Why does Wales export its assets and resources, or allow them to be spirited away, when even minor innovations would see us benefit instead?

by Michael Murphy, Director of YesCymru

A number of offshore wind farms have been installed off the north coast of Wales in recent years. Two more wind farms currently under development there will increase power generation from its current 700 megawatts (MW) by an additional 2000MW. Further floating wind farms are in the early stages of development off the southwest coast of Wales, which could provide another 2000MW of power.

But even before these new wind farms are launched, Wales already generates 50% more electricity than it needs. This is exported with little if any benefit accruing to Wales itself. Welsh consumers already pay some of the highest standing charges for energy in the UK, while profits and taxation are recorded elsewhere.

A unique opportunity

One of the biggest failings of the Welsh economy is the lack of value-adding industry, and the development of these wind farms seems set to continue this trend. They will provide some – mostly low-paid – support jobs, but most of the equipment and specialist services will be imported.

It doesn’t have to be this way. We have a once-in-a-lifetime opportunity to capitalise on these developments, but we need to move quickly.

The wind turbines themselves are complex pieces of equipment. We cannot realistically expect the German and Chinese suppliers to establish manufacturing facilities in Wales. But the tower legs are much simpler – basically large steel tubes. These are made up of four or five 20m sections bolted together, each being 3m to 4m in diameter, and up to 50mm in wall thickness.

The turbine suppliers don’t manufacture these themselves, but subcontract them to other suppliers and ship them separately for assembly at the installation location. There is no reason why these tower sections cannot be fabricated in Wales, with an ideal location being Port Talbot.

The Welsh Government should approach Tata Steel to develop tower fabrication facilities as part of the transition from primary steel-making at Port Talbot. Most of the required production facilities, quayside, and support services are already in place, as well as a skilled local workforce. The towers can be supplied from the port directly to their installation site in the Celtic Sea, drastically reducing supply chain logistics and transportation costs, and providing well-paid jobs.

Made in Wales

The floating structures could also be built in Wales. These are similar to oil and gas platform support structures but are far less complex. They would require a much larger fabrication and assembly yard (and workforce) than the tower sections. But the end of primary steel-making in Port Talbot will release large areas of quayside currently used for coal and iron ore storage.

Again, most of the required production and support facilities are already in place. We just need the vision and will to make it happen.

While the immediate target should be to support offshore wind farms being developed in the Celtic Sea, we can also compete for wind farm work further afield. And while the current focus should be on wind power, the next big development will be tidal power – whether a Severn barrage or tidal lagoons. This will have different requirements, probably including the construction of large precast concrete caissons. We must ensure that as much of this work as possible is supplied from Wales, by insisting that planning conditions include a ‘local content plan’.

All these proposals would benefit the Welsh economy, but are not particularly ambitious goals. We also need to think about what we could do with our surplus power, aside from exporting it. We need to identify energy-intensive industries that can harness our power at source, thereby reducing costs due to transmission losses.

We saw a good example of this with Anglesey Aluminium, which used up to 25% of the output of the nearby Wylfa nuclear power station. (Both are now closed). There is a cluster of advanced optical companies around St Asaph where, at one time, Pilkington smelted its own glass and refractory materials. Such companies, could be encouraged to restart production there, given an abundance of cheap electricity.

Wind farms for Wales

Other energy-intensive industries include fertiliser production, paper milling, and ceramics. All could be encouraged to locate or expand in already-industrialised parts of the Welsh coast.

Our wind power and tidal power can also be used as the primary power source in the manufacture of green hydrogen, with our abundant water supply being the other raw material. Building a green hydrogen plant at our energy cluster in Milford Haven – which can export hydrogen to Europe in the form of liquid ammonia – could also provide feedstock for new green industries such as fuel cells.

This is, or should be, the purpose of ‘freeports’. Not to create a deregulation free-for-all but to encourage manufacture-for-export that is sustainable whenever possible. And where any added value stays in Wales.

While our natural resources are valuable, we must not repeat history by extracting them for the benefit of others (you know who I mean). We must maximise their value for our own benefit by ensuring they provide sustainable, value-added in-country development.

We have the opportunity to create a new industrial revolution. To create Wales 2.0. 

But we must act now – and keep the dead hand of Westminster as far away as possible.