Energy: Wind Farms
To ask Her Majesty's Government what assessment they have made of the impact of current and proposed wind farms and their supporting infrastructures on the communities and landscape of mid-Wales and Shropshire.
Lord Thomas of Gresford: My Lords, I welcome and congratulate the noble Baroness, Lady Stowell, on her first venture to the Dispatch Box. It is a pleasure to see her responding to this debate. I declare an interest as a former president of the Montgomeryshire Society with strong links to the Vrynwy and Meifod valleys. Together with my noble friend Lord Hooson I was engaged in resisting successfully the proposals to drown the Dulas valley near Llanidloes in the early 1970s to provide a regulating reservoir for Birmingham.
Two or three years ago my noble friend Lady Walmsley-my wife-and I visited a school in Llanfair Caereinion to present prizes given by the Montgomeryshire Society. While we were congratulating a bright young boy on the excellent prize he had won, I asked him, "What are your plans when you leave school?". He said he wanted to be a farmer. I asked whether it was sheep, cattle or arable farming that he had in mind. "No," he said, "Wind farming".
This is a timely debate, having regard to the KPMG report Thinking About the Affordable published this week. The report says that government plans for wind farms are too expensive and should be shelved in favour of cheaper nuclear and gas-fired power stations. Government plans to cut pollution by a third by 2020 rest heavily on wind power and will cost £108 billion to implement. The report says that shifting away from turbines towards nuclear and gas-fired power stations would slash the bill by £34 billion, which is equal to around £550 for every person in this country. Wind power is accordingly one of the most expensive forms of electricity generation to build. Wind farms are expensive to operate as they depend on nature, which means they often do not run at full capacity. It is claimed that they run at 31 per cent of capacity but analysis of past performance in the UK suggests that 21 per cent is nearer to the truth. I would be grateful to hear from the Minister the Government's reaction to this report.
In 2005 the Welsh Assembly Government issued TAN 8, the technical advice note meant to guide planning decisions relating to renewable energy projects. TAN 8 identified seven strategic search areas as suitable for concentrated, large-scale wind farm development, three of which were in mid-Wales. The focus is on mid-Wales because Snowdonia National Park lies to the north and Brecon Beacons National Park to the south. Targets for capacity have varied from 1.1 gigawatts originally to 2.5 gigawatts in 2007, falling back to 2 gigawatts in 2010, all to be constructed within the SSAs by 2015.
9 Nov 2011 : Column 314
In mid-Wales, schemes have been proposed for 800 turbines up to 600 feet tall, spreading through the Severn valley and into the hills above the Meifod and Vyrnwy valleys. Of course, there are no connections to the national grid in the area so these schemes require a network of electricity pylons, running to a substation at either Abermule or Cefn Coch, spread over some 28 acres. That substation will require a link of 154-feet-tall mega-pylons across the rest of Montgomeryshire and into England, all the way through Shropshire to Telford some 45 miles away. There are currently some 200 pylons in existence in Powys. ScottishPower Renewables is into the second phase of its proposals to build a 135-megawatt wind farm of 35 pylons-the highest in Europe at 600 feet-on land that it has leased from the Forestry Commission in the Dyfnant forest. They will tower over Lake Vyrnwy and the beautiful countryside around. In response to the proposal for these pylons put forward by ScottishPower and National Grid, some 500 people turned up to a protest meeting at the Meifod rugby club-and this is a very small village-at the end of March. In May the biggest protest demonstration in the Welsh Assembly's history took place in Cardiff with some 2,000 people. In Welshpool in June, 2,000 people attended to protest and to watch on a large screen the proceedings of Powys County Council where a motion calling for the review of the TAN 8 policy was passed unanimously with only one abstention. Shropshire County Council has also declared itself to be unanimously against this proposal and all the parish councils involved have expressed their opposition. As a result of all this pressure Carwyn Jones, the Welsh Assembly Government's First Minister, realised finally what the previous Government had let loose with TAN 8 and in a reversal of previous policy said on 17 June:
"Planning guidelines on the number of wind farms should in future be regarded as an upper limit. The Welsh Government wants the UK government to devolve powers over large-scale energy generation projects. We cannot accept a position where decisions made outside Wales will lead to inappropriate development for the people of Wales. The Welsh Government believe this level of development is unacceptable in view of its wider impacts on the local area".
