|Andrew R.T. Davies AC|
|Jenny Rathbone AC|
|Joyce Watson AC|
|Llyr Gruffydd AC|
|Mike Hedges AC||Cadeirydd y Pwyllgor|
|Neil Hamilton AC|
|Jonathan Oates||Pennaeth Twf Glân, Llywodraeth Cymru|
|Head of Clean Growth, Welsh Government|
|Lesley Griffiths AC||Gweinidog yr Amgylchedd, Ynni a Materion Gwledig|
|Minister for Environment, Energy and Rural Affairs|
|Lucy Corfield||Pennaeth Datgarboneiddio, Llywodraeth Cymru|
|Head of Decarbonisation, Welsh Government|
|Simon Jones||Cyfarwyddwr, Seilwaith Economaidd, Llywodraeth Cymru|
|Director, Economic Infrastructure, Welsh Government|
|Andrea Storer||Dirprwy Glerc|
|Marc Wyn Jones||Clerc|
|1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau||1. Introductions, apologies, substitutions and declarations of interest|
|2. Sesiwn i Graffu ar Waith y Gweinidog - Newid Hinsawdd||2. Ministerial Scrutiny Session - Climate Change|
|3. Cynnig o dan Reol Sefydlog 17.42(vi) i benderfynu gwahardd y cyhoedd o'r cyfarfod heddiw ar gyfer eitemau 4, 5, 6 a 7||3. Motion under Standing Order 17.42 (vi) to resolve to exclude the public from items 4, 5, 6 and 7 of today's meeting|
Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.
The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.
Dechreuodd y cyfarfod am 09:30.
The meeting began at 09:30.
Bore da. Good morning. Can I welcome Members to the meeting? Andrew Davies is not here but he'll be joining us later. Have any Members got any interests to declare? If Andrew was here, he'd declare the fact that he was an active farmer, so can we declare that on his behalf? And there are no apologies or substitutions. Can I remind people, or tell people if they didn't know, that at 10 o'clock the bell is going to ring for two minutes' silence for those railway workers who were killed last week, which I hope we'll go along with.
That takes us on to the main item, which is scrutiny of the Minister for Environment, Energy and Rural Affairs on climate change. So, can I welcome the Minister for Environment, Energy and Rural Affairs, Lesley Griffiths, and would you like to introduce your officials?
I'll let them introduce themselves.
Good morning, everyone. My name is Simon Jones. I'm the director of economic infrastructure.
Good morning. I'm Jonathan Oates, head of clean growth in decarbonisation and energy.
Good morning. I'm Lucy Corfield, head of decarbonisation.
Okay, thank you very much. Are you ready to go straight to questions? Is Wales on track to meet its 2020 emissions reduction target?
We're making very good progress towards our 2020 target. You may have seen the report this morning in the news. That focused on data that was published back in June. That showed a big improvement in Wales from 2016; the figures were for 2017. It showed a 25 per cent reduction for us in 2017. So, the report that has been published, the UK Committee on Climate Change's report, was on the UK progress, but, obviously, within that it showed that Wales had made the most progress of all the countries in the UK as a whole.
Our first carbon budget will be very difficult to achieve unless we get our power sector emissions lower than they were back in 2016, and that's why I'm saying there was a big improvement from 2016-17, but we know why that improvement was. So, if you think about it, changes in the power sector are largely driven by the UK Government, and also EU policy. So, the UK Government do have a huge role in helping us achieve that. You will have seen the Chair of the UK CCC's comments around what the UK Government are doing, so that's why I also have to really press the UK Government.
The data that we've had from the EU emissions trading scheme shows us that our emissions will fall again next year, which is obviously very good news. So, we do need to maintain that progress, but if we do, then the short answer to your question is 'yes'.
We're going to come on to talk about power and housing later with Neil Hamilton and Llyr Gruffydd, and land use with Joyce Watson, but are there any areas that you know are lagging behind in improvement?
So, the only sector that saw a minor increase for the year that we're talking about the data was the agricultural sector. So, you'll be aware that just yesterday we launched the consultation on 'Sustainable Farming and Our Land', and obviously that is an area where I think we can make significant progress. Outside of the energy sector, emissions have reduced across all but agriculture, so I think that's very positive. The reductions are small, I accept that, but apart from agriculture, we've seen progress in all areas. So, we do have to be very mindful about what's happening in both the power and the industry sectors because of the dominance in our emissions, and the lack of investment and progress around technology such as carbon capture and storage, for instance, but we are doing significant research and development into those areas.
You'll be aware of the 'Prosperity for All: A Low Carbon Wales' delivery plan, and I do think we have a good story to tell in Wales. If we deliver the policies and the proposals that are outlined here, then I think we will achieve our targets.
Okay, thank you very much. The Welsh Government declared a climate emergency, one which I fully support, but what's going to be done differently?
Okay. So, I mentioned the low-carbon delivery plan, which was only published in March, and we declared the climate emergency in April. So, I think people have got kind of mixed up around why we did it so soon after this, and the reason I did it was to trigger that wave of action that we have seen. I have to say, I think it's gone beyond my expectations. We have been—I think probably the word to use is 'inundated' with requests for help and assistance about what people should do, from communities, from individuals, from businesses. Ken Skates, the Economic and Social Research Council, they asked me to go along; the Confederation of British Industry, and people like that, wanted to know what they could do. And I suppose that's the really important thing, isn't it? Government can't do this on their own. We've got to see a change across society as a whole. So, we've started to review the policies and the proposals that are in there, which I know sounds really quick. I've asked every Minister—and I'm going to wave this document, or Lucy's going to wave this document—. So, I asked every Minister—you'll be aware I chair the ministerial decarbonisation group. Now, that group was set up quite soon after I came into post in 2016. In this new Government—obviously, it was the previous administration when it was set up—it's now a Cabinet sub-committee, on a permanent footing. Because I can't do decarbonisation on my own. So, every Minister is having to review the policies and proposals in there. That document there, which you can see is quite big, is all the actions that have been taken since we declared a climate emergency, reviewing the policies and proposals, right across Government, so nobody's working in silos. So, I think that's the first thing to say.
It's also, I think, given a bit of a kick-start to local authorities, in different parts of the public sector, to see what they're doing. The First Minister and I went to visit Natural Resources Wales a couple of weeks ago to see what they'd changed since we announced the climate emergency. I've obviously accepted the UK Committee on Climate Change's advice since we declared that, for the 95 per cent reduction in Wales by 2050. If you bear in mind the UK CCC's advice to us only a year ago was 80 per cent, you can see how much—it is just a completely changing picture all the time. So, I've accepted the UK CCC's advice. I will be legislating for that next year. I think what it does is represent our fair commitment to the UK's commitment under the Paris agreement. I did say to the UK CCC that I wanted to look at how we could achieve net zero by 2050. So, we're the only country, obviously, to go beyond what the UK CCC have advised us we can do. So, I've got that ambition. The committee are looking at that for me—how we could do that. So there's a huge amount of work going on across Government.
The other danger, of course, is we export it. I'm sure that the biggest drop that took place last year was in Scunthorpe, where the steelworks closed, but on the world, it has had no effect whatsoever, because the steel that would previously have been made in Scunthorpe will now be made in China or on continental Europe. So, are you looking at the fact that we can—? And it happened in the north-west of England—the Ellesmere Port plant made a third reduction in its carbon emissions; it went from three shifts to two. It's making sure that what we're doing is actually something that is making a real difference, and making a real difference on the world stage, not just turning us into net importers of materials, which themselves are high in carbon. If we were more efficient, we might actually be doing something that is worse for the world than actually using the carbon ourselves.
So, that would be totally irresponsible. We won't be offshoring in that way. I was talking to Lucy and Jon earlier this morning; I was wondering: when did this word 'decarbonisation' start? And it was probably just as I came into portfolio, in 2016—you changed from 'climate change' to 'decarbonisation'. And they were saying that people, at that time, were thinking that we would need to close Tata, for instance. But that would be completely—what's the word? Not 'unsensible'—what's the word? 'Not sensible'—because we have to have steel to make things, so I don't want to be importing steel. So, we need to work with these high emissions companies. And I'm visiting Tata later this month to have discussions with them. But you're absolutely right. And we're only a small country, but we take our responsibilities very seriously. We're a member of the States and Regions Alliance—the Under2 Coalition, states and regions. I've been very lucky to go out and speak at their conferences. And working with other states and regions, like South Australia, and areas of Canada—we can learn a lot from them, but they can learn a lot from us as well.
