It is well recognised that securing grid capacity is a major barrier to successfully deploying renewables in Wales. A 2022 report from the House of Commons Welsh Affairs Committee exploring grid capacity in Wales stated that:

They highlighted the risk of grid constraints impacting Wales’ ability to meet its decarbonisation targets, stating that grid infrastructure must be able to cope with the projected increase in demand for electricity, and even posited that:

The Welsh Government has recognised this challenge in its Future Energy Grids for Wales project, which aims to achieve a long-term approach and joint view, across all grid operators and other stakeholders, of the likely future energy needs across Wales to 2050. The project will decide on the steps to evolve networks to support Wales’ Net Zero Carbon ambition and the work needed to achieve this, drawing on the perspectives of a wide range of people across Wales.

At a national level, the Welsh Government has confirmed a commitment to renewable deployment and has striven to create a positive planning environment, with the publication of a key policy document in 2021 – the Future Wales National Development Framework, which reiterated strong support for onshore wind and identified a series of ‘Pre-Assessed Areas for Wind Energy’. Within these areas, which cover almost 281,000 hectares, there is now a presumption in favour of large scale energy developments, subject to meeting additional policy requirements around a number of areas, such as ecological and heritage sites and sustainable construction.

Furthermore, in July 2022 the First Minister announced the introduction of a Bill on Infrastructure Consenting, which is intended to replace existing statutory regimes for the consenting of Welsh infrastructure projects, and reduce the number of authorisations required to consent to a project. This suggests that the Welsh Government is keen to simplify the process for developing major infrastructure projects.

However, the Renewable Energy Planning Database (REPD)[4] which tracks the progress of UK renewable electricity projects over 150 kW through the planning system, shows that over 680 MW of renewable energy projects have been abandoned in Wales since 2001, and a further 2,400 MW are awaiting a planning decision (as of October 2022) – the majority of which is represented by 40 projects which have submitted applications in the past three years. While it is difficult to identify the main cause of projects being abandoned, the volume of projects awaiting a planning decision highlights how lengthy the planning process can be.

The ending of financial support mechanisms during the latter part of the 2010s has been a key factor in slowing deployment of many types of renewables which, when combined with rising installation costs in recent years, means that developing viable subsidy-free business cases for projects has been challenging. This has been further compounded in recent months by the current energy crisis, driving up inflation and further increasing the costs associated with construction.

The Contracts for Difference (CfD) scheme is a well-established support mechanism for developing renewable projects. However, due to capacity limits imposed in the allocation rounds, only a fraction of renewable projects being developed are able to secure a CfD.

As we discuss in our response to BEIS’  Review of Electricity Market Arrangements (REMA) consultation[5], Regen has long supported the extension of the CfD scheme for variable renewable generation, calling for a much clearer long term strategy for renewable energy deployment and supporting the move to annual allocation rounds. This would send a positive signal to investors, allow developers to build their project portfolios, utilities to invest in grid infrastructure and supply chain companies to build the jobs, skills and capabilities needed to efficiently deliver net zero.