Climate Change, Environment, and Infrastructure Committee

Croeso nôl i gyfarfod y pwyllgor. Mae'n dda gweld panel newydd gyda ni o dystion o'n blaenau ni ar gyfer yr ail sesiwn fel rhan o'r gwaith rŷn ni'n ei wneud i edrych ar ynni adnewyddadwy.

Gaf i groeso—estyn croeso dylwn i ddweud—i Peter Bingham, sy'n brif beiriannydd a dirprwy gyfarwyddwr sicrwydd a dadansoddi gyda Ofgem; Graham Halladay, sy'n gyfarwyddwr gweithrediadau gyda Western Power Distribution; a Liam O'Sullivan, sy'n gyfarwyddwr SP Manweb—SP Energy Networks. Croeso cynnes iawn i'r tri ohonoch chi.

Awn ni'n syth i gwestiynau. Mae gennym ni awr wedi'i glustnodi, felly fe wnawn ni fwrw ati yn syth. Fe wnaf i gychwyn, os caf i, drwy ofyn: ydych chi'n credu bod—? Neu beth ydych chi'n credu dylai blaenoriaethau Llywodraeth Cymru fod yn y maes yma, yng nghyd-destun, wrth gwrs, y pwerau sydd ganddi, sydd, wrth gwrs, yn mynd i gyfyngu efallai ar beth mae'n gallu ei gyflawni, er mwyn cyflymu'r broses o ddatblygu ynni adnewyddadwy yng Nghymru? Pwy sydd eisiau ateb hwnna yn gyntaf? Ie, Liam.

I think, from a network perspective, obviously we're committed to working with Welsh Government on achieving its priorities for net zero. That's why, over the period from 2023 to 2028, we intend to invest over £650 million in the electrical infrastructure for Wales, subject to our business plans being approved by Ofgem.

However, in terms of priorities, we think network planning is probably one of the key priorities, and not just planning for the electricity network, but taking that whole-system approach to planning so that we can consider all vectors and ensure that we get the right solution that benefits customers in the short, medium and long term, right the way out to 2050.

We think that also looking at innovation in Wales is a big priority. Wales has a number of opportunities that we're currently exploring in terms of innovation and we want to make sure, as a company, that we're putting Wales at the very forefront of innovation when it comes to decarbonisation, particularly in the heat and transport space, but also in network resilience and automation and operation.

Another priority is working collaboratively with both Welsh Government and local authorities on prioritisation, particularly for demand connections, where that connection may be able to facilitate the creation of jobs, particularly serving areas where well-paid jobs perhaps are few and far between and hard to come by. So, a collaborative approach to prioritisation and planning would be something we would very much welcome.

We have already carried out over 500 optioneering and feasibility studies, largely with the Welsh Government but also with other parties, including local authorities, to try and understand where prioritisation could take place in order to get maximum benefit for all parties, but particularly for the customers and inhabitants of that local area. So, for me, those would be key priorities.

Yes, okay. There's quite a few there. Graham or Peter, would you want to add any others? Yes, Graham, first of all, then.

Yes. I certainly think that—. I share the view from SP that it is about working together. Certainly, one of our key priorities is working with the local authorities to build up their local energy plans, and we see that local plans and community energy are going to be key to delivering the ambitions of the Welsh Government, and we certainly are fully supportive of that. We have within our business plan for Electricity Distribution 2 dedicated engineers to work specifically with the authorities within south Wales to identify those opportunities and to ensure that our network is going to be ready to meet those requirements. I think innovation is going to be key, but I also think that data and digitalisation is going to be a key part of this as well, and certainly we are taking great strides now to make our data publicly available so that it's not only ourselves as WPD that have access and use of that data, but that data is widely available for use by either local authorities or the Welsh Government itself, or other partners. I think the whole system is definitely going to be a key part of that, and so working across the whole of Wales is going to be key, so we are within our business plan working closely now with SP and National Grid transmission to ensure that we have a co-ordinated approach, to ensure that we get the best outcome and the most economic outcome for Wales.

Yes, thank you, Graham, and I appreciate, Peter, your relationship or your role in this context, is slightly different, of course, but I suppose it's maintaining those dynamic relations with Welsh Government and having that dialogue as we move forward.

Yes, absolutely. Our role is to enable these net-zero plans that the networks are putting forward. For me, from the Welsh Government, it's really important that there's a vision for the future of renewable energy in Wales that's clearly articulated, that explores the art of the possible. There are lots of pathways to achieving net zero. There are lots of options available. It's making sure that there's a clear plan that everybody can get behind, that we can get behind, in terms of supporting the networks, so we can drive it forward. So, yes, let's have a clear vision that we can all articulate and get behind.

Sure. Thank you for that. Having that clear vision has to be based on a clear understanding of how much renewable energy we need to meet our net-zero targets for 2050 and anything else, if we want to be a net exporter or just self sufficient. I know that's something that's been touched upon. Maybe I could ask Liam and Graham initially: do you believe that the Welsh Government has a sufficient clarity around that?

From my own perspective, I think they do have clarity. One of the indications that that is the case is the alignment between the results of the renewable energies deep dive and our own distribution future energy scenarios document. There's very good alignment in terms of the outcomes and findings between those two documents, which suggests that Welsh Government and our own thinking are very close in terms of what is required. Obviously, as Peter outlined there, there are lots of paths to get there, but we at least know what the destination is and are working collaboratively to achieve that.

And Graham.

Yes. So, I think the Welsh Government have been very clear on their ambitions and we're very supportive of those. I think, to echo what's been said, our future energy scenarios that we published seem to very much align with that pathway. To echo what Peter said, there are many different pathways to achieve this, and, clearly, I think, whatever happens, the plan needs to be flexible. As time goes on, things will change. The way people use energy is clearly changing now and will continue to change. Investment in heat and insulation within homes will change, again, the way that energy is used. So, I think the key is that there are many different pathways, but what we need to be is very flexible about how we approach that and ensure that, whatever pathway is eventually taken, whatever the end goal is, we as WPD, working with Ofgem, the regulator, have the ability to invest and be flexible in our investment in the network to ensure that we can meet those goals.

There's been reference to the deep dive, clearly, and that's quite a central plank of the work that we're doing as a committee in terms of what we're looking at. I'm just interested to know whether you feel that there might be some omissions in the scope or in the recommendations of the deep dive. Is there anything you feel that has been omitted from that process? Peter.

I've had lots of interactions with Welsh Government on their plans. To your earlier question in terms of is there a clear understanding of the challenge, I guess, the need for renewable energy, I think the Welsh Government have got a good grasp of that from my interaction. Some of the questions I had you outlined at the beginning: the question of does Wales want to be self-sufficient, or a net exporter of renewable energy, does it want to harness the renewable potential onshore, or offshore. There are all sorts of different options and different pathways, as we said earlier, that they can take.

There are a couple of areas that I didn't see. First of all, I guess, having lots of renewables is great to meet your needs, but it's intermittent, so the question for me is how do you fill the gaps when it's not sunny, when it's not windy and when it's cold. Flexibility absolutely is a key part f that future energy system to help fill that gap, so I think there's something missing. That might be dispatchable generation, large-scale storage; I'm not entirely sure what the plan is in that respect.

The other area that I've asked about many times is to try and understand what are the perceived blockers in terms of the current market arrangement, the current regulatory framework, the current statutory framework that is inhibiting progress towards net zero. I'm keen to understand what those are, so I can take those back and see if there's a way to address them.

Yes, okay. Thank you, Peter. Liam, Graham, do you have any reflections on the deep dive generally, before we come on to some specifics?

I think in general, it's fairly comprehensive in terms of the conclusions and outputs. As I've mentioned before, it closely aligns with our own studies into this particular area.

Okay. There was a suggestion it might have been too comprehensive, actually, trying to be too broad, in the earlier session that we had. I don't know whether that's something that you share. Graham.

I think we're fully supportive of that document and the ambitions within it. We feel that it's a very comprehensive document, one that's a very good start, and I think what we're able to do from now on is to build on that by working closely together and in collaboration.

Yes, okay. Thank you so much. We'll get on to some of the specifics now. We'll move on to Delyth.

Diolch, Gadeirydd. Bore da, bawb. Could you please talk us through your views on what the Welsh Government is doing in terms of scaling up local energy plans and creating a national energy plan? I don't know if you saw some of our earlier sessions, because this came up then. Are there any potential risks that you'd like us to kind of keep at the front of our mind, as well as the good things that could come about because of this? And just to save time, because I know that we're going to be short on time, could you also at the same time, please, talk us through what your role is likely to be in the development of both the national and local energy plans?

I'll go first, if that's all right. From a local area perspective, firstly, we absolutely fully support local area energy plans, and it's very important that at a community level, people understand the opportunities, challenges and what actions can be taken to maximise the energy potential for local communities. That said, it's also equally important that as a country, we in Wales have a plan that we're working to that sits over the top of all those and gives us that overarching control co-ordination and also sets out clarity in terms of responsibility so that we don't have the situation where people are off working on their own agendas, which may be well be at odds with what we're trying to do at a national policy level.

I think from our business perspective, we're working across all of those spaces. We're actively involved in local area energy plans and we were facilitating the current Conwy council trial. We're working very closely with Conwy on their local area energy plan, and all the other local authorities in the areas that we serve. In terms of our role, I see that as a facilitation role, understanding what local and national ambitions are in terms of energy and then playing our part in facilitating those ambitions. But also, we need to make sure that whatever those ambitions might be, they are firmly rooted in the communities that we serve. As a business, SP Energy Networks is rooted in the communities that it serves. We employ from those communities and the solutions that we put in place are for the benefit of those communities. That's something that cannot be lost, regardless of whether that's at local or national level.

Thank you, Liam.

Graham, did you want to pick up on anything?

Yes, if I can. Thank you. I think the part that Western Power and particularly our independent distribution system operator business plays in the local energy area plans is key. It's certainly something that we are very supportive of, working with all the local authorities to support them in delivering their local energy plans. They feed then into, clearly, the national plan for Wales, but key for us is they feed into our future energy scenarios and our planning for going forward. With that, that's a loop that constantly goes around. We then take that information from those, feed it into our plans and then republish those plans. All of our future energy scenario plans are published down to a local authority level, so it's very clear to see how the local authorities fed into our plans and how those plans have been changed based on the information that's come from those.

Clearly, also, then, for the south Wales licence area that we cover, we have a plan for the whole of our licence area, and then individual plans for each of those individual authorities. And certainly, going forward under ED2, we've got funding in place to have dedicated people that are there embedded within our organisation to work with local authorities across our business to support and help with those local area energy plans, but also, as I've also mentioned already, dedicated people, separate to that, embedded within our business to support community energy groups as well within those, because we see that that is going to be a key part of ensuring that those plans work for the whole community and that nobody is left behind.

I would add that as a national regulator, our job is to make sure that Liam and Graham actually do what they've just described. And, indeed, we have received these plans. We set a requirement on the networks to take account of the local energy plans in setting up their plans for the future. We're currently churning through the plans that they've submitted to make sure that they meet those requirements, and we'll be setting their price controls for the next five years during the course of this year.

Some of challenges around these local energy plans are making sure that they're consistent and, I guess, making sure local authorities have got the resources in place to be able to develop c2onsistent plans. We set out methodologies for all of the local authorities to follow, so that we have some consistency. It's really important that these link together, that they join up with the national plan. All too often, in the past, local plans have been inconsistent, and you add them all together, and the sum of them doesn't meet the whole. So, it is important that the local and national plans are an integrated suite, again, that we can all get behind.

Thank you very much for that. Peter, you've anticipated this; I was going to ask you how you thought that Ofgem's ways of working and your role might have to change or adapt to support this more decentralised system. Is there anything other than what you've already said that you'd like to add on that?

Yes. There's a whole load of initiatives going on in Ofgem to facilitate the path to net zero. We've talked about the price controls—that's just part of it. We've got five strategic change programmes ongoing in Ofgem to support this work. One of them is around low-carbon infrastructure, making sure that networks such as the distribution networks here are building the infrastructure of the future. But that extends further; that extends to the gas grid, it extends to the national transmission system. There's a whole programme around what we call full chain flexibility. Flexibility is going to be key to the future energy system, especially with the intermittence of renewables, and enabling that is key. We've got a whole work stream around governance and governance reforms around how the industry operates, a big programme around data and digitisation—you know, that is key, that's going to be kind of the nerve centre, if you like, of this high-tech energy system of the future. And reforming the retail market models to accommodate new business models that are going to come forward and have already started coming forward from the more innovative suppliers out there.

So, yes, there are lots of things that we're doing to support this. And absolutely, I think the final point is around distribution system operators that Liam and Graham have outlined. This is a new capability within the distribution networks to plan and operate a much more active network on a local basis. We're moving away from a world where electricity flowed from the national grid and down through the distribution networks to demand; we're going to have a lot more demand-side resources and it's important that the networks are planning for those and can dispatch them, if you like, in a much more active system.

Thank you.

Gadeirydd, dwi'n ymwybodol o amser, fe wna i ei adael e yn fanna.

Diolch yn fawr iawn. Thank you, Delyth. Janet Finch-Saunders.

We've talked, haven't we, today about reports of power lines being close to full capacity leaving potential energy schemes and developers facing prohibitive upfront costs to upgrade local networks before they can even start generating. Could you outline the main areas of grid constraint in north, mid and south Wales, but do it on a separate basis? I know, certainly in mid Wales, of the strong objections in rural Wales to pylons; could we have some clarity on how much more it's going to cost to do what's needed so that we can have that grid capacity increase by putting the infrastructure needed underground?

There are two things there—the scale and pace generally, but also, then, undergrounding. I don't know who wants to take that first.

I can start if you like. I think where we are at this moment in time for us within the south Wales area and the mid Wales area is we have connected 2.1 GW of generation on our network already, and we have a pipeline of 2.7 GW, with a demand in the area that we cover of only 2.5 GW, so we've actually facilitated a huge amount of generation connection already, and doubling that in the pipeline that we have. Those are offers that have been sent out and generators have already accepted those offers. So, there is a considerable amount of work that's already been done. Clearly, the current price control that we work under and the funding mechanism for these schemes does mean that those that want the connection do have to either pay or pay towards the cost of that connection or the reinforcement associated with it. We're fully supportive of the work that Ofgem have been doing around the significant code review that would have the potential from 2023 onwards to socialise some of those reinforcement costs, so those that wish to connect wouldn't see the same significant upfront costs for those connections that they want.

I think, to cover the second point, clearly, Western Power cover mid and south Wales and I can only talk about those two, but the south Wales area has historically been an industrial area and there's a significant amount of electrical infrastructure, both at distribution and transmission level, around the south Wales area. But certainly, the mid Wales area, which is an area that we can all see has great potential for renewable energy, has historically been a very rural area, and the infrastructure in those areas has been designed for the demand that is there. That doesn't mean that we haven't connected. The windfarm up at Brechfa forest—a significant sized windfarm—of 50 MW has been connected onto our network without significant reinforcement being required.

But we do accept that, where infrastructure is required, overhead networks do come up against opposition from the people in the area and from environmentalists, and quite understandably so. So, certainly, underground networks can be delivered, but they are significantly more expensive. They can be 10 times more expensive than a traditional overhead network, and, of course, under the current charging regime, then the connecting party would have to either pay or pay a considerable amount towards that. The proposals under the significant code review potentially could socialise some of those costs, but it's still, at the end of the day, all of us as energy users and bill payers for energy that would pay for that, so I think it is definitely a debate that needs to happen, and a discussion needs to take place about the right way of providing the capacity in those more rural areas and whether that is underground network or overhead network, or a combination of the two to try and balance the availability of network capacity in those areas to meet the renewable generation ambitions against the environmental impact that that network has.