Thank you, Cabinet Secretary—or Minister, I should say, sorry. I'm still two years behind the pace. [Laughter.] I appreciate what you say about offshoring and exporting some of these businesses and we end up being consumers of what's produced in other parts of the world, and we all agree that that shouldn't happen, and you said that that would be unacceptable. So, how are you as a Government and as a Minister going to stop that happening? Because it's one thing saying that you're not going to do it, but the reality is, as we've just seen in China, for example—they brought a moratorium in on coal-fired power stations; now 50 per cent of those power stations are being reopened, they are, then. That is a fact, that is—the BBC were carrying that story, and Sky News also followed it up, only last week. So, how are you as a Government going to bring these two conflicting arguments together, where we do want to be carbon-neutral by 2050, but the fact of the matter is that there's a hell of a cost to that, there's a hell of a technology gap still in existence of how we're going to do it and there's a procurement, as well, to it, and how are you going to use the Welsh pound to support that journey? So, how are you going to turn those words into actions?
So, I think you're right about technology, there are always—nothing stands still, does it? There are always emerging technologies and innovation. Before you came in, I was talking about the low-carbon delivery plan, and I was saying that if we—and the UK CCC have said this—. So, if you think about it, we're well into our first carbon budget; that finishes next year. The UK CCC have said, if we deliver on this, we will meet our first budget, and then, obviously, we've started the process of setting our second budget.
There are always new technologies, innovations. The cost—I think people get really obsessed with the cost, because the cost of doing nothing is far higher than the cost of what we're doing. So, it's about making sure that, right across Government, we don't work in silos. So, if we do it on a sector-by-sector basis, it will cost a lot of money, but, if we do it across Government, by not working in silos and making sure everybody is—. I was saying that all Ministers have had to review what they're doing, so the reason—. I think, probably this time last year, I wouldn't have had a transport official accompanying me to committee—it would just have been the decarbonisation, but decarbonisation is not just me; it is absolutely every Minister. So, the fact that Simon is with me today, I think shows the change in Government in relation to this agenda.
So, for instance, the new rail franchise that we've had, I think you would say, Simon, it wouldn't have been—.
So, as part of what we've designed into that franchise, all of the energy that the new electric trains are going to be using will be renewable energy, half of which will be generated in Wales. Now, if we'd have gone through that exercise three years ago, before this agenda had been something that is central to the Government, I don't think we would have taken the opportunity of a procurement to buy a railway service and use that to deliver on this decarbonisation agenda. The fact that we did was as a result of this thinking penetrating all areas of Government.
Thank you. Minister, you say that we have a good story to tell, but the story so far doesn't make for very good reading. You say that the current figures are much better, but the 2015-16 figures were terrible: traffic increased by over 2 per cent, emissions from non-residential buildings up 5 per cent, residential buildings 2 per cent up, and agriculture 5 per cent up.
I think we have a credibility issue here, simply because we aren't taking the action we need to sufficiently strongly. The headlines today are that—although there's been a 40 per cent cut in emissions by transferring from coal to gas, I was really alarmed to hear that the green spaces across the UK are down from 63 per cent to 55 per cent. So, a lot of the statistics are still going in the wrong direction, and it's really how we think that the Government can convince the public that we are taking this as seriously as the public is taking it now.
So, let's start with the figures. So, you went back to 2014 and 2015, so obviously the figures that have been published—
2017; the latest data.
Yes, the latest data, and we reduced our emissions by an additional 13 per cent. So, let's—. Next year's figures, i.e. 2018, when they're published next year, we believe, and the advice from the UK CCC is, that they will improve again.
So, I've highlighted some of the things that we're doing, just on the rail franchise, for instance, the fact that we've got this focus on renewable energy. The green spaces—. So, the figures that you're quoting are obviously for the UK as a whole, and, even though obviously the report was for the UK, Wales was singled out as being the best, if you like, of the four countries.
So, we are changing our policies. So, green spaces is probably a very good example. So, you know that we're not planting enough trees; I'm not even going to pretend we're planting enough trees. However, the new First Minister, when he came in, has made it one of his priorities. I had a meeting with him yesterday on the national forest. We're looking at—it's called tiny forests; it's a Dutch idea where people plant tiny forests the size of a tennis court. So, we're looking at whether we can perhaps have lots of tiny forests maybe on public sector land, for instance. So, if you think about a hospital, for instance, quite often where there's land where there's nothing on it; it would be good to have a little tiny forest. So, we are looking at increasing our green spaces significantly.
But, you're right, the public is—well, some of the public; there are still a lot of people—we don't have to look very far—that need persuading. But I do think the young people have grasped this now in a way that I think is really encouraging. But it's not just about Government, is it? It's about—. We can regulate, we can—. And, if you look at behavioral change, which I think is what we need here now—so, I was thinking about this from my own experience. So, recycling has had a huge behavioural change, but it has taken Government to put a massive amount of money and show a huge amount of leadership to get that behavioural change in relation to waste and recycling. And I think we need that now, but it's not just a matter of Government.
And I think—I was saying before about everybody gets hung up on cost. I don't think it can just be a cost for Government; it has to be a cost for everything. Maybe with the huge swell of interest, particularly with young people—I'm meeting some young people today in relation to this. I've met with students from Atlantic College. I've met little ones from a primary school in Cardiff. I think maybe now is the time to grasp it, but Government can't do it on its own.
I absolutely agree with that, but I'm just trying to test the Government's resolve to actually achieve the targets it has set itself. Because the problem with any 2050 target is, if I'm not dead, I won't be in a position to do anything about it. So, all the focus seems to be, by the experts, that, if we don't change within the next 12 years, we are talking doomsday. We've seen what happened in France—46 degrees; that kills people. So, whilst we have a very good story to tell on public transport, I agree there's lots of investment going in, lots of good news on that, we still are not doing anything about controlling the cars that are clogging up our roads and causing people to die of air pollution. How is it possible to convince us that you are now in a position to go for 100 per cent emissions reductions when we don't look as if we're making the reductions we need to do now?
So, you're right about resolve, and we have that strong resolve. But obviously future targets are for future Governments, and, you're right, 2050 is—. I never think, personally, 'Oh well, 2050, I'll be 90 years of age, if I'm still here'. You're right, because it's so immediate, and it's quite rare in politics you get something so immediate—you know, 12 years is nothing; it goes in the blink of an eye.
So, going back to the upscaling of the policies here—so, air quality, or poor air quality, for instance, you'll be aware that Cardiff Council and Caerphilly have submitted their plans, so it's about keeping on top of things like that. In relation to cars, I go back to behavioural change: how do we persuade people that we need them to get out of their cars? The way we do that is to make sure that we have the public transport system in place. So, we go back to Ken Skates's part of the portfolio about ensuring that there are alternatives, and bus services aren't where I think they personally should be. Certainly, as an AM, it's one of my biggest postbags.
So, it's about making sure we get those improvements, and I'll ask Simon to say a bit more about that. But it is about ensuring that all our policies that we're bringing forward—. It's about futureproofing our houses. So, next week, Julie James and I will be receiving the report around decarbonisation of housing from the group that Chris Jofeh led for us. So, Julie and I will be getting the report next week.
So, it's not as if we're standing still and doing nothing. It's not as if we're not changing. And, with the new technologies and innovations, things that seem completely implausible at the moment, probably, in three years' time, when we've got a new Government, won't be, and you might look back and think, 'Well, why did they do that?' but it's about doing what we think is right at the time. But I'll ask Simon to say a little bit more about—
Okay. All right, but can I just pursue—? It's great that we're going to have the carrots of excellent public transport, but we also need the sticks. When people do the wrong thing, they need to pay for it. So, we don't even have a congestion charge in our capital city, which is the most congested city we have, and we don't even seem to have the political will to do that. Given that we do already have alternative ways of getting into the capital city, we should be ensuring that it's going to be more difficult for people to just get into the car because they fancy doing that. It's just giving us some sense that we really are using all the levers at our disposal and getting the public on board, but half of my constituents in certain areas don't have a car, so they are suffering the consequences of other people who are able to take these choices.
