Marine Renewables Industry

Liz Saville Roberts Excerpts

Thursday 16th January 2025 Westminster Hall

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Diolch yn fawr iawn, Ms Jardine. I welcome you to your first chairmanship role here. I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing this debate.

With a wind-lashed coastline stretching for a grand total of 1,680 miles, Wales has an abundance of marine energy potential. This growing sector already contributes significant sums to the Welsh economy. Last financial year, the marine renewable energy sector delivered £29.9 million to the Welsh economy, and it currently sustains 429 full-time jobs. We would like the number of jobs to be way more than that, please.

Tidal stream is the largest contributor to the sector at present, and developers are set to deliver 28 MW-worth of development by 2028. That number is expected to grow with each annual auction round. For the future, it is estimated that Wales has the potential to generate up to 6 GW-worth of wave and tidal stream energy.

I have mentioned jobs. Development and installation of 1 GW alone could support 440 full-time jobs during generation—and those in communities that currently suffer deprivation. That is a theme for many Members of Parliament from what might be called the Celtic fringe, but it really matters to us. We have such potential to generate more energy for the United Kingdom in its entirety and to generate energy security, but at the same time this can be a real levelling-up prospect for communities that have suffered in low-wage economies. Particularly in relation to Wales, I could mention Holyhead; I could mention my own community of Dwyfor Meirionnydd; and I could mention Milford Haven. We should plan ahead and look at the futures of those communities, particularly somewhere like Milford Haven, which is so dependent on fossil fuel at present.

Wales is clearly poised to play a leading role in marine renewables. However, the sector is still in the early stages of development and needs Government support so that it can truly flourish. The Welsh Government have recently announced strategic resource areas for tidal stream, and I welcome that. It is a form of marine planning to designate the future availability of these areas for potential tidal stream energy projects. Of course, in Wales, as elsewhere, it is important to work with other key users of the sea, such as fishermen. There are tourism considerations as well.

This includes, just with regard to my own constituency, the sea off the Llŷn peninsula, where Swnt Enlli—Bardsey sound—has some of the strongest tidal races in the Irish sea. Proudly, Nova Innovation had a project there, but sadly, because of the lack of grid capacity, it eventually pulled out. It is exactly these problems with grid capacity that often hinder the bringing of projects to fruition in bringing their energy onshore from the sea.

Now, of course, I turn to Ynys Môn. I am speaking in place of my hon. Friend the Member for Ynys Môn (Llinos Medi), who is glad to be reopening one of the berths at Holyhead. As of today, ferries are again sailing from Holyhead, which is very good news for not just Holyhead and north Wales, but the connections with Ireland. We have existing tidal stream projects there, such as the Morlais project, and we see a potential model that addresses the problem of grid connection, which might be replicated elsewhere.

Morlais came about with major investment from both the European Union and the Welsh Government, with a grid substation already developed and the environmental consents already in place—that is the important point. That provides an offering to tidal stream developers in which there is a reduced cost and risk that mean that they are sure of getting their technology into the water.

[Wera Hobhouse (Bath) (LD)]

I know that the National Energy System Operator has just put forward proposals to Government on how to address the grid queue and how it should be renewed and reviewed. Does the right hon. Lady agree that we need to hear from Government as soon as possible what the reorganisation of the grid queue would mean and which projects would be prioritised?

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[Liz Saville Roberts]

When we find ourselves discussing any large-scale energy project, we come up against some of these pragmatic, practical questions. Until we have answers to those, it is difficult for us as local MPs to do more for our constituencies than promote. I have found myself in a similar situation with Trawsfynydd and small nuclear reactors; I have been in this place talking about that for 10 years and have not got past the pragmatic first points to actually see further developments.

The UK Government could use Great British Energy to invest in and develop pre-leased and consented grid connector sites for marine energy projects in Wales and elsewhere. However, the Great British Energy Bill does not make any reference to tidal stream or to marine renewable technologies, and, sadly, the Welsh Government’s announcement of tidal stream SRAs does not make any reference to GB Energy—if only those things were joined up and we had that co-working between Cardiff and London that is so vaunted. In his summing up, can the Minister set out what relationship GB Energy will have with the Welsh Government’s SRAs, because at present there seems to be a lack of joined-up thinking? I also echo the sector’s call for the Government to commit £250 million of Great British Energy’s budget to accelerate the development of and embed UK content in tidal stream projects and for a 1 GW target for deployment by 2035.

I turn to a particularly Welsh issue, although other hon. Members have touched on it—namely, the relationship or partnership between GB Energy and the Crown Estate, which will be crucial in the development of marine energy projects, given that it owns the sea bed to 12 nautical miles from the coast, including in Wales. It is therefore vital that Wales has full control over the Crown Estate, as is the case in Scotland, so that the people of Wales, not civil servants in Whitehall, shape the development of marine renewables to fit our nation’s needs and aspirations. That comparison between Wales and Scotland will not go away, and in a moment I will show hon. Members why. We could therefore ensure real benefits to Welsh communities, including the use of local supply chains and jobs in deprived, low-wage areas that will follow on from those projects. We could shape those with Welsh needs in mind.