Okay. Before I bring Liam in, maybe, Huw, do you want to add a supplementary?

Yes, thank you, Chair, and it is directly related to this point. You touched on the fact that, over the years, one of the major constraints on enhancing, strengthening the grid capacity through mid Wales, and mid Wales to west Wales, has been local opposition, and it's been very strident. Now, meanwhile, in south Wales, we've gone ahead, we've developed—we've realised the potential of renewables. We probably can do more, but we're probably significant in our contribution here in Wales, particularly in terms of onshore wind. I just want to ask you: what's your assessment of the planning approach now in terms of developing this grid infrastructure, because everything you've touched on are familiar constraints in terms of opposition to developing the grid infrastructure we've seen for years, and I'm just worried, from what you're saying, that we haven't found a way through this yet that can say, 'Well, we can realise the potential in mid Wales as well'? The future generations Wales 2040 has clearly identified mid Wales and other parts of Wales and their potential for contributing. It's not going to happen unless we sort the grid out.

I totally agree, and that's why, within our business plan for ED2, working in collaboration with Scottish Power and National Grid transmission, we are pulling together a plan that's a co-ordinated plan about what is the right solution, whether it's a transmission solution or a distribution solution, or, almost certainly, a combination of the two. We've built into our plan £2 million to have dedicated engineering resource to work through all of the possible options so that we can be ready then to start to go out to consultation and to start addressing those planning issues, because all of those things, we recognise, do take time. So, for us, the important thing now is to work with the Welsh Government, with our other partners, being Scottish Power and National Grid transmission, to optioneer the possible solutions so that we can share those with the people of Wales, so that we can engage in consultation and so that we can then start that planning process to deliver the correct grid connections in that mid Wales area.

Okay. I will bring Liam in, and then I'll bring Joyce in, if that's okay, Joyce.

Thank you, Chair. I'll try and be succinct, because Graham has outlined very well the issues in mid Wales, but one thing that I would add to that discussion is that there is no one company that has the answer to unlock the true potential of energy generation in mid Wales. It is very much that collaborative approach with a tailored solution that takes into cognisance both the maximisation of the opportunity for energy, but the considerations from an environmental and a local economic standpoint, and delivers a solution that not only fixes the problem in the short term, but also creates even further opportunities as and when, down the line, they come along. So, it really does need to be that collaborative approach to answer the issue in mid Wales.

From a north Wales perspective, I think the solution is actually a little bit closer in terms of where we are in north Wales. Because it has traditionally more inhabitants, there's more infrastructure there naturally, anyway, to provide supply to the people who live there. But, one of the key things in north Wales is the level of innovation that's going on there right now, and I think of projects like Angle-DC, which is literally a world-leading distribution energy project designed to increase the capacity for renewable generation on Anglesey, and many other projects, which Peter has touched upon, in terms of active network management and the creation of constraint management zones, which can actually increase the potential for generators to connect.

So, the reality is, from a north Wales perspective, there's a lot going on right now. There will be a hell of lot more going on in ED2, subject to our plans being approved. And, for mid Wales, we do need that collaborative, multiparty solution to resolve the problem and unlock that potential, which, I think, everybody agrees is clearly there.

Thank you, Liam. I'm conscious that Janet has been very patient in being able to come back, so, Joyce, very briefly.

It is brief. I cover mid Wales—the only one here that does. The real problem with mid Wales, from great experience, is the fact that you can generate your green energy through wind, but then you've got a distribution issue. That's the crux of it in reality, and, of course, that makes people nervous, because of all the things that have already been said, and they feel like it's being done to them with no advantage for them. So, my question to you is: how do you take people with you on a journey to realise the potential for those people who will have to put up with some inconvenience to them, and that they see the benefit? I would like to know if any of you have been involved in any of that work.

I have, certainly, and I think the key to that is twofold. One is community engagement, for that very purpose that you outlined there, in terms of understanding the issues but also being able to convey the benefits and understanding what those benefits might look like at a very close community level, and being able to make sure, in whatever we do in that local area, that those benefits aren't sacrificed or lost—they're actually maximised. I think that the second part of that is to make sure that the community's voice is always heard, and that there are clear lines of communication for communities to come and discuss and actually have what I would say is a direct influence on the solution that's put in place in their area to avoid that feeling that you articulated there about communities feeling that things are being done to them. So, there's a lot about engagement but also about the maximisation for local benefits for those communities.

Okay, thank you for that. Back to Janet, then. Thanks, Janet.

Thank you, Chair. The WPD submission highlights a need for a detailed analysis to be undertaken of potential whole-system solutions to the challenges faced by the Welsh energy system. Do you think that the UK and Welsh Governments are doing enough to understand the constraints on the grid in Wales, and that rather than further analysis of grid capacity, we should all be actually better working, moving more forward now towards implementing actual solutions? One thing that's been raised with me by some people in the renewable energy industry is microgrids, and I'd just like your opinion on those.

So, I think, from our perspective, yes, absolutely, we need to come to a solution and be able to put that solution in place. But the challenges in mid Wales, I think, as we all can see, are significant because of the rural nature of those areas and the impact that any network will have upon the environmental concerns in those areas. So, I think the time now is to explore all of the options, do the optioneering, and to make that publicly available, start that consultation process and, I think, going back to the last question, to bring people along with us so that the solution is actually one that can be achieved with the support of the local communities. I think, to do that, we have to be very open and transparent about what all the options are, and their positive and negative impacts upon the amount of renewable generation that can connect and its impact upon the environment and its impact, ultimately, upon the bill as well. So, I think now is the time for us to invest that time and effort, working with the local communities and the Welsh Government to really explore all the possible options and to share that and to have that consultation process.

Okay. Peter wants to come in. I can see Huw wants to add a quick supplementary, and then we'll go from there. Peter.

I'd just like to say that the obligations on the network companies—. So, developers come along with their project to build renewable energy, and the obligation sits with the networks to offer connections and build out their network to accommodate that, and our obligation as a regulator is to make sure that they're funded for those projects. This is a little bit incremental. It's not necessarily joined up; it's a little bit bitty. To Graham's point, what we really need is to get to a joined-up, strategic plan that sets out what network we need to get us to our 2050 ambition. So, the parties here on this call are committed to coming up with that sort of future blueprint, however it looks, and taking account of some of these environmental concerns that people have got. But, fundamentally, the process is there. If developers feel there's an opportunity, they'll come in and seek connection, and the networks will build the infrastructure needed to accommodate those connections. The funding pathway is there to ensure that they can get on with that work.

Okay. Huw.

Thank you, Chair. Look, my apologies if I'm being absolutely dense here, and that's not beyond the realms of possibility, but I've heard all this stuff before. We've been through this before—better engagement, better community engagement, lining up all the ducks in a row. Can I just ask you what, in all that you're saying, is materially different now, or will look different in 12 months, 24 months, that means that we can develop the potential of renewables in all parts of Wales, including those that are currently facing the constraints of grid? I'm not hearing the hard, practical stuff from you. I'm hearing some really good and encouraging sounds, but they're not new sounds, and this is where it went into the sand before. So, please tell me I've missed something, that I'm being dense.

Certainly I wouldn't say you're being dense at all. It's a very fair challenge. I do go back to my point that we've already connected 2.1 GW and we have 2.7 GW in our pipeline. So, those are already accepted schemes and already built solutions to achieve those schemes. That is, actually, a net-zero pathway—that amount of energy connecting to the network will meet the net-zero pathway to 2050. I think the challenge is that developers come to us and want to connect, and we give them the quotation for their connection. We always do that, but, of course, that doesn't always then meet with their funding, and that may make that project unviable. I think what we're talking about here is not the incremental growth of the network through developers coming to us and asking for applications, as they have. There's 2.7 GW of generation in that pipeline, and that pipeline hasn't stopped—we've actually offered 14 GW of offers over the last 12 months in south Wales for connections. So, I think what I'm talking about is not the incremental growth, but a real plan for going all the way out to 2050, about how we continue that pipeline of connections, how we continue that net-zero pathway to achieve the ambitions of Wales and to achieve that through a co-ordinated approach.

Okay. Peter, in response as well.

Yes, just echoing what Graham said, their plans include lots of building of new infrastructure to accommodate the developments that they see. And through our price controls, we would look to approve that if it's economic, efficient and well justified.

I also just want to reflect on the SCR that Graham mentioned. Effectively, this is a change of rules. At the moment, developers effectively have to pay for reinforcements to the grid to get connected. What we're considering now—the decision is pending—is effectively socialising those costs, so the developer will no longer have to fund that reinforcement cost. So, in effect, the networks don't now have to wait until the cheque comes through the door before they can get on and build the infrastructure that they think is needed. And I think that will open some of these barriers up.

Okay. Thank you. We've got 20 minutes left, and there are a large number of areas that we still need to cover, so we have to move on, I'm afraid. So, we'll have to come to Jenny next.

Thanks very much. So, this joined-up strategic plan, is that what you're going to get out of the evolving the network grids for Net Zero Wales project?

I think all network operators working alongside Welsh Government to develop that plan and that pathway out to 2050 is the right way forward in terms of making sure that we have that collaborative approach to energy planning, which we believe is probably the key to delivering a joined-up solution across Government, local authorities, network companies, the system operator and Ofgem—all working together to deliver a plan that meets that net-zero requirement.

Okay. So, how far have you got to date?

Well, we've made good progress on all of the things that we set out to do in our ED1 pricing period. We're building infrastructure, as has been mentioned previously, that facilitates connections. I guess the key thing is being able to deal with the scaling up, which our ED2 business plan very much is set out to do. But, the pace of change and scale that's going to come with the electrification of heat and transport all coming at us relatively quickly—we're starting to see a real upturn in electric vehicle uptake, for example, now—we need to make sure that we're not just keeping pace with that but that we get ahead of that pace, and our plan sets us on a strong platform to do that.

Electric vehicle charging systems, that's one of the obvious things that could be done by local community generation. Is that something that you're supporting?

We're supporting various community energy projects. There are some that look at using locally generated electricity for electric vehicle charging or heating, and we're involved in several projects that look at those aspects. But, again, the key thing is understanding what the local community is able and wants to do, but also what their requirement will be for those types of technologies, and making sure that our plans meet those requirements. And, as we mentioned before, the future energy scenarios documents that we have absolutely do that.

Okay. Well, moving on—thank you for that. Obviously, we could talk a lot more about that, but moving on, starting with Ofgem, the Welsh Government's hoping that Ofgem will create a Wales energy systems architect. Is this something that you're going to be able to lead on?

So, proposals around energy systems architectures are not new, but it doesn't generally align with central Government thinking. I'd also say that it's not in our gift to create such a thing. Our powers are limited to regulating the networks and market participants under the current institutional framework. So, creating a system architect will be a matter for Government, rather than for Ofgem.

Okay, so how are we going to get around this problem? If the UK Government has still not grasped the extent of the crisis we face, how else can we approach this? Because our earlier witnesses in the earlier panel this morning said that National Grid was still talking about having to assess development projects and turning them down because they don't think there's sufficient evidence of anticipatory demand for future investment, when we know we can sell absolutely everything we generate. Anything that we can't use in the UK, Germany will buy it, absolutely without question. So, I'm wondering why we're still having these sorts of conversations, as opposed to—

So, the networks working together are effectively an architect. To the extent National Grid is saying, 'We can't build', well, I'd challenge that. They're duty bound, like the distribution operators here. If developers want to connect to the national transmission system or if they have large connections to the distribution network that require transmission build, they've got an obligation to bring those plans forward. So, if they're not doing so, I'd be interested to understand why. It may be that they don't have confidence in the projects. But if projects have come forward, they have planning consent, they have an agreement through, say, the contracts for difference scheme for funding support—you know, they've got financial backing—and there's clear evidence that those projects are going to go ahead, the grid needs to build infrastructure to accommodate them.

So, they're wrong in thinking that Ofgem still turns down things because there isn't sufficient evidence of who the buyers of the energy are going to be.

Some examples, actually, are in Scotland. So, Shetland, for example, we recently approved a 600 MW link to Scotland to accommodate renewable development in Scotland, and that's because we can see clear evidence that that's going ahead. We've got a similar arrangement with Orkney. That's not yet been approved. That's conditional on enough generation coming along. But again, once they've met that criteria, we will give them the green light to build a link to Orkney. And the same can happen here. There are lots of renewable developments, whether it's onshore or offshore, and if there's a clear signal that that's going to go ahead then the network can come to us and seek funding to build the infrastructure, like they've done in Scotland.

So, you're saying that they're wrong in thinking that you still turn projects down because there's not sufficient evidence of demand. I understand they have to get planning permission and sort out—

Our job is to protect the interests of consumers. These are very, very expensive projects that ultimately consumers end up paying for. What we don't want to see is white elephants, big projects that—

My question's in the context of gas prices going through the roof and a climate emergency. That's what I'm struggling to understand.

Can I just maybe come in here? Because you mentioned earlier, the whole architect issue aside, that it wasn't in line with central Government thinking, and I think there is a broader question here about Ofgem being beholden to the UK Government and maybe—and I'm sure you'll respond to this accordingly—not being sufficiently in tune or reflective of the different and increasingly diverging policy environment here in Wales in terms of what Welsh Government, the Welsh public sector and wider Welsh society wants to achieve in this space. What would you say to that?

We are evolving the institutional arrangements. We talked earlier on about the sort of DSO context and, effectively, distribution networks' strategic planning. We're consulting on strategic network planning on a national scale, including Wales, for the transmission grids. We and Government are consulting on creating an independent system operator, again with a strategic planning role, to look across sectors, across regions, between distribution and transmission, to come up with much more strategic plans. One of the things that the electricity system operator is doing at the moment is, where we have a plan to build 40 GW of offshore wind, coming up with a holistic network plan, a strategic plan, that will need to be built to accommodate that. And these sorts of initiatives fit just as well for Wales as they do for England and for Scotland. I think what you're looking for is scope to deviate from those arrangements, because there are particular local issues.

Well, yes, the Well-being of Future Generations (Wales) Act 2015 is recasting the policy environment here in Wales, and the way that we do politics, do business, do everything really. And I'm just wondering how, as part of wider UK processes, are you sufficiently reflecting that in your deliberations around our situation here in Wales.

So, what we're asking for, we're asking the companies as part of the plans they're putting forward to take account of local energy needs.

So, the onus is on the companies to do that.

Yes.

Okay.

Yes, and that's part of the obligation and the guidance that we've given them in order to put forward well-justified plans.

Okay, thank you. Back to you briefly, Jenny, and then we'll have to move on.

Okay. Mr Halladay, in your submission, you talk about a change of policy as of September 2020. The restrictions that were previously on new thermal plants and battery storage have been lifted, and since then we've had over 200 MW of potential battery storage capacity. So, how much more can we envisage being able to increase that storage capacity, given this realignment of the rules?

So, there was a restriction on dispatchable generation—thermal generation, not reneawable generation—in the south Wales area due to a constraint on the national grid transmission network. But because of larger coal fired-type power stations that have closed down in south Wales that capacity has then subsequently been released, and that's what removed that restriction in 2020 to enable dispatchable thermal generation to start connecting again. There was never any restriction upon renewable generation connecting throughout that time, and there still isn't now.

So, as I said, the pipeline that we currently have is 2.7 GW in our licence area. So, we have offers sent out and accepted from developers to build 2.7 GW of generation: 2.1 GW of that is actually renewable generation, and some of that will be storage, and some of it will be wind, and some will be solar. And, as I said, we've actually sent out 14 GW of offers, and I'm sure some of those will be accepted.

