Wales to set up state-owned renewable energy company

The company, which is yet to have a name, will initially look at developing onshore wind farms on the country’s woodland estate, the Welsh Government confirmed on Tuesday.

It is expected to launch in April 2024 and will become the only government-run company of its kind in the UK.

The nation’s climate change minister Julie James said the “significant” profits generated by the business would be reinvested back into the community, with income also going towards making homes more energy efficient and creating clean energy jobs.

The plans to create a renewable energy development company were announced in the Welsh Parliament on Tuesday (Ben Birchall/PA)

During a statement in the Senedd, Ms James said: “This is a truly historic moment for Wales.

“If other countries are anything to go by then we should expect considerable returns from our investment and – as we share the ambitions of these other nations – we have a genuine opportunity to produce income that will really help us to deliver here.”

She added: “We are in a climate emergency and our approach is in stark contrast to the UK Government that is focusing on fracking and fossil fuels – opposed by most communities and incompatible with our international obligations.”

The minister called the current UK market “bad for bill payers” and said the ambition was to make energy cheaper for Welsh households.

Labour leader Sir Keir Starmer vowed last month to set up a publicly owned clean energy company within the party’s first year of government should it come to power.

The government in Cardiff Bay said it had been working on its idea to start a renewable energy business since early 2020.

It is estimated the first projects will begin two to three years after the company launches, with money expected to start rolling in towards the end of the decade.

Limited grid capacity outside the North and South Wales corridors will however constrain the type of projects the government is able to explore.

Wales’s grid capacity must be improved quickly to take advantage of its on and offshore wind potential, a Welsh Affairs Committee report said last week (Ben Birchall/PA)

A report released last week by the UK Government’s Welsh Affairs Committee called Westminster’s lack of action on improving grid connectivity a “significant threat to economic growth in Wales”.

Committee chairman Stephen Crabb MP said Wales had “huge potential” in the renewable energy market and called for grid improvements to be “sped up”.

At the moment many of the renewable energy projects in Wales, as in the rest of the UK, are developed by other state-owned companies.

Pen y Cymoedd, the largest wind farm in England and Wales which is capable of producing enough electricity yearly to power 15% of Welsh homes, was developed by Swedish-owned company Vattenfall.

Another project in South Wales called Y Bryn is being developed by a consortium of Electricity Supply Board (ESB) and Coriolis. ESB is 95% owned by the Irish government.

Other state developers active in Wales include China and Norway.