Cardiff Capital Region and Welsh Government Collaborate to Create Pioneering Energy Vision and Strategy

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A pioneering collaboration between Cardiff Capital Region (CCR) and the Welsh Government is about to transform the way energy is generated, transported and utilised in South East Wales – making the step-change that’s essential to meet the UK net zero carbon targets by 2050. 

The Welsh Government Energy Service (WGES) is working with each region across Wales – and this partnership has created the CCR Energy Vision & Strategy, bringing together the knowledge and insights of over a hundred stakeholders across the region. This is the first of the 4 regional outputs to be approved by the respective Regional Cabinets and puts the CCR firmly on a pathway to achieve net zero carbon by 2050.

The Vision and Strategy

Kellie Beirne, Director of the Cardiff Capital Region City Deal, sees this transformation as a major part of enhancing health and wellbeing in communities across the region, as well as supporting a just transition to a clean growth economy and protecting the environment for future generations:

“The options and choices put in front of us have been stark and there are no neutral decisions. There’s a consensus across the region that these decisions need to be made now; and our initial delivery plan, due in the Spring,  will present the emergent Energy Strategy, including how we align the regional approach to the local strategies of the ten Councils and co-ordinate implementation of the plan.”

The plan will scope the first ‘Energy Mission’ for the region, recognising the interlinked characteristics of climate crisis, historic low growth and productivity in the region – and the post COVID-19 recovery. It will inform both City Deal and City Region opportunities and wider funding streams as the region evolves to a Corporate Joint Committee model, embedding a core set of energy ‘asks and offers’ within a levelling-up investment prospectus that showcases the potential for transformative programmes of activity.

Huw David, Regional Cabinet Board Member with portfolio responsibility for the environment, air quality and sustainable transport, highlighted the requirement to amplify the emphasis on decarbonisation as integral to “Building Back Better” – and the need to agree the strategy and implementation plan for the new financial year:

“Many scientists believe that the next 15 years will be the most consequential period in the history of humanity, demanding from us our best endeavours in dealing with a global pandemic – and a climate and extinction emergency. As a result of COVID-19 and the huge scarring effects on global and local economies alike, all of this will play out against the backdrop of what some experts are calling ‘a systemic economic crisis’. Against this context, we have the opportunity to build upon the region’s unique natural energy generating assets – and use the strength of our existing manufacturing base as a springboard for a transition to a hydrogen economy, with the creation of multiple Clean Growth hubs.”

The UK Government’s recent ‘10 Point Plan for a Green Industrial Revolution’ provides further perspective to this major new Energy policy development, offering CCR the opportunity to align with an increased R&D and infrastructure spending – and working in the spirit of CCR’s declared intent to create the conditions for transitioning to a carbon neutral economy and society in the CCR, using low carbon energy as an enabler of economic regeneration, to grow ‘clean’ regional income that protects the environment.

Potential to create 47,330 jobs and a £7.2bn uplift in Gross Value Add

 Analysis (BEIS sub-regional data 2019) shows that the energy use is 33 terawatt hours v each year across heat, electricity, transport and fuel. To put that in perspective, Mid Wales uses 5 terawatt hours. That demonstrates the hive of industrial and consumer activity across our region. Currently, only one sixth of this comes from renewable sources, predominantly electricity. So the challenge of decarbonising the remaining five sixths is significant. To achieve the energy system transformation, Welsh Government techno-economic analysis shows that the investment needed between now and 2035 totals £8.6bn, with investments required from a range of stakeholders. That investment however, would create 47,330 (mostly net) jobs and a £7.2bn uplift in GVA

Creating an Actionable Plan

To meet the targets, CCR needs a 55% reduction in emissions from its energy system by 2035 – achievable by a 51% decrease in domestic heat and power, a 54% reduction in commercial and industrial sectors and a 60% reduction in road transport emissions.

An actionable plan is being evolved to meet these targets, with key potential pillars already in place, including:

Levelling-Up: The CCR Levelling-up Prospectus contains proposals  predicted to generate a GVA of £12bn and 12,414 jobs, centered around objectives that include domestic and commercial retrofit, hydrogen demonstration and harnessing tidal power.

Energy Mission: A proven and innovative way of structuring public investments, responding directly to problems posed by focusing on societal factors such as behavioural-change. CCR’s Local Wealth Building Challenge Fund is a strong example of such a challenge-driven approach; providing a successful template for developing an Energy Mission to address a myriad of energy challenges.

Innovation: New energy technologies are emerging at a rapid pace in the transition towards a low carbon economy and there are promising opportunities for these transitions to bring benefits for communities across CCR. Through the Smart Living Initiative, the Welsh Government support Demonstrator ‘place-based and needs-led’ projects across Wales seeking to position Cardiff as a ‘catalyst of change’ in particular towards low carbon transportation.

Building Back Better: Already one of the key ‘5 for 5’ priority areas for CCR, ‘Build Back Better’ places an emphasis on embedding energy imperatives into economic objectives, to develop specific projects and programmes; and move the mental model towards maximising wellbeing through societal and economic impacts.

Evolution towards a CJC: The move towards an environment broader and more diverse than the City Deal would see a pioneering regional economic governance with the CCR Cabinet as a Corporate Joint Committee. This naturally opens up opportunities for regional public investment on a wider scale – for R&D, infrastructure, the new Shared Prosperity Fund, the £12bn Green Industrial Revolution Fund and a revised Industrial Strategy.

Transport Strategy: Metro Plus and other local transport work all contain an element of carbon reduction. The LEV Taxi Strategy, £1.3m ULEV procurement and regional electric bus feasibility study are also underway, with capacity to align with combined core energy development.

Engagement: Beyond the extensive engagement already undertaken, a wide-ranging engagement strategy will continue, focusing on developing data-based evidence that the CCR Vision produces greater GVA and net jobs than a BAU scenario.

Further information on our strategic intent and emerging delivery plans will be shared over the coming weeks and months.