So, every year, we are sending out offers, we get acceptances. So, throughout the remaining period of this price control, up to March 2023, and beyond in the next price control period from 2023 to 2028, we've got a significant amount of investment in our plans to continue to invest in the network to ensure that we can continue to facilitate connections, both demand and generation. And I think that links in then to that wider piece of work, which is about where we go beyond the next price control to have a more co-ordinated approach to ensuring that the grid continues to meet the net-zero pathways and the ambitions of Wales.

Okay. So, on your map, you talk about fossil gas sites. How much is gas replacing the coal as opposed to renewables?

I'm afraid I don't have that number with me; I apologise.

Okay. That's particularly important. If you can write to us with it, that would be great.

Yes, I'm sure there are a few areas that we may wish to cover in written form after this session, particularly given that we've only got about seven minutes left, and I know Huw and Joyce wish to pursue some themes as well. So, Huw first, and then Joyce.

Thanks, Chair. I'll try and do this really quickly and skip over the areas we've done already there. Can I just ask you for your view on the contribution of what we now know as constraint management zones? They're a feature of every electricity provider in terms of the UK, but are these a serious element of contributing both to grid issues, but also to local demand management and so on? And, if so, how do we decide where they are in Wales? What's the priorities? What's the criteria?

Liam first on this.

Yes, okay. Active network management schemes, which constraint management zones are very much a factor of, are absolutely a serious part of the solution. They're not the entire solution to the problem; they're another tool in the box that we can use to manage issues with capacity.

I think the critical factors and the criteria that you mentioned are around the demand for connections, and also the network make-up in that particular area. But the constraint management zones are typically employed at the point where the transmission system interfaces with the distribution system. Technology is employed at those grid supply points, which allows us to then use flexible—customers who signed up to us flexibly to peak their demand, which then facilitates our ability to connect more generation. So, an innovative solution and very much part of the future.

They're not fully worked up yet within Wales, are they? We're still scoping out where they'll be, how they're developed?

Well, certainly, in our area, we've had a successful trial up in Scotland, in the Dumfries area, which we're looking to replicate along the coast, from mid Wales up to north Wales—so from Aberystwyth up to sort of the Bangor area. There are four grid supply points that we intend to start work this year, actually, installing the equipment, so that that trial for Wales is complete by the end of this price review period in 2023.

Okay. Well, I think we'd love to hear more about that, but perhaps in writing, with some detail of what that means for Wales.

No problem at all.

Chair, do you want me to ask about local authority capacity?

I think we need to move on, Huw, I'm afraid.

That's fine, no problem.

Peter briefly wanted to come in on this, I think. Peter, do you want to add anything very briefly on this?

Yes, I just wanted to say that the constraint management zones and active network management are a tool to connecting a lot more generation onto the network than the network is physically capable of managing at the time. But my view and our view as a regulator is that, ultimately, if renewable generation grows, you need to start the reinforcement job and remove those constraints. The example I mentioned of Orkney earlier on—. So, there's a big active network management scheme on Orkney, but it's getting to the stage where it's bursting at the seams, and hence the application from Scottish and Southern to build a new connection to the mainland to accommodate that. So, where there's a need, we're more than open to funding building new infrastructure to remove network constraints.

Okay. There we are. Thank you for that. Joyce, then. [Interruption.] Oh, there we are.

[Inaudible.]—the operators. Anyway, just a question to Peter about regulatory derogation and your response to it. The Welsh Government has called for the development of that, to enable energy business model innovation, in support of the recommendation of the deep dive that currently has taken place. Do you agree with the proposed objectives of that derogation?

I agree with what it's trying to achieve—absolutely. I spoke earlier on about our future retail strategy, which is all about enabling new business models in the retail sector. Our powers are limited in terms of issuing derogations; generally, derogations are for specific areas where the technical compliance of standards, for example, or codes, cannot be achieved. The concept of a national derogation is not within our powers. I think the question here really is that you're looking for changes to the rules to allow new things to happen. And back to my initial point—tell me what rules are blocking the sorts of things you want to achieve, and I will take those back and we will consider them as a regulator, and consider what—. It's not about derogations, it's about changing the rules. And Graham talked about the new rules around connections and not paying for upstreaming enforcement—that's a change to facilitate net zero. So, where there's a blocker, let us know what it is, and we can consider how we might address those blockers, because we're all trying to achieve the same objectives here.

Okay. I'm afraid we're out of time. I'm sure we'll take you up on that, Peter, in our report—keep an eye out for some of the recommendations. But, thank you, the three of you, for your evidence. We will send you a copy of the draft transcript, just for you to check for accuracy. And we're very grateful to you for the evidence, both in written form and orally that we've received from you today—it's really valuable and a big contribution to our work. Thank you very much. Diolch yn fawr.

The committee will now take a break, and we will reconvene in time for restarting our session at 11.55 a.m. Thank you very much. Diolch yn fawr.

Croeso nôl i gyfarfod y Pwyllgor Newid Hinsawdd, Amgylchedd a Seilwaith. Rŷn ni'n symud at ein trydydd sesiwn dystiolaeth ni y bore yma, a'r ffocws yn bennaf, efallai, ar gydsynio a thrwyddedu, ond dwi'n siŵr y byddwn ni'n mynd i feysydd eraill hefyd wrth wneud hynny.

A gaf i groesawu'r tystion sy'n ymuno â ni ar gyfer y sesiwn yma, sef Huub den Rooijen, sy'n rheolwr gyfarwyddwr materion morol gydag Ystâd y Goron; Dr John Goold, cyfarwyddwr tystiolaeth a chyngor morol gyda'r Cydbwyllgor Cadwraeth Natur, neu'r JNCC; a Karema Randall, sy'n gyd-arweinydd y tîm rheoli morol hefyd gyda'r JNCC. Croeso i'r tri ohonoch chi.

Mi awn ni'n syth i gwestiynau ac fe wnaf i gychwyn, efallai, trwy ofyn i chi os gallwch chi amlinellu, efallai, rai o'r prif rwystrau o'ch safbwynt chi pan mae'n dod i 'scale-io' i fyny cynhyrchiant ynni adnewyddadwy yng Nghymru. Dwi ddim yn gwybod pwy sydd eisiau ymateb yn gyntaf. Unrhyw un? Ie, John.

I'll go first, just from what is, I suppose, our narrow sectoral perspective. So, from the nature and conservation sector, which is myself and Karema, I think the main barrier we see with the big scaling up of offshore renewables is the balance between the commitment to net zero, which is obviously very important, and the target to halt biodiversity decline, so the rolling out of big infrastructure in the marine environment where we are actively protecting species and habitats for various reasons. So, it's that balance in terms of the impact that a physical infrastructure has, both in the construction and the operation, in terms of biodiversity.

So, would you say that existing structures are sufficient in that respect or what is it within that that isn't sufficiently addressed at all?

I think it's the sheer scale. So, what we are seeing with the targets to accelerate to net zero is the fact that we need much, much more infrastructure out in the marine environment—much more than we had anticipated even a few years ago. So, when we're putting big physical structures out, which can interact with wildlife, so the obvious things are things like bird strikes on wind turbines—so it's that kind of thing. So, proximity to protected sites, proximity to foraging grounds. And on the sea bed, we have had an active programme over the last decade of putting in place marine protected areas. So, it's ensuring that infrastructure goes in in a compatible manner.

Okay. Huub, is there anything in particular from the Crown Estate perspective?

Yes, and let me start by acknowledging the points that John made. As the Crown Estate, we're the entity that is entrusted to looking after the sea bed for the nation, and we are committed to driving solutions for both the climate emergency, but also for the nature emergency. So, biodiversity concerns, as John outlined, are a very significant one. And one of the main barriers that we have seen over the years, working on, for example, fixed-bottom wind, is that often the evidence base on these ecological systems is good, but not good enough to make the complex decisions that are required.

So, we set up, in fact, last year, and John was one of the founding members of the original group, what we call the offshore wind evidence and change programme, which works with over 20 statutory bodies and environmental non-governmental organisations—and it includes Welsh Government—to really say what is the evidence base that is needed to make sure that those trade-offs, which inevitably will need to be made, can be made in the right way. And even—and this is very much our aspiration for the work that we're currently doing in the Celtic sea on floating offshore wind—how can we take an integral perspective where we really integrate environmental considerations as much as societal considerations into the design of these leasing rounds. And therefore—. Yes, there are these trade-offs. The two that I will add to that one is we have to ensure that the delivery and the growth of offshore renewables is really done in a way that is respectful of existing economic sectors like the fishing industry. We have to make them become part of our success story as well. And the second one is that we have to be very mindful of the economic opportunities that this enormous energy transition offers. And therefore driving societal value for Wales, for the south-west region, and indeed for the country, is part and parcel of how we are designing our activities in the Celtic seas.

Okay, thanks for that, Huub. I think, Huw, you want to pick up on some of that, I'm sure.

Yes, please. Huub, if you don't mind, I'll come back to you in a moment, because I want to pick up on some of the issues you raised, but if I can go to our colleague from the JNCC first of all, and ask you—. Before I turn to the work that Huub talked about that's been set up last year, which is good to hear about, what's your take on where we are with marine science generally? Has the marine science strategy 2010-25 delivered on its aims of tackling those cross-cutting barriers to actually sharing marine science so we can map the marine environment properly? What's your take from a JNCC perspective on where we are with the marine science and the various strategies we've had over the years?

I'll start with the first go. Yes, there is a lot. Casting my mind back to that marine strategy, I think there always has been very good collaboration in the marine environment. There is always more that can be done. So, I think, in terms of maximising the opportunities we have to collaborate and gather evidence in the marine environment to tackle those cross-cutting themes, I think the UK is doing fairly well at that. I think the barriers we persistently come across are: it's just very expensive to work in the marine environment, so it's very difficult to actually plug all of the gaps that we might wish to plug. But in terms of a strategy I think it's still quite relevant. It's just that it takes time to plug these gaps in a dynamic and hostile environment.

Just tell me, then, John, before I come to Huub with the same question, do you think we've dealt with one of the main cross-cutting barriers, which is the willingness of operators in the marine environment, from the Crown Estate to developers, to fisheries, to whatever, to actually share information, particularly when, understandably, they have issues such as commercial confidentiality they want to protect? Are we now at a point where we can genuinely say that all the good science that we have in terms of mapping the marine environment and the changes in the marine environment is somehow or another being shared? It has a relevance to today's discussion, clearly. Are we at that point where we've broken that barrier?

I'm not sure if we've actually broken the barrier. I think things are better than they used to be. I think there will always be those issues of commercial confidentiality, but it is, once we get past that point, ensuring that we have the right data feeds into the right system and the interoperability of systems and a willingness to share data. So, there certainly is a focus on that, but I don't think we've entirely broken through that barrier yet.

Okay. Well, maybe, Huub, if I can put that same question to you: where do you think we are with the science? Obviously, in the very establishment of this new initiative from last year including Welsh Government, that shows that we've got more to do. What's your take on where we are, and are we inevitably in a situation where we put the science together piece by piece, project by project now, or are there still barriers, frankly, from your perspective as Crown Estate, where you engage with a lot of operators out there? Are there still things that we can just do better, to use the existing science?

It is a really good question, and it is one that has been exercising us, and it has been one of the main drivers behind this offshore wind evidence and change programme, which is funded by the Crown Estate. The initial funding was £25 million, and in fact we awarded the first three projects in January, which are totalling £12 million. So, we are investing in getting better science, but there is a lot more that we're doing. So, we have, in all our commercial agreements with developers—and it doesn't matter whether it's offshore wind or whether it's other businesses that access the seabed—data clauses that say, any surveys that you carry out, we respect your commercial confidentiality, but you have to supply us with those data, and after a period of a few years, which we agree with you, you will then make those data available to the public free of charge. And in fact, if I would have planted a question, it couldn't have been any other than this question, because, just today, we've announced that we've relaunched our what we call marine data exchange, which is a freely accessible database that includes over 2,300 environmental surveys, science surveys, but including wind data, including sea bed data, freely accessible, can be downloaded by anyone—marinedataexchange.co.uk—and all of this is essential because the only way that we're going to deal with such a highly complex and dynamic environment like the ecological system—. Ecosystems vary over time, but the physical environment also varies over time, so having the best possible data to the largest possible audience allows us to take an informed position on those trade-offs and on those optimisation questions that say, 'How do we now integrate environmental impacts, fishing impacts? How do we integrate them in the thinking that we do on something like floating wind in the Celtic sea?' I can say more on that, but maybe I should pause here with this particular question.

Well, I think one thing we'd welcome as a committee—both in terms of this inquiry, but our wider focus on the marine environment—is more of the detail you've just been talking about, and the sharing of that science. That's really fascinating, and, in some ways, encouraging as well. But let me turn directly to the issue of marine energy for a moment—[Inaudible.]—

Sorry, Huw. Huw, sorry.

Sorry, Llyr.

Joyce wants to come in. Is it specifically on something that we're speaking about now, Joyce? Yes, it is. Okay, let's have Joyce first, and then we'll come back.

Just priorities. We were talking about priorities: the need to have energy, so we're not dependent on fossil fuels, and the need to balance, as Huw's just explored. So, my question is an easy one, a quick one: where will that priority lie? Are we in danger of one negating the other? The rush to get more green energy, with the cost being the environment. How do we know where that balance lies?

So, if I maybe start answering that question, I think that's the hardest question in the book, because we don't know, and what I can tell you is that the demand on sea bed space has never been greater—and I've worked in offshore renewable energy for 25 years now—it has never been greater than it is now. And making sure that we have the best possible data, and really that we have the broad dialogue with environmental organisations, but also with fishing organisations, on the tourism side, we have to make sure that we develop a shared vision of how these infrastructure projects that John was talking about, that they can be designed and developed in a way that really works for all those three different dimensions—economically, environmentally and socially—but it's the hardest question in the book.

It is indeed. Karema, did you want to add anything to that?

Not really. I agree with what Huub has just said. I think from JNCC's point of view, our role, really, is to sort of make sure that the environmental designations are considered in that process, and are adequately considered in that process. So, I think Huub's right; we have to bring everybody together, but the ENGOs and the statutory nature conservation bodies have a role to play in making sure that those decisions are made with the marine environment in check.

Okay. Thank you so much. Back to Huw.

Thanks, Chair. And Huub, I wonder if I could just ask you: in terms of marine energy, how do you see the Crown Estate playing a role in enabling us this to go ahead, and let me just ask this: I love seeing the Crown Estate, because you're a bit like MI5—and I say this in a nice way—when we see somebody in person, but we always think of you as lurking around there out there somewhere interplaying with us, but we're not quite sure who you are. So, I guess I'd ask you: is there anyway in which the Crown Estate, partly because of that slight distance, maybe, but there might be other factors, is there anyway that it constrains development in its relationship with Welsh Government, with developers and so on?

I would say that we have a really good, open, constructive, sometimes critical relationship with Welsh Government—a real partnership. Just maybe as a scene set, as Crown Estate, we are entrusted with looking after the sea bed and the shorelines in England, Wales and Northern Ireland, and that is a trust that we don't carry lightly. So, we are committed to creating shared and lasting prosperity, and we really do that by convening, by not thinking things up in an MI5 think tank, if I can just borrow that analogy for a second, but, really, running workshops. We have met with the fishing sector on several occasions already, and, in fact, we are running a joint programme that is led by the National Federation of Fisherman's Organisations to really look at how can we integrate fishing needs with new floating wind turbines. We carry out these joint projects. So, our style of operations is very much open, it is collaborative, but I do agree with you that we're not always as visible. And that's partly because you would be surprised how small an organisation we are. So, we don't have hundreds of field agents running about. I really would, therefore, welcome also the opportunity to talk to the Senedd on this particular subject, because we care about the work that we do. I've got a very passionate team that sits around us, and we really hope to deliver this shared vision in partnership.