What is this Government's response? They have rejected Mr Jones's demand for further devolution but surely the Department of Energy and Climate Change will not ride roughshod over the express will of parish councils, county councils, the Welsh Assembly Government and, most importantly, the whole community of Montgomeryshire, Shropshire and beyond. According to the Telegraph on 9 October a spokesman for DECC said:
Who exactly is going to deal with these applications? Name the Minister. Who will balance the antagonism of local people, the expressed hostility of their
representatives, the obvious environmental considerations, and the impact on tourism and the local economy against the expensive and limited capacity for generating electricity that these wind farms possess? The impact on the people and the beautiful countryside will be devastating. I do not share the gleam in the eye of those who try to tell us that turbines are a thing of beauty. It is all a question of proportion. The countryside can absorb a certain number of these structures. Indeed, in Dulas valley near Machynlleth, the first community-owned wind turbine in the United Kingdom was erected in 2003 and serves the local population, who own it, very well. But 800 turbines in the area proposed will be completely and wholly out of proportion. If localism means anything at all to this Government, the ruination of the hills should be taken by bodies that are accountable locally.
9 Nov 2011 : Column 315
For those who think that mid-Wales is an empty and barren land that does not matter, I advise them to read the report commissioned during the Dulas valley inquiry of 1970 from the University of Aberystwyth, which stressed the value of the strong community life, the strength of the culture and the human effects of the proposed development upon a mid-Wales community. At that time, the Secretary of State for Wales, Lord Cledwyn, determined and announced that no Welsh valley would be sacrificed again. It is time for the Secretary of State for Wales in the present Government to step in and to follow that precedent.
Lord Williams of Elvel: My Lords, the House will be most grateful to the noble Lord, Lord Thomas of Gresford, for introducing this subject and for concentrating on the theme of localism, which I want to follow up on because it is vitally important. It is a matter that has got slightly confused over the years. Let me start with TAN 8, which the noble Lord introduced us to.
TAN 8 went through a consultation process, a recent analysis of which has shown that 66 per cent of consultees opposed it and 7 per cent were in favour. Even at its promulgation, TAN 8 was unpopular with all the consultees who the Welsh Assembly Government had invited to comment. That went through to the selection of the SSAs. These strategic search areas were identified by a Danish company, Arup, on the grounds of simple criteria. Social conditions were not part of the criteria to identify them. The result was that we had three SSAs in mid-Wales, as the noble Lord, Lord Thomas, quite rightly points out-they were B, C and D, to be technical about it-where the criteria were basically the number of people who did not live there; that is, the most beautiful wildernesses in mid-Wales.
The result of TAN 8, curiously enough, has been slightly perverse. It was designed to stop what is known as pepper-potting, with wind turbines being put up all over Wales, and to concentrate on serious and strategic areas. The problem with that, as the noble Lord, Lord Thomas, has pointed out, is that this gave rise to large applications because if you were going to try and meet the targets which the Welsh Assembly Government had set in terms of carbon
emissions from Wales, you had to make sure that the applications were of large sizes. The result is that we have a number of applications-I will not go through the whole list-with, for example, 160 megawatts, 150 megawatts, 140 megawatts or 170 megawatts of installed capacity. It is a long list and the noble Lord, Lord Thomas, has given us a graphic idea of the total, so what happens then?
9 Nov 2011 : Column 316
What happens is that these applications are outside the control of the Welsh Assembly Government, the local authority and local people, so they come to Westminster-originally under the Electricity Act 1989 but now, because of rearrangements in the planning mechanisms, these applications would come through the Infrastructure Planning Commission. We read in the Localism Bill that that commission is to be abolished, so that it will become an infrastructure planning inspectorate inside the general inspectorate. The ultimate decision would be for a Secretary of State. I have no quarrel with that remedy but I have a quarrel about which Secretary of State would be responsible for this-I follow the noble Lord, Lord Thomas. Would it be the Secretary of State for Energy and Climate Change, who sits for an English constituency? Would it be the Secretary of State for Wales, who sits for an English constituency? Would it be the Secretary of State for Communities and Local Government, who sits for an English constituency? In any way, it would be determined by somebody who has no particular interest in ensuring the benefits of mid-Wales.
We had an example of this in the previous Government, which I attacked then and would attack now. The wind farm at Cefn Croes, in the middle of the Cambrian Mountains-one of the most beautiful places in the world, let alone the United Kingdom-was opposed by every planning authority in mid-Wales. It went to London and one of my colleagues in the Westminster Government simply signed it off. Did he go and visit the site? No. Did he consult with various people? No. It was simple ideology: he wanted to ensure that there was enough capacity in whatever it was, however it was done. It is that which we must avoid.
