Energy Island: Potential Opportunities and Economic Impacts - Executive Summary

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Energy Island: © Westinghouse Potential Opportunities and Economic Impacts

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Prepared - URS Corporation Ltd Anglesey Energy Island Programme Office Date - May 2010 Anglesey Business Centre Bryn Cefni Business Park Llangefni - Anglesey LL77 7XA

tel 01248 752431 / 2435 fax 01248 752192 e-mail: [email protected]

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Energy Island: Potential Opportunities and Economic Impacts - Executive Summary

EXECUTIVE SUMMARY

Energy Island: Vision and Objectives

Climate change and energy security present all areas with major challenges over the coming decades. On Anglesey significant job losses, deprivation and out migration mean there is a pressing need to consider a different approach to economic, social and environmental development.

The Energy Island vision is to create a world-renowned centre of excellence for the production, demonstration and servicing of low carbon energy. And the objectives are:

Production – Investing in new low carbon energy production to help secure a stable energy future for Wales;

Demonstration – Establishing world-class facilities to place Anglesey as a leading location for low carbon energy innovation and demonstration;

Servicing – Ensuring that local companies and people benefit and take advantage of opportunities from new energy investments.

Precedents from the UK and Europe provide strong evidence that this is an achievable and ambitious direction for the sustainable economic development of Anglesey.

Energy Island: Opportunities and Challenges

The recent downturn has adversely affected economies across Wales and the UK. Local circumstances have also eroded Anglesey’s economic and employment base. In this context the opportunities offered by low carbon energy development are of critical importance to the wider economic development and diversification of North WestWales and the regeneration of its local communities.

The local and global contexts present a complex series of opportunities and challenges for Energy Island. Most recently the National Energy policy statement - Low Carbon Revolution, has identified the goals and targets for low carbon activity in Wales.The key opportunities for Energy Island are:

Job creation/Supply chain development: The critical opportunity is the potential to deliver economic development and regeneration through the development of the low carbon economy.This means capturing jobs, engaging and linking individuals and communities to jobs through education and training and placing Wales as a leading location for energy research.

Skills and Knowledge: Energy Island is already addressing this issue with work by local and national partners including Coleg Menai through their Energy and Fabrication Centre and The National Skills Academy for Nuclear.The Low Carbon Research Institute and Bangor University are also key research and development assets. Energy Island Cover - Exec:Layout 1 14/6/10 14:15 Page 4

Energy Island: Potential Opportunities and Economic Impacts - Executive Summary

Energy Exporting: Wales has an ambition to become a major energy exporter, producing twice the level of energy demand by 2025. Energy Island can play a major role here through the development of offshore wind and nuclear power.

Tidal power: National policy supports low carbon demonstration including tidal resources. Here the Skerries marine current project can set the pace and tone for tidal energy.

Energy efficiency and micro-generation: ARBED, a strategic investment programme to improve energy performance, is a focus for activity in the short term, with strong support for energy efficiency measures and installation of micro-generation and community scale renewables.

Nuclear Power: Horizon Nuclear Power, the joint venture between E.ON UK and RWE npower, has recently confirmed that in 2012 they will be applying for planning consent for a new nuclear reactor at Wylfa.The new build represents a significant opportunity to realise new high quality jobs and presents opportunities for local companies to become part of the wider supply chain.

Offshore Wind: Recent investments in the offshore wind market provide good evidence of the potential for job creation across the UK. Clipper Wind Power, Mitsubishi, GE and other manufacturers have announced investments totalling approximately £350 million.The presence of Round 2 and 3 offshore development areas in close proximity to Anglesey offer significant potential for the Island to grow its supply chain in this context.

Exploiting assets: Anglesey has a range of supporting assets that can be utilised for Energy Island. These include development sites such as Parc Cybi and Anglesey Aluminium, alongside strategic infrastructure at RAFValley/Anglesey Airport and Holyhead Port.