Thank you, Huub. My final question, Chair, just to go back a little bit: is there anything you want to add, or John or Karema, on the issue of evidence gaps in terms of the offshore environment, and that would include offshore floating wind as well? What are we missing there in terms of the evidence to allow projects to go forward in a timely but also a sustainable way?

So, shall I answer for JNCC? So, it's more around the amount of information we have. So, JNCC has been leading on the development of the offshore wind environmental evidence register, which is actually hosted by the Crown Estate, and this is the first ever UK-wide register of offshore wind evidence gaps. So, this has identified gaps of evidence under the themes of ornithology, marine mammals, fisheries and benthic ecology. There are planned updates for that register in June and December of this year, and Natural Resources Wales have also contributed to that register. Within the register, the gaps are prioritised in terms of their consenting risk, so that gives us, as a community, some idea about where the greatest risks are and what gaps we need to fill and what projects we need to do to fill those gaps.

So, there are a number of research projects being undertaken in Welsh waters to fill some of those evidence gaps, and these are under the themes of benthic ecology, ornithology, marine mammals and fisheries, as well as some UK-wide projects that cover a number of themes, including cumulative impacts.

Thank you.

Okay. Thank you very much for that. Yes, Huub.

Just maybe to add, one thing is that we're also planning a survey campaign in the Celtic sea to look at, if you like, the science that needs to underpin the design of these floating windfarms that will work with the leasing process. So, leasing for us is much more than just granting rights to sea beds. We take the basis of that design, i.e. the proper science data, very seriously and we will be investing in that and hopefully have vessels in the water later this year.

Excellent. Thank you.

John.

Yes, I could just maybe add a little bit more to what Karema was saying. So, JNCC also hosts something called the offshore wind strategic monitoring and research forum, which is basically a forum of statutory bodies, statutory conservation bodies, regulators and the industry themselves, and that's about deciding what are the key difficulties they have in terms of consenting offshore windfarms—so, what are the key evidence gaps, be that around species or habitat gaps. So, they've been prioritising those things to feed into research initiatives. So, one of the things, a year or two back, was that they prioritised kittiwake mortality, because that was one of the species that was closest to the windfarms. And of interest, now we might be looking at different species being prioritised for research in that forum.

There's one—. I suppose also bringing this other bit alive, there's one sort of fairly novel research project that JNCC has distilled as a collaborative venture. We've been looking at—bringing it down to a very detailed level—the energetics of the red-throated diver as it inhabits the North sea, and this is about where it migrates from Finland and Iceland and other parts of the UK and overwinters in the North sea, and it's been looking at the energetic needs and whether displacement is going to be a problem for them. So, that's with a view to some of the big North sea windfarms. It's all to do with the environmental assessment process—how big an impact is it if they displace that kind of thing and how it relates to their energetics of foraging, so it's been quite an interesting study that we've been doing with a number of partners.

Very good.

Okay, thank you so much for that. Joyce. There we are.

I've got to remember to keep my hand off that button.

This is just for the Crown Estate. You did start mentioning the Celtic sea and my question is on the discussions that you've had with the Welsh Government and also energy developers in Wales on the timing, the scale and the speed of future leasing rounds for the Celtic sea FLOW?

Yes, I'm sorry, I didn't quite get the question, but we have had a number of discussions with those parties. Would you want me to elaborate on that, maybe?

Yes. It was about—. Yes, well, if you want to expand on what those discussions mean, because, obviously, there's timing, scale and speed of future leasing agreements that have to be reached. So, you know, yes, you've had discussions—that's great, I'm glad to hear it, but I'd like to know a little bit more.

Absolutely. So, the Celtic sea we see as a tremendous energy opportunity for Wales, for the south-west region, for the country. So, it is also one that sits in an environment that is already being used by other users of the sea. It's got high environmental value, it's got high tourism value, so, therefore, the design of a leasing round in the Celtic sea is something that has our attention, and we have held numerous workshops with the market; we've had two rounds of market consultation with developers, we have held workshops with statutory bodies, so with statutory nature conservation bodies and with environmental organisations, and what those have resulted in is that we are going to use a novel approach to leasing in the Celtic sea compared to what we've been doing in the past. And that novel approach will be that we will be identifying the areas first before we offer them to the private sector.

Now, we speak to a lot of developers who say, 'Don't bother, just give us the keys to the sea bed and we will sort everything out.' And we believe that if were to do that we could create the kind of problem that one of your colleagues asked about, which is: how do we deal with the cumulative impact of all these environmental impacts? How can we make sure that, if we take this piecemeal, project-by-project approach—? How can we deal with the totality, with the sum total? And what we are doing is we are doing an approach that is, if you like, led by the Crown Estate in a consultative mode. So, this is not us on our own; it's us working with the market, with the complete range of stakeholders, I would say, and really looking to answer three questions. One question is: how and where is the best way to provide access to the private sector? So, at what point in time do we run our lease, and what areas of seabed? The second question is: what ancillary investments—infrastructure investments—are required to make sure that we can also offer the best possible opportunity for Welsh businesses and other businesses in the area, and in the country, to be competitively successful? Because we want this leasing round to drive social value. And the third one is: how can we do that in a way that really works for the environment and that really integrates those environmental sectors?

So, as a result, there is a much longer lead period for the Crown Estate than the market has traditionally seen. So, we will be the ones who will be carrying out those site surveys offshore in the period ahead, which will inform, together with the views of the market, on the areas of seabed to be offered. And only once that, shall we say, centralised part of work has been done, and that we collectively can agree, 'This is the right pace and the right scale', so that we have answered the question on that balance between environment and infrastructure, only then will we open the gates for the private sector.

Llyr, shall I go on to 7 now? It sort of makes sense.

If you wish, if you wish.

So, with all that done, to what extent is Wales's offshore wind potential constrained by supply-chain port infrastructure and electric grid infrastructure?

Yes. It is constrained, and just to put maybe a picture of floating wind in the Celtic sea—what should be before our mind's eye when we talk about 4 GW of floating wind in the Celtic sea, because those in the sector throw these numbers around every day—just to put it into numbers, 4 GW of floating wind in the Celtic sea, which is the ambition that we have formulated together, is an investment in the order of, let's say, £12 billion. It will supply probably in the order of 4 million homes with electricity. It is a project that would see around 250—keep in mind floating wind—floating foundations. On the top of each foundation would sit a wind turbine the size of the Eiffel Tower, although more slender—much more slender. But, in terms of the height of those structures themselves—those floating structures—are the size of seagoing vessels that will be permanently anchored to the seabed. That's simply because that's the scale of floating turbines. The anchor chains or the tension cables that are fixed to the seabed will all need to be there, will all need to be manufactured, will all need to be installed, will all need to be maintained. So, it is a big project in its own right, and what we want to ensure is that other ports in the area can offer the services—to install those turbines, to do the mounting work, to lay the cables, to connect it all up for the service crews to travel out there. So, there is a lot of infrastructure required, and I'm not even speaking of the fabrication itself of these turbines and these vessels. So, it is a massive civil engineering undertaking, and we want to make sure that we are doing a lot of work with others on understanding where the opportunities are for Wales in terms of early investments that will make Wales an attractive and competitive place for the supply chain to really benefit from this level of investment. So, it is the big question, and I'm also sitting here with my hat on as a non-executive director of Offshore Renewable Energy Catapult, who are the leading technology organisation in the UK, who have recently opened the floating wind centre of excellence, and who are really working with the Celtic Sea Cluster of companies to identify and shape the opportunities for the supply chain in Wales. So, that's to the supply-chain point.

On the grid point, equally important, we need to ensure that the power that these windfarms generate can be transmitted to consumers and to industry who need to use it, and, therefore, anticipating where the grid points are going to be that the power from these offshore windfarms can connect into. Ensuring that the onshore transmission infrastructure—transmission grid—is there on time is another key area of infrastructure development that we are engaged with. And, in fact, we are working together with National Grid to ensure that this 4 GW of capacity is included in the strategic planning that National Grid do of their future transmission system.

Thank you very much. That's pretty comprehensive, in fairness. That's excellent. Janet Finch-Saunders.

Unlike on land, the Welsh national marine plan is not on a spatial basis. Do you have any thoughts on the impact the creation of a marine development plan that sets out a spatial and strategic context to development proposals in the marine environment would have on the workings of you as the Crown Estate?

What has become clear over the years is that the spatial dimension of the sea bed has become, arguably, the largest factor that we need to take into consideration. As Crown Estate, we are entrusted with looking after the sea bed, and it is a duty that we fulfil in collaboration with many, many, many others. And, fundamentally, having the right data, the right evidence that informs the policy decisions and that helps shape market access, we believe, is critical in ensuring that communities, that Wales, that the country are really getting the best value out of the sea bed. So, we see the Welsh marine plan as an integral component of that collaborative approach to really driving the sustainable development of the sea bed

Thank you. I'm aware that there is pressure on the Crown Estate to work proactively with developers to ensure adequate leasing rounds continue to be offered regularly, but can you outline the steps you do take to consider the potential environmental impact of any leasing on marine diversity before opening a round? And I know that there have been lots of concerns raised that these leases and things are—. How do the biodiversity marine conservation aims fit into that as a primary?

Again, it is one of the hardest questions to answer. As Crown Estate, we are committed to the net-zero agenda as much as committed to healthy and environmentally rich marine environments. So, we recognise the primacy of the nature and climate emergencies. Now, integrating environmental factors into the design of our leasing rounds is, therefore, absolutely critical. Maybe old-school planning would be, 'Here's a developer that has a plan,' they submit it for planning consent, and then objections are barriers that need to be dealt with. That is old school. That won't work anymore. What we really aim to do is work with the widest practicably possible range of environmental bodies, to say, 'How can we integrate their views and their perspectives into the areas of sea bed that we offer, the surveys that need to be carried out before we offer those surveys, and the monitoring programmes, so that the access rights to the sea bed that we offer is done in the most responsible way possible?' I think that's the first limb of my answer.

There's a second limb to my answer, which is that we are not the statutory body that has the ultimate decision. Now, there are bodies, like Natural Resources Wales and like the Marine Management Organisation and the planning inspectorate, that have the statutory duty to adjudicate on the designs that developers bring forward. We work with those bodies obviously, and all the work we do is there to help the private sector ultimately be successful in securing those planning consents. But we will never sit on the chair of the planning authorities because that's not our statutory remit. I just wanted to clarify that point.

Thank you very much. An interesting situation has arisen here whereby, obviously, we've got these big schemes coming off the north Wales coast and the impact on our fishermen, and some are actually thinking now—. Apparently, during the Gwynt y Môr scheme, lots of fish disappeared and some have never returned, and what they're saying is that they would like to be able to work with you and, say, the energy companies. They've thought of things like using the actual poles of the wind turbines and harvesting—a bit like rope harvesting—seafood, and actually using the bases of the wind turbines to be able to encourage biodiversity. They see themselves as a very small organisation and they're really struggling to have those conversations with the energy companies. Is there anything that the Crown Estate—? Because, for me, I think that's a no brainer—if there's a way that supports our fishing industry. They're accepting that these things are coming, but what they're saying is, rather than let nature, over many years, produce this build up of molluscs, or whatever it is that builds up, there is a way you can plant them on at the start of the project. I feel quite frustrated that my fishermen cannot open into those avenues of conversation.

I would welcome your fishermen to reach out to us. From my personal experience, just before Christmas, having been in a workshop with fisherman from various areas in the south-west, sitting at a meal afterwards just talking through their concerns and their ambitions, it's one thing for the energy companies to say, 'We are committed to a sustainable future'; the fishing community wants to see a sustainable future. And we want to work with the fishing community to make sure that we can integrate their perspectives into the work that we do. Now, whether the specific solution that you talked to is a good one or not, I don't think it's for me to say, but what I will say is that, as the Crown Estate, we have an open door to those concerns. We are also, in case there is, for example, a need for some experimentation to be carried to look at what we can do to make that happen to inform better answers—. The big net-zero energy revolution can only be successful if it's experienced as a success by everyone who needs access to that marine space, and I do not want fishermen to feel taken for granted or feel excluded. They are part and parcel of the solution of a better, more sustainable use of our marine space.

Thank you very much.

Thank you. Jenny.

Thanks very much. I just wanted to explore your co-operative relationship with NRW, which you mention in your written paper. Particularly, for example, you mentioned earlier that you have data-sharing arrangements with commercial companies, and obviously you have to keep that safe from competitors for a determined period. But what are the implications of that for data sharing with NRW, for example?

Any obligations that developers have under their planning consents, of course, always take precedence. So, if NRW would grant a licence, and that licence would include monitoring obligations, of course those data would need to be provided by the operator to NRW. We have no role in that. What we do is we say over and above anything that is going on on a project-by-project basis, we require the provision of these data in the way that you just described, which is the operator provides them to us, we run quality assurance processes, and we subsequently make them available on our marine data exchange after a period of a number of years. From this period onwards, they are fully accessible to Natural Resources Wales and to anyone. If you're a Master's student at Cardiff uni or you're one of the fishermen that we just spoke about, you can access those data—you can just download them from the internet.

Okay. So, it's not a particularly close relationship at the moment. Clearly, you're talking to them, I understand that. But given the complexities of data gathering in the seas—much more difficult than on land—there isn't that sort of data-sharing relationship with yourselves and NRW, who are both caretakers of our seas.

Yes. I have to admit I'm slightly missing the presence of my colleague who was due to join us as well, because she has the day-to-day contact with NRW. But I do have a crib sheet in front of me here that I'm going to just check the answer on. We have regular meetings with NRW on these issues. We have a forum where we talk. They are part of various expert working groups that we have. They are part of the steering group of this offshore wind evidence and change programme, which I mentioned earlier—this £25 million programme for data and evidence that we have funded. And we also regularly meet with them on the development of floating wind in the Celtic sea. We work with them on the Welsh marine affairs advisory group. I have a few other names here as well, but maybe you get the picture. We have a healthy and frequent operational relationship with Natural Resources Wales.

Okay. Obviously, I'm trying to explore what difference would it make if the Crown Estate was devolved to Wales in the same way as it is in Scotland, because then there might be statutory bodies sharing information for regulatory purposes.

The other aspect I just wanted to quickly explore is that we've recently become the first nation to install cameras on all commercial fishing boats, and that is going to give us quite a lot of information that, once again, is extremely difficult and very expensive to gather otherwise. Will you have access to any of that information in terms of the migration of fish or the absence of fish in particular areas?

We would not have automatic access to that data, because that is the property of fishermen, and they would have to choose to share the data with us. But there is a precedent. We ran a system a few years back that we called the UK FIM—fishing information management, I believe it was called—which had fishermen sharing their fishing tracks with us, which went in an anonymised database and it allowed us to design windfarms away from main fishing grounds, for example. I can say that we have active discussions with the fishing sector now to make sure that the design of the windfarms in the Celtic sea, in those windfarm areas, is going to be one where the fishing sector has had a full chance to provide its input and where we have had the opportunity to listen to that input.

Okay, but do you think there would be further benefits if the Crown Estate was devolved? You'd then become an agent of Government in same the way that NRW is, and therefore that information could actively be worked on to work out the most sustainable and least damaging way of developing the energy.

