Energising the Case for Independence

Another one of the clichéd arguments against Welsh independence which gets trotted out from time to time is that “Wales can’t afford to be independent because it doesn’t have its own resources – unlike Scotland it doesn’t have oil, and the coal’s all gone”.

Of course there’s a big assumption lying behind that statement – namely that natural resources are what makes a country wealthy. On the face of it this seems so obvious as to be beyond question, but it doesn’t take much thought, or much looking around the rest of the world, to see that it’s really not true.

In fact there’s surprisingly little correlation between a country’s natural resources and its average wealth, and resource-rich countries with high incomes and healthy economies – such as Norway – are very much the exception rather than the rule. The country with the most oil in the world, after all, is Jeremy Corbyn’s pin-up – Venezuela – currently experiencing 1,000,000% inflation and complete economic collapse. Other oil-rich states like Nigeria, Libya and Angola are not exactly beacons of growth and prosperity. Not for nothing has oil been described as “the devil’s excrement“, and economists talk of “the resource curse” and “Dutch disease” (named for the damage experienced by the Dutch economy after the discovery of the Groningen natural gas field in the 1950s). Countries with comparatively few natural resources, such as Chile (by far the richest country in South America), Finland, Israel and Singapore consistently power ahead. Between 1960 and 1990, countries classified as ‘resource poor’ grew on average over twice as fast as those classified ‘resource rich’.

Pieces of Eight – not, in fact, the path to long-term prosperity.

The reason is that wealth from natural resources tends to distort an economy by sucking resources away from more labour-intensive sectors such as manufacturing and services – which employ people, develop their skills and increase their incomes. This can happen directly, simply by pulling all the country’s investment capacity into that sector at the expense of others (as is  typically the case in Arab countries and in the developing world); or indirectly, by inflating the value of the country’s currency and so making imports cheaper than home-manufactured goods – and making exports prohibitively expensive – as was the case with the UK economy during the North Sea Oil boom of the 1980s.

In fact, any type of economic windfall can damage a country’s economy if not managed well – Spain lagged behind the rest of Europe for centuries as an after-effect of being inundated by South American gold in the 17th Century, and the depression in the Welsh coal industry of the 1920s and 30s was primarily caused by the glut of cheap German coal brought in by Lloyd George as reparations after the First World War.  Norway has avoided this fate by putting most of its oil revenue straight into the world’s largest Sovereign Wealth Fund, making sure that it can’t circulate in the economy.

So our relative absence of natural resources is no obstacle; on the contrary, it’s almost something to be celebrated, so long as we pay proper attention to the rest of the economy and invest in the most important resource of all, namely people.

Keeping the lights on

Even so, whether from coal, oil or any other source, a modern economy needs energy to prosper and the UK as a whole, let alone Wales, is in danger of running out. In this week’s Spectator, Martin Vander Weyer draws attention to the fact that the cancellation of Wylfa B, compounded with the Westminster government’s refusal to fund the Swansea Bay Tidal Lagoon project and the cancellation also of another nuclear station, Moorside in Cumbria (which was to have been built by another Japanese contractor, Toshiba), leaves a big hole in the UK’s power-generation capacity and threatens ‘brown outs’ if action isn’t taken quickly.

It’s complete fantasy  to suggest, as some do, that this gap can be filled by wind power. All over the countryside. monstrous highly-subsidised turbines are blighting the landscape, liberating tonnes of CO2 into the atmosphere as ancient peat bogs are torn into, disrupting communities and generating very little electricity. Solar energy is a little less damaging, but still not the answer on a cloudy day.

Yet Wales is placed very strongly for two very promising sources of reliable next-generation electricity.

Wales’s energy future could lie under water in more ways than one.