What happens when an application for a wind farm of over 50 megawatts of installed capacity comes to the Secretary of State? Will he or she look at the criteria that Arup introduced to define these selected areas? What is important, wilderness and wind speed or social conditions and communities? What happens when the Secretary of State receives the application and says, "I'm not bothered about mid-Wales. That is not my interest at all"? We have to ensure that localism means something rather than simply being a theory. It would be perfectly possible to ensure by some mechanism or other that localism actually counted, and I hope very much that the Minister will give us that reassurance.
Lord Teverson: My Lords, I am very aware that I am not a resident of Wales so I shall be careful in what I say. However, some months ago, as part of a business trip-nothing to do with energy or renewables-I passed through central Wales. I stayed there for the evening and enjoyed the hospitality, the scenery and the countryside. I noticed a number of signs and placards there around renewable energy, so I fully
accept that this is a major issue in that area. I live in another Celtic part of the United Kingdom, one that has high wind potential with regard to renewable energy. It has a number of wind farms and similar issues to those of Wales, although maybe not to the same degree.
9 Nov 2011 : Column 317
It is important to remember the slightly broader context to this debate-that is not a justification, but it puts the debate in a broader context-of global warming and the need to decarbonise our electricity supply chain in this country and indeed further afield than that. Global warming exists, it is happening, it is dangerous and it will have major effects not just on our own country but much more widely. The Berkeley earth surface temperature study has recently taken place. A study that was originally very sceptical about the question of temperatures and global warming looked at the University of East Anglia results and the controversy about the Hadley Centre, and came back to say that global warming was really happening.
We have to go through the process of decarbonisation and the Government have some excellent strategies towards that: energy efficiency; new nuclear, which some of my colleagues might disagree with rather more; carbon capture and storage; and renewables. Why those four different things? Because this is such an important issue that we cannot have just one approach to it. We have to have a multifaceted approach to the problem, and that is true of electricity generation as well.
One small point about the KPMG report is that onshore wind generation is not one of the most expensive technologies but quite the opposite: it is actually one of the least expensive. Offshore wind, wave, geothermal and various other technologies are more expensive than onshore wind; that is not even slightly contestable. The other thing about the report-and I was rather surprised that KPMG put its name to something that was so shaky in its economic analysis-is that it looks purely at capital cost. Those of us who have had anything whatever to do with business or industry understand that, in terms of cash flow or assessing projects, looking only at capital cost means nothing. In fact, if we looked purely at that, we as a civilisation would still be in the stone age rather than where we are now. Some people might welcome that, but I personally am not one of those who are into deindustrialisation.
The important thing about renewables is that the ongoing fuel cost is far less. If we look at those countries such as Denmark and Spain that bothered to invest in renewables way back in the past, we see that the energy prices where there is a much higher renewable content have not increased at anything like the rate that our own energy costs have in the UK. I remind the Minister that in the five-year period 2004 to 2009, electricity costs went up by 75 per cent and gas costs 120 per cent-far higher than any costs that would have resulted from renewable energy.
In fact, if we invest suitably in renewable energy we will have a much lower cost increase in future. Onshore wind generation is a good solution in terms of renewable energy and decarbonising the economy and a good way of tackling global warming. One of the cheaper ways of producing renewable energy is hydro-including
dams in the type of area where my noble friend, quite rightly, campaigned. However, there is less ability in the UK to build extra hydro than onshore wind generation.
9 Nov 2011 : Column 318
The crux of this argument, with which I absolutely agree, is about the concentration of wind turbines in a particular area and providing access to the national grid, such as by building pylons. I have sympathy for Wales, and central Wales in particular, because the plans that have come back to the Welsh Government have delineated specific areas and there is a problem with that. What is required is for the Welsh Assembly and Government to look at changing those criteria and move it away from DECC, which should not make those sorts of decisions for the UK. We would then have the right solution for Wales that would also challenge and affect global warming.
The current plans to construct a further 600 to 800 onshore turbines in mid-Wales are unacceptable on two counts. First, there is the wanton destruction of an extraordinary environment, which has already been referred to. Secondly, there is the further development of an inefficient and absurdly expensive solution to achieving the targets for CO2 emissions that the UK has undertaken, and for increased use of renewables.
"is a place of great beauty ... it underpins the most important and largest part of the local economy-tourism".-[Official Report, 10/6/11; col. 347WH.]
Although mid-Wales constitutes some two-thirds of the land mass of our country, its population is small and, apart from sheep farming, tourism is the only other major sector upon which the economy is dependent. In addition to these 800 new onshore turbines, there is the installation-as has been mentioned-of a 20-acre electricity substation and 100 miles of new cable, mostly carried on 150-foot-high steel towers. No wonder the local populace is protesting.