What I can say is that we work with such a wide group of commercial businesses, and we find them invariably all very aware of the fact that there is this great need for collaboration and transparency on data, and it has been the main driver behind us setting up this marine data exchange. I believe that the balance that we can take between very legitimate commercial interests on the one hand—keep in mind we want to be an attractive environment for the private sector to invest—and on the other hand the very legitimate need for, shall we say, the state, the public sector, to protect the interests of the public—. I believe that where we currently are as a Crown Estate, on that intersection between the two, allows us to operate effectively. That is the mindset that we take to all the work that we do. I hope that's an answer to your question.

Okay.

Thank you very much. Thank you, Jenny, and thank you, Huub, for that. Huw.

Thanks very much, Chair. A really interesting discussion. Let me turn to where the advisory powers currently rest and the need to make timely decisions, expertly led, on the best evidence in order to enable good projects to proceed and not to delay them as well, but to do it with the best knowledge in front of you. On the Welsh Government's proposal to delegate offshore advisory powers from the JNCC to NRW—and this might seem like a really unfair question to put to JNCC—what are your thoughts about that?

I'll have a go at that. It's quite interesting, actually. Once, I sat on a cross-Government programme board—it was called the offshore wind programme board—that was all about the earlier phase of the growth of renewable energy and offshore wind, and the journey of that board was about cost reduction, which has been spectacularly achieved, and the UK content supply chain and all of this type of thing. I think we used to think as statutory bodies, from our view of the world, that we were a major constraint, and then when you saw their risk register, you realised that, actually, we were just one of the little lines in there and there was a whole heap of other stuff that was actually constraining offshore wind development. So, coming to the question about the ease or otherwise and the streamlining of the advisory process, I don't think it's really been our experience that that has actually been a major constraint.

From about a decade ago, we were working jointly with Natural England on big North sea projects and, a little bit later we were working with NatureScot—they were Scottish Natural Heritage at the time—on big projects in the Moray firth and the Firth of Forth, and working actually very well together and producing joint packages of advice because we had different statutory geographic remits; one is territorial and ours is the offshore, the 12 miles out to the economic exclusion zone limits. Through those processes, what we have progressively done is we have actually delegated that function to the country body, and that's really been primarily on the basis of streamlined customer interface. It's probably a bit simpler for the customer to actually interact with one body on some of these complex licensing and advisory processes than it is with two.

Having said that, when we've done our own internal reviews of that, we've found it's a fairly finely balanced judgment, but on balance it probably is a little bit easier. So, I think it probably helps a little bit from the customer interface. I wouldn't have said it was actually a constraint the way things are. I think it just makes things a little bit simpler for the customer, as I say. I don't think it actually makes things any cheaper—you just tend to find that the cost shifts from one body to another. So, it has some benefits, some merits, but it's not perhaps the panacea that many people think it is.

Okay. So, it's a finely balanced decision from your point of view. Can I ask whether it carries any risks with it, from your perception? I'm sorry, I'm not asking you to do this—it sounds like asking you to dob in your concerns on another body, which I know JNCC wouldn't want to do. But from a scientific point of view in terms of the advisory role we're talking about, would you have any concerns about a sister body like NRW—which is a slightly different-shaped body from the JNCC, with a slightly different remit—either in terms of the expertise that they currently have available or may have available to them in doing this, or, alternatively, in a slightly different agenda within NRW serving a slightly different wider remit? Are there any risks there to the advisory role that they have to take on?

I can't say I've thought about it that deeply, but I think in general we would have confidence in our NRW colleagues that we work with on a daily basis, anyway. I'm aware that Natural Resources Wales have a broader function and they have to separate their licensing a bit from their advisory bit, so it's primarily the advisory bit we'd be talking about. So, I think they would be more than capable. I know they do struggle with resources, just as, in fact, we have struggled with resources in the past. Funnily enough, I mentioned this cross-programme board a while ago, and one of the things in their risk register, which has been perpetual for the last decade, is resourcing to statutory bodies to fulfil those advisory functions; so, making sure those gaps are filled. I think in terms of overall competence, I'm sure they're more than competent to do it. I think it's just that they need to be assured—as, indeed, would we—that the resources are there to back it up in terms of the financial resources.

Okay. Thanks.

Thank you very much. And a final few questions from Delyth Jewell.

Diolch, Gadeirydd. Could you please let us know how things are working with National Grid and distribution network operators in terms of developing the right grid infrastructure to realise all of these plans?

I can't give you a lot of detail, but I will say that it is absolutely critical. So, grid usually sits on the critical path for any major energy project, meaning that if there is a delay in the grid connection then the entire project gets delayed. It is also sensitive because grid is—. The transmission cables, they need to be there offshore, but also they need to make landfall somewhere. They then need to connect to a substation, and then that particular substation needs to connect to a high-voltage grid somewhere, which may mean on land that there are buried cables or that there are pylons. These are all projects that have an impact on communities. If the roads get dug up or someone is planning a big substation in an area, communities have an opinion and rightly so. The planning process needs to be there too have enough time to work with the developers to choose the best possible locations.

At an electric system level, it is relatively straightforward. In fact, as Crown Estate, we have a statement of intent with National Grid in place that gives guidance to our co-operation and it helps us to have dialogues that we have to make sure that we work, for example, on these 4 GW for floating wind in the Celtic sea—that we integrate it early enough in their strategic thinking so it is part of what is called HND, holistic network design. It is a term that's used in the sector and it's a big piece of design work that National Grid are carrying out to make sure that they can meet the growing demands of a changing electricity system across the country. So, holistic network design.

I hope my electrical engineering colleagues don't criticise me for saying that it's relatively straightforward, because experience is that the social dimension, where these cables go, where the transmission system sits, where the transformers are—that is the bit that's much harder. And that is something that really has to start in earnest. As Crown Estate, we see this as something that we really want to enable National Grid, and developers in the end, to get on with. But, certainly, National Grid, in terms of planning, the overall backbone of the infrastructure that these wind farms connect into, they play a huge role. We are, I would say, on track with them in terms of the four key goals in the Celtic seas.

Thank you for that. Does anyone else wanted to add anything to that? Yes.

I was going to say, can I come in on the JNCC's role in that? So, JNCC are playing an active role in the offshore transmission network review, which is looking at how the network is designed and delivered in UK waters. So, we're an active member of the environmental steering group, which is currently looking at grid connection options on how you connect offshore wind to the onshore network. We're providing advice on the possible implications for those marine protected areas, along with other environmental non-governmental organisations and statutory nature conservation bodies, and we'll also be a statutory consultee for any of the plan-level habitats regulations assessment that goes with those consenting requirements.

Thank you very much for that. John, if you did want to come in—please, I don't want to stop you speaking. No, you're fine. The final question I had is for Huub. Am I pronouncing your name correctly? Is it Huub?

Yes.

Yes. I wanted to check. I just panicked. Okay, great, thank you. What are your views, please—? I'm aware of the time, I think we've only got four minutes left, but what are your views, please, on the Welsh Government's level of ambition on wave and tidal energy—anything further to what's already come up—and if you've had any discussions with the Government on these technologies? Again, I'm aware that this will touch on some of the things that have already come up.

Yes. So, yes, we have productive discussions with Welsh Government on those technologies. They are in a much lesser advanced stage than offshore wind is. So, there is a much greater need for, for example, demonstration projects, extra demonstration projects. The technology has potential. There is sizeable resource in Wales. So, the natural energy, for example, in the flows of tidal streams is well known. We have six agreements in place with developers of tidal stream projects around the coast in Wales. So, we are working—in fact, we are making a contribution to a programme called the joint industry project for wave and tidal projects. I think, honestly, these projects need a journey in terms of their maturation, technological maturation, and they have significant opportunity, and they require, therefore, to be able to move to a demonstration stage. We were very pleased to see the allocation of a budget in the contracts for difference round from the Department for Business, Energy and Industrial Strategy that is specific to these wave and tidal projects, because only by doing can we actually learn. There is only that much that you can learn in the lab tank or on the laptop. You want to be in the water with these technologies at an appropriate scale, and as the Crown Estate we are working with developers to enable that.

Thank you very much, you finished with a minute to spare.

That's excellent. Can I thank you? There's so much there in terms of evidence that we can take away as a committee. We're really, really grateful to you for your participation this morning—or this afternoon, now. You will be sent a copy of the draft transcript just to check for accuracy, in case we've misrepresented anything that you might have said. But with that, can I thank the three of you for your attendance and for the evidence that you've given us today, and in written form previously as well? Thank you very much.

Mi wnaiff y pwyllgor nawr dorri. Mi gymrwn ni egwyl am ginio. Fe wnawn ni ailymgynnull am 13.40 p.m. fel bod modd inni ailgychwyn y cyfarfod am 13.50 p.m. Diolch yn fawr.

Croeso nôl i'r Pwyllgor Newid Hinsawdd, Amgylchedd a Seilwaith. Mae'n dda gen i ddweud ein bod ni'n symud ymlaen at sesiwn dystiolaeth arall yn y gwaith rŷn ni'n ei wneud yn edrych ar ynni adnewyddadwy. Ac rŷn ni'n mynd i glywed nawr gan ddarparwyr ynni, ac yn dod i roi tystiolaeth i ni am yr awr a chwarter nesaf y mae Tom Glover, sy'n gadeirydd gwlad y Deyrnas Unedig gydag RWE Renewables UK Ltd; Dan McCallum, sy'n gyfarwyddwr Awel Aman Tawe ac Egni Co-op; Sarah Merrick, sy'n brif weithredwr Ripple Energy; a Jon O'Sullivan, sy'n gyfarwyddwr gwynt a solar ar y tir gyda EDF Renewables UK. Croeso i'r pedwar ohonoch chi.

Fe wnawn ni fynd yn syth i gwestiynau, ac mi wnaf i jest gychwyn drwy ofyn yn syml beth rŷch chi'n credu y dylai blaenoriaethau Llywodraeth Cymru fod o fewn y pwerau sydd ganddi ar hyn o bryd er mwyn cyflymu'r datblygiad o brojectau ynni adnewyddadwy? Mae'n gwestiwn eithaf eang, ond efallai gallwch chi jest feddwl am un neu ddwy o flaenoriaethau o'ch persbectif chi. Pwy sydd eisiau cychwyn? Oes rhywun eisiau mynd gyntaf? Ie, Tom. Diolch yn fawr.

Thank you, and prynhawn da, everybody; good afternoon. So, I think there are lots of things you can do to accelerate renewables. Our request as an industry will always be more and more and more. But I think you're probably going to start with the thing I say to everybody in every country, which is grid, grid and grid. So, I think that's the—. The main point is it's not just about renewables but about electrification generally. So, you need a grid. The electricity grid is like the broadband digital age's requirement for the electrification age. So, that's the kind of one we always say right at the beginning.

The other one, particularly for us, as we now look at floating offshore wind, and the opportunity thereof, would be investing in port infrastructure, and really leveraging Wales's ability to take a key role in the development of that floating offshore wind. And then we get into, from our perspective, we get into the kind of resourcing of bodies in order that we can deliver. So, in particular Natural Resources Wales, whether it's more resources or more focused resources into the 'able to give us advice' on the consenting process. And then also, just finally, making sure the marine licensing process is timely and fit for purpose.

Okay. Diolch yn fawr, Tom. Jon.

Thank you. I'd like to support those comments, please. So, at the risk of being boring, I think we couldn't agree more with the fact that it's grid, grid and grid. I think everybody knows EDF—we're the largest producer of low-carbon electricity in the UK, and I think we have, potentially, up to 2 GW of renewable energy projects that we would love to invest in Wales, but the biggest single challenge is connecting those projects to grid. So, yes, we really support that.

Diolch yn fawr. Dan.

I disagree. [Laughter.] I think I'd say it's people, people, people, in contrast to what Jon said, if we want to decarbonise our society. The technical stuff is important, but people can derail technology, as has been seen by windfarms, which can face opposition. So, we've got to focus on people, and we've got to focus on engagement in energy. One of the best tools I've seen for that is a portal called Energy Sparks, which works in schools and conveys real data for gas, electric and solar into schools, and a whole lot of teaching materials that then enable children to then reduce their carbon impact within schools and their builds. So, it's that kind of thing that we also need to be considering along with technology.

Thank you, Dan. And Sarah.

Yes, so I think I'm a hybrid of the two. So, Ripple enables individual households and businesses to own their own source of clean power. So, we obviously want as much as renewables in Wales to be developed as possible, but really, really importantly, we want consumers, households and businesses to be able to own part of those sources of clean power, and then we can see—. In owning those sources of clean, stable-priced electricity, they can then protect themselves from volatile energy prices like those that we're seeing at the moment. So, it's a combination of the two. We want projects, and it's fantastic that the Welsh Government has such a clear focus on ensuring that as much of the value of projects can be retained in Wales. We think that it should be the benefits as well—so it's not just about value, it's about the benefits, and part of the benefits of renewables is that they can generate electricity at a really stable cost, for the long term. And we think that Welsh consumers should be able to benefit by owning their own source of clean power, and benefiting from that stable-price green electricity that renewables can deliver.

Yes, and that was really interesting in the paper that you supplied as well, and I'm sure we'll pursue some of that further in a moment. Okay. Thank you for those initial responses. We'll go on now to Janet.

Surely, the first stage of determining an effective energy mix and in deciding where best to place finite resources is to actually conduct a survey in the first place on the potential for energy production. As such, what assessments do you feel have been undertaken by the Welsh Government, or indeed other organisations, to ascertain the true renewable energy for all of Wales, for all types of renewable energy, and, obviously, not just focusing on offshore wind, as appears to be the case here in north Wales?

Dan?

Everyone's gone quiet. [Laughter.]

Okay. Sorry, I saw Dan had been unmuted—I wasn't sure whether you did it yourself or whether it was done for you. But who wishes to respond to this one? Yes, go on, Tom.

It's a really interesting question—thank you, Janet—and it's a complicated one to answer, because I think the first question you need to answer is: what is the problem you're trying to solve? So, are you trying to solve renewable energy for Wales, or are you trying to solve Wales's potential to maximise economic value and local value from renewable energy? So, how much could you become a green electricity exporter as well, which I think is a very good opportunity for the people of Wales to use that natural resource that you have. And that's what we see, for example, in Scotland. Scotland sets a much wider ambition about how it wants to be a green electricity and hydrogen provider for the world.

So, I think, first of all, you've got to start with a solution—what's the question you're trying to answer? I think we would appreciate guidance from the Welsh Government, because it's not unequivocal—are you trying to do green for Wales, or Welsh green power for the world? And I think that's the first part. I think then you can look at—and you mentioned offshore wind, and, as you know, we're the largest offshore wind operator and developer in Wales. And I think it is important, as much as we talk about local solutions, and they're absolutely important, but we need local solutions and national and international solutions—this is such a large problem. And, of course, the Crown Estate have done a really good job in terms of identifying those areas of the sea that are best placed for wind resource.

Thank you. And then, as we see the growing use of electrical vehicles and the continued reliance of our society on electricity, what detailed assessments have been made to ascertain the expected energy demand over the coming years, to ensure that Wales has renewable energy production to meet that demand in electricity, and to make sure, for instance, that we have the relevant and required number of electric charging points for cars, in particular, being as we are pushing now electric vehicles so much?

Okay. I think we may have lost Tom, actually; I think he's having some problems with his line. But would any of the others want to come in? Jon initially, then.

Thank you. Hi, Janet.

Hello.

Hello again. I wanted to maybe just confirm that EDF—. I think we have at least two significant battery projects that we have in the pipeline. I think each is around 50 MW, wind, and potentially looking at combining with EV charging. So, we're very much aware of the increasing demand from Welsh consumers for electric vehicles et cetera. So, we very much welcome working with you to grow that part of the pipeline and increase those projects in Wales.

