Calls for local ownership of renewable energy profits in Wales

The Senedd debated a proposal for a bill to require profits from renewable energy developments to be kept in Wales.

Adam Price outlined proposals for a community energy benefits bill to make local ownership a mandatory element in every energy generation development.

He warned of the risk of history repeating itself, saying Wales bore much of the human cost of the extractive economy but did not derive the full economic benefits.

Mr Price said: “The profit was extracted from Wales for others’ benefit.

“Unfortunately, I think we are seeing the same model, the same pattern now reproducing itself in terms of Wales’ natural resources for the 21st century, in terms of renewable energy.”

‘Mega scale’

The former Plaid Cymru leader said a tendency towards “mega-scale” developments is being driven by profit motives which should not be at the forefront of decision making.

Mr Price said local ownership has been a part of Welsh Government policy since 2020.

But he warned: “It’s not mandatory and therefore it’s ignored, which is why we have so many developments that have no substantive element of local ownership.”

He praised Denmark “which has been so successful in rooting its decarbonisation in local ownership” since introducing a 20% local ownership requirement in 2009.

Mr Price said the Institute of Welsh Affairs has been calling for a minimum threshold of 15%.

‘Exploitation’

Labour’s Carolyn Thomas supported the principle of the proposal, saying profits from renewable energy should go towards lowering people’s energy bills.

Ms Thomas, who represents North Wales, agreed brownfield sites should be utilised first and developers should be forced to install renewable technology in new buildings.

Delyth Jewell, Plaid Cymru’s shadow climate change secretary, told the chamber Wales’ history can be seen through scars on the landscape.

She said: “In areas like the valleys, there’s a history of corporations deriving a profit at the expense of local residents. That is the context – a history of exploitation.

“We must ensure history doesn’t repeat itself.

“We have an opportunity here to invest in our communities, to empower local people, to develop alternative methods of generating energy and to ensure that our landscapes are never again sites for the extraction of profit and exploitation.”

‘Drop in the ocean’

Samuel Kurtz, the Conservatives’ shadow economy secretary, called for a definition of “community benefit” as he raised examples of companies sponsoring football team kits.

He asked: “It’s very good in that immediate sense but what’s the long-term benefit for a community? If you’re not linked with that football club, you don’t see that.”

Mr Kurtz said communities should also benefit from connecting infrastructure, such as the cabling snaking through his Carmarthen West and South Pembrokeshire constituency.

Drawing the debate on June 26, Luke Fletcher described developers’ current community pots as a “drop in the ocean” compared with the profits being extracted.

Plaid Cymru’s shadow economy secretary said profits should be invested in projects such as retrofitting housing, improving transport links and establishing a sovereign wealth fund.

‘Chicken feed’

Labour backbencher Lee Waters said Wales deserves more than “chicken feed” as he stressed the importance of learning the lessons of the “harmful” extractive model.

He said: “Our renewable and natural assets are amongst our greatest strengths as we look to regenerate our economy and it’s critical that we get our ducks in a row.”

The former deputy minister for climate change, who led a green energy deep dive in 2021, cautioned that the practical reality of the proposal is incredibly complex.

He said: “The way that foreign-owned investment is swooping in is a real challenge for us…. In a sense, a bill is not really what’s needed in response to this.

“It’s not that we lack the powers – it’s that we lack the capacity and the wherewithal and the finance to be able to properly move at the scale needed to capture these opportunities.”

‘Unintended consequences’

Jeremy Miles, who is responsible for energy policy, agreed that Wales must benefit from the essential transition to renewables.

The economy secretary said the Welsh Government has made strides towards a target of at least 1.5GW of locally owned renewable energy capacity by 2035.

Pouring cold water on the proposal for legislation, Mr Miles said the renewable energy sector is fast-growing and policies must be flexible.

He told the Senedd: “Community ownership is at the heart of our renewable energy policy and is a crucial element of our general plan to benefit from green energy investments.

“I think that legislation such as this can be too heavy a tool and there’s a risk in restricting the investment that is required by our communities and our environment.”

While Senedd members backed the motion 23-0, with 25 abstaining, the proposal is unlikely to proceed without the Welsh Government’s support.

By Chris Haines, ICNN Senedd reporter