According to the Country Guardian website, by August this year 275 different groups had been formed throughout the UK to object to the impact of planned wind farm developments, 30 of which are in Wales. That is 11 per cent of the total, which is disproportionate to the 5 per cent of the UK population that the area represents. It is too easy for Government and other industrial protagonists of this vandalism to characterise the protestors as guilty of nimbyism. That is a slanderous description. Their approach is not "nimby"; if anything, it is "nioby"-not in our back yard, and not in the nation's back yard that is the beautiful and unique topography of these isles, which both this Parliament and the devolved Administrations must have a primary duty to protect.
Financial analysis is available to all. Anyone can see that the costs far outweigh the effective generation of electricity in comparison to other sources. What can Government do to take the heat out of this most contentious issue and give leadership to the development
of alternative forms of electricity production? It will not surprise your Lordships if I return to the Severn barrage, a mega-project that would generate more than 5 per cent of the total UK electricity requirement by using the power of the second-largest rise and fall of tide in the world. Ironically, this year is the 100th anniversary of the first reference to a Severn barrage for energy purposes, made by a Frenchman in 1911. Since then, between 1926 and 1989, there have been many government and privately sponsored investigations. Since the Sustainable Development Commission's report of October 2007, which was largely constructive in its approach, Governments continue to be reluctant to give the scheme their backing.
9 Nov 2011 : Column 319
Despite past cross-party support in the other place, led at that time by the previous Secretary of State for Wales, little has happened until now. A private sector consortium, Corlan Hafren, has set about the task of making it happen. It should be supported. Its plans appear to incorporate the most recent engineering developments, with environmental outcomes that are,
In addition to its extraordinary relevance to achieving UK targets, the construction and associated infrastructure of the barrage would be set to create 100,000 jobs. Perhaps the Minister would care to note the Financial Times report of 24 November 2010, in which the Secretary of State is reported as saying that,
"I think the Severn barrage will eventually happen and will provide about 7 per cent of all the electricity in the UK. When it does it will involve a lot of different businesses. But investors will need assurance that the government is behind it".
Finally, at the other end of the scale is biomass. In Wales the use of biomass fuel lags well behind that in Germany and other countries. The technology is proven, there are grants and funding incentives and a supply infrastructure is in place. Wales has an abundant timber resource: 13 per cent of its land mass is woodland, of which some 75,000 hectares is unmanaged private woodland. Biomass systems are not designed just for individual domestic use. Already there are examples of their use in Wales by organisations such as the new Rhondda hospital in Llwynypia and the Office for National Statistics in Newport. The Welsh Government happily lead the way, with a biomass system installed in the Senedd building.
There are alternatives. Let us pause and reconsider the effects of these policies in destroying our beautiful countryside. If we do not, the ugly results will be the inheritance of future generations at grossly unacceptable cost.
Lord Howie of Troon: My Lords, I hesitate to intervene in what is clearly a Welsh evening but I am happy to come to the aid of my fellow Celts on this
occasion. I congratulate the noble Lord, Lord Thomas, on securing this debate and on the powerful manner in which he introduced it.
9 Nov 2011 : Column 320
I should say that I have a kind of background in Wales. Older Members of the House, if there are any present, may remember that I spent a lifetime in the construction industry and younger Members should take note of that now. In my civil engineering days I was involved in the Milford Haven power station, in a coal mine near Llanelli, in a gas works near Neath and in the Wylfa nuclear power station in north Wales. I have a background in the energy business, although I was on the construction side of the infrastructure for industry.
I am with the noble Lord, Lord Teverson, in that I want to widen the debate from the specific mid-Wales aspect. I regard that as a microcosm of what is likely to happen through the rest of the country. Many years ago, as a relatively new Member of the House-I think that Jim Callaghan was the Prime Minister although I am not too sure-I drew attention to my experience with Milford Haven and suggested to the House that if we were to replace the Milford Haven oil-powered station, which produced 2,000 megawatts, we would have required something like 2,000 windmills, as we called them in those days. They have now been upgraded to wind turbines. I said at the time that they would stretch from Cardiff, at roughly every 100 yards, around the coast to the Mersey. The turbines are stronger now and would stretch for only half that distance-but that is the scale that we are talking about. I reminded the House more recently that if you took the Thames array-an offshore assembly that is no longer called a farm but an array-it would stretch from the House here in one direction as far as the Tate Modern and in the other direction as far as King's Cross railway station. We are talking about covering large swathes of the country with wind turbines, or windmills-call them what you like.