One is small-scale nuclear, with Trawsfynydd being tipped as a center for R&D in this area (according to the BBC, the UK government has allocated £40 million to this, though details are scarce) . Small nuclear generators have been used in submarines for decades, safely despite being in close proximity to large numbers of people. This seems a much more sensible area in which to direct Wales’s nuclear expertise  – which is still significant – rather than on huge projects like Wylfa B where the economics are very uncertain.

Another is tidal. Quietly and without much fanfare, Wales is building up a significant tidal energy sector both in Pembrokeshire and in Anglesey, co-ordinated by Marine Energy Wales and growing steadily. At present, too much of this consists of pilot installations of systems developed in Scotland or Sweden, but the opportunity is there if we raise our game. There’s still a lot of development work to be done because the technology is difficult, requiring significant heavy-engineering expertise (just look at the size of that tidal turbine in the picture above, and compare it to a wind turbine!). Yet Pembrokeshire in particular is already well supplied with this, through its recent experience in the oil and gas industries. And the prize is great: steady, dependable renewable energy, not subject to the vagaries of the sun and the wind, available most abundantly in the parts of Wales which are currently among its poorest and least developed.

There’s a lot to play for, but for the UK government this is simply too far down its list of priorities. We need a strong, independent Welsh government which can support developments like these with the priority they deserve. It won’t make Wales into Norway overnight, but it will keep the lights on and bring prosperity into some of Wales’s forgotten areas. They key to it will be in developing the know-how ourselves, not just buying it in from elsewhere.

5 thoughts on “Energising the Case for Independence

  1. Just wanted to comment on what I believe to be few factual errors in this article:

    1. cost of wind power. Onshore wind is easily the cheapest form of power generation in many countries:
    The main reason we are not currently building much onshore wind in the UK/Wales is not because of lack of subsidies but because the UK gov have effectively banned it.
    2. Causing an eyesore.
    Ask people if they’d prefer:a. a wind turbine, b: a coal power station or c: nuclear. People are against any form of development that affects them (the “nimby” problem). But we need to generate power -somewhere-
    3. Cant generate 100% power from renewables/wind power is intermittent.
    Tell this to Uruguay:
    wind power can be intermittent, but the wind is always blowing somewhere. But having an integrated power distribution network (like the national grid), a mix of onshore/offshore wind, solar, tidal and hydroelectric, storage schemes like electric mountain and tanygrisiau it is technically possible to generate power from 100% renewables in Wales. Like in Uruguay.
    4. Small scale nuclear.
    Hopefully this will work, and help decarbonise the grid. But there is not a single example of a mass produced, cost effective small scale nuclear plant in operation today. There are a couple (one in Argentina, one in Russia) currently under construction. But I wouldent bet the farm on it quite yet, or propose it as a serious answer to Wales energy generation requirements.

    1. Thank you for your comment. I’m glad that we seem to agree on small-scale nuclear, though the fact that no such sites are currently in commercial operation underlines the point that R&D is required and that Wales is well-placed to do it. Presumably we also agree that Wales can do just fine without its own reserves of oil or of economically-recoverable coal.

      Regarding onshore wind, if it works for Uruguay then so be it; it is after all a largely flat country with not much more than a tenth of the population density that Wales has (19.8 people per sq. km, against 148 for Wales). Even then, the percentage of wind power in Uruguay’s mix is dwarfed by the contribution of hydro-electric power, with which the country is very richly endowed.

      I’ve seen many figures put forward for onshore wind’s supposed cheapness relative to other sources, but they’re not very convincing. Generally they seem to be based on capacity rather than actual power generated, and the comparisons load coal, gas and nuclear costs with pessimistic assumptions about carbon costs and decommissioning expenses, while not fully accounting for the costs of battery backup for wind plants (which of course is also very bad for the environment, since it involves a lot of toxic metals sourced in unstable parts of the world). The fact that China, despite much fanfare about its renewables sector, continues to build up its power-generation capacity largely with coal plants tells us far more about the economics than any number of academic studies.