Energy Island: The Programme

In order to realise the Energy Island there is a need to focus on a limited number of opportunities that can deliver the right mix of ambition, impact and profile.These can play a significant role in a more resilient, diverse and prosperous economic future for Anglesey and North WestWales.The key elements of the Energy Island Framework are:

Short term: Large and small scale biomass installations and supporting energy crops, energy efficiency measures, and micro generation. Initial discussion and negotiation to maximise opportunities from Offshore wind Irish Sea Round 3 Zone.

Medium to long term: New build at Wylfa up to 3.2 GW,implementation of tidal project at Skerries, offshore wind base at Holyhead Port and the replanting of existing onshore wind farms.

Long term:Tidal power expansion and development of the hydrogen economy. Energy Island Cover - Exec:Layout 1 14/6/10 14:15 Page 5

Energy Island: Potential Opportunities and Economic Impacts - Executive Summary

Energy Island has major potential to realise economic, social and environmental gains for Anglesey and the North WestWales economy.There is the potential to create a peak of 4500 construction jobs (2017) in Anglesey and North WestWales including jobs in the supply chain.The Framework could also deliver a further 2500 operational and maintenance jobs on the Island and wider sub-region by 2025.

These new jobs and associated income have the potential help to make a contribution of £2.34 billion to Anglesey and the sub-regional economy in the period to 2025. On average Energy Island investments add up to an additional 8.6% of Anglesey’s GVA per annum over the period 2010 to 2025.

Energy Island: Recommendations

The evidence shows that the potential of Energy Island is significant and represents the best opportunity for Anglesey to diversify and strengthen its economy:

Production Nuclear new build represents the central opportunity within Energy Island with significant benefits in employment and GVA terms for both Anglesey and the wider sub-region. Continued close working with Horizon,Areva and Westinghouse is required to maximise the local benefits and supply chain opportunities.

Re-training and skilling the potential workforce for the new build and wider energy market should be supported to maximise the benefits for the local area in the immediate and longer-term future.

Consultation with local communities will also be critical to the ongoing success of the new build and wider Energy Island proposals.This work needs to demonstrate the benefits of the programme to local people.

Development of Holyhead Port. Whilst there is potential here there are also constraints that need to be addressed. Ongoing discussion with Centrica,Welsh Assembly Government, Stena, the Port Authority and potential investors are critical to understanding the scale and nature of the opportunity and the steps that need to be taken to realise this.

Enhancing energy infrastructure: National and local ambitions to export energy requires significant investment in the existing transmission network. Discussion and clarity over the planning and delivery of new and improved connections should be continued. Energy Island Cover - Exec:Layout 1 14/6/10 14:15 Page 6

Energy Island: Potential Opportunities and Economic Impacts - Executive Summary

Demonstration

Demonstration projects offer the opportunity to put Energy Island “on the map” as a premier location for energy research and development.

Tidal energy: Pursuing tidal energy would give Anglesey an early mover advantage and help create the profile needed to help attract investment in research, development and manufacturing.The Skerries marine current project is an excellent opportunity to develop a distinctive element of the framework.

Nuclear decommissioning at Wylfa A and nuclear skills training through NSAN also offers potential to showcase the safe decommissioning of the current reactor and offer hands on training to help access new jobs created in the new nuclear build.

Smart Grids in rural and urban areas are of increasing interest to Government and the private sector and again offers a first/early mover advantage if the opportunity can be progressed.

Servicing

There will be significant levels of investment over the next fifteen years. It is essential that these opportunities are used to grow, attract and retain businesses and jobs.

Consultation and supply chain events - Further work to engage and maintain these relationships with local Small Medium Enterprises should be undertaken with Horizon, local business development agencies and the public sector.

Land and premises - Providing sufficient and suitable development sites and premises for companies to relocate to will be an important factor in realising the supply chain ambitions of Energy Island.

Skills development and associated training is one of the key areas where the public sector can play a major role. Investment in relevant training for the nuclear and wider energy and construction sectors is already being rolled out.