Speaking as an engineer, I would not mind that if they actually produced the energy that they are thought to produce. However, they do not. If one looks back to the coldest day of the winter in December last year, wind power produced 0.04 per cent-I repeat, 0.04 per cent-of the energy required to heat the homes of this country on that day. That figure is derisory. The idea that wind power, which is intermittent, can replace any other form of electricity production is a miasma at best. In order to make up for the periods when windmills are not producing electricity, there has to be a back-up. I refer again to Milford Haven. If we had had the 2,000 megawatts of wind power in Wales that failed, as it happened, last year, one would still have needed Milford Haven power station as a back-up. One would not have replaced it. The idea that windmills will help us is an illusion.
I shall conclude by drawing to attention to a book published two years ago by James Lovelock. It is entitled, The Vanishing face of Gaia. He was a guru of Greenpeace at its beginning, but is now thought of as an apostate. We need 70 gigawatts of electricity. He said that the footprint of a nuclear power station producing 1 gigawatt is 30 acres. The footprint for 1 gigawatt of wind power is 1,000 square miles. I tend to giggle at that thought.
9 Nov 2011 : Column 321
I shall not go on any longer, but I should say this. The Minister and the shadow Minister on the Front Bench should get hold of Lovelock's book and read it. If they read it and apply its message, they would save all the bother in mid-Wales and in the rest of the country as well.
Baroness Randerson: My Lords, the background to this debate is a very confused situation. It is confused because renewable energy development in Wales is divided between the UK Government and the Welsh Government, with 50 megawatts, as you have heard, as the dividing line. It is also confused because, to be honest, the Welsh Government have got themselves into a particular pickle over TAN 8, which is the guidance that has been referred to. This was never a good document, but it is now badly out of date. It was always too heavily reliant on wind power: there are 12 pages of guidance on wind power, but three pages on every other type of renewable energy.
It is also out of date because the capacity targets it refers to appear to be greatly exceeded now in terms of potential. In each of the seven designated areas, the capacity targets seem now to be understated. In fact the Welsh Government do not seem to know whether they are targets or maxima; various Welsh government documents refer to them variously as targets, or, on the other hand, as maxima. Yet the report last year by Arup showed that the planning applications in the pipeline at the moment far exceed the capacity targets. It is quite logical: as time goes on, technical capacity increases and therefore the targets that you set in 2005 are out of date by the time you get to 2011. Indeed, earlier this year the Welsh Government said that it was their aspiration to reach 2 gigawatts as a target in the seven areas by 2013 to 2015. Faced with an absolute uproar in mid-Wales, they are now rowing back from that. However, we do not know whether it is a target or a maximum.
I obviously agree with noble Lords who have stated how strongly they feel about the beauty of mid-Wales. I am a strong supporter of renewable energy but I believe that we have to preserve our best, and the wonderful and unique scenery of mid-Wales comes into that category. It is important to remember the importance of the tourism industry in that area as well. An area which has difficulty in attracting jobs cannot afford to lose its tourist industry.
There is a particular problem in mid-Wales because of the lack of grid infrastructure. This is what has sparked the latest opposition. At the moment, people feel very strongly about the mid-Wales connection project. TAN 8 is hopelessly optimistic on this as well. It said that if extra grid capacity were needed as a result of the wind farm development, it should come via underground cables. We know that that is far too expensive to contemplate on the scale which would be necessary. However, I have a letter from the Minister, written in July, which said:
"Where new grid is required, we expect the grid company and regulator to ensure that it is located, designed and installed as sensitively as possible, using appropriate techniques, including the use of undergrounding".
9 Nov 2011 : Column 322
One point of confusion could be overcome if the power over developments of more than 50 megawatts could be delegated-devolved-to the Welsh Assembly. At the moment, the UK Government decide whether a wind farm can be developed and the Welsh Government decide the detail, if it is more than 50 megawatts. That is inappropriate. I strongly argue for devolution of those powers. The Silk commission has recently been established to consider the extent of Welsh devolution, and I very much hope that it will consider this issue as part of its remit. Given that TAN 8 envisaged that 1,700 megawatts in total would be coming from the seven SSAs, the 50-megawatt limit is a very low threshold. It is completely arbitrary. I argue that it appears increasingly out of date.
Finally, I return to my point that the balance of TAN 8 was wrong. Too much emphasis was placed on wind. We need much greater exploitation of Wales's greatest assets: its rivers and tides. The Severn barrage was sensibly abandoned by the coalition Government. It was too costly, it would come into late and it would have destroyed a major SSSI, but there are good alternatives, and many of them.
