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Blog Post 23 November 2021

Net Zero Wales: an analysis of the Welsh Government’s decarbonisation plan

The run up to COP26 was a busy period for UK climate policy, with the UK Government publishing around 20 documents spearheaded by the Heat and Buildings Strategy, Net Zero Strategy and Treasury Net Zero Review. Together these set out the decarbonisation trajectory at a UK level to 2050.

Many of the policy announcements included in these publications will impact upon the devolved nations – and particularly on Wales – where the nature of the devolution settlement leaves many powers related to energy, transport, housing and infrastructure under the jurisdiction of the UK Government.

This complex political settlement and the challenges it presents to decarbonisation in Wales (the Climate Change Committee (CCC) estimates that 60% of the actions needed to reach net zero in Wales are reserved powers) are key themes running through the recently published Net Zero Wales Plan.

The plan itself builds on the previous ‘Prosperity for All: A Low Carbon Wales’ policy document and is the latest five-year plan mandated by Wales’s climate legislation, the Environment (Wales) Act 2016, to cover emission reductions in the second carbