Planning and nimbyism present two of the biggest challenges to decarbonising the UK economy, according to Tom Glover the UK country chair of global power generation company RWE.
Addressing a meeting of Cardiff Business Club, Mr Glover said the German-headquartered company planned to invest £2bn — having already invested £3bn since 2010 — in projects in Wales.
However, he told the mainly business audience that decarbonisation shouldn’t be at the expense of running down manufacturing and shifting emissions offshore. UK-wide RWE plans to invest £15bn in low-carbon projects across the UK over the next eight years.
Its current projects in Wales include the Gwynt y Mor offshore windfarm in North Wales, which Mr Glover said has created well-paid and skilled job opportunities in deprived areas like Rhyl and Prestatyn as a result of its inward investment as a global offshore business.
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Mr Glover said: “For Gwynt y Mor we created 700 jobs during construction and maintain 100 highly skilled and paid jobs ongoing.”
He said the firm would also play a key role in helping to decarbonise the economy of South Wales. He added: “It’s not generally known how important South Wales is to the UK economy and the energy sector. If you take LNG (liquefied natural gas) at Milford Haven, it supplies 20% of the UK’s gas demand with some of the largest LNG terminals in Europe.
“This region has the second-highest CO2 emissions in the UK. People talk about Teesside, but it has fewer emissions than South Wales. However, what we need to focus on is not decarbonising through de-industrialising. A lot of what the UK has done is de-industrialise, with manufacturing now less than 20% of the UK economy. That is the easiest way to decarbonise by ‘shutting everything down,’ but you haven’t really decarbonised if you have offshored it to China, as they have terrible Co2 emissions.
“We need to do it through re-industrialisation, and we can do that because there are all sorts of opportunities like the Celtic Sea and huge potential for floating wind… and the UK and Welsh governments working together to get the supply chains into Wales.”
RWE has just secured a development consent order for another huge offshore wind farm project (Awel y Mor) in North Wales. Mr Glover said: “If we go into investment on that, it will be Wales’s largest infrastructure project for ten years and will provide power for around 500,000 homes. RWE has around 600 megawatts of development pipeline for onshore wind in Wales, which is a huge opportunity and around £2bn of investment that we want to deliver.
“We are also developing the Pembroke Net Zero Centre where our largest and most efficient power station in Europe is. We want to use that as our flagship decarbonisation hub by looking at carbon capture and storage, a clean housing project, solar, However, we can only do that with support from the government and are doing that via the South Wales Industrial Cluster, which RWE is a proud partner of and working with all industries across South Wales to ‘try this story’ so we all can decarbonise.”
Last week RWE and Dragon LNG, confirmed a new partnership to explore the potential for a multi-utility service transit (MUST) infrastructure project across the Milford Haven waterway.
Depending on the outcome of a feasibility study this could the result in the removal of all Co2 emissions from Dragon LNG’s regasification process by utilising residual process heat from the generators at RWE’s Pembroke Power Stations. Other potential projects also include the exporting of carbon from a carbon capture plant at the power station.
He said there is significant global investment ready to find an investment home in the UK for renewable projects, but that schemes faced two challenging hurdles in planning and nimbyism.
Offshore floating wind turbine (Image: FLOW) He added: “It normally takes us 10 years plus to get consent for an offshore wind farm, and yet we have a climate emergency and want to decarbonise and that is just not acceptable. To be honest we have Nimby politics. They (some politicians) all love net zero, but you try to put a solar farm in their constituencies and they are all against it because of a few voices. If you do any survey, 80% plus of people are in favour of solar, 15% don’t care, and around 5% are driving those politicians (nimbyism), which affects all of our futures.
“We have issues on the electricity network as there isn’t enough transition capacity, and some of that is nimbyism because they don’t want a pylon. That’s great, but if you don’t want a pylon near you, that means you are happy with ‘killing the world.’ We need to change our view and the narrative… if you adopt a pylon, you are saving the world.”
While he said the UK Government’s balance sheet was saddled with eye-watering debt levels, there is capital for investment in renewables globally.
Mr Glover, who has worked with RWE for 20 years, said: ‘When I, as the UK country chair of RWE, try to get capital to come to the UK, I am fighting against 19 other country chairs. If they can show a better investment environment to my boss, then they get the money. So, we have to show that the UK and Wales are great places to invest in order to get that money.”
He said while the UK has been a global leader in decarbonisation, it now needs to move into other sectors and not just energy, where RWE has pivoted away from coal production, although it still has a significant business in Germany.
He added: “We can be proud of what we have done and have reduced our emissions by half since 1999. However, emissions so far have been predominantly driven by the power sector, which decarbonised and seen a 70% reduction in emissions since 1990. But now we are really getting to the tough part of the power sectors like transport, heating, and industrial processes, which need to see similar progress and really move on.”
RWE’s UK boss said energy prices have been impacted by the war in Ukraine and global competition for gas post Covid, but that increasing domestic energy sources and getting more efficient use of energy consumption were important.
He added: “Energy is probably the most relevant issue in the world at the moment. Not only is energy the foundation of a modern-day economy, businesses can only be profitable if energy prices are sustainable, predictable, and hopefully cheap, which they aren’t at the moment.”
He said one of the UK’s major energy suppliers has more than 100,000 households that haven’t paid a bill for two years. He added: “Most people aren’t paying their energy bills, and this is a massive issue for our economy. The war in Ukraine has also driven energy prices up. We have got a price issue and a security issue, and probably the most important issue for our future generations is the climate change issue and the need to reduce emissions.
“This requires the energy sector to completely transition and basically change all our technologies, like how we decarbonise our power stations and our industries, which has risks and opportunities to it.
“These topics together have a high impact on our economy and all the businesses that we work in and on society, which is really struggling to pay its energy bills. And they are topics that need to be dealt with at pace as most people will not be able to afford this winter’s energy prices, so we are at an absolute crisis point in the energy sector.”
While recognising the impact high energy prices have, he said they actually drive energy efficiency. He explained: “If we sell energy too cheap, there is no incentive for energy efficiency, and actually the cheapest form of energy is the energy that you don’t use. As a sector we actually want you not to buy our product. We need to keep prices at a level so that you guys invest in your efficiency.
“Then we need to make it predictable so you know how to plan your businesses, and the way we do that is by having more domestic energy sources and less volatile gas. This is where renewable energy is good, so we are not exposed as much to international volatile gas prices.
“We need to make sure that subsidies and social tariffs are in place so that people can afford those high prices, and that is the key point. Yes, we need high prices to drive efficiencies, but we also need to socially make sure people can pay their bills or can afford them.”