Baroness Smith of Basildon: My Lords, your Lordships' House should thank the noble Lord, Lord Thomas of Gresford, for doing us a service by holding this debate in his name this evening. It has been a timely and stimulating debate with a great deal of interest in this House and beyond. It makes us understand the strongly held views on the issue. I shall take my lead from the noble Lords, Lord Teverson and Lord Howie of Troon, in addressing the general issues and lead from that into the specific ones.
I was interested in the exchange between the noble Lord, Lord Rowe-Beddoe, and the noble Baroness, Lady Randerson, about the Severn barrage. Whatever form of energy we suggest, there will be strongly held views on all sides of the argument, as we have heard this evening. However, we cannot underestimate the challenges that we face in seeking to improve the security of energy supply and to meet the Government's target to reduce carbon emissions. Today's report from the International Energy Agency has not been mentioned, although KPMG has. That report makes it clear that if no substantive action is taken to reduce reliance on fossil fuels and reduce carbon, we will have lost the opportunity to tackle climate change in the next five years-a sobering thought.
The UK is committed to increasing the amount of electricity generated from renewables, such as wind and solar, from 7 per cent to 30 per cent by 2020-although I have to say that, given the Government's appalling decision on the feed-in tariffs, it will be interesting to know how they can possibly reach those targets. The solar business has been virtually destroyed: 77 per cent of businesses that responded to a poll for BusinessGreen said that they will now scrap their plans to install solar PV; only 6 per cent said that they will carry on. I welcome the noble Baroness to the Dispatch Box tonight. Can she say anything about
how the Government intend to achieve the 30 per cent by 2020, and whether that commitment remains? That would be very helpful.
9 Nov 2011 : Column 323
In the light of that decision, there will be greater attention on wind power. I found the speech of the noble Lord, Lord Thomas of Gresford, speaking from the Liberal Democrat Benches, interesting, as the Liberal Democrats were even more ambitious than the Government at the time of the previous election, and made even greater commitments in their election manifesto to renewable energy, as the noble Lord, Lord Teverson, mentioned. That manifesto stated:
"Climate change is the greatest challenge facing this generation. Liberal Democrats are unwavering in our commitment: runaway climate change must be stopped ... We will set a target for 40 per cent of UK electricity to come from clean, non-carbon-emitting sources by 2020, rising to 100 per cent by 2050",
At that time, I understand that the party was not in favour of new nuclear, so the remaining 25 per cent would have to have included significant onshore wind. Despite that commitment to offshore wind, it is significantly more expensive in both installation and maintenance-as the noble Lord, Lord Teverson, said-and is probably not as efficient as onshore wind. As people worry about turning on the heating as it gets colder, every effort must be taken to protect the consumer from even higher bills. If renewables, including wind power, can play a part in energy security and in keeping those longer term costs down, we must act responsibly in the interests of the consumer. The noble Lord, Lord Thomas of Gresford, quoted KPMG's report; I was interested in the demolition of it made by the noble Lord, Lord Teverson, as I had read the same report. It is unfortunate that we do not have a full report from KPMG, so we cannot analyse the figures that it has put out. However, if we look at the options that the report seems to prefer, we can see that the costs that also have to be taken into account for new nuclear, as well as the capital bill-which would be less than for wind power-include not just the construction but the fuel, security and clean-up costs, which run into very large amounts.
The questions that we need to ask ourselves are: does onshore wind have a role to play? If so, is it cost-effective? If that is the case, how do we achieve it, and how can we minimise the concerns that have been raised and best address those issues of location and infrastructure that cause such concern? Compared with other European countries we are not maximising our potential, despite government commitments. The population of Denmark is 10 per cent of that of the UK, yet it has 84 per cent of the amount of onshore wind. Twenty per cent of Danish energy is supplied by wind, with electricity costs about 14 per cent lower than the UK, and in Germany they are about 7 per cent lower.
The greatest concerns we have heard on costs are the capital costs. It would be helpful to know whether the Government have made any assessment of how those costs could be reduced, using the European examples of economies of scale, for example, or of any plans to do some kind of assessment of how the capital costs-the initial costs-could be reduced.
I apologise for not giving the noble Baroness advance notice of that, but perhaps she could write to me at some point.
9 Nov 2011 : Column 324
The other issue on wind power is the consequential effect of job creation. A survey in Wales indicated that the average wage in the wind energy sector was around £44,000 a year. There is an opportunity for the Government here, and it was articulated just two weeks ago by 100 leading economists in their Plan B: A Good Economy for a Good Society, when they identified that a green new deal would create thousands of jobs, stimulating growth through investing in SMEs and new technologies and, in particular, nurturing the UK renewables sector. It is clear that there are benefits to be gained, but very important issues have been raised tonight about location and infrastructure. The noble Lords, Lord Thomas and Lord Williams of Elvel, both referred to the planning process, and I agree that there is a lack of clarity since the Localism Bill about transitional arrangements. That is an issue that would have benefited from discussion during proceedings on the Localism Bill in your Lordships' House.
