Richard Little: Unlocking Wales’s energy potential

Article by Richard Little, PNZC Director at RWE Generation UK

Many won’t be familiar with the RWE name, despite our being one of the UK’s leading power generators, and by far the largest power producer from both conventional and renewable sources in Wales.  RWE has invested over £3 billion in Wales over the last dozen years and built the UK’s largest and (at the time) most efficient Combined Cycle Gas Turbine power station at Pembroke in SW Wales, as well as Wales’s largest offshore wind farm Gwynt y Môr off the North Wales coast.  RWE also built the last major onshore wind farm in Wales at Clocaenog Forest.

We are now active across a range of energy transition projects including decarbonising Pembroke Power Station through carbon capture, green hydrogen production (from water), batteries, grid stability projects, onshore and offshore wind, and solar PV.

I make these points only to establish our credentials for having a view on the challenges of developing major infrastructure projects in Wales, and to give credibility to our ambitions to deliver further major clean energy projects in Wales, given the right conditions.

First - a couple of uncomfortable statistics for context:

• Construction of our 96 megawatt (MW) Clocaenog Forest wind farm project was completed in 2020. Since then, less than 3.5 MW of wind power has been built in Wales (1).
• From the very beginnings of the Contracts for Difference (CfD) low carbon energy auctions established by UK Government in 2015, less than 2% of the capacity has been awarded to Welsh projects.  Over those 10 years, the remaining 98% of capacity, and therefore bulk of investment, has flowed to Scottish and English projects.
   

So why is this?

All too often I hear “planning” quoted as the constraint, but the problem goes much deeper than that. After all, the planning authorities simply work through their process, and any planning resource constraints (also often quoted) can be assisted with established mechanisms such as project-funded Planning Performance Agreements (PPAs).

The reality is that energy projects in Wales face a raft of hurdles that are in some way higher than those that developers face in other parts of the UK.  For instance:

Grid:  The current Welsh Government stated preference for undergrounding of High Voltage networks means that grid connections would be circa five times more expensive to build than conventional overground connections.  When combining this political stance with the current lack of transmission capacity, particularly in Mid Wales, the vast wind resource of Wales is inaccessible or prohibitively expensive to connect.

Peat:  Welsh Government currently has a zero tolerance to disturbance of peat, even that degraded by forestry and agricultural practices, with little account taken of substantial peat enhancement measures delivered by developers as an integral part of their design.

National Parks: Circa 20% of Wales is already designated as a National Park where development of large-scale energy projects is not permitted.  Current plans to add another park area would bring that proportion to around 25%, in contrast with only 7% in Scotland and 9% in England.  Developers can even face planning challenges if a project is visible from a National Park, so the overall impact of this landscape designation is profound. 

Community ownership / benefits: RWE has a long and proud history of delivering community funds in Wales (we invested over £3.1m in 2024 alone) and is offering community ownership at a number of our latest projects.   However, there is a view expressed in Wales that a greater proportion of the benefits of each project should be carved out, either by mandating community shared ownership as a percentage, or raising the level of funding (£ per MW). Bear in mind where I started though, that there have effectively been no projects built in Wales in the last five years, and that other UK nations are consistently delivering more cost-competitive projects.  Being blunt, a greater percentage of nothing is still nothing.

This list isn’t exhaustive…

For Wales the solution to all this can only be a complete levelling of critical infrastructure policy with the other nations.  If the hurdles to deployment in Wales are even a fraction higher then, cumulatively, this means that Wales will always lose out.  That means missing the opportunity of decades of highly skilled construction, operations and maintenance jobs, supply chain investment and associated jobs, and secondary benefits to communities through accommodation and hospitality, never mind the challenge of delivering on Wales’s legally-binding CO2 targets.

Wales has vast potential in its natural resources, and in the ambitions of the many nationally significant industries that have their home in Wales to invest broadly across decarbonisation.  The energy transition is a multi-decade project with many billions of pounds of investment into Wales possible, but we must have clear and consistent alignment on policy, and cross-UK alignment on deployment conditions.

Richard Little, Director of the RWE Pembroke Net Zero Centre, a combination of energy transition projects centred on the Pembroke Power Station asset and land.

Footnote to WG reports:

• 2021: energy-generation-in-wales-2021.pdf (3.4MW across 2 sites)
• 2022: Energy Generation in Wales: 2022 (6 kilowatts on a single site)
• 2023: Energy Use in Wales 2023 (0MW)