Well, I certainly think climate change—the cost—is not spread evenly, is it? And I think you've just highlighted a very good example. But I do—. I go back to that Government can't do everything and it is about behavioural change. So, in my constituency I've got a 50 mile speed limit for carbon emissions, and you may have heard me talk about this in the Chamber. I get more letters from people complaining about it than I do from people who are supportive of it. I actually had a letter, this week—I've just written to Ken, actually—saying, 'Please, can you extend it?', and that's the first one I've had. The other probably 50 have been, 'Why are you doing this?' Now, I think we do have a responsibility there, because I don't think we've explained why we're doing it, and we need signage and the signage needs to say 'Poor air quality kills'. And I think it needs to be as vicious as that to make people understand why we are doing it.
Okay. So, in the context of the UK CCC recommending a 95 per cent target for Wales, what is it that your Government—our Government—is going to do to meet an even more ambitious target of 100 per cent?
So, what I've done on that is ask the UK CCC—because they don't think we can do it, that's why they've put 95 per cent. So, to go beyond that, to 100 per cent, I've asked them to give me some advice. I don't know—do we know when we'll get that advice?
We're likely to get that next year. First of all, they need to explore the options and do the analysis, and that will probably require obviously looking at the evidence base again in those different sectors to obviously test some of the assumptions around it, but also to understand what UK Government are doing as well, because obviously there's the influence that they have on our emissions as well, so conducting more analysis around that.
Yes. I just want to play devil's advocate here to a point, because I'm someone who actually enjoys driving a car, to be honest, but I hear the arguments Jenny's making, and the problems and the blight that it does cause when you have congestion. But if I open any magazine, if I switch on most tv programmes, there are glitzy, glamorous adverts telling us about car ownership and how great it is and how personalised that space is. If I look at cigarette advertising, as was, there were health warnings put on that, there were. Would you be a Minister who would support such health warnings, because, as Jenny talked about there, if you look at those temperatures in France—46, 47, 48 degrees—that kills people, that does?
So, Government have got this policy position that they want to reduce car ownership and car usage, yet the marketeers and car manufacturers sell us the dream of empowerment, of owning a car, they do. And if you talk to most 17-year-olds the priority for most 17-year-olds is to get a car and get on the road. So, I just put the devil's advocate point of view to you and say, 'Do you believe that there should be health warnings on such glitzy and glamorous adverts to inform people about what would be happening with more cars on the roads, with more emissions, and actually you need to take a more responsible view if you do switch that ignition on?'
So, that's going back to behavioural change, isn't it? So, you're right about cigarettes. So, I can remember, when I was a teenager—I don't think cigarette packets had 'Smoking kills'. So, I go back—. So, would I be the Minister who would support that? I'd go back to the signage. So, it's me that's pushing that signage; I'm pushing an open door with Ken. But to actually have the word 'kill', some officials and ministerial colleagues are like, 'Oh, "kill"?' Yes, I think it has to be that vicious—'Poor quality kills'. Because I'll have to have it bilingually and that probably will—you know, the signs that are on the road, because you can't have them too big because it'd be distracting—. So, I suppose—. Would I be the Minister who would have that health warning, I suppose the short answer is 'yes', because that's what I'm trying to do on the 50 mile per hour limits. I mean, do you think that would work? I'll come back to you, do you think—?
I find that—. Well, the great thing about being on the committee is that I can ask the questions and elicit the answers, because no-one's really interested in what I think. You're the Minister and—
You've got the levers, you have. So, from your answer I take it that it is a Government position to obviously try and promote such messaging.
You could do it on air quality tomorrow, or today, on the M4, because you've got those signs that are there, which say, 'Don't drink and drive' in the 50 mph zone. So, instead of just saying, 'Don't drink and drive' or 'Drive carefully', you could put, when it goes to 50 mph in Port Talbot, you could actually say that. You could do that this afternoon.
Yes. You're absolutely right. And because I've had one in my own constituency, where I've seen people not doing 50 mph, people—. I mean, the other day, people just were whizzing past me and it's because they don't understand what it's for. Initially people thought it was a speed reduction. So, I think you're right; we've got to use the levers that we have, because we haven't got all the levers, and with a sign saying 'Poor air quality kills', would that make people slow down? I don't know the answer to that. I hope so.
They would notice it, because I notice the 'Don't drink and drive', because you always look at those signs, because they might be telling you something important like, 'The road ahead is closed'. So, people always read those signs, because it's stupid not to. People always read them. Would it have an effect? I think it has the drip-drip effect, doesn't it? I remember those 'Don't drink and drive', 'Drive carefully' from that, because it says that every time I drive past it. Sorry, Neil.
Can we be careful not to confuse the issues here? I think Jenny is quite justified in raising the points that she has about what the economists call the 'externalities' of cars in terms of air quality on her constituents, but we're looking here at climate change. Those who believe these theories think that one of the great drivers is carbon dioxide. Well, we're talking about air quality; we're talking about carbon monoxide, nitrous oxide, et cetera. It's a completely different issue, clean air, from the climate change implications of this, and we must be careful, I think, to separate the two out, because I think there are strong arguments to justify clean air and weaker arguments to justify the policy on climate change.
If you think about my portfolio, I've got clean air, I've got decarbonisation, and I've got climate change mitigation, and they are three different things. However, they are completely integrated. Jon's just reminded me about the research that we're undertaking to reduce industrial carbon emissions at Cardiff University, which I hadn't made—. Matters around behavioural change.
I think there are a couple of things, really. Cardiff University have recently set up a programme that will be looking at behaviour change, and the social side of this, as has been discussed, is enormously useful. I don't know whether a sign would make a difference either, but this is why we have very clever people in the social sciences who look at this kind of thing and look at whether a drip-drip effect or whether nudge theory is going to work in certain areas. So, I think we're really privileged to have that kind of expertise in Cardiff, now, and they will be developing their research over the next five years.
There is research going on in countless places to try and understand how behaviour change can be used as the key lever to achieve the decarbonisation ambitions we have, because ultimately we are all little climate change engines, as individuals, and we all have choices to make, and when I think about my own personal life, am I given the information or do I have access to the information that enables me to make informed decisions across a whole spectrum of how I live, how I heat my home, how I drive my car, et cetera? No, I don't feel as though I have. Government certainly has a role in that, but also businesses and communities have a role in that too.
Thank you. In 25 seconds' time, we'll have the bell ringing, so perhaps I can just ask you a question, Neil. If carbon dioxide is not a greenhouse gas, why is Venus hotter than Mars, hotter than Mercury, when it's twice as far away?
Nobody denies that carbon dioxide is a greenhouse gas. The question is: are there compensating factors for the increase in carbon dioxide? I think we've gone from 280 parts per million to 400 parts per million—
Cynhaliwyd munud o dawelwch i gofio’r ddau unigolyn a gollodd eu bywydau yn y ddamwain rheilffordd drasig ym Margam ar 3 Gorffennaf.
A minute’s silence was held in remembrance of the two individuals who lost their lives in the tragic rail incident in Margam on 3 July.
I want to move on now to talk about some policies, 'Prosperity for All: A Low Carbon Wales', and the individual policies and proposals within the low-carbon delivery plan are not accompanied by costs—that's financial costs—or by anticipated emission reduction targets. Is there a reason for that?
So, because of legislative competence, the plan's made up of Welsh, UK and EU policies. So, although we've not set out each modelled assumption for each of the 76 policies, we have set out the sectoral emission abatement contribution, and the policies and proposals will then form those sectoral contributions. We decided to adopt the UK CCC's recommended pathway in relation to this document, so this only applies for our first carbon budget, which, as I said, finishes next year. So, the analysis is we will meet that first budget next year through the existing policies and actions that we're taking. But also, we're told, we need to start bringing forward more policies and proposals ready for the second budget, and that's why we've got longer term policies in there to show how we will develop future budgets and targets.
