UK Energy Infrastructure (Wales)

Jessica Morden Excerpts

Wednesday 17th July 2013 Westminster Hall

[Geraint Davies (Swansea West) (Lab/Co-op)]

It is a pleasure to serve under your chairpersonship, Mr Bayley, as I know that you are a green Chair in a green chair. In this debate, I will talk about Wales’s contribution to UK energy, and the development thereof.

Wales currently produces about 22,000 GWh of energy a year and consumes about 18,000 GW. We export approximately 4,000 GWh to England, but that figure is due to grow because of the abundant opportunities provided by the sea and the wind, and by solar energy. Essentially, I want to discuss the need to have the right balance between green energy and green tourism, with future tourism and economic opportunities paying due respect to our seascape and landscape.

The global population is growing, from something like 6 billion to 9 billion, and we are therefore not in control of the environment beyond our immediate physical surroundings. The size of the middle class in China, for instance, has grown from 2% to 20% of the population in the past 10 years, and more people from developing nations are travelling. Opportunities for green tourism in places such as Wales, which has a relatively sparse population, are therefore enormous and need to be borne in mind, as do opportunities in the creative industries. “Da Vinci’s Demons” is filmed at the old Fabian way site in my area. Our landscapes lend themselves to extraordinary Hollywood-type productions. We need a balance.

There are opportunities for nuclear development in Anglesey to produce another 34 GWh, which would be an increase of 150% in Wales’s total energy production and should justify further investment in Wales. We do not get our fair share of investment: some 80% of current infrastructure investment plans and 90% of transport plans are for London and the south-east. I know that hon. Members are interested in freight, for instance, and there is a case for investment in that.

[Jessica Morden (Newport East) (Lab)]

Uskmouth power station in my constituency, which is one of the oldest power stations, is having huge problems getting rail freight capacity—it is difficult for rail freight companies to invest in the future—which is causing problems locally and increasing the costs to the power station’s operators. Does my hon. Friend agree that the Government should consider that further?

[Geraint Davies]

I completely agree. The big political debate is the balance between growth and cuts to get down the deficit, and we need to focus on growth, which means investment in infrastructure. We need to get the right gauges for freight—from Milford Haven, Swansea, Cardiff or Newport—and we need to move around universal freight modules, which are ship-carried in many instances, and energy from power stations, as my hon. Friend mentioned. There is a case for investment now, given the expected future income from new energy sources in Wales. There has been some discussion of a barrage that might generate up to 16,500 GWh, which would be 5% of UK energy, but the idea has clearly been kicked into touch, partly by the European habitats directive.

Meanwhile, the Swansea Lagoon is a big issue in the local press. It could generate some 400 GWh, which would be 0.1% of UK consumption and 2% of what the barrage could produce. That is a relatively small level of production, but it is big scheme in that it would take £650 million to build, with its footprint extending from Swansea docks halfway to Mumbles pier. The electricity produced would be enough for about 121,000 households, but it would be for the UK grid and not for Swansea itself, which has about that many households. I am concerned, therefore, that on balance the development is at least neutral in tourism terms. We hope to become the UK city of culture in 2017—we are on the shortlist of four—and next year we celebrate the 100th anniversary of Dylan Thomas’s birth. We have high hopes for prosperity from cultural tourism in the emerging Swansea Bay city region, so preserving our iconic view is enormously important to us locally.

--- Later in debate ---

[Michael Fallon]

Yes, I am happy to do so. We are now accelerating the pace of shale gas exploration by putting in place a robust regulatory framework, and ensuring that where shale is hosted by a local community, that local community benefits, just as it benefits from onshore wind farms and as it will do from nuclear stations. The Chancellor has also announced fiscal measures to incentivise the expensive early years of exploration. My right hon. Friend the Secretary of State for Communities and Local Government will be setting out some amended planning guidance so that both developers and local communities that want to consider their applications will be clearer about how the applications are to be handled. We want to make sure that we do not miss out on the potential of shale gas.

Last month, we published the first authoritative estimate of the amount of shale lying underneath the northern basin—the Bowland-Hodder basin covering the northern counties of Lancashire, Cheshire, Yorkshire and so on. We now have a similar study going on in the south of England. Eventually we need to start mapping the resource right across the United Kingdom.

Finally, I can say that I have authorised a new 14th onshore licensing round, which is in preparation at the moment and will commence next year. Again, that should provide opportunities right across the United Kingdom to check and tap the potential of this resource. It is only potential at the moment; we do not yet know whether shale gas is recoverable as cost-effectively and as easily as it is in the United States. We know that the shale here appears to be thicker, so potentially there is a lot of gas that could be extracted and that could make a real difference to our economy. We also know that given the increasing volatility of international oil and gas prices, we have to do more to secure our energy supplies here at home by encouraging a stronger mix of energy from different sources, whether it is wind, other renewables, nuclear, other gas or shale gas.

[Jessica Morden]

The Minister rightly talks about long-term energy projects. In the short term, we have to maximise the capacity of what we have, particularly when demand is high. Will he look at the issue of lack of rail freight for existing power stations?

[Michael Fallon]

I am certainly prepared to look at that.

In conclusion, with the framework for investment in place, the energy legislation in front of the House and the details of electricity and market reform being published in greater detail and in draft, we now need to get investment flowing. That is the challenge over the coming years. If we can get investment in a new efficient, low-carbon and diverse energy mix, the jobs and growth that we all want to see will follow. Based on the evidence to date, and the points I have been making, I am confident that Wales is up to the challenge. It is already seeing deployment on the ground, and it is well placed to take advantage of the new investment that we need.