[Jayne Kirkham]

I have a question about the Crown Estate and the devolution of it. How would that work in the Celtic sea, where Cornwall would obviously benefit a great deal from some of the floating offshore wind in other installations there?

[Liz Saville Roberts]

Some of the politics of Cornwall already looks to Wales for guidelines; the same question arises from Scotland regarding where the border lies with England there. None the less, from Wales’s point of view, we have suffered a long tradition of extractive industries, and that looks set to continue.

There is a fair argument for the devolvement of the Crown Estate in Wales. The only argument against it is that it would cause confusion in the intervening point, but any change causes confusion. Devolution of the Crown Estate, which would give Wales, rather than the Treasury, the power to manage local supply chains is a call from many politicians in Wales—including many Welsh Labour politicians—that will not go away.

Scotland, where the Crown Estate is devolved, has successfully aligned the Crown Estate with the marine planning process and sought to make use of those local supply chains. The Scottish Government also distribute the net revenue generated by the Scottish Crown Estate marine assets to coastal local authority areas—those poor areas which we all want to seek every means we can to support. That coastal community benefit amounted to £11.1 million in 2023-24. Why are we preventing that from happening in other places? Wales should be able to do the same. The Minister will no doubt say, because this is the argument we have heard before, that devolution will fragment the market and deter investment. The success of the Scottish Crown Estate emphatically proves that not to be the case.

I want to touch on the contracts for difference auction process and EU innovation funding. To date, the marine renewables industry has been set at £20 million, £10 million and £15 million ringfenced in the last three auctions. If we want to build a renewable energy industry with high levels of UK content, the level needs to be set—as the lead Member for this debate, the right hon. Member for Orkney and Shetland, has said—at £50 million for tidal stream and £5 million for wave. I am very supportive of that for this year’s renewable auction. Marine Energy Wales says that without this ringfence, Welsh tidal projects will be disadvantaged, stalling momentum and undermining the benefits already delivered by sites like Morlais.

In addition to ringfenced funding domestically, we should maximise institutional flows of funds for the sector. Leaving the European emissions trading scheme has meant that the UK no longer receives sums from the related EU innovation fund. Rejoining that scheme would help unlock further sources of funding for marine developments.

I welcome the discussion of the marine energy task force. Of course, skills are devolved to Wales. We need to make sure that the advantages work between the Welsh Government and what is being proposed here, and that there is discussion on that.

Given the weather we have today in London, we are not going to be doing much in the way of tidal stream in the Thames, but this is the sort of day in winter—grey, no wind, renewables not otherwise generating—when we should take the opportunity to bring forward further electricity supplies.

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[Michael Shanks]

I won’t. Hopefully, it was not the upcoming speeches from me and the shadow Minister that drove her from Chamber. In any event, it is a delight to be here.

I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) not just for securing this debate and the customary way that he introduced it, but for the engagement we have had since I came into this post on this issue and many others. He is a great champion not just of marine renewables, but of Orkney and Shetland. In fact, in the last debate we had in this Chamber, he declared that God came from Orkney and Shetland. I am glad that we did not get into the theological nature of the debate this afternoon.

I thank all hon. Members for their contributions to this wide-ranging debate. I pay tribute to the various policy teams and organisations that have clearly done a very effective job of getting a consistent set of lines out to Members of Parliament; they have certainly earned their salary this week. Those are important points, and I will address each of them.

As hon. Members have said, the sector has enormous potential relating not just to energy outcomes, but to the many positive opportunities in skills, supply chains and innovation. The UK can export that innovation to the rest of the world. I will say at the very beginning that the Government are hugely supportive of marine energy, and we want to do what we can to support it.

I will start by giving some context on the Government’s position. As Members will be aware—many have raised it today—we published the “Clean Power 2030” action plan just before Christmas. That was an important step in providing some considerable detail on how the Government will deliver on our mission of clean power by 2030, which is hugely ambitious but achievable. It picks up on some of the strands that Members have raised this afternoon, including how we will deliver more effective grid connections and connections reform, as well as look at the planning system and consenting. It is about all the various things that Members have raised that hold back so much of the delivery of such projects across the country.

Clean power by 2030 is not some ideological project, as the shadow Minister, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), and others in the Conservative party might like to suggest. It is a critical pathway for how we deliver energy security in the long term; all our constituents have been facing a considerable cost of living crisis as a result of us not having home-grown energy security. The clean power mission is about ensuring that we not only have that energy security but tackle the climate crisis and deliver economic growth. I make no apologies for the fact that we are a Government moving at pace, because it is important that we grasp the opportunities for the implementation of both marine technologies and the many other innovative technologies that Britain can be a world leader in delivering. It is also our best opportunity to deliver cheaper energy for people across the country.

