transform the economy of north Wales—as other projects could in south Wales—but to have an impact on the wider supply chain within the United Kingdom.

Contrary to Opposition Members’ comments, the Government have invested in city region deals for Cardiff and Swansea, so I must ask why we are accused of ignoring the Swansea city region. One reason for the Welsh and UK Governments’ keenness to see a cross-border north Wales growth deal is the energy supply chains. The energy opportunities in north Wales are not confined to north Wales; they are dependent on cross-border connectivity.

--- Later in debate ---

[Geraint Davies]

I was asking about the timetable, not the city deal.

[Ian Paisley (in the Chair)]

Order. The Minister has not given way, as the hon. Gentleman knows.

[Guto Bebb]

Thank you, Mr Paisley. The tidal lagoon was not part of the Swansea region deal, as the hon. Member for Swansea West should have been aware.

[Guto Bebb]

Good.

I should also address the possibility of moving forward with the small modular reactor—as I said, we will visit Trawsfynydd very shortly—and the renewables issues that hon. Members have raised. Our track record on renewables is positive. I fully accept that wind farm costs have fallen quite significantly as a result of investments made, but I think the comments of the hon. Member for Vale of Clwyd about the success of our renewables project since we have been in government were unreasonable. There has been more than £52 billion of investment in renewables since 2010—not an insignificant sum.

As for expected energy generation, we are now on track to deliver 35% of the UK’s electricity demand through renewable sources. Far from being a failure, that is a success story that we should be proud of. I am surprised by the accusation that the Government have not been proactive in our investment within the renewables sector. The evidence points the other way. It is all very well talking about projections, but in 2015 we achieved 25% of energy generation through renewable sources.

These are successful outcomes of an integrated Government policy that should be supported. Their success is reflected in the fall in the cost of renewable sources of energy. Opposition Members talk about failure to support developments in Wales, but it is worth pointing out that 49,662 sites in Wales are generating renewable energy—another success story that we should be proud of.

That point brings me on to an issue raised by the hon. Member for Ceredigion (Ben Lake). I have not responded to him in this Chamber before, so I welcome him to his place. He is absolutely right that one of the success stories of north-west Wales has been community hydro projects. My constituency has a few such projects, and I know full well that there are similar projects in the constituency of the hon. Member for Arfon (Hywel Williams), who is not here today. Community energy projects are really exciting, because they generate electricity locally and give a financial benefit to the locality. The Government support such developments, which are crucial to our energy policy, but we need to highlight to the Welsh Government how they are taxed differently in Wales from in Scotland and England.

The Welsh Government have been very constructive on energy generation in many ways, but the taxes on community projects—on equipment used in small hydro plants, for example—are not beneficial to the development of further community projects. That can be contrasted with the situation in England, which is a result of the UK Government’s decisions, and in Scotland. The Barnett consequentials of the decisions made in England could be applied in Wales; certainly the funding has gone to Wales.

We have a good story to tell on renewables. It is a success story that has really touched the grassroots, but we need to make sure that it continues, and that requires action both from the Welsh Government and from Westminster.

I apologise that I am running out of time, but I would like to allow the hon. Member for Ynys Môn time to conclude. He mentioned marine energy opportunities beyond tidal lagoons. I fully understand why tidal lagoons have dominated the debate—the hon. Members for Gower (Tonia Antoniazzi), for Swansea East (Carolyn Harris) and for Swansea West have a real interest in the issue, as do Members throughout Wales, because we understand the potential—but there is a real opportunity for innovatively designed marine energy proposals in Wales. I know that for a fact, because I have visited potential developments off Holyhead and off the Pembrokeshire coast. This is an opportunity for new technology to be developed to put Wales at the forefront of renewable energy opportunities.

The Government are looking carefully at these issues. We want to be supportive, which is why I have visited sites in Pembrokeshire and Ynys Môn and met Anglesey developers. We want to see renewable technologies operating in Wales, but within the context of an energy policy that is fair to the consumer and the business user and supports the development of the energy sector in Wales and the job creation that goes with it.

I thank the hon. Member for Ynys Môn again for bringing the matter to our attention. I apologise if I did not respond to every issue he raised, but 15 minutes is 15 minutes, and I am more than happy to write to him with further guidance on any specific issues. To hon. Members who are concerned about the wait for the tidal lagoon decision, I say that the Wales Office continues to argue strongly for that decision to be made, but—as has consistently been stated—it must be right for Swansea, for people who support the tidal lagoon there, and for our energy policy and its costs. That is the decision that the Government will deliver in due course.

[Ian Paisley (in the Chair)]

At the beginning of the debate I thought we might run out of speakers. We clearly did not; Members were very energised. Will the Member who moved the motion, the hon. Member for Ynys Môn (Albert Owen), give us a two-minute wind-up?