In terms of costs, it is difficult to put a price on that, and you're talking about monetary costs, obviously. So, we need to think about how we do it, where do the costs lie, because obviously, again, not all the actions are with Welsh Government, all the cost isn't going to be borne by Welsh Government. So, there are some financial commitments that we've highlighted, but, again, I go back to what I was saying: it's not just me, it's cross-Government, so transport, for instance, has a massive part to play in achieving this and, obviously, building new homes also. But the costs of policy delivery are, obviously, set out in the Government's budget. You can't silo it, but I'm sure when we have scrutiny of budget, for instance, you'll see far more how the decarbonisation is fitted in across Government.
Do you want me to just add some examples to that in the cost space on the transport side? Minister Skates recently gave evidence to the Economy, Infrastructure and Skills Committee about electric vehicle charging, and you'll recall it. During that discussion, he set out the ambition that Ministers now have for creating a national electric vehicle charging network without actually deploying significant amounts of public capital.
You will recall that our friends in Scotland spent a significant amount of public money building a national electric vehicle charging network, and the view here has been that doing the same at that point in time would have only benefited a very small subsection of society, the people who could afford to pay £30,000, £40,000, £50,000 for an electric vehicle. So, there was a fairness element to that. What's changed since then, though, is the appetite of private sector investors to put their own money into building electric vehicle charging networks, and what the public sector needs to bring to the party are sites where they can do that.
So, we've talked about the railway station asset that we now have, and we're talking to other public sector bodies, for example, health boards and local authorities with libraries and things, places where people want to spend some time, where it's reasonable for people to take their car and leave it for 20 minutes or so for it to charge up, where there's something else for them to do there. That land belongs to the public sector; that land can be made available in a concession-type arrangement, where there's a profit-share mechanism. The public sector doesn't need to put any capital expenditure into that, it doesn't need to put any operational expenditure into that; in fact, it could generate revenue out of that. So, instead of spending tens of millions of pounds on building a charging network, we could actually make some money out of it.
I guess this cuts across the whole issue of costs when you're thinking about this, because not only is technology changing, but the ways of funding the technology are changing. If you'll permit me, I'll give you one more example. We're doing work about creating more electric buses in Wales, so we've got a commitment that by 2028 we will have a 100 per cent zero-emission bus and taxi fleet in Wales. At the moment, we're focusing our efforts on the bus network, so there is a wide range of things going on. There's a legislative programme and a whole range of other things and we're talking to partners who have received grants to be able to deploy electric buses. About 50 per cent of the cost of an electric bus is in the batteries, and the conversations that we've been having are, 'How can those batteries be funded in a different way to drive down the cost of buses?' Because they have a life after operating on the buses, so is there a value that can be captured in order to reduce the cost of running those buses? We think that's got great potential to drive down the cost of acquiring a bus, a bus that would be cheaper to operate than a diesel bus. The financial backdrop to a lot of this stuff is changing quite rapidly at the moment, so it's quite difficult to put a forward forecast on the cost of decarbonising when, actually, there are opportunities for the private sector that drive out costs for the public sector.
If I could just, on one of—. Because you mentioned batteries and because at the moment they have 5 per cent VAT charged on them, which the UK Government decided goes up to 20 per cent and that's a 15 per cent rise in costs, and if you're telling me it's 50 per cent of the cost of doing this, those levers are out of your hands, because you haven't decided that. So, the money that you were expecting to spend, or the companies were expecting to spend, has just gone up by an increased 15 per cent of a total 50 per cent cost—and my brain won't let me work that out quick enough. That's a significant cost. So just on that alone, because you've highlighted it and because I know I read it the other day, have you had some conversations with the UK Government just on that? And we'll leave that there, because I want to go on.
We are talking to the UK Government about a range of issues to do with the decarbonisation agenda, particularly in transport, because we don't have control over all the levers, so we don't set the standards for vehicles either. And if we are to make the changes that we need to make, we can do a lot of work in the public transport space, where we provide funding, so buses and trains and other parts of public transport; we can create the conditions that will support a switch to electric vehicles by doing things, which I've just described, in the electric vehicle network, but we do need the UK Government to step into this as well. So, there are a range of conversations going on about how we can get the UK Government to support this agenda.
So, you're moving on, you've got the report and you've highlighted some of the lessons that have been learnt along the way from developing that, and that's always going to be the case—there'll be lessons learnt next time. Do you have anything further to add, or do you think you've covered the lessons that you've learnt so far?
The first carbon budget was very clear, for the first time, it was exceptional, it drew in every Minister and every portfolio across Government. And I go back to what we were saying: in 2016, when we started this carbon budget, climate change and decarbonisation wasn't on everybody's agenda. So, just in three years—and I've been in post for three years, unusually—you can see just a massive change across Government. Even the ministerial decarbonisation group—we don’t have many Cabinet sub-committees, so I think that shows the importance the previous First Minister put on it, and obviously the current First Minister. It's a sixth priority. If you think about the economic action plan that Ken's brought in, that's got a focus on decarbonisation, so you can see we're maturing.
Of course, the second plan will be different. I think another thing that will be very different about the second plan is the First Minister has made it clear he wants it to be an all-Wales plan; he doesn't just want it to be a Welsh Government plan. So, we've always done—Lucy and Jon's team have always done a huge amount of work with stakeholders, but we've gone beyond the usual suspects, if you like, so that we're not just talking to people who are interested in the climate change agenda; we're talking to a much wider choice of groups. I know you've met the women's institutes, young people. So, young people were very important in relation to this. We had a consultation document particularly for young people, and they were part of the consultation launch. So, I think, as a Government—. I think you used a good word—that decarbonisation has 'penetrated' right across Government. So, we've been on a change of culture, but it's now about extending that. I think there are a lot of lessons to learn. Technologies and innovations are changing all the time. All the evidence we look at is peer reviewed. I think we collaborate in a much more inclusive way. So, of course there will be improvements in the second plan, and, as you say, probably by the time we come to a third plan there will be more improvements.
We've also got the legislation. So, if you think of the Environment (Wales) Act, certainly with Brexit I think that was an incredibly prescient piece of legislation, and certainly in discussions I've had with counterparts, they look on that jealously.
So, we've got a Climate Just advisory group. Did you say it had been established, or is it in the throes of being established? Could you tell us when that's likely to happen and a little bit more about what it's going to do, and the membership that you expect it to hold?
Okay. So, we haven't got one yet. Officials are scoping and exploring options. I'll ask Lucy to say a bit more about when we're going to have it. We announced it when we brought forward this plan in March. So, the plan is that the group will advise Government on a transition away from a fossil fuel-based economy in a fair and just way. Again, we can call on the states and regions group, the Under2 Coalition. What we will do with the group, we will have representation from right across the board—industry, agriculture, wider society. We'll obviously need academics, we'll need people from Government. I think South Australia have done this, Canada have done this, so there are examples where we can look to other countries as to how they've done it.
I signed at the Powering Past Coal Alliance when I was out at the global climate action summit last September in San Francisco, so Wales has become a member of that. I forget how many countries are involved in that—is it about 40?
It's over 90 now.
Over 90 now. So, again, there are lots of examples of how they can help that, and we will be able to learn lessons from other industries and sectors. I'll ask Lucy to say about when we're going to have that established.
We're looking to do it later in the year. I think the unique bit in terms of the Welsh context is we have the Well-being of Future Generations (Wales) Act 2015, and we're very mindful of that, so when we're looking at transition—and I think it was raised earlier, about how do we transition in terms of industry, in terms of making sure we retain our industrial base and not offshore those emissions—we're very mindful of the just transition and making sure that we're actually involving people and actually understanding the issues as we're going along.
We decided to set up the Climate Just group, so when we're actually looking at transition, people are part of it, and we're actually informed by evidence, by information. At the moment we've just been scoping in terms of the options and looking at how other groups are working. Scotland have an equivalent group, but we're looking at different options. So, as we said, Scotland have a group, South Australia have a different group, so we're trying to look at the different mechanisms for doing it, but importantly so the actual work of the group can feed into the next plan, because I think we've already highlighted sometimes in that transition we have to be mindful. So, whether it's industry making sure that they're part of it, and some of the industrial sectors are already doing some really good work in this sector in terms of electric vehicles, but not everyone can afford an electric vehicle—so, being mindful, actually, when we're doing these policies, we have to make sure we're thinking about how it is fair to society. So, we're looking to, obviously, announce more details later on this year, but at the moment we're scoping the options in terms of how best to work and also to fit into the development of the next plan.