      It does seem to me, though, that if Wales is really to capitalise on renewable energy, then rather than blighting our landscape and communities with foreign-manufactured turbines, we should be seizing the opportunity to develop a tidal power industry of our own. Uniquely, this is a renewable source which is completely predictable, doesn’t blight the landscape, and for which Wales is one of the best locations on the planet both to develop it and install it. We should be playing to our strengths.

      1. I agree with the main point of the article that we can do well with our own natural, renewable resources. I just ever so slightly disagree with your choice of technologies!

        There’s lots of articles searchable online giving recent wind power strike prices. Avoiding articles on environmental/wind power enthusiast sites still yields plenty of data suggesting quite low prices:

        None of the above load up carbon costs onto fossils.

        Similar to Uruguay, The UK and Wales in particular has some of the best potential wind generating resources in the world:

        The main obstacle to developing more wind power is the current govenment, plus a small minority of NIMBY’s. Most recent surveys show that the overwhelming majority of people in the UK are in favour of onshore wind. I personally think they look fine – and would be happy to see a wind power development anywhere in the views around my house in rural north wales. I used to live in the shadow of the power station in Trawsfynydd, which didnt bother me either. But the point I made earlier – we need power generation somewhere, and wind power looks no worse that any other generator (in fact, better than most), and i think people would prefer a few turbines to a new nuclear station nearby. But Wales have lots of people who retire here for the views, and a large number of them dont want turbines, even though they would provide local jobs in maintenance and upkeep. Should this vocal minority stop everyone else benefitting from cheap, renewable power plus ocal economic benefits? And whats to stoip a future independent Welsh government mandating turbines assembled in Wales?

        Having said all that, a mix of power generation works best – as much onshore wind as possible for cheap power, solar on rooftops to help with daytime peak power, offshore wind for predictable power (similar to tide as offshore wind is predictable at certain times), hydro (wales has good hydro resources too – and tons of community hydro schemes like ynni padarn are springing up), plus the development of tidal and lagoon power as well.

        Battery storage can be expensive and uses some toxic chemicals – but with good recycling that can be mitigated. but there are other options – the two pumped storage schemes I mentioned, i read an interesting idea to use compressed gas and depleted oil fields as a backup battery for large scale offshore wind currently planned for the north sea, plus there are cheaper large scale flow batteries, and lastly vehicle to grid technology as electric cars start replacing petrol and diesel in large numbers over the next 3-5 years.

        1. Thank you again; it’s good to have thoughtful comments on this site, backed up with data.

          I’m still not convinced on the case for onshore wind, though. For what it’s worth, I clicked on the links you provided re. the prices of electricity generated by different methods; and from the BBC report I clicked through to the BEIS report on which the figures are based. The raw figures in there are consistent with what I’ve seen elsewhere, namely that onshore wind is certainly the cheapest renewable, but that it only comes in cheaper than combined-cycle gas if the latter has a £19/MWh ‘carbon cost’ factored in. Take that out and gas is over 30% cheaper; yet I’m very sceptical of how objectively these carbon costs can be calculated, and I smell a rat when they come in at just the right level to make wind cheaper than gas by a whisker. Also, in the report the figures for onshore wind are based on >5MW turbines, which are behemoths – huge turbines with >150m rotor spans – basically offshore kit placed onshore. Even those people who find the sight of smaller onshore turbines unobjectionable may well baulk at those (I know I would).

          Even so, I’m not here to argue that we should be building gas power stations all over Wales. I accept that renewable energy is a Good Thing, for all sorts of reasons, and should be encouraged. My case is simply that tidal power is more attractive, both because it is out-of-sight and because it is totally predictable, and that Wales – especially West Wales – is a good place to encourage investment into its development.

          1. Thank you, i appreciate your replies, and the time you’ve taken to answer. I think theres a fair bit of agreement here, and I too hope tidal and small scale nuclear can be developed succesfully.

            Thanks for your comments, and for the original article.

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