Secretary of State for Wales at Renewable UK Conference, Cardiff

The Secretary of State for Wales, Cheryl Gillan MP speaks on ‘Meeting the Energy Challenge’.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon Cheryl Gillan

I am here to talk to you about the energy challenge we face today.

There is an unstoppable shift towards a low carbon future in the UK. And it’s not just a matter of climate change. Although the science is undeniably clear, it comes at a time when we have to rebuild our ageing energy infrastructure and make the right decisions on investing in low carbon technologies.

This shift will take time. Ultimately it will deliver cleaner energy and sustainable, greener growth. And it must do so with public support and without undermining our economic base.

So what does this actually mean?

It means a more sustainable, more resilient economy, particularly in the face of global uncertainty.

It means jobs. Investment coming into the UK, and exports pouring out. Technologies and solutions that can be licensed and can lock-in profits.

And it means a skilled workforce. Able to compete in the global marketplace, furthering our reputation for innovation, boosting British enterprise across all sectors.

The shift to low carbon offers billions of pounds of savings across the economy to businesses and homeowners and the public sector through better use of our energy and resources.

That’s the reality we face today.

We must take action on climate change; but we must also change our national economic story, from one of financial speculation, to one of sustainable growth. And we need a green business revolution too.

The challenge of delivering our future energy needs in a way which is clean, secure and contributes to carbon reduction is one of the greatest challenges we face today.

It also presents challenges AND opportunities here in Wales.

If we rise to these challenges and seize these opportunities we can drive the green economy.

To deliver green jobs and green growth. And that is what is behind our commitment in our coalition agreement.

We want to see Wales at the heart of this  approach.  After all, if China invested over £20 billion in the low carbon economy in 2009, that shows that the green economy is a viable, and growing, business opportunity.   We want Wales, and the UK, to be at the forefront of that and not lose out to competition from abroad.

I will explain how, working with colleagues in Cardiff, we plan to do that. We are immensely proud of the progress already made by this government in one short year since we took office.

From day one this government has sent out a message loud and clear that we are determined to transform Britain permanently into a low carbon economy.

This and every future British government will have to keep pace with and put in place the most effective policies to tackle climate change.

We have introduced the Green Deal which will help improve the energy efficiency of our homes and our businesses;

We are reforming the electricity market to provide a clearer, stable framework for investors, and incentivise proven and new low carbon technologies.

And the Green Investment Bank is an innovative new approach that will bring new investment to support the move towards a green economy.  This will be the first of its kind in the world showing how committed we are to thinking differently about these issues. 

Most recently, we announced the fourth Carbon Budget - sending a clear signal to the international community of our desire to drive the changes needed to turn the UK into a dynamic, low carbon economy that is attractive to investors.

But we all know time is not on our side and we know not every decision we take will please the business community but we see low carbon technologies as the way forward to meet our climate change commitments and also to enhance our energy security.

 I am well-aware of some of the concerns expressed by businesses here in Wales and I am also conscious of the scale of our task on taking office last May.

When Labour left office carbon emissions were rising. The previous government’s manifesto commitments had actually been broken. Carbon emissions had fallen by just two per cent before the recession. Green taxes had fallen as a proportion of tax revenue. The country’s dependence on fossil fuels had risen. And the UK had the lowest contribution from renewable energy of any major EU country.

This government’s approach is different.

Back in 2009 the then Leader of the Opposition David Cameron promised to lead an ‘energy revolution’ which would lead to lower carbon emissions, create jobs and reduce our reliance on oil and gas imports. He pledged measures to encourage more people to generate their own power and to boost renewables. I believe we are now taking forward those promises in government.

Our goal is to make Britain the most attractive place to invest in energy and to provide secure, low carbon energy.

But we also need to keep the bills affordable And that is why we are engaging with business and, in particular, carbon intensive industries and business to find a constructive way forward.  To help create the conditions for UK companies to excel in the low carbon industries of the future. 

In Wales our past strength and much of our history is based on energy - sourcing and supplying energy for the rest of the UK and far beyond.

The needs may have changed, but Wales is still perfectly placed to become the centre of the new green economy. There is already much we can be proud of: new offshore wind developments like North Hoyle, Rhyl Flats and Gwynt y mor show our potential.  Opportunities to harness tidal and hydro power must be grasped.

Future plans - such as for an Atlantic Array in the Bristol Channel show how much more can be done.  And how these developments are integral to our economy: if the Atlantic Array does go ahead it could also bring a much needed boost to local ports.

However, we recognise that onshore wind developments can prove controversial. We have seen only this week how strong feelings can be. 

Our view is that on-shore wind energy does have a role to play in our energy mix.  The only way to meet the stretching climate reduction targets we have set is by all low carbon forms of energy playing a role.

But that does not mean that politicians or developers can ride roughshod over local opinion.  Rather, they should work with communities to ensure that proposals have local support and are sympathetic to the environment around them.

The people of Powys made that loud and clear when more than a 1,000 demonstrated outside the Senedd on Tuesday. Theirs is a voice that cannot and should not be ignored.

