How Wales can be a leading clean energy transition hub and a cornerstone of the UK industrial base
The current impact of Wales’ manufacturing and power sector
In October last year, the UK Government launched its green paper titled: “Invest 2035, the UK’s Modern Industrial Strategy”. The paper sets out its plan to deliver the certainty and stability that businesses need to invest in the UK and deliver the UK Government’s growth ambitions.
The manufacturing and energy sectors in Wales contribute to ~20% of the nation’s gross value added (GVA), which is well above the UK average. There is, therefore, a clear need for Wales to define its role within this UK Industrial Strategy — which will formally launch alongside the Comprehensive Spending Review, later this spring.
Beyond its economic impact, Welsh manufacturing and its power sector contributes up to 50% of the nation’s carbon footprint and up to 20% of the UK total emissions for these sectors. Wales has set ambitious targets for achieving net zero, but ambition alone is not enough.
How can Wales reach net zero?
To reach net zero, we need to be much more confident in making our case for investment. This is not about asking for special treatment — it is about ensuring that Wales gets the funding it needs and deserves, to drive transformational change.
The Well-being of Future Generations Act gives us a clear framework for what we want to achieve. It provides our north star — guiding decisions on investment and Wales’ place within the UK Industrial Strategy.
Too often, we look back and seek to prevent our past mistakes, rather than focusing on what we want our communities to have so they can thrive — both now and in the future. Instead, we can use the Act to set out a clear vision for Wales — a vision that articulates what we want to achieve, how we will get there and the role Wales will play, in the wider UK Industrial Strategy.
How is NZIW supporting the UK’s industrial strategy?
Net Zero Industry Wales (NZIW) has co-created, with input from the private and public sector, a clear role for the manufacturing and energy sector in Wales within the UK industrial strategy, which is:
“Be a leading clean energy transition hub and a cornerstone of the UK industrial base”
The role and associated delivery strategy is based on the SWIC and NEWID cluster plans, which are supplemented by the projects that are developed within Wales’ renewables sector. There are three strategic goals:
- Generate an abundant source of local, low carbon energy that in the long term predominantly uses Wales’ abundant natural resources, supplemented by energy that has been produced using fossil fuels (abated, were possible). There is clear & important role for fossil fuels during and after the transition to net zero
- Build the infrastructure needed to transport & distribute the low carbon energy produced, to connect the energy generators with the energy consumers in Wales
- Retain and grow Welsh industry by supporting their investment in decarbonisation technologies — allowing industry to transition to net zero, benefit from the low carbon energy that is produced in Wales and gain global competitiveness
These goals are closely aligned with those set out in the Well-being of Future Generations Act 2015 — in particular, “a prosperous Wales”, “a resilient Wales”, “a Wales of cohesive communities” and “a globally responsible Wales”.
There needs to be a recognition that to achieve these ambitious goals will require new ways of thinking, working and collaborating. In other words, all stakeholders have a role to play in contributing to this vision for Wales and this strategy provides the catalyst and framework on which we can build.
I strongly believe that a solid and detailed strategic plan has been shaped to deliver the outlined goals that not only halts the further de-industrialisation of Wales, but attracts the inward investment needed for the economy to grow, sustainably.
More about this strategic plan
This cluster plan outlines 13 strategies and over 20 ‘anchor projects’ that have a relatively high but varying level of maturity. These can reach financial investment decision within the next three years and make a significant positive economic and social impact within the next five-to-ten years, if not sooner.
The investment value of the projects exceeds £40 billion (2025-2035) and NZIW is currently in the process of fully assessing the economic impact of this investment. The results of the assessment will be presented at EmpowerCymru on Monday 10th March 2025.
However, to unlock this investment, three urgent interventions have been identified. These are:
- Non-Pipeline-Transport of CO2 (shipping) – kickstart the industrial decarbonisation of South Wales by allowing non-pipeline connected Carbon Capture & Storage projects to bid for CO2 business model support. Non-pipeline connected are currently explicitly excluded
- Floating Offshore Wind (FLOW) – Anchoring the “once in a lifetime” economic growth opportunity to Wales by granting Contracts for Difference (CfD) support for Test & Demonstrator projects and make the use of a UK port — a requirement to access future CfD support for FLOW projects
- North to South Wales electricity transmission interconnector (PSNC) — unlock the significant onshore wind pipeline and additional 12 GW of FLOW capacity by accelerating the development of the PSNC project and commence construction of the interconnector within the current price review period (RIIO-T3)
Wales needs to be more assertive in securing UK Government support on these identified interventions. Currently, we are not getting our fair share of funding that is made available by UK treasury, to support the transition to Net Zero in Wales.
Wales has a higher per capita carbon footprint and higher levels of deprivation than other parts of the UK, meaning we need greater than per capita support to transition successfully and do it in a way that promotes a just transition.
Wales is a small, well-connected nation and with that comes real strength and opportunity — but also challenge. The latter should not hold us back!
We have an opportunity to be bolder, more confident, more vocal, and more determined in securing the private and public sector investment we need to realise our ambitions.
Let’s put our case forward with more energy and assertiveness, using a “Team Wales” approach to generate an impact that is more than the sum of its parts.
Now is the time to push hard, be more ambitious and ensure that Wales leads the way in delivering the UK Government’s growth mission — making best use of the devolved powers that Wales has, to bring us a step closer to achieving the nation’s well-being goals.
Ben Burggraaf is CEO of Net Zero Industry Wales.