Okay. Thank you. Andrew Davies wants to come in with a supplementary question, but, before he does, can I just remind everybody we've used up half our time, roughly, and only covered a third of the areas we're looking to cover?
We'll have to have the Minister back, then, won't we? [Laughter.]
You touched on infrastructure in response to Joyce, and I think there's a really important point about how we develop that infrastructure. Sadly, Wales very often is last in the queue for this, if you're talking about the mobile network, for example, because of the commercial challenges. And it's to be welcomed that the Welsh Government is engaging commercially. But if we take the 5G network, for example, that's obviously been stimulated by the actions of the UK Government, and Cardiff, for example, will be one of the first five cities to have it rolled out. How important is it that, obviously, UK Government takes a lead on this infrastructure in promoting it in the private sector and getting the investment funds to come in? One thing from our engagement last week that came over loud and clear is that, at the moment, there seems to be a sense that certain private equity isn't looking at Wales and putting money on the table, if you like. It might be a blindingly obvious question, but, to me, it seems as if the UK Government in particular, with the size and capacity it has, needs to be on point on this particular issue.
I talked earlier on about the funding opportunities for electric vehicle charging, and the UK Treasury have put, I think, £400 million into a fund, which has been matched by the private sector. And one of the things that we're aiming to do is access more than our fair share of that money in order to be able to fund the kind of roll-out of electric vehicle charging that I talked about earlier on. But it doesn't have to be from that fund. Our ambition is to put this out to the market, and the fund that's best placed to be able to support our ambition will be the one that is successful. So, we welcome, I think, the ambition of the UK Government to put financial resource into this place, but actually if what that does is stimulate other entrants into the market to invest as well, then that's a good thing as well.
The outcome that we want to achieve is that we want to be able to have a comprehensive electric vehicle charging network across Wales to deal with the kinds of issues that you've described in the mobile sense. I used to work on broadband activities as well, so I'm well aware of that. And I think the advantage of doing it in the way we're planning to do this, where we set out what it is we want to achieve, we set out a value proposition, if you like, for what the investors get—. So, what the investors get will be groups of a captive audience that can use their charging points. So, we've got 250 railway stations in Wales, and an awful lot of them have got car parks where people leave their cars for a long period of time to be able to charge their vehicles up, and we'll put other public sector assets into the mix as well. So, we will be offering the market a captive audience, if you like, of potential customers.
We will select a partner not based, necessarily, or not solely, on the financial return that they're able to give us, but on their ability to be able to take charging points out into the most rural parts of Wales, learning the lessons that we've learned from things like broadband and mobile infrastructure, to be able to make sure that this is spread evenly across Wales. We will be interested in what that means in terms of the ease of use. So, can we use a single charging card to be able to pay for this? Could we even tie this into the account-based system that Transport for Wales are going to be operating for paying for your bus ticket and your railway ticket? Could you be paying for your vehicle charging on the same account, for example—get your park-and-ride and all the rest of it, and your cycle hire and all the rest of it, through a single account.
So, there's definitely a role for UK Government to play, and if UK Government have got sites in Wales that they want to put into that mix that we can offer to the market, then all to the good, really, because I think what we want to be able to do is offer the market the maximum number of sites and say to them, 'Right, one of the criteria for the winner is who can istall EV charging at the maximum number of sites that we're offering to the market.' So, that's pretty much the same principle as we used on the superfast broadband thing. We went for a penetration across Wales.
I want to look at the costs of our ambitious plans, because in the explanatory memorandum to the climate change regulations 2018, we're talking about four options. Option 1 is do nothing, so we're not even going to discuss that. Option 2, which is to achieve the 80 per cent target, we're talking about £50 billion overall, or £1.5 billion a year. And option 3, what is described as the maximum feasible, or technically possible target—£64 billion, or £1.9 billion a year. So, could you just tell us where the additional money is going to come from?
So, I know the committee did a report on this last year, and then, obviously, I brought forward the regulations in the Assembly in December. And I think the point of the analysis is to make the broad case to say, 'I think the costs are not that high.' I know £50 billion sounds a huge amount of money, but, as you say, option 1—do nothing—is far costlier. And I think we have to be very clear that that £50 billion is not going to come just from the Welsh Government. It's going to come from right across the economy. It includes businesses. It includes households. And the costs will change, because, as we have new innovations and technologies that we haven't even thought about, that will obviously have an impact on the cost. We also have to look at the benefits as well as the cost. And I think what the UK CCC advice has given us in an indication of those costs. And, as I say, they won't just be borne with us.
We also have to take full account of the co-benefits of the mitigation action as well. So, if you think about reduced combustion of fossil fuels, that will reduce emissions of other air pollutants. We've talked about, again going back to behavioural change, whether people's diets could have an impact, if they changed that. Better public transport—we've just heard. More green spaces. So, I think we have to think £50 billion isn't astronomical on the scale of things, and it's not just going to be borne by Government. So, I'm not able to say to you, 'That money is coming from here or from there.'
What is the budget line you expect to see for decarbonisation in next year's budget?
So, we've done a huge amount of work trying to align the carbon budgets and the financial budgets. So, I think it will be much more transparent this year. It's still very difficult because they're not aligned wholly, but I think you will see that. So, you won't see it on one budget line. Again, you will see it across Government. So, you won't just see it in my portfolio; you'll see it in Ken's portfolio and you'll see it in other ministerial portfolios too.
Okay. I accept the arguments that it won't all come from Government; it will come from commercial businesses and also from the sticks we talked about earlier. So, that's based on the 80 per cent emissions target. How would you then—? Is it feasible, then, to cost the 95 per cent emissions target your committed to enshrining in regulations next year? I think we'd like some clarification, really, on your aspirations against the reality of the money that is going to need to transfer from other priorities.
Well, we won't conduct a cost-benefit analysis of amending the target from 80 per cent to 95 per cent. But what the UK CCC told us was, I think, it was around 1 per cent higher.
One per cent to 2 per cent.
Yes. It wasn't significantly that much different. I think it was between—. Well, I thought it was 1 per cent.
One per cent to 2 per cent higher.
One per cent to 2 per cent higher than the costs of the existing 80 per cent to go to 95 per cent. So, I know they've modelled the scenario that we retain our industrial base to keep our competitiveness and ensure that we're not going to offshore. I've made that very clear—I don't want to offshore our emissions. I think they believe the static cost-benefit analysis is not suitable when looking to consider the impact of the longer term targets.
Just to pick up on that, you say between 1 per cent and 2 per cent is what the Committee on Climate Change has suggested. But you use a different model for costings, don't you—you use the Wales 2050 calculator? So, what are your projections, because they've been very different to the committee's projections in the past? So, what's your anticipated cost?
So, last year, as part of the RIA, we put the UK CCC's figures in there, in terms of their range. We also gave our range as well—
There was a difference, yes, because we use different methodologies, we use different assumptions—
In terms of the 95 per cent, we were looking at it in terms of that. But the important point is that the UK Government have just laid their regulations, upping it to 95 per cent, and they haven't done a cost-benefit analysis. Because the UK CCC say that when it's such a long-term target, you're talking about just indications, scales of costs. The actual cost, in terms of delivery, is almost like the more shorter term, in terms of delivery of the plan. Because with the long-term costs, there are so many variables—in terms of energy, technologies and aspects, so you have to do broad assumptions.
Yes. So, we did broad assumptions in terms of that, in terms of—. But some of that was in terms of—. They said, in terms of their broad assumptions, that some of the data has been updated in terms of they've looked at it in different ways. So, in terms of the actual cost, ultimately, when it comes back down to it, we have to obviously lay a plan for that carbon budget period, and the Government at the time would determine what actions, so then the cost will be whatever actions they choose at the time. So you can get to that 2050 in a few different ways, depending on the actions you choose. So, you do a broad, long-term range of, 'Okay, what are the possible options to get there?', and you do broad assumptions. But in terms of immediate costs, it's about, 'Okay, what action is the Government taking at the time?'
So is that a long way of saying you don't know what the cost is going to be at the moment?