The point that the noble Lord, Lord Thomas, makes, is a very important one. There is plenty of evidence that, although the public as a whole support wind farms and renewable energy in principle, in practice they also have very genuine concerns about where they are to be sited. It is wrong to dismiss those concerns when they are genuinely felt, but it would also be wrong to fail to proceed with the contribution that onshore wind can make if those fears can be addressed.
We have heard today about the very specific issues in Wales, and the concerns that decisions will be taken in London-in Westminster-rather than locally, where Ministers can hear local concerns and address problems themselves. There are issues, as we have heard, about the national grid, the infrastructure and pylons. I see the noble Baroness the Whip on her feet-I am winding up very quickly. In regard to the questions put by the noble Lords, Lord Thomas of Gresford and Lord Williams of Elvel, what discussions have the Government had with Welsh Ministers on the scale and routing of the national grid to TAN 8 areas? Along the lines that have been discussed by many noble Lords this evening, are the Government minded to devolve the consenting rights for larger projects to the Wales Government?
Baroness Garden of Frognal: My Lords, if you do not mind me interrupting, already the Minister has not got the 12 minutes she was allocated, so if we could allow her to reply it would be very helpful.
The introduction of wind farms is a significant matter and, like any significant matter that brings about change, it will always attract comment and some concern. On matters such as this, it is important that people have a chance to voice their opinions and that Ministers listen. I am certainly grateful for the opportunity to listen tonight and to respond to some of the points that have been raised.
With something of this significance, it is usual for people in their communities to want to understand what the overall objective is and what we are trying to achieve. People will want to know about and understand the process. They will want to know how decisions are made, what criteria determine those decisions, whether all issues that are of concern to them are being taken into account, and whether they can have a say. People also, quite rightly, want to know what the gains are from these decisions and whether they are gains from which they, too, can benefit.
Perhaps I should start by reminding your Lordships that the Government have three strategic aims in relation to energy and climate change: to secure the supply of energy-what we often talk about as keeping the lights on; to minimise costs to consumers; and to cut fossil fuel emissions so that we play our part in taking care of the planet for the sake of future generations. Renewable energy is vital to delivering our strategic aims and we are committed to it. Appropriately sited onshore wind needs to be part of our energy mix because it is one of the most cost-effective and established renewable technologies.
The noble Lord, Lord Howie of Troon, for whose expertise in and knowledge of all matters engineering I have great respect, talked about the intermittency of wind energy. Wind power is not in and of itself the answer-no one is suggesting that it is a solution-but it is an important part of the mix. Other noble Lords talked about other renewable technologies that are out there. The noble Lord, Lord Rowe-Beddoe, and my noble friend Lady Randerson mentioned the Severn barrage and asked what is happening with it. If a private company were to come forward with a new proposal for a Severn barrage, the Government would listen and would definitely want to hear what it had to say. However, it is worth my pointing out that even an option such as that would still require major grid reinforcements to connect it to the national grid.
Noble Lords also asked about other options. The noble Lord, Lord Rowe-Beddoe, asked what other renewables we are considering and mentioned biomass fuel. I take this opportunity to remind noble Lords that in July this year the Government published their renewables road map, which set out the various renewable technologies that would form part of their plan for hitting the target of 20 per cent of renewables by 2010. The noble Baroness mentioned a figure of 30 per cent but the target is actually 20 per cent. Biomass plays an important part in that. Indeed, it is one of the leading contributors.
Returning to wind power, my noble friend Lord Thomas of Gresford and other noble Lords mentioned the recent KPMG report and its criticisms of wind power. It is important that I point out, as did my noble friend Lord Teverson, that, in focusing exclusively on the upfront capital costs of technologies, the report
does not take into account the long-term benefits to consumers of energy sources that involve no ongoing fuel costs. Let us be clear: unlike other types of fuel, wind is free. The noble Baroness, Lady Smith of Basildon, asked how we can go about reducing the capital costs of wind farms. I shall have to explore that and will write to the noble Baroness.