I want to pick up specifically on the point made by the hon. Member for South Devon (Caroline Voaden) and the shadow Minister on the clean power action plan. It is right to say that marine renewables are not in the top lines of the pathways to clean power by 2030, because we do not think that that technology is quite at the point where it will be deployed at scale to help us to achieve that mission. That does not mean that we do not hope that projects will come onstream before 2030.

Although we are sprinting to deliver clean power by 2030, that will not be the end of the journey. By 2050, we estimate that the electricity demand in this country will have doubled, so this journey will require us to harness all possible technologies to continue to expand our energy supply over the coming decades. That is where I think marine renewables will start to play more of an important role, as they get past the commercialisation challenges and their price comes down, and as we have some more confidence in the technology.

[Liz Saville Roberts]

I do not know whether the Minister will touch on the Crown Estate, so I am taking the opportunity now. On the point about electricity demand doubling, there is such potential in areas such as Wales and Cornwall, if it so wishes. The concept that the Crown Estate should be so centralised in the United Kingdom works badly in the interests of not only Wales but areas such as Cornwall. What does the Minister tell his Welsh Labour colleagues about why that issue cannot be devolved, when it would make such a difference to our local economies?

[Michael Shanks]

I will touch on the Crown Estate later in my speech. On that specific point, I am afraid that I fundamentally disagree with the idea that devolving the Crown Estate is the answer, and I take issue with the suggestion that the Crown Estate’s considerations in Wales somehow come from Whitehall. I have met a number of representatives of the Crown Estate, and they are in engaged with the Welsh Government and with communities in Wales. If we can do more on that, I am very happy to reach out to the Crown Estate, although I am not directly responsible for it and it is not accountable to me. Of course, it has published a number of strategies recently and there is more coming on the long-term vision for the Celtic sea and other parts of the Crown Estate in Wales. It is about partnership work, which includes not just bringing together the Crown Estate but how we look at the planning system and consenting, as well as the strategic spatial energy plan more broadly to plan for the long term. I will come back to some of those points later.

Although marine renewables are not at the centre of that clean power action plan to 2030, they will hugely benefit from the actions that we will deliver through it, not least on grid connections. Grid connections are all about future-proofing the grid in this country so that it can meet the demand of the future, and prioritising a grid queue that has got out of control with over 700 GW waiting to connect, which is simply not deliverable.

I would like to turn to the issue of funding, but first I wish a happy birthday to the hon. Member for Taunton and Wellington (Gideon Amos), who does not look a day over 21—but that is the last time I will pander to the Lib Dems. He raised a point about Great British Energy, as did a number of other hon. Members, many of whom I cannot help but notice did not vote for it, but now want it to be headquartered in their constituencies and deliver significant amounts of funding. Great British Energy will play a role in this space. It is our first publicly owned energy champion, and it will deliver and deploy clean power across the country and help with some of the innovation and development work.

Marine renewables are exactly the kind of technology that Great British Energy might invest in at an early stage and have a significant impact on, rather than technologies that are at a more confident stage. Hon. Members may not have had the opportunity to reach out to Great British Energy—the Bill is still going through the House of Lords, so it does not technically exist yet—but the start-up chair, Jürgen Maier, has had a number of meetings across the UK, has engaged on questions about a whole range of technologies and is keen to continue to do so. It will be for Great British Energy, as an independent company, to make its own investment decisions based on a whole range of factors, including the return on investment potential, but I see marine renewable technology as a potential benefit for it.

We think that tidal stream energy will play a significant role, particularly beyond 2030. As many Members raised, tidal stream will bring balancing benefits to a future electricity system that will have renewables at its heart. The balancing role that tidal can play—as a baseload, in the traditional way of thinking about the electricity system—would be important. Currently over half of the world’s tidal stream deployment is situated in UK waters. However, this Government want to go further and faster, as the technology has huge potential.

Aside from having one of the world’s best tidal resources, the UK also hosts world-leading marine energy hubs. Many hon. Members spoke about the EMEC. I have been pleased to speak to the EMEC over the last few months; the Minister for Climate, my hon. Friend the Member for Bristol East (Kerry McCarthy), visited recently and I hope to get to Orkney to do the same at some point.

When we came into power, the Government took the contracts for difference option that had been started by the previous Government and increased the budget to try to get as many projects as we could over the line. That led to a 50% increase in the ringfence for tidal stream to £15 million in the last allocation round. That demonstrated our commitment to the technology and ensured that 28 MW of tidal stream was secured in allocation round 6, including 9 MW for projects based in Orkney.