I think the other point I was going to make was we're also well aware of the work you're doing with NRW , around the forest. So, that's another really good initiative that I think can again identify where there is space for all of those different technologies—onshore wind, offshore wind, batteries and solar—where are the right places and the right scales. So, I think maybe if there was one point, another key point, from EDF today it would be around getting that balance, so it's not a one-size-fits-all approach, but we have those really good local, small-scale community developments and yet we also have a place for the large-scale developments in the right places, which will make a dent in the climate emergency and in those net-zero aspirations. So, it's trying to find that balance.

Thanks, Jon.

Okay, thank you, Jon. Dan.

Yes, thanks, Janet. Just to say, really, that the wind energy in north Wales, that's such a great opportunity for north Wales—and south Wales—and we just need to make the most of it. We've got that resource here and it's really good. Tom's off the call, but there is a shared ownership project that is developing in Alwen up in north Wales between Community Energy Wales and RWE, which is just a way of retaining, as Sarah has said, more value from these sorts of projects within Wales. And there has been, obviously, a big level of assessment that's been done to identify that location. We're also—Awel Aman Tawe—involved in another project in south Wales near Port Talbot, working with the two councils for voluntary services on 100 MW windfarm—again shared ownership to retain value. So, these projects—the shared ownership, community owned—can be really large scale as well, not just smaller scale.

But, in terms of the EV point you were making, the smaller-scale side of it is also really important. So, with Egni, we've developed a lot of rooftop solar and, again, that's ideal for factories or community centres, because it's supplying renewables on-site, so it enables those organisations then to look at EV charging because they've got clean-energy capacity on their own site, which is best to use there, rather than going on to the grid, because that creates more of a problem in terms of the size of the grid. So, yes. So, there are real—. When you go on holiday to Germany or places like that, you just see the amount of rooftop solar that they've got everywhere, and you travel around Wales, and there's so much capacity and we just need to find ways of doing more on that.

On that point, I've always wondered, and I've even been asked by some headteachers, why are schools in Wales—? We've got this twenty-first century project and new schools will be built and they don't have things like solar panels on them and I've even got people with established schools who've said, 'We'd love a scheme to have some solar panels on our roof.'

Yes. Yes, okay. Yes, I'm sure we'd all agree with that. We've Tom back with us.

Apologies, Chair, I think we've just illustrated why a good grid connection is required, so, many apologies.

No, no, and I hope you didn't do it on purpose just to make that point. Okay, right, thank you, Janet. Let's move on to Delyth.

Diolch, Cadeirydd. Prynahwn da, bawb. Looking at the renewable energy targets, how ambitious do you think the plans for renewable energy are that are set out in the Net Zero Wales plan, please? Whoever wants to go first on that.

Sarah.

Yes, I can. So, in terms of the—. I was involved in the Welsh Government's deep dive in renewables and the finding of that was the ambition for Wales to generate at least as much electricity as it needs from renewables, which is fantastic. But I think Wales has got a really, really good renewable resource, and almost by just seeking to meet all of its own electricity needs from renewables can potentially be constraining the amount of renewables that get developed. There's fantastic resource in the Celtic sea; still lots more potential for onshore and for solar. So, the targets are obviously very, very welcome and they are very ambitious, but we live in a very interconnected world and I don't think Wales should necessarily see its potential as limited to what is—. And the targets do specify 'at least', but, yes, I think the targets could—. Yes. Wales's potential is far greater than what is needed to meet its own electricity needs, and I think it's really important that that comes through in the targets.

Tom.

Just to emphasise the point really. So, if you talk about the Celtic sea, there are all kinds of estimates about what the capacity could be, but we could at least easily get 10 GW to 15 GW, which is way more than the Welsh renewable electricity demand. And that's a real opportunity for people for employment, for added value to Wales. So, the Celtic sea will require the use of Milford Haven port, will require the use of Port Talbot port, and these are real jobs in fabrication, port jobs, in areas that could really do with the industry coming. But if you set yourself a lower target, then those jobs won't come, because those ports need a clear pipeline and throughput of these big projects in order to invest in the port infrastructure and the skills that are required to bring that through. So, I think, on the offshore, why not follow the example of Scotland and try and be a world leader and think about export of green hydrogen, think about export of electricity? So, I think that's that. On onshore, kind of the same; Renewables UK did a report about what the potential for onshore is, and there is 3.5 GW of potential that they believe could be in Wales. The gross value added that they talked about for Wales in that was £4.4 billion. That's their numbers, not my numbers. So, this is a real opportunity, and why constrain yourselves just to serve? In all other industries, people try and build industries to export as well, and I would urge Wales to consider that.

Okay. Jon.

Thank you. I would just like to echo that and put on record that we would also be very supportive if the Welsh Government was to take that even more ambitious step to sea, to really maximise the renewable energy and the great resources that we have there, and go for the net exporter route. And really, I see it as a win-win situation for the Welsh Government, for the Welsh consumers, for the communities. I think we should really maximise those opportunities, large and small.

Thank you. Thank you for that. Focusing on the deep dive, then, do you think that there are any omissions in the scope or the recommendations of that deep dive? Can you talk us through any involvement that some of you might have had in that project, please? A number of you have unmuted yourselves so I can see that you definitely want to come in, but Sarah has put her hand up first. I'm going to go to Sarah first.

[Inaudible.] So, I was involved in the deep dive and I'm also involved in the finance group looking at taking it to the next step. So, I think the terms of reference of the deep dive were really good. If anything, it was very broad, and I think quite deliberately, and the terms of it were very, very specific and the Minister, or the Deputy Minister, was very clear that he wanted it to lead to very specific, actionable recommendations, which, having been involved in quite a few similar things in the past, having that really clear focus on actionable recommendations was very, very refreshing. And I think the recommendations that came out of it, we're now working through how can you get those implemented. But, yes, I thought it was a very refreshing process to be so focused on the outcomes.

Yes, Tom.

So, first of all, we think it was a great process, so I don't want to—. I do want to make some slight, maybe, improvement on it, though. I do think there was, perhaps—. In terms of the focus, and I'm going to say this, aren't I, but there was a lack, maybe, of engagement of the larger developers. It was mainly focused on the smaller, community developers, which are really important, but, ultimately, at the moment, the heavy lifting has been done in terms of decarbonisation of the larger players, and I think we've got a lot to contribute to the discussions as well. And Renewables UK were brought in, but towards the end of the process, and I think it's quite surprising. We are the largest renewable generator in Wales, and yet our involvement was more towards the end and not as much as we would have liked. However, the output was very good. So, it's only a 'could be even better if', not a massive criticism.

Okay, let's hear from Dan, then, and I am aware that Huw would like to pick up on something also.

Just to agree with Tom, it would have been really good to have had the larger developers more involved, and it is important. I think when Tom was off the call I highlighted the shared ownership opportunities that are happening with the RWE project up in north Wales with Community Energy Wales, and those kinds of schemes to retain more value in Wales and engage more people in energy are really, really important. I know this didn't come out in the deep dive particularly, but I do want to highlight the potential for direct supply of consumers by community energy projects. In the UK, we have a very restricted energy market, dominated by very large companies, and there is a tendency within civil servants et cetera to just think, 'Oh, it's just too complicated to engage new suppliers coming onto the market.' And I know, obviously, some have gone bust, like Bristol Energy et cetera, recently, but I think it is important we do—. People want to get supplied by community energy projects and it is an ambition, and, in the continent, it's very different. I would like to highlight to the committee that one example is Ecopower in Belgium, which have got 50,000 customers. I've met with them several times, and what's interesting is they're asset based, so they own lots of wind turbines and solar farms. So, of course, when electricity prices are high, they get paid more money and that enables their stability. So, they've carried on through the current energy turmoil as have a lot of other similar-sized companies in Europe.

Anyway, the point is that Dirk Vansintjan, who set that company up, is coming to Wales—24, 25 May—and I think it would be really good if Senedd Members can perhaps try and speak to him when he is over, because he's got—. I can talk about it, but, when you hear it from the horse's mouth, you kind of realise, 'Well, this is possible.' Obviously, it's a regulated area, Wales can't do it on its own, but it's well worth listening to somebody like him that's actually done it.

I'm sure Members would be very interested in engaging in that, certainly, if the opportunity's there, and I'm sure we'll take you up on it. Thank you for that. Huw, did you want to pick up on something?

Thanks, Chair. It's only a quick one, but Delyth's line of questioning took us into the realm of ambitions, and you took us then off on to not just ambitions in terms of climate change and carbon reductions, but, actually, the wider economic benefits of Wales leading the world and all of that, and I get all of that; that's fine. But one of the lessons that we've learned from 20, 30 years of renewables, particularly onshore renewables in Wales, is that we haven't actually captured the full benefits in terms of community impact, because we've had to buy in the major pylons, the generators, the turbines, the equipment; we ship them in from other countries, and we've kept falling back on this reason or excuse—whichever it is—that we don't have the capacity here. Now, I'm just wondering, as we look at offshore windfarm development, floating offshore windfarm development, have we learnt any lessons about ports development, manufacturing development. I remember we had Mabey Bridge in Chepstow, which I visited years ago when I was a Wales Office Minister, the potential for them to supply. They seemed to have no market here for our own market in Wales or England; they put some up to Scotland. So, just give us some reassurance here in the committee that, in this big new expansion to realise the potential of Wales in marine, but also on wind as well, that we've learned the lessons, we're actually going to create jobs here to the nth degree in Wales.

Yes, Tom. And then Jon.

Yes, thanks. So, I think I mentioned before—. So, I think, first of all, we now have the ambition within the UK, we have the commitment under the offshore sector deal, that 50 per cent of total spend across the whole lifetime of an offshore project will be UK based, and we've got an ambition to get that to 60 per cent. So, you've got that kind of commitment in the offshore sector deal, and I think, when you talk about further renewables onshore, the industry is very keen to work with the Welsh Government to look at an onshore sector deal that puts similar commitments and ambitions onto the sector, and RenewableUK Cymru are working on a proposal for that that we will share when the industry have aligned on it as well. So, I think that's one.

I think, on the floating offshore wind in particular, I mentioned before that we don't see as a company any way other than using Milford Haven and Port Talbot as a dual port function to build that floating offshore, right. So, I think No. 1 is—. Never mind promises or whatever else, just technically and practically, those ports need to be used. I think then the question is how do you get them to invest and maximise the opportunity, and what we have learnt is that what you need is long-term commitments through factories or ports, because they need to invest, and people who go and work there need to have job certainty. So, just giving them one project doesn't work; you need to give them this project, then that project, then that project. So, this is why, as renewable developers, when you ask us are the targets good enough, what we want is we want targets in 2030, 2040, 2050, because then we can deliver pipeline promises to ports that they can have throughput for 2020, 2030, 2040.

So, I think what we've learnt globally is you need to (a), do these sector deals where they give commitments between developers and industry, and, second of all, give clear targets and pipelines that enable all the supporting businesses to actually invest, because, otherwise, they end up with things we've seen elsewhere. We talk about things like the solar scandal, where everybody set up solar businesses and then the Government changed the targets and they all went bust. Well, are they going to do that again? So, there have to be commitments that enable people to take that capital risk, investment risk and skill training risk and develop that pipeline. So, those are the things, I think, we've learnt.

Okay. Thank you. We'll go to Jon next, then Dan, and then we'll come back to Delyth. Jon.

Thank you. I just wanted to share that, in my career, I've spent quite a lot of time in Wales—I used to work for a Scandinavian utility company—so I've seen first hand, not just from behind a computer or a video screen, the real positive benefits and impacts. The jobs in the local communities, the impact—. I think this is well known, but Jones Bros is a really good example of a company that has worked with major developers at significant scale, so there are real revenues and growth there. So, EDF Renewables is very welcoming of this report and the recommendations to do more in this area of working with local supply chains—so, fully welcome that. And just to echo what Tom said, I think clear targets would be very, very helpful in providing the certainty for us to invest, take the risks of investing and then reaping the rewards for everybody in those win-win situations I talked about.

There we are. Thank you, Jon. Dan.

Just to highlight, it would be really good to see solar panel production back in Wales. One issue that's come to light in the past year is the use of slave labour in China to manufacture solar panels in Xinjiang province, which, you know, is why they were so blooming cheap, basically. Europe is now aware of that because of research by Sheffield Hallam University and published on the BBC, and it's really important that we respond to that. So, Egni isn't using any Chinese panels now for its projects. There are panels available from Singapore and Korea, but we need to try and look at developing our manufacturing base in Britain as well, for our own resilience, really.

Yes, absolutely. Okay. Thanks, Dan. Delyth.

Diolch. Just one final question from me: looking at the deep dive and the net-zero plan, do you think that they have enough of a focus on the wider energy mix in terms of solar, hydropower and energy storage?

Sorry, I hate to go first again, but, no, but it was a renewable energy deep dive. One thing we have—. As you know, we also own a very large gas-fired power station in Pembrokeshire, and we are part of the transition. I started, 10 years ago, buying some coal for Aberthaw, right in the Welsh valleys. So, we are part of this transition journey where we're trying to get everything decarbonised, not just local renewables, not just local electricity, but also the national electricity. And, you know, we do need a plan about how we're going to decarbonise places like Pembroke, and that needs to be an integrated plan. So, it's just good enough to say, 'We're going to do offshore wind, or solar'; we need to integrate that into the local refineries. So, we're going to do hydrogen, and how are we going to get them off methane? What are we going to do with the LNG terminals? How are we going to decarbonise Pembroke? Are we going to go down a CCS route? Are we going to go down a hydrogen route? It's an integrated story. So, whereas renewables, I think, do the heavy lifting and maybe 80-90 per cent of it is going to come from renewables, actually that last 10 per cent is really hard to decarbonise. So, what happens when the wind doesn't blow and the sun doesn't shine? It's a really hard question, and that's the bit that you need to—. It requires full, integrated industry solutions in the clusters, which is why we have these clusters. We've got the south Wales industrial cluster, we've got the Pembroke net-zero cluster, which we sponsor, and the Haven cluster, et cetera, et cetera, which are all trying to work out how we do integrated decarbonisation. Renewables will be, like, the 90 per cent, but, actually, how do we get all the industries there? Because what you don't want to do is lose those industries out of Wales as part of the decarbonisation. Decarbonisation shouldn't be, 'Let's shut down productive industries and move them to China', so that, in Wales, it looks good because you've got zero carbon. That's not the answer. The answer is how you keep your industry whilst decarbonising, and I think that that is something, maybe, for the Welsh committee to look at, longer term.

Thank you, Tom. Sarah, you wanted to come in as well.

Yes. In terms of the sort of split of focus between the different renewable technologies, I think a lot of the focus was on financing and infrastructure, which would apply to all the different technologies. So, I guess, whilst there was a lot of talk of offshore wind and onshore wind and solar, I think it would kind of be natural for most processes to focus on the areas that have got the biggest scope for potential, basically. But I think a lot of the foundations would apply equally across all the technologies anyway. So, whether that's the finance stuff, the grid stuff, all of that applies to whichever technology you're looking at. So, I don't think necessarily that splitting it by technology is particularly helpful, because there are so many issues that apply across all the different technologies.

Okay. That's a point well made. Thank you. Right, Joyce.

Thank you, Chair. Not only do I cover Pembrokeshire, I actually live there, so, yes, I know about all the infrastructure. I think one of the first lessons I learnt—it's been alluded to—about bringing the public with you—. I remember there was an application for three wind turbines in place of three tall chimneys and the objections were incredible and eye-opening, because I couldn't see any objection, ever. So, I put that out there because my series of questions is going to be along the line of the current planning and consenting process for renewable energy projects, and to outline any necessary changes to those processes if you think they are needed.