In terms of the 95 per cent?
It would probably be similar in terms of what the UK have said in terms of the 80 per cent in terms of—. So, the UK Committee on Climate Change said the cost will be between 1 per cent and 2 per cent of GDP in 2050.
I think the scale of the uncertainty is best, probably, expressed in the way that the UK CCC do it. So, when they first looked at a 60 per cent UK reduction, they estimated that it was probably 1 per cent to 2 per cent of GDP. Then, when the UK Government upped its ambition to 80 per cent, the UK CCC assessment was—. As their knowledge had increased, as the cost of certain technologies had come down, such as renewables, their estimate was around about 1 per cent to 2 per cent of GDP. And that's what they were advising us in just December 2017. But the work that they have done since, looking at, particularly, how will the energy system work with industry, and what might be the costs there, their assessment now, for net zero, is around about 1 per cent to 2 per cent of GDP. So, I guess that that illustrates that, over the course of 10 years, going to 60 per cent decarbonisation is now, according to their models, the same as a net zero decarbonisation on a UK basis. So I think that kind of demonstrates the learning that is happening, and also the uncertainty of those longer term projections. But Lucy is quite correct; what we will do, as we already have done, in regulation, in putting those interim targets—that's created the pathway. But how you get to that pathway will vary enormously, dependent on the choices of the Government of the time.
Sure. But you did actually apply a figure in the 2018 regulations. So do you not intend to apply a figure for the new projected 95 per cent?
There are no plans to re-run that exercise.
So you're not going to be applying the Wales 2050 calculator to this—to the new target.
Not in terms of the economic costing. We're looking at the Wales 2050—. The Wales 2050 calculator is an emissions model, so it's separate to an economic model. So you look at the emissions model, and then you do the economic analysis from the emissions model. So we will be looking at the Wales 2050 model in terms of looking at the 95 per cent pathway and looking at what way we want to get there.
So, whilst you did publish a £1.5 billion annual cost to the 80 per cent target, you won't be giving the price tag to the 95 per cent target.
I'm going to ask Lucy if I've remembered this correctly. Certainly, when we had discussions with the UK CCC, my understanding was that they thought, even if we went to net zero, we could still do it within the cost envelope.
They were looking—. In terms of the UK level, they were thinking in terms of that. In terms of the Wales level, they would obviously have to look in terms of their exploratory action—in terms of that, in terms of seeing what options there are.
So you've set a target without knowing how much it's going to cost, basically—that's the bottom line here. You've set 95 per cent, but you can't really tell us—
I accept the argument that it is quite difficult to cost these things, because the technology is getting cheaper all the time. But in response to a question about funding for decarbonisation in the Senedd, you said,
'in these times of austerity and all the calls on the Welsh Government budget, to find £1 billion in a year is completely unrealistic'.
So, I go back to: is the Government going to find the money now to pump prime this activity when there seems to be universal agreement that we need to get on with it?
I go back to: it's not just for Government. Because we're looking at our policies and proposals and ministerial colleagues are changing what they do. I go back to the rail franchise, where you changed it around renewable energy. So, the costs around this do need to be part of our decision making across Government. I'm not just going to be able to find £1 billion and you will not see it in one budget; you will see it across the Government budget.
Okay, but you accept the argument on invest-to-save. If we retrofit the heating systems in people's homes now, it's obviously going to reduce the carbon emissions from now, therefore, rather than waiting for five years.
So, we've put additional funding into retrofitting houses. I think it's something like £230 million in this term of Government. I mentioned that Julie James and I are having the report next week. And you will have heard me say before about the speaker—the climatic analyst—who came to speak to our decarbonisation group, who told us that that's probably one of the cheapest—. When I say 'cheapest', I'm not sure that 'cheapest' is the right word, but the most effective way of helping us with our carbon budget and our carbon targets is retrofitting of homes, because we know, in Wales, that we've got very old housing stock, so that's where we can make a very big impact.
Lastly, could I just ask you if you agree with the future generations commissioner's 10-point plan for funding the climate emergency? Do you think the areas of focus are right and are the figures the sort of things that your Government is looking at?
I've had a look, obviously, at the report. I know that the Minister for finance is meeting with the commissioner very soon and I too want to meet her again to discuss the plan. The costs in the report do appear very high. Again, it's not costed, so I think there's a lot of work to do, but she looks for an uplift in Welsh Government spending around decarbonisation activities, which I absolutely agree with—they're good things to do and they're areas where we've got control, so I think it's right to focus on that. Again, it's about encouraging all public bodies and communities. I'm very pleased that, because we declared a climate emergency, the future generations commissioner has done this, but I think we need to have some dialogue with her. I'd be very interested to see a bit more costing on her plan, but, of course, she's on the same side as us and I took what she said as very positive.
I would actually like to see the formulas being used and the assumptions made.
I'd like to see the formulas being used and the assumptions made for the different calculations so that we can have our own views on it. Andrew Davies.
Just very briefly, building on what Llyr was questioning you on, I appreciate the official's point of view, saying that there are no plans to do costings on this new commitment of 95 per cent, but I presume that it's not impossible to do those costings if you had ministerial direction to do that.
It's about the validity and the effort in doing that over a 30-year horizon. Just a broad example is the cost of offshore wind. The first contracts for difference that were issued for offshore wind were operating at £120 to £130 per MWh. Just five years later, we're down to £60 per MWh, so there are investment choices that will drive down costs in certain areas that we can't foresee currently. There are pathways that future Governments will want to take on the way that they will want to invest money and how they will want to invest money and use the other levers at their disposal, such as regulation and encouragement, which will have a dramatic impact on those costs.
So, as the Minister said, the UK CCC advice came with some order-of-magnitude costs. We can repeat the exercise that we did previously, which came to a similar conclusion on order-of-magnitude costs, or we can choose to spend more of our time trying to encourage the development of the policies that will achieve the targets. That's where the focus has been recommended to the Minister—that we actually focus our efforts on the actions rather than economic analysis that is difficult—
Resource intensive and difficult to achieve a meaningful figure. We're not going to get this down to pounds and pence, clearly.
I fully appreciate and understand the point you make. I suppose I was asking the wrong question as well. It isn't what's the cost of the 95 per cent reduction, it's what's the cost of the increased flooding incidents and the higher temperatures leading to costs to the NHS and all that kind of thing, really, and how we pay for that as well, isn't it? I was asking the wrong question. There we are. I'll learn from my mistakes. And the savings as well, of course, because one thing that was clear in the future generations commissioner's 10-point plan was, for example, in terms of retrofitting, it would save the NHS £67 million a year, I think, and every household around £350 a year as well in their bills. So, I think we need a more rounded discussion.
I think the message is we need to be a little bit more savvy about where we invest. You just gave some examples about flood incidents. Again, flood mitigation, the funding we've put into it—. And I think we have seen the benefits of that investment already. If you look at the levels of flooding that the south-east of England particularly had, where they hadn't put in the investment—touching wood here—we haven't seen that level of flooding in Wales, which is positive.
Okay. So, moving on, then, to engagement with the wider sector, could you clarify to me whose decision it was to disband the Climate Change Commission for Wales and whether its functions were formally absorbed into the office of the future generations commissioner?
That was before my time. I think it was disbanded when we were still talking about climate change before I came into post in 2016. I think it was around that time—maybe about 2015 it was disbanded. I'm trying to think who the Minister would have been—Alun Davies?
I'm not too sure who it was at the time. But it was when the well-being of future generations Act was going through.
So, there was a clear decision in terms of disbanding that body and moving its functions into the office of the commissioner.
And at the time we obviously had a non-statutory climate change commissioner and we had a non-statutory sustainable development commissioner. So, the commission had a number of different roles, and that obviously did then I think—
The reason I'm asking is because we have had, as a committee, a push back from the climate change sector and experts in that field feeling that they've lost an important focal point, if you like, given that that function has been absorbed into the commissioner's office, which has a broader remit and a broader focus. Some people feel that we've lost maybe a bit of impetus—that sort of clarity of focus on climate change particularly.
