The Institute of Welsh Affairs (IWA) has published a new analysis which lays out four key areas of improvement for the Welsh government’s green strategy.
The research, supported by Friends Provident Foundation, revealed that despite ambitious targets, the organisation believes that a lack of strategic dialogue and policy guidance currently allows economic benefits from net zero to miss Wales.
IWA’s report breaks down its recommendations into four different sections. They are as follows:
Re-powering communities
This sector focuses on reforming community benefit funding and the power they have in the development of clean energy projects.
To retain greater economic impact and income from renewable energy projects within Welsh communities, the Welsh government should outline clear policy and good practice guidance for providing Community Benefit Funds (CBFs) from renewable energy projects to support both developers and communities in achieving greater economic impact of CBFs.
Establish best practice through Trydan Gwyrdd Cymru
This is about ensuring a minimum of 30% of community ownership in future developments to maximise retaining income and increase community economic impact.
As the Welsh Government formalises the role of Trydan Gwyrdd Cymru, it should explore the possibility of community ownership where possible.
Where projects may be a private/public partnership, jointly developed with a commercial developer, the Welsh Government must ensure the developer provides best practice CBFs.
Accelerate community ownership on commercial projects
This area revolves around compelling all new commercial renewable projects above 5MW to have a minimum level of 15% of community and local ownership by 2028.
IWA suggest that the Welsh government should learn from the Danish government’s example and establish a policy to retain the benefits in Wales and ensure that communities have a stake in local energy generation.
The Welsh government should work with developers to explore and offer a range of community-ownership models, reducing upfront financial barriers that may currently limit economically disadvantaged communities from community ownership.
Re-investment for future generations
According to the IWA, Welsh government should establish a Wales Wealth Fund, reinvesting income from renewable energy projects for the long-term benefits of future generations.
The fund would capture ‘sovereign wealth fund Payments’ of at least 15% of net revenues made from future large-scale onshore and offshore wind projects with an installed capacity of over 50MW in Wales, alongside a CBF for the local community.
Road to success
It is worth noting that Wales has succeeded in several areas of the renewable energy sector thus far, including awarding British Gas a new seven-year contract to deliver services via the Welsh government’s Warm Homes scheme.
The Warm Homes Nest scheme, of which this new contract is a continuation, offers energy efficiency measures, including heat pumps and solar panels for low-income households and those in deprived communities to keep warm and reduce their energy bills.
Launched in 2011, it has helped 60,300 low-income households with a package of free home energy efficiency measures in an effort to tackle fuel poverty.
The new scheme will focus specifically on low-carbon technologies for the home, aiming to deliver energy efficiency improvements in up to 2000 properties per year.
Moreover, the nation installed a record number of residential and commercial solar panels and heat pumps through 2023, as confirmed by the Microgeneration Certification Scheme (MCS).
Wales saw more than double the amount of certified renewable installations in the country than the previous year, bringing the total number of Welsh homes and businesses with renewable energy to over 100,000.
Almost one in ten households in Wales have MCS-certified renewable installations as of 2023, the highest proportion of any country in the UK.
Solar panels accounted for most new renewable energy, with 14,730 MCS-certified installations nationwide, representing a 12-year high and the highest level since Feed-In Tariff grants were cut in 2011.