Okay. Who wants to kick off? Planning and consenting is always one that we could talk about for a long time, I'm sure.

I'm happy to go first on this. I've got long experience.

Yes, go on, Dan.

Planning just makes my blood go cold, actually. It's ironic, really, that we have this system called 'planning' trying to tackle something called climate change. You'd think that the two would be linked, but we got turned down repeatedly for planning, but we did get there in the end. I think it is very difficult when things like bureaucracy get involved in trying to decide when projects should go ahead or not, and it's very difficult when the planning process is meant to be blind, i.e. not consider who the developer is. So, if it's a community energy organisation, they can't easily attach any weight to that. I mean, I studied history and you can always find things to make an argument and turn stuff down, and that's what I felt kept on happening to us.

I don't want to talk too much about the wind side. One example that I recently came up against was on the solar side, actually. A youth centre in Llandovery wanted to put solar panels on its roof. It already had Velux windows there and it was smack bang next to the ugliest garage you can possibly imagine, but because it was a conservation area, the heritage officers basically said, 'No, we're going to recommend refusal on this' and the youth group just got scared off and didn't take it forward. So, I think one of my recommendations would be that—. Planning permission for solar panels isn't required normally in Wales on rooftops and that's great because it just keeps planning and planners well away from projects that I'm involved with. But I would just say take it away—planning should not be required in conservation areas because it's just another hurdle to jump over, and, given the climate emergency, I can't see any justification for protecting areas that are quite nice to look at when, I think, there are bigger issues at stake.

Okay. Thank you, Dan. Anybody else want to pick up on these issues? Jon.

Thank you. I would probably say that the EDF Renewables view is that the planning process in Wales is, in theory, good and getting better, but I think it's fair to say that the developments of national significance process has not been properly tested yet. I think there are some windfarms going through currently that will be real proof of how far things have improved, or not. So, I think we're all watching that with great eagerness. I think we're really looking forward to seeing the critical mass of projects going through the system.

So, we welcome these deep-dive recommendations—for example, bringing forward the Welsh national infrastructure consenting regime. Just in terms of areas to go further or improve, maybe it's an obvious point but we'd like to make sure that the local planning authorities are adequately resourced and take into account those ambitions set out in the regional and national policies. I think those are probably my key points.

Thank you, Jon. Tom.

I agree with everything Jon said about the DNS process not being proven yet, and we reserve our right to see, I suppose, on that one. And thanks, Dan, for the stuff on the local level. I'm going to talk a bit about the big projects. So, Awel y Môr, for example, if we go ahead with the consenting, would be Wales's largest infrastructure project probably this decade. So, it's a real opportunity. On the other hand, it has a real impact, and so it's really important that, with any planning process, we go beyond the statutory processes, which is what RWE tries to do—to really try and get an understanding. Of course, we will never ever, ever get everybody happy when we are trying to do such a big infrastructure investment, but I think there are a few things that practically go beyond that trying to consult and engage and get the community with this.

At the moment, the disadvantage for Wales is the delink between the development consent order and the marine licensing process. So, for other England and Scotland projects, the marine licensing is done in the DCO process itself. In Wales, you've got to do them separately. So, you do the DCO process and the marine licensing process separately. And, actually, there's no statutory timeline or even, really, an agreed process about how the marine licensing and the DCO interact together. So, I think it would be very good—. And, actually, it was one of the renewable deep-dive recommendations that there would be more resource at NRW to look at this and more confidence about those marine licensing timescales. But I think we would just say that that's a bit of an issue, at the very large level, about making sure that, because of some devolved powers, you don't disadvantage Welsh projects versus elsewhere in the UK.

Yes. Okay. Thank you. Joyce.

Yes. That's interesting. So, this is just for RWE and EDF—well, actually, EDF—about how the approach to national energy planning should be adapted to ensure large scale. You started talking about it, to a degree, and you did mention there is a national development plan, as well as a regional and a local plan. So there were three plans. I sat through those in the last Assembly, as it was then. But how do you think the approach to that national energy plan should be adapted to ensure the large scale? And, of course, we can't get away from the fact that you do have to take people with you. You have to take people with you, otherwise your objections will be in before your plans.

Thank you, Joyce. I would say that the most important thing for us is that, with the UK Government and the Welsh Government, we continue to work together, and with these various national and all the planning consenting systems and frameworks, to really identify those win-win situations for the communities and the companies and the Government. I mean, if we can continue to do that, then that's where I think we'll continue to see real success.

Probably the most pertinent example is the one that everybody on this committee knows so well, which is grid, so I probably won't go there again. And the other really good example of where national meets regional planning is, as Tom said, around marine licensing and development consent orders. So, I'd probably highlight those two areas.

If there a job, or who's job is it, really? If you want to bring something forward in planning, who's job should it be to explain the benefits of an application to those people who will be affected, but who might not actually be the overall recipients of the energy that's going to be produced? You can see that the issue here, and I've seen it many times, where people feel that their area is being dug up, the inconvenience is theirs, but the benefit might be elsewhere, which isn't necessarily strictly true, but there's a job of work to be done. So, who should be doing it?

Tom first, then Jon.

Thanks, Joyce. It's an absolutely critical question. When we're delivering these infrastructure projects, there are, obviously, some communities that negatively are affected more than others, and yet we're delivering this, if you like, for the greater good, right. We're trying to decarbonise the whole country, the whole of Wales, the whole of the UK, the whole of the world, but, obviously, if you're near a certain big infrastructure, then you get the negativity, and we've had that all the way through energy, right. This isn't a renewable problem, we had the same when we built Pembroke gas station. We had a massive impact on the Aberthaw community. So, we've always had this problem, and I think it's for all of us.

So, I start—. With the specific development, of course, it's the developer, and that's why we go above and beyond in our consultation and we try and engage. But, actually, it's more than that. We do actually need politicians' support, right, because politicians like you—you can see the bigger picture, you can see what we're trying to do at a national level and help bring people with us. It's for educators. We talked before about action in schools. Ultimately, we need to understand that we're not doing this for the health of that region, we are doing it for the greater good.

And then I think, unfortunately, even with all that education, there will be some communities that are negatively affected, and this is where we believe local community benefits are key to winning the hearts and minds. So, yes, you might have some negativity from that large local infrastructure, so, therefore, you need that positivity. I'm a Scout leader, I always say I would love RWE to put a wind turbine in my town, because I could really do with a new Scout hut, and I'm serious, because that's what's important to me. I think what we try and do when we engage local communities is set up independent community benefit funds and try and get those managed by the local community. They can see that, okay, they get this negativity, this disturbance, but they get the positivity of a village hall, of a support, of investment in energy efficiency or whatever else to offset. So, they do get something in their local community that offsets some of the negativity they've had, and these aren't immaterial amounts. RWE just went past the headline for £10 million of community benefits into Wales, so we are actually putting that money in and we've got countless examples of where we've done investments into all kinds of things in the local community, and I think that hearts and minds help offset that local negative impact in order to get that greater national goal.

Thank you, Tom. Just to interject, if I may, I agree somewhat with what you're saying, but I honestly thought that we were beyond these—I don't want to say tokenistic funding schemes, but, really, for me, surely it must be about the local community having a more meaningful stake in these enterprises, rather than being the subject of being lucky enough to receive a grant or not.

So, I think you're right in both ways. Please don't underestimate the value that communities put on the community benefits, and that some people would rather have that defibrillator, would rather have that village hall than a stake in a windfarm. So, please don't underestimate it, and we get very, very, very positive feedback for our community funds. So, I think that's No. 1.

I think you're right, though, the local ownership—we hear you, we believe it's right and it's another way of getting those hearts and minds. I think you have to really think, though, about is it appropriate for that local particular funding, and I've mentioned before that Renewables UK Cymru and the developers are working on a proposal that we're going to come back with, with a proper way of structuring an onshore sector deal, if you like, where that proper ownership can happen. Sorry, I think I dropped out—I think Dan might have mentioned it.

Our latest two projects both have community ownership. I think one has the option of 15 per cent ownership, and with the other one we've got a memorandum of understanding with Caerphilly, which is still under MOU stage about how they can take local ownership. So, you're fully right—we are moving beyond that. It's another way of getting that. I think you have to be—. I will put a note of caution around it. I talked about Awel y Môr. Awel y Môr is probably going to be somewhere between £1 billion to £2 billion of capital expenditure investment, and it's going to be extremely risky. It's going to take from now until 2030 to deliver. You've got to really ask yourself: is that appropriate for a local community to put money into? Are they really wanting the risk? We've seen lots of examples where local authorities and stuff around the UK have got involved in schemes and lost a considerable amount of money. And we also have to be careful, as developers, not to be selling schemes that we don't think are a good use of public money.

Okay. And maybe the emphasis would be different, in terms of onshore and offshore—that is possibly true. Jenny, you're very keen to come in, I think.

Okay. I share Llyr's frustration on this. Just tell us about any large-scale project that's actually been prepared to share the benefits with local communities by offering them reduced price energy. That is what is going to be far more effective getting people's attention, and it's never been done. All these people who wanted to put up windfarms and give people tuppenny-ha'penny never engaged with people and said, 'We will give you cut-price energy for x amount of time.' That would have been the way to deal with it. So, you're all guilty of not having made sufficient progress. I'm not talking about you, personally. I'm just saying that all the big developers have committed the same mistake.

So, maybe just to come back on a few. I can't give you a specific example because it's more or less done indirectly via the Government support scheme. I want to just highlight that renewable companies are giving £660 million, under the latest low-carbon-contracts company, back to UK consumers, including Welsh consumers, as a result of the current high power prices. That is not penny-pinching—that is £660 million that is reducing UK consumers' bills this year. So, I think you have to look at it, unfortunately, about the regulatory regime that we're in, which is we have to sell our power to the national grid as a large infrastructure, but the money does come back to consumers.

I get the frustration, and I completely agree that it then doesn't come back to the local consumers, which are the ones that are impacted, but we're not able to do that under the current UK electricity system at the national level, but that's why we are looking, as I said, at community benefits, which are not immaterial, and also, as I mentioned before, Alwen Forest—there is an opportunity to have 15 per cent ownership by the local community. So, we are trying to work on it within the legal and regulatory constraints that we have. I fully recognise it would be even nicer if we could give them cheaper electricity, but, indirectly, we are.

Okay. Thank you. I'm conscious we didn't allow Jon to come in on this. So, Jon next. I know Sarah wants to come in as well, and then I'll come to you, Huw, who wants to pick up on something. Jon.

Thank you. I would like to probably share something—I think it is in the public domain—that EDF as a whole, as you know, has a strong customer-focused business, and I think it's fair to say that for large parts of this year, EDF is not alone in having had to sell power for less than it's cost us to make. So, I think this is something that is—. Maybe I can't quantify the exact numbers today, but I'm happy to come back on that point, but I know for sure that EDF is absorbing a lot of the volatility and the price increases in the market to the direct benefit of consumers in Wales and the rest of the UK.

Okay, thank you—that's an important point. Thanks, Jon. Sarah.

I've worked in the wind industry for 22 years, and we set up Ripple to do exactly what the industry is trying to do now, which is giving consumers—they can be focused in the local area or they can be more regionally or nationally—or enabling them to co-own large-scale windfarms, whether that's onshore—. We're looking at offshore as well, potentially being part of offshore windfarms. And then they get bill savings as a result of their ownership. So, it has been a really, really tough nut to for the industry to crack, but we genuinely think we've done it with our ownership model. It's not easy, but it is highly scalable and it can be focused at the local community, you can give local communities first access, and you can expand it out on a sort of onion ring-type approach. But, yes, it's really scaleable—it works with small projects and large projects. We think we have got the solution that people have been looking for all this time.

Thank you, Sarah. Okay, Huw—you wanted to come in.

Yes, thank you. As Dan will know from one of the very large-scale projects that's in the pipeline locally, the proof of the pudding, both in terms of the planning issues but also in terms of the community benefits that come back, are really live to me in this area. But what I wanted to say was two things. One of them is a question, one is an observation. I don't think companies are doing themselves any favours by hiding away what they actually do donate to the community through steering groups, through different mechanisms they set up. You know, often people will say to me, 'I don't know what the hell they're doing. Where's the money gone from all of this?' It's an absolute trick that's being missed here, because, yes, I don't underestimate the many individual contributions that help a lot of organisations on the ground. It's not the same as real ownership, I have to say, but it is a contribution, and you need to look at that.

What I wanted to ask you was a question I put to an earlier panel: to what extent do you think existing operators on the ground, some of whom have been here for a decade—I've got one in my patch that's been here for nearly 30 years now; one of the first windfarms in Wales—to what extent do you think, depending on the situation in the market at any time, they should revisit their contracts? And for some of the ones that do not have generous contributions towards the local community, they should really go and open their books up, and say, 'Look, here's how we're doing it—tough', or 'Here's how it's going—it's going really well. We'd like to give more back to you', either in terms of energy costs, energy storage to help with overnight cheaper electricity, or just donations to local clubs, because we have some on the ground that are being extended, renewed, without any consideration of the local community. It's not good enough.

Anybody want to respond to that? Tom.

It's a difficult question. So, each project is quite different, right? So, if you like, for example, take the latest projects under what we call contracts for difference—this is what I was talking about with the £660 million—they don't get a windfall if prices are high. And actually, neither do they suffer if prices are low, by the way. So, they already are protected, so their revenue model is pretty clear. Of course, if you're an older project, and you're exposed to the wholesale power prices, you would have been making quite a bit of money this winter. Of course, if you go back two years, power prices have been materially lower than probably their investments would have been, and they would have lost in many of those periods. I think it's therefore very difficult to work out whether they're making excess or not, unless you look over the whole investment horizon, and you're only going to know that if you've got perfect foresight or hindsight. So, I think it's a very difficult challenge, because, of course, when they make more money in their predicted period, it's very easy to say, 'Can we give you some money back?', but when they—

Okay, Tom, let me just say, then—would you support a proposal that said, when an existing windfarm or other energy generation facility comes up for renewal, for an extension or expansion, then at that point there should be an opportunity—there should be an obligation, statutorily—for them to sit down with the community and talk about what the community benefits should be going forward? Because I've had one in my patch, and I just feel we had no opportunity to sit with that company. The company just said, 'We're putting an application in to expand and there we go.'

So, maybe I'll answer first indirectly, but then directly, if you would allow me. I think we are very keen that the whole methodology of community benefits is a lot more standardised, whether that's through obligations or through standards. Because what we find is—and this is a bit of a problem with the way the market's set up—we're completely competitive. So, my projects are trying to beat Jon's projects and trying to beat Sarah's projects, right? And so the problem is, when you then get to your financial investment decision, you're trying to squeeze everything, whether that be your construction contractors or whatever else, and that includes, unfortunately, at the moment, community benefits, because they're not mandated, and therefore we have these very difficult discussions, which are that we'd like to give, say, £5,000 per megawatt, but we think we're not going to be successful, so best we give £3,000 per megawatt, because at least the community gets something and we get our project away. So, we would start anyway with a kind of proposal that says, 'Why don't you mandate?' So, a bit like forest estate Scotland says that if you do anything on their land, you've got to pay £5,000 per megawatt. If you made community benefits a standard approach, then at least we're not competing on that and we have no incentive to reduce them down. So, I think that's one, which then probably answers directly your second question, which is: yes, have an obligation, as long as it applies to everybody. The problem is that, if RWE just does it and then the next developer next door doesn't do it, then they get the extension but I don't, then the community doesn't get any benefits anyway. So, I think I would say it's one of those ones where—. You don't often hear corporates like us asking for mandates, but I think here mandating community benefits is probably not a bad idea to take it out of the competitive process.