I don't think we have, but I think we're in a different time. So, I'll go back to what I was saying before. When did the word decarbonisation start to appear? It was probably about three years ago. I think decarbonisation has been mainstreamed in a different way and the engagement has been different. So, going back to what I was saying about not the usual suspects, we've had to go to much wider society groups, rather than people who specifically were looking at climate change. But I personally think we have got excellent—I think we're doing a huge amount of stakeholder engagement.
I think because it was a legislative process there was a new way we had to look in terms of where emissions are, and recognising that we have got some challenges in the Welsh context in terms of industry, in terms of the power sector, the business—. We had to make sure that, if we needed to focus effort, we obviously needed to bring—. And this is a long-term change programme; it's not just necessarily speaking with people every few months. We have to basically start working with different sectors, with different organisations, because we all have to work together in terms of this.
So, we had to start more engagement with the industrial sector, with the transport sector, with the power sector, recognising, obviously, what we need to bring in terms of those sectors, but actually what we can learn from them as well. And we do recognise there's a certain part of stakeholders that are already climate change leaders in terms of they're already doing absolutely fantastic stuff and already implementing action. But, in terms of our focus, we obviously recognise we have a big challenge in the Welsh context with the change programme.
So, in terms of that engagement with the low carbon delivery plan, for example, and the new iteration, when we see that, could you tell me a bit about how these people are getting involved in that process, then?
Following the learning from the first part in terms of the plan, it was obviously setting up a number of groups in terms of to focus effort. In terms of the next plan, we've committed a number of groups to focus around the areas. So, we obviously talked about the industry group, recognising their report and their part of it, and they actually need to be involved; the Climate Just group—recognising that we actually think about the just transition across it; and then, in terms of innovation, recognising we obviously need to bring innovation along with it. But, as we said earlier, the First Minister said that the next plan needs to be an all-Wales plan, and so, as a team, we're trying to work out the best way in terms of co-ordination. We're recognising this is already a 200-page document. In an all-Wales plan, we obviously have got to try and work out how to do that, so we're already been speaking to the Confederation of British Industry, the Wales Council for Voluntary Action and the Welsh Local Government Association, in terms of representative bodies in trying to think, 'Okay, how can we all work together on this', and they're already doing some work in this area. So, we're having early conversations now—recognising the plan needs to be developed in the next two years—on how we can work together. Then we're looking to do an annual conference in October. Again, bringing those different sectors—. I think one of the feedbacks we've had from stakeholders is that they don't get necessarily many opportunities to link together. So, as part of the conference, we actually want to link up, again recognising that, actually, if some of these sectors and some of these groups can work together, hopefully that can achieve more. So, we're looking at that plan of engagement and obviously speaking to some of these key bodies.
But one of the things, from the decarbonisation team view—we're trying to be clear that it's not just the decarbonisation team, we're actually mainstreaming it across Government now. So, business colleagues are actually speaking to their business stakeholders. So, when they're actually talking about the economic action plan, they're going out to businesses and talking about decarbonisation. So, we're getting more, in terms of discourse with stakeholders, because it's not just one team, it's actually spread throughout Government. So, in terms of agriculture colleagues—Farming Connect. So, hopefully, we're trying to get more and wider engagement.
I think the difference I've seen, since I came into portfolio, is that climate change was viewed as an environmental issue, whereas decarbonisation isn't. And I think that's evolved, if you like, over the last three years.
So, broadening it out, then, how are relations, and how is the Welsh Government working with UK Government and other devolved administrations? How is that going, because in certain areas we're not feeling that things are functioning as maybe they should? How does it look in this context?
I think it's fair to say I've struggled to get meaningful engagement with the Department for Business, Energy and Industrial Strategy in a way that I haven't with the Department for Environment, Food and Rural Affairs. The quadrilaterals with DEFRA were a really good model of how to work across the four Governments. We've struggled with BEIS. It's got a little better these last, probably, four months. So, I actually met with BEIS and Scottish colleagues and the Northern Ireland—obviously civil servants were there from Northern Ireland—a week last Friday. We were all there for the British-Irish Council, which had a focus on energy. So, we just happened to be there, so we took the opportunity to meet. Post Brexit it's really important—not post Brexit. Pre Brexit it's really important that we have up-down engagements. If you think about the EU emissions trading system, for instance—we're going to need a UK one. I wouldn't be being honest if I said it was great. It's not been great. I think at an official level it's better, but not at a ministerial level. Are you involved at official—?
Can I pick up the UK ETS and EU ETS point, because it's a case in point about the maturity of the relationship, really? I've been in the energy area for a little while now, and I think, certainly with BEIS, and the Department of Energy and Climate Change beforehand, the mindset was, 'This is all reserved, we don't really need to speak to you. We might speak to you as a stakeholder, but you're certainly not a partner.' And I think the EU ETS—that's been at the sharp end of trying to change that dynamic with UK Government, and I must say, I would characterise it more as cock-up rather than a conspiracy. It is not primarily the UK Government not wanting to talk. I think it's the UK Government and officials not fully understanding, perhaps, the devolution settlement, and not fully understanding that actions that they may take within their devolved competence has an effect on our ability to discharge our devolved competence. That's been a journey on EU ETS, but there's been a coming together on both sides and that relationship is improving at a rate of knots. I think the consultation that we've put out collectively, in the way that we've approached the UK climate change commission for advice on how we don't offshore emissions and how we maintain competitiveness of our industrial sector—I think that's a pretty good example of not where we want to be, but certainly getting there.
I'd like to move on to the power sector. You've got some very challenging ambitions in this area. By 2030, which is just 10 years away, you have an aspiration to 70 per cent renewable energy and also to reduce emissions from the power sector by 37 per cent from baseline levels. Now, when you consider that, in 2017—and this is from page 71 in 'Prosperity for All'—8 per cent of Welsh power generation was from coal and 69 per cent was from gas, and Aberthaw alone represented 37 per cent of Welsh power emissions and 12 per cent of total Welsh emissions, and Pembroke gas-fired power station represented another 30 per cent of power emissions in 2016. So, I'm wondering how we get from where we are to where you want to be, given that the key decisions over power generation in Wales are not within your competence—whether Aberthaw is switched off by 2025 or not is not a decision that will fall to you to be made. So, if that doesn't happen, you're not going to meet your target, are you?
No, but I think that will happen. In fact, I think it'll happen earlier. And, certainly, we've seen a decline in the use of Aberthaw. I'm not kidding myself; I know that the increase that was announced in the report this morning is a lot down to that. So, you're right, we haven't got all the levers; but we do have some levers and I think we're making significant progress. I think you're right, I think 70 per cent by 2030 was ambitious, but I also think it's realistic, and I didn't want to set a target that wasn't realistic, and we were starting from quite a low baseline. I think that, when we first set that target, we were at about 30 per cent; but we're now at 48 per cent. In 2017, we had 48 per cent of our electricity consumption met by renewables generation. That was a 5 per cent increase on 2016, so if we can continue that we will obviously meet the target.
It's about looking at how our policies do support that delivery. So, Simon's given you a very good example about the rail franchise using renewable energy. We've also now got the new Welsh Government energy service. That provides support to the public sector and to communities who want to have community projects. I think people are much more aware of that now. I've visited some amazing community projects right across Wales, and we're working hard with these communities.
We've now got 76 renewable electricity projects across Wales up and running, and the potential investment value is approximately £73 million, so we are, I think, making significant progress there. We're also working very closely with Natural Resources Wales around our woodland estate to make sure we get renewable energy projects there. We've just not long announced the Bryn project—I don't know if you're aware of that one. So, whilst, you're right, we haven't got all the levers and it is incredibly frustrating sometimes—. I went to a farm not far from Machynlleth, and the farmer had installed his own hydro scheme at significant cost, but it was worth it because of the return he was getting. But he said, 'I won't be doing another one even though I've got all this expertise from doing one', and an adjacent farmer would have been very happy to have one on his land, because the price had gone down. So, I've had quite difficult conversations with BEIS because we do need them to help us reach our targets.
But if we are to achieve these targets, even allowing for the closure of Aberthaw, you're going to have to have a massive increase in wind generation, I presume, by 2030. How many new wind turbines do you think we will need? How many will you have erected?
