14:01 Stephen Kinnock (Labour)

The Government’s short-sightedness is undermining other forms of renewable energy, such as wind and solar. These are burgeoning industries in my constituency, with hundreds of jobs at stake, but they are under threat because of the Government’s moves to cut price stabilisation mechanisms, such as the feed-in tariffs. The Government have been on a policy descent from “Hug a huskie” to, in the words of the Prime Minister, “Let’s cut the green crap”.

I agree absolutely. The Energy and Climate Change Committee has just produced a compelling report that clearly demonstrates that we are losing investment and jobs precisely because of the mixed messages and signals that this Government send to investors. Business abhors a vacuum. Business needs stability. It needs to know whether there will be a return on its investments, and at present it sees no evidence whatever of that in the United Kingdom.

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15:19 Paul Flynn (Newport West) (Lab)

As for finances, if we look on the other side at tidal power and at the source of the energy, we find that it is free, British and of immense power, whereas the source of energy for Hinkley Point is an imported form of fuel that will leave a legacy for all time. The source of the power on the tide is entirely predictable—unlike most other forms of renewable energy such as solar. We can predict precisely how the tide is going to come in and make the energy entirely demand responsive by linking whatever it is—lagoons, barrages or whatever—to electric storage schemes that allow us to pump water up to the heads of the valleys when electricity is required and save the energy when it is not. That is how the Dinorwig power station has provided a vital element in our electricity supply for many years.

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16:21 Carolyn Harris (Labour)

Wales and my constituency of Swansea East will be the big winners from the launch of a UK tidal lagoon, but the whole country will share the success of this globally ground-breaking innovation. I look forward eagerly to the quick formation of a committee and a chair—a committee that, one naturally assumes, will have Welsh representation among its members. I look forward to seeing the details of how the review will operate, who will be involved and when it will report. I will follow those developments closely, as I know many people here and in the other place will. We also eagerly await updates from the Department of Energy and Climate Change regarding the progression of negotiations on the Swansea bay tidal lagoon.

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16:27 Jonathan Edwards (Carmarthen East and Dinefwr) (PC)

I want to turn my attention to one economic project in Wales about which I have not had the opportunity to comment in any great detail to date—the Swansea bay tidal lagoon. Despite Wales being one of the most advantageous locations in Europe for renewable energy, just 10.1% of our electricity is generated from renewable sources. That compares with 32% in Scotland and 14.9% for the UK as a whole. Despite Wales being home to the second highest tidal range in the world, and 1,200 km of coastline, we are lagging behind on tidal technology. I understand concerns about the proposed financing model. Proponents of the contract for difference strike price model argue that the Swansea lagoon is nowhere near as big as the planned Cardiff and Colwyn bay lagoons, and that therefore the strike price on a per megawatt basis seems high. However, it must be considered as a long-term investment that will eventually deliver multiple lagoons across the UK.

Funding green energy through a CFD effectively passes the cost of upfront investment on to the consumer, who inevitably will see their bills go up. If I were in the shoes of the Secretary of State, I would make the case that the Treasury should invest in the project by bringing it on to the books directly, as happens for transport infrastructure such as HS2 in England. Raising money on the bond markets has never been cheaper, with 50-year bonds at a negative rate and 10-year bonds at less than 1.5%. Those rates are available only to the Government and not the private sector. Using an old-school financing method—direct public investment—as opposed to an ultimately far more costly financing scheme such as CFD, will be far cheaper in the end for the public, and the UK Government should be honest with the people of Wales about that.

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