Okay. We are going to have to make progress, I'm afraid. So, Joyce, if you'd allow me, I think Janet wanted to ask one question around planning and consenting, and then we'll come on to Jenny to talk about the grid. Janet, did you want to come in?

Yes. The development of renewable energy projects to meet Welsh consumption understandably requires the undertaking of significant engineering and construction projects across our communities. What opposition are your organisations facing from local residents, and in which ways are you working with residents to address their concerns? My reason for asking that is I know that when some of the public consultations have taken place—. There was one last year during COVID where it was held outside in the winter, on the promenade in Llandudno. The feedback I had was that it was really well attended, but when I saw the numbers, it wasn't, in fact. Just this town alone is 22,000, and the scheme will impact across all of the north Wales coast—Penrhyn Bay, Llanfairfechan, Penmaenmawr. [Interruption.] Sorry, that's my parrot. At what point do we have some assurances that proper and meaningful consultation will go out on the these schemes, whereby they are going to impact—? And I'm not talking about just Nimbyism or views or things such as the night-time visuals and things like that, but also there are a lot of people who are very concerned at the size and scale of these schemes that are coming. They're going to be twice the size of the Eiffel tower, for instance, or will stand behind the Great Orme, which has never happened. So, you get my drift. We're not talking about small schemes here, we're talking about very large ones.

Okay. Jon.

Thank you. Maybe if I could share some numbers with you, because EDF Renewables is very genuine in wanting to consult with the local communities to help allay any fears and try to make it, as I said, a win-win situation. What we often do is commission independent surveys and reports. One of our leading projects is Garn Fach, near Newtown. In January 2020, we commissioned some feedback and 147 people responded. I think the numbers are that 66.7 per cent said they supported that windfarm. So, I think what we've seen over the years is that that trend has been increasing and increasing. Those are honest independent numbers, on which we're happy to share more details with you.

I think maybe the other thing I'd say is that, if we do this genuinely, if we do this openly, the early engagement with the communities on those consultations, then I think in general it is increasingly well understood that we all have a role to play in the climate emergency, we all have a role to play in net zero, and things like the world events over the past few weeks are only focusing the mind and placing maybe even more importance on things like renewable energy across our countries.

Yes, okay. Thank you, Jon. Very briefly, Dan, and then we are going to have to move on, because we've only got 15 minutes left and we've got a lot of stuff to cover. Dan.

Just to mention that that opposition is there, but again when we were doing the consultation for the big Y Bryn project, a 100 MW scheme in Port Talbot, a number of people just quietly said, 'Look, we support this.' And they keep their voices down sometimes, because it can be quite intimidating. It is really important to remember that silent, often, majority.

And the other thing: with our windfarm, again, we had opposition to that, but I think we've had over 2,000 people visit it—school groups and the public. These projects, as Jon was saying, can be really popular, especially once they're built and people get used to them.

Okay. Thank you. Sorry, Tom, we are going to have to move on, I'm afraid. Jenny.

The public has moved on on this, but I'm not sure that the UK Government has. Amidst the perfect storm that we now face, to what extent would Jon and Tom be able to advise us as to whether the UK Government, which control the National Grid and Ofgem, have grasped the changes that we need to make for a whole variety of reasons? Because the Welsh Government is unhappy that we don't control the grid.

Have they grasped it? I think there's been a hell of a lot of progress around the changes required with things like the offshore network transmission review, holistic network design, trying to really plan the system. Therefore, the integration of renewables is getting there at the macro level. I think what isn't there is the full system design architecture of what it means around the integration of this. So, what we don't see is the plan that goes from electrification of households, electrification of houses, how local energy gets delivered, how national energy gets delivered and exported, what it really means for grid, and it still feels a little bit piecemeal. When we talked about some of the planning issues we have—. I was down in Sussex, actually, on Tuesday talking to somebody who again has a local issue with a big wire going through their estate. The problem, as he says, is, 'Well, you put a wire through there 10 years ago—why do we have to put a wire through the same place?', and I think this is about anticipating a little bit further in the future—2040, 2050—to make sure we only disturb communities once, we do some anticipative planning. We need more, I think, centralised, strategic thinking about how does this all fit together—the hydrogen, the electricity and renewables. I would say it is better done at a UK or even European level, because it's all integrated—how Wales integrates with Ireland, how Wales integrates with Devon, how Wales integrates with the north-west, how Wales integrates with England. So, you need to think about it at a very holistic level.

Thank you, Tom. Jon.

I'm very sorry; I don't think I have much more to add to that answer.

That's no problem whatsoever.

That's fine; we can move on. Does the Welsh Government have a coherent strategy for body swerving the restrictions of the National Grid whilst the UK Government catches up, or whilst the joining up of all the dots catches up so that we do have a coherent plan? You know, we want to go for net zero by 2050, so how are we going to proceed now as a result of this deep dive in order to very, very urgently transfer away from gas, which is going through the roof?

I think going to back to how does Wales deal with some of those policies that are not devolved—so particularly, as you said, the grid and stuff—we welcomed the fact that there was this review between the Welsh Government, Ofgem and the DNOs and transmission owners about how we're going to look at this grid. I must admit I can't really tell you whether I'm optimistic about that or not, because the industry involvement in that hasn't, so far, really been there, so it's been a bit of a quiet box. Six months have gone by. We hope that they're working together and coming up with the answer, but we don't really know, so I can't really give you the assurance there at the moment about what the status of that is.

Okay. Thank you for the honesty on that. Jon, do you have anything to add on that?

Dan wants to come in.

Just in terms of body swerving UK Government, one way is rooftop solar, because you just don't get involved in the grid, you look at on-site demand. It also comes back to what Janet was saying that lots of schools in north Wales haven't got solar panels but really want to do something about it. We, Egni, wrote to all local authorities in north Wales and didn't get a response from any of then, but we did work really effectively with Newport, Pembrokeshire and Swansea councils and installed tons there. So, they can learn from what especially Newport did to get more solar panels on schools, and that's a way of just decarbonising what we can using existing buildings. But I think learn from Newport in terms of how they dealt with procurement and the legal side. And we're happy to work with any—. There's a number of really good co-ops up in north Wales, and we're happy to work with them to do that.

That's very useful to have on the record, because there isn't a single solar panel on any school in Cardiff as far as I'm aware. Jon, did you want to come in on this?

I would maybe highlight, I think, some recent positive developments in EDF Renewables where we have an industrial commercial rooftop solar business, and have had for a number of years, and we're going to grow that business. I think that's positive news, and that's growing in Wales, Scotland and England. So, I think we'd be very interested in working with you to look at those opportunities in Wales too.

Okay. One of the things that confuses me is why we haven't seen more local community energy schemes developing for what motorists are demanding now, which is connection points for cars, so they can buy an electric one. I just wondered if any of you can clarify why we haven't seen that. The A470 is sitting there, people are going to go up and down it.

I would like to confirm and put on record that we are looking at that very seriously. We have projects going through our pipeline to invest in Wales in those electric vehicle charging points, and battery, as well as the solar and wind I've already talked about. So, I think we see so many opportunities for those—I'm going to bore you with my win-win situation comment again—genuinely to maximize the natural resources in Wales across all of those technologies. If we can implement the recommendations from this deep dive to clearer targets, unlock the grid, develop those standard packages for communities, so that it is genuinely fair for everybody, then I think we can make real progress.

Thank you. We're going to have to move on, I'm afraid, Jenny. We've got eight minutes left. I'll ask Huw to come in at this point.

Thank you. Can I rush ahead then? A couple of the areas I was going to cover we've touched on already. I just want to ask for your views on the effectiveness of the Welsh Government energy service in supporting renewable energy, and also your take on Ynni Cymru and the potential for that, or any pitfalls with it as well.

Sarah first, and then Tom.

We worked with the Welsh energy service as part of—. So, Graig Fatha in south Wales was the UK's first consumer owned windfarm. The co-op that owns the windfarm secured a grant and that was facilitated in part by the Welsh Government service. They were incredibly responsive. We found them fantastic to work with—very, very practical. They knew their stuff. We were really, really pleased with them. And in terms of getting a solution that works, now that power prices have gone up, the level of community benefit that will go towards fuel poverty has more than doubled. We were able to work together to get a really good solution.

Thanks for that, Sarah. Do you or others have any suggestion on improvements that could be made? You seem to give quite a glowing report there of it.

There's nothing obvious that springs to mind from me, but obviously others may have something.

Thank you, Sarah. Dan.

Obviously, we've been helped massively through the energy service as well with the development of the windfarm and then Egni as well, so that's important to recognise. I think areas to look at would be shared ownership. I think there is a lot of potential for that, as Tom and Jon have been saying on their projects, to engage people. I think that's an area that could be developed more within the energy service in terms of looking at funding models et cetera, but also just clarity from Welsh Government to kind of mandate it across projects just to give clarity to developers as well about what's expected, and then the energy service can follow on from that. And I think sometimes looking a bit more broadly. I mentioned earlier the Energy Sparks model within schools, which is really, really good. We've rolled that out in all the schools that have got Egni solar panels, and it's making tangible differences in their carbon reduction. And, again, that's not the sort of thing that the energy service can currently look at; it tends to be much more infrastructure focused. We are talking to civil servants about Welsh Government funding for a Welsh version of Energy Sparks. There is interest there, but it would be good, sometimes, I think, to have a slightly broader look within the energy service at this kind of thing, which involves behaviour change as well.

That's great, thank you. Jon.

Thank you. I'd like to say, regarding your question around the Welsh national energy company, I think, if we're being honest, the EDF Renewables view is there's probably other ways, other alternatives, to achieve your ambitions about keeping the benefits in Wales other than that. So, I think maybe we'd point to Scotland again. I know there are a lot of good contacts and interface between this committee and your counterparts in Scotland, but I'd probably highlight that Scotland has been incredibly successful, and there are some really good lessons learnt, and choosing to set up a national energy company isn't one that Scotland has decided to do for, I think, those reasons, that offering the chance for the Welsh Government to invest in projects is one way to do it, with much less risk and without taking on the challenges from developments.

And also, many of the large developers like ourselves—we're only able to develop these projects in these competitive times because we're leveraging global supply chains and a lot of those things that will then benefit those individual projects. So, again, there will be some pros and cons to going down that route with a national energy company, but there are probably other ways that have proven to be really successful, with less risk and less time that that might take.

What are the fears that you have, Jon, from a developer perspective?

Regarding?

Regarding Ynni Cymru, and saying you preferred different models. That clearly means that you have worries that it's either going to disadvantage you or destabilise the market. What are your fears?

No, I think the fear—. It was just maybe that our experience of having run large energy companies is that, as I was saying, it's not easy; it's increasingly competitive, and, actually, there are easier ways to get that investment in renewable projects without having to do everything yourselves and take all the risks and the challenges that we face. So, I think, if you look at Scotland, then EDF is very active in Scotland as well, and using those models very successfully, which hasn't included needing to set up a national energy company.

Is that something you'd agree with—thanks, Jon—Tom, or do you see that this could be a useful way forward and, if so, with what parameters?

It's probably not going to surprise you that I do agree with Jon on this one, being as we're a large developer and we have similar challenges. So, I guess that's no surprise. I think I was going to come back to—. I was going to say exactly the same as Jon, but he got there first, but I'll come back on what I think the risks are. What we're trying to achieve here is to deploy renewables as fast as possible, and to do that, we have many tens of experienced developers, engineers, planners, constructors, et cetera, of many, many years in this industry, who are experts in delivering this. And all the challenges we've talked about, about grid, about local planning and stuff, this is complicated stuff, and what you don't want to do is, if you're starting from scratch again—how long it takes to deliver a pipeline, deliver that expertise, is not immaterial.

So, No. 1 is: it could slow down your deployment. No. 2 is, of course: if it happens through that—. We don't know what the detail is. There's no published blueprint on this Ynni Cymru, and maybe, hopefully, we're wrong, but if it is also takes priority on certain development sites, for example those on the forest lands, forest estates, then, actually, you might find that developers like us think, 'Well, if that's where most of the developable land is, and that goes to this Ynni Cymru, then, actually, we might find Wales as unattractive, and we'll go to Scotland or wherever else.' I hope not, and it's certainly not a threat because we'd like to stay in Wales. But you've got to be really careful—.

You do have advantages of me and Jon and other developers competing all the time. So, we're cutthroat. We are—. I want to kill his projects, he wants to kill my projects, I want to get the projects ahead of him, and this is driving down costs for consumers. This competitive process is good. It maximises the deployment and it keep us all on our toes. And it's not clear that having national entities is really the way to do that. And I think, as Jon says—and I mentioned before, I'll mention again—we think, actually, an onshore sector deal is a much better way of doing it quicker, in terms of—. Because we get it; we get Wales wants more skin in the game. The question is, what's the best way of doing it? And maybe a sector deal, where it's a bit more prescribed about how you do that and how you get in there may be a better way forward, and/or more projects like we're doing, where we can have communities coming in at different stages, with different levels of risk. And I think development risk is tricky—maybe one in four projects go ahead. So, you've got to write off as a Government three out of your four projects, and is that going to be acceptable to taxpayers? I don't know.

There was a chill that went across the committee then as you talked about the potential of losing projects up to Scotland or elsewhere, Tom, as you said that. Okay. That's really helpful, because it's a very frank and honest appraisal—from both of you—of what a preferred approach would be. Dan, have you got a different suggestion?

Well, at the end of the day, though, Huw, Welsh Government owns that land, that forestry land, so the whole planning permission, that should be okay, shouldn't it? So, the attrition rate that Tom and Jon were referring to should be really good—should be fine there, I think. But I think, at the moment, we're looking at both approaches, aren't we? So, Ynni Cymru is taking shape, and also we've got commercial developments happening as well, but equally the shared ownership opportunities. And I think we've just got to look at what works best. At the end of the day, a lot of the big projects in Wales have been developed by Vattenfall, and is it Statkraft, who are both state owned. So, there are some models for this kind of development, and it will be interesting to see what works most effectively, going forward.

Okay. We're out of time. Hopefully, we're not out of time with climate change and carbon reduction, but we're out of time on this.

We are out of time, yes. And I think we'll therefore draw the session to an end. So, can I thank you for your evidence, and for being with us this afternoon? You will be sent a draft copy of the transcript, just to check for accuracy. Thank you so much for your attendance. There's a lot that we've heard and we'll reflect upon in our sessions today, and, obviously, that will form a solid basis, I hope, for us, not only for this particular day-long piece of work, but certainly ongoing throughout this Senedd. So, thank you for your attendance. And whilst the colleagues who are here to give us evidence can now leave the meeting, we'll continue. So, thank you for your attendance.

Ocê. Felly, diolch i'r Aelodau.

Fe wnaf i ofyn inni, felly, symud at eitem rhif 6, sef i nodi nifer o bapurau. Mae yna bapurau i'w nodi, o 6.1 i 6.8. Fe wnaf i gynnig ein bod ni'n eu nodi nhw gyda'i gilydd, oni bai fod rhywun eisiau tynnu sylw yn arbennig at unrhyw un ohonyn nhw. Na. Pawb yn hapus. Ocê. Fe wnawn ni eu nodi nhw, felly. Diolch yn fawr iawn.

Ac felly eitem 7 yw i fi gynnig, yn unol â Rheol Sefydlog 17.42(vi) a (ix), fod y pwyllgor yn penderfynu cynnal gweddill y cyfarfod yn breifat. Ydy Aelodau yn fodlon â hynny? Iawn, pawb yn fodlon. Dyna ni, felly, mi wnawn ni symud i sesiwn breifat, ac fe wnawn ni aros am eiliad tan i'r darllediad ddod i ben.