I couldn't pick a number out of the air—
It would be wrong anyway, wouldn't it, because wind turbines have got more efficient, they've got larger? So, the figure you'd have given us five years ago would be substantially more than the figure you would calculate now and it's substantially less than it would be in five years' time because turbines have got more efficient, they've got larger, and they've also got the capacity to work at different wind speeds.
I remember having the discussion with officials. I don't know if you were—were you there, Jon? Were you working in energy then when we set the targets? And I remember thinking it was as if you had another Pen y Cymoedd farm—that would achieve such an such a target. It wasn't huge, but, as you say, the innovation is changing.
I think the key thing is route to market. The Minister has written, on more than one occasion, to the UK Government recognising that the route for market isn't great at the moment. Previously, the renewables obligation provided substantial subsidies and contracts for difference came forward. But, essentially, onshore wind were sort of excluded from contracts for difference, and, subsequently, the feed-in tariff has ended as well. I think there is a recognition that subsidies have to have an end point at the end of the day. But I think the key point about feed-in tariffs and the contracts for difference is that there were two market mechanisms within that. One was a subsidy and one was that somebody was buying at a guaranteed price for 15 years or longer. So, that’s a capital issue for these projects. So, a lot of the work that’s happening around the renewable energy scheme is to try and find ways of reducing costs to market for renewables.
Time and time again, I can think of—and I declare an interest in the renewables sector—. The amount of businesses I speak to who would adopt renewable generation tomorrow, but they can't get a grid connection, full stop—they can’t. Western Power have a moratorium on commercial battery deployment until 2026 in Wales and the south-west. So, what influence, what pressure, can you bring to bear on the grid? You can talk all you want about subsidies, but, actually, the commercial model is strong enough now to deploy large-scale solar, for example, without any subsidy, but you can’t get a grid connection.
I agree. National grid capacity is absolutely an issue, particularly in mid Wales, and you'll be aware of the work that National Grid were doing with Ynys Môn ahead of Wylfa Newydd, which I know is, obviously, not going ahead at the minute. So, I meet with National Grid regularly. Obviously, it's a matter for the UK Government. Again, I've put pressure on UK Government to make sure they invest in the national grid. I know what you’re saying about route to market, but if you think about solar panels. I know a lot of local authorities—my own in Wrexham was installing significant numbers of solar panels on the social housing, and then it just stopped because the feed-in tariff finished. So, the UK Government need to be not so short-sighted in relation to these matters.
Can I just ask—? Because things are changing we need to change our thinking. So, at the moment, we’re thinking about all the electricity that’s produced, however that might be, feeding into the grid. But maybe we need to start thinking differently, and that’s why I asked that question about battery storage earlier on. Because if we start thinking differently in how the new technologies that are there now but are yet to be fully tried and tested—it might mean that we don’t actually have to put anything in the grid at all. So, I suppose the question really, is where we’re at with that thinking, and also using what we’ve already got, because I’ve had an e-mail about Maentwrog hydroelectric power station as an example that’s really doing that sort of thing—it’s got its own network. So, are we thinking—and I’m sure you are—about how we let communities take ownership, in some cases, of quite well-established, as in this case, in Maentwrog, electric generation that can serve those communities in which it’s generated, rather than trying to fight, because it will be a major fight, the six big companies that are currently controlling the national grid, but also buying on spec, so I’ve been told, from people in this room, space that is preventing other people from using that? So, I suppose it’s a much bigger question, but it’s a very real question, given the parameters we’re trying to work in.
The grid, as everybody knows, is a constraint for many projects. The Welsh Government energy service, actually, in working with local authorities, is looking to a number of projects where there is an offtaker close to the site. That reduces grid costs, actually, for the project, and makes the project more viable. It has the potential to reduce costs for the consumer receiving the electrons. So, it's a win-win. There will—. I can envisage that it will be a mixed market for some considerable time. The big six, or major players in this area, who are able to be able to develop large-scale schemes and pay for a grid connection will continue to do so, as is entirely appropriate, but, increasingly, we are going to have to look at siting energy generation closer to the consumption, and through the energy service there is quite a lot of work already being undertaken in that area.
I'm just wondering what input you're having into the UK Government's White Paper on energy, which we're expecting to see in the autumn, because clearly we touched earlier about the ways of working across Governments. Are you—? Are those messages being heard, and are they being listened to? That's the more important question.
Yes. It's a different official who's been representing us on that group, and, yes, we've had significant—. I know this, because the First Minister has taken a particular interest in this, and I had a briefing just last week, so, yes, we've been able to feed in significantly.
—your green energy policies, there are also other areas where I'm with you: things like insulation programmes for houses, also on hydroelectric schemes, where I think the payback is over very long periods of time and the costs of operation are minimal. So, I think schemes of that kind, if you can build them into your plans, have a commercial viability that justifies them in their own right, quite apart from any other argument you might advance. So, I'd just like to follow on, also, from the point that Joyce has just made about Maentwrog and similar opportunities that might exist in community-owned renewable energy. Again, I think that this is a desirable aim in the longer term. So, have you got a plan for increasing the proportions of power generation that come from community-owned schemes?
Absolutely. So, again, we set targets: 1 GW of renewable electricity and heat capacity to be locally owned by 2030, and all new energy projects to have an element of local ownership by next year. I think we're well on target to achieving that. So, we've got the Welsh Government energy service, which I've spoken about previously. They work with communities. They provide advice on different levels as to how they should be able to bring forward a scheme—so, technical procurement, financial advice. I've been to many of these projects. I opened one up in Corwen last year. That was a hydro one, and it was great talking to a lady, who said to me, 'I know every time I put my kettle on where the electricity's coming from, and I'm getting money from it as well.'
We've been supporting the community renewable energy sector, I think, since about 2010. It's a long-established thing now with us, and we will obviously continue to do that. We had a call for evidence back in 2018, around how we would have that approach, and that 1 GW local energy target. It also sought some evidence on effective ways of increasing local and shared ownership, and that will obviously help inform us. We've also—. Have we now convened—? I think we have now convened a group of stakeholders to involve them around policy statements and guidance. So, there's a huge amount of work going on in relation to this.
Good. Well, thank you for that. I have to move on now. I'd just like to go back to a point that Jonathan mentioned earlier on in relation to the emissions trading scheme. Could you just provide us with an update on your discussions with the UK Government about a successor scheme? Can you give us some more detail about that—where we are and where we're likely to get to?
It is enormously important for our emissions profile, because nearly 60 per cent of our emissions are covered by the trading sector—for the most part of it, the ETS. So, yes, we have a consultation out at the moment. Just on Monday, one of my colleagues was down in London having a technical discussion around the linking of that. So, one of the advantages of having a large carbon market is that you're able to decarbonise that entire market at the lowest cost. So, the ambition is to have a linked emissions trading scheme, preferably with the EU. So, a lot of work is going on in the background, lots of technical work. As I mentioned earlier on, we have commissioned the UK CCC to look at how the trajectory of the cap, which decreases over time, might impact on the competitiveness of UK businesses, and we've asked for all Wales businesses to be included specifically within that as a set of their own. So, it's moving along.
We've run out of time, but we obviously haven't run out of questions. I think there are two things that we need to take from that. One is that we will send some questions to you to which, hopefully, you will give us responses, and, secondly, I think that, in future, we'll need a much longer session. Llyr, you want to say something.
I just wanted to ask about the Part L regulations. There is an intention, I think, or there was an intention to consult over the summer, is that still—?
Can I say that perhaps we do need to look for slightly longer sessions, as we missed a third of the areas that we wished to cover? Okay, can I thank the Minister and her colleagues for coming along? We're very grateful for your coming along and answering the questions.
bod y pwyllgor yn penderfynu gwahardd y cyhoedd o'r cyfarfod heddiw ar gyfer eitermau 4, 5, 6 a 7 yn unol â Rheol Sefydlog 17.42(vi).
that the committee resolves to exclude the public from from items 4, 5, 6 and 7 of today's meeting in accordance with Standing Order 17.42(vi).
Cynigiwyd y cynnig.
Can I move a motion under Standing Order 17.42 to resolve to exclude the public from items 4, 5, 6 and 7 of today's meeting? Is that agreed?
Derbyniwyd y cynnig.
Daeth rhan gyhoeddus y cyfarfod i ben am 11:01.
The public part of the meeting ended at 11:01.