Recently UK Energy Minister Charles Hendry told MPs that there need to be “a new relationship between wind farms and the communities that host them”.

He spoke of onshore wind being “one of the most cost-effective and established renewable technologies”. But, he insisted that while it is clear onshore wind “should continue to be part of the solution” to energy security and low carbon challenges it also “needs more democratic legitimacy than it has today”. How right he is.

The First Minister, who you’ll hear from later, will no doubt set out the areas where he wants his government to play a part in reducing carbon emissions and to develop more renewable energy sources in Wales.

I look forward to studying his comments with interest and am committed to working in partnership with his government to harness Wales’ natural resources to meet the UK’s renewable energy commitments. Because I believe it is through collaboration between government, energy  suppliers, and local communities that we can achieve our objectives.

We all support initiatives which contribute to carbon reduction, while at the same time deliver much-needed economic growth are required here in Wales. 

That is why we did not rule out proposals for making use of tidal power in the Severn (despite the conclusions of the recent government feasibility study) and why we support some of the innovative developments to harness the power of the sun - even in Wales - for energy needs.

The excellent work for example that Sharp is doing in Wrexham and their plans to expand production of solar panels are just the sort of development we want to see increase: bringing together innovation, carbon reduction technologies and increasing job opportunities.

There is much more innovation in this area that Wales has to offer.  For instance, I have seen for myself the development of biofuel from grass at IBERS in Aberystwyth. 

This is just the sort of project the government is keen to encourage: using the need to reduce carbon as an opportunity for us to grow our science base and boost Wales’ performance on Research and Development. 

Low carbon energy of course includes nuclear as part of the mix.  Parts of Wales have a long association with nuclear generation - one that I would like to see continue.  The skills we have developed include expertise in decommissioning and when the closure of the Trawsfynydd plant is completed - I hope this will be transferred to Wylfa, as I believe these are the sort of skills we need to retain and grow.

Wylfa will continue to generate low carbon energy until next year and has been listed as a possible site for new nuclear power generation - a much welcomed decision for the local population and the local economy.

Of course we must recognise that some people have concerns about nuclear generation. 

But Dr Weightman’s recent report suggests that there is no reason for the UK to curtail the operation of nuclear power plants here or stop building new plants which I believe that is good news for Wales And, in particular, very good news for Anglesey, which has a long-held ambition to become an ‘Energy Island’. Anything I can do to assist with this, I will.

Delivering a low carbon economy requires active participation at all levels.  From global ambition and stretching European targets; to national and local governments.  All need to look at how they can contribute and how they can encourage innovation.  

That will primarily be done by working closely with businesses - like those here today - to deliver solutions that reduce emissions or increase take-up of renewable energy.  

Here in Wales it will also require London and Cardiff to work together to ensure that the fact that some responsibilities are devolved does not impact on the scale of our ambition.

Now that the new Welsh government in Cardiff is in place, I will not let political differences stand in the way of effective co-operation in this area.  The issues are too important to let that happen.

The fact that the First Minister will take on personal responsibility for energy is a positive step and I look forward to working constructively with him in this area. 

I have already said that innovative businesses have an important role to play.  We believe that all levels of government should seek to remove unnecessary burdens which make it harder for you to do business.

I know you will be considering the planning process in more detail later this morning. That is an example of where the businesses that will build a greener economy are asking for the systems to be as simple as possible.  And to be as simple in Wales as they are elsewhere.

That is why, although the last government divided the responsibility for energy decisions, so that decisions on projects up to 50mW are taken locally, we currently have no plans to change the current major infrastructure regime.  We need to ensure that the decisions we make are consistent across England and Wales.  And those affected by these decisions need certainty.

We will also work to ensure the regulatory environment for those businesses that want to invest in the green economy is as supportive as possible. 

The government’s ‘Red Tape Challenge’ is a root and branch run through the regulations that impact on people and businesses across the UK. 

Attention will turn to regulations that impact on the energy sector in October and if there are any regulations that are preventing you from moving ahead with projects that will grow the renewables sector and the Welsh economy, I encourage you to tell us what they are. 

We also need this discussion to be widened to take in Whitehall AND Cardiff Bay so this approach can reduce the burden for businesses in Wales. 

 In conclusion, e are conscious of just how important businesses like those here today are to delivering a low carbon future.  We know some of you have concerns about where the renewables industry is heading. 

I hope the approach I have set out today and, above all, the ambitious business agenda that we are keen to pursue, shows just how committed we are to a bright future for renewable energy.

We’re behind it here in Wales and we want to release its full potential, harnessing our natural resources to maximum effect but in a manner which is sympathetic to local views, the local economy, and the local environment.

We believe the UK is leading the way, and with the support of government - at all levels - Welsh businesses can be in a leading position to take advantage of the emerging global opportunities associated with this historic shift. 

I think the future’s bright, the future’s green.

Thank you for listening. I hope I’ve given you an essence of what we’re doing to encourage this shift to a low carbon future that will benefit all our interests in Wales and across the United Kingdom.

Published 26 May 2011