9 Nov 2011 : Column 326
Affordability obviously figures in all our decisions. Nothing is more important to consumers today and that will continue into the future. That is why we are reshaping our renewable subsidies to get a better bang for the buck, targeting support where it is needed and driving costs down in the long run. For example, we are consulting on proposals to reduce the level of support to onshore wind by one-tenth in the renewables obligation banding review. I am talking about the subsidies to those who operate onshore wind farms. We are also consulting on the proposed introduction of new feed-in tariffs for solar panels based on the evidence of falling costs. Although some might question the reduction in subsidies, as the noble Baroness, Lady Smith of Basildon, did, let us not forget that the cost of all these subsidies is paid for by bill payers. These subsidies are not met from general taxation. Overall, the long-term national interest lies in cutting carbon and keeping the lights on in the most cost-effective way possible and substantial amounts of renewable energy will be needed to do that.
If that is the what and the why of what we are trying to do, let me now turn to how we decide, which has been an important topic of today's debate. Clearly I recognise, as do the Government, that proposed onshore wind developments in Wales and their associated energy infrastructure have raised a lot of interest and debate in recent months. Your Lordships will understand that I cannot comment on specific applications, but let me say something about the process. First, the Welsh Government's TAN 8 policy has designated specific areas in mid-Wales as strategic search areas, sometimes known as SSAs, as potential locations for major wind farms. The noble Lord, Lord Williams of Elvel, and my noble friend Lady Randerson questioned the validity of TAN 8, but that is a matter for the Welsh Assembly. It is not something for me to comment on. It is a devolved matter.
Local authorities in Wales are responsible for deciding planning applications within the devolved planning policy for smaller-less than 50 megawatt-farms. The Westminster Government are responsible for deciding on major energy infrastructure projects that affect Wales. Some may argue, as some of your Lordships have this evening, that it is not appropriate for UK Ministers to make decisions on major infrastructure applications in Wales, but UK Ministers are accountable to Welsh voters, as they are to English voters. We believe that it is appropriate for UK Ministers to take these decisions on major infrastructure of national importance and of relevance to the UK Government's wider strategic aims that I have already outlined.
I will not take up your Lordships' time by trying to describe the different processes and policies that are followed, because they are quite detailed, but the key thing for me to stress is that regardless of whether applications are dealt with nationally or locally,
communities must be and are being consulted on all proposed developments before decisions are reached. Crucially, all decisions are taken on a case-by-case basis so that local factors can be taken fully into account.
9 Nov 2011 : Column 327
Mid-Wales is a beautiful part of the United Kingdom. It is important that wind farms are sited correctly and wind energy developers are guided away from the most sensitive landscapes, such as national parks and areas of outstanding natural beauty. Moreover, protections are in place to ensure that detailed environmental assessments are made in the preparation of planning applications, including, most importantly-and I will stress this-an assessment of cumulative impact.
I know that it is not just the wind farms that are causing concern. My noble friend Lord Thomas of Gresford and others have asked about the supporting infrastructure. As there is no existing high-voltage network in this part of Wales, the necessary infrastructure to make these connections will have to be built. Connection options are currently being developed by National Grid and ScottishPower Energy Networks. The applications for these connections will be decided by the appropriate planning authorities. Many people feel very strongly about pylons and the impact they can have on the landscape. Effective consultation with local communities and other interested parties is therefore a vital part of the planning process and this is ongoing. An important point I would like to stress is that National Grid has also recently announced that it will put greater emphasis on mitigating the visual impact of its new electricity lines, while balancing this with the obvious need to minimise household energy bills. People in areas potentially affected can therefore be reassured that alternatives to overhead lines are being actively explored.
I wanted to talk about the economic benefits of wind farms to us as a nation and to local communities. My noble friend Lord Teverson has covered some of these already. I would like to can pick out a couple of points. The wind sector in Wales is creating high-value jobs. The average wage for those jobs is around £44,000 a year. The annual contribution to the Welsh economy is estimated at £158 million a year. We have consulted on a proposal for communities in England to retain the business rates generated by renewable energy developments. This matter would be devolved in Wales, but I would urge influential noble Lords with connections to the Welsh Assembly to highlight what is happening in England and the benefits that may be enjoyed in Wales if it was to follow that idea. A good example of a wind farm developer making sure that there are direct local benefits is the Cefn Croes Wind Farm Community Trust, funded by Cambrian Wind Energy.
Appropriately sited onshore wind farms make a vital contribution to our strategic aims. They are also important to our economic growth. This coalition Government support appropriately sited onshore wind. We will make decisions about where they are located with great care. We will make sure that communities can benefit directly from renewable energy developments in their area. I shall of course ensure that all the points made this evening are relayed accurately back to the department. I thank once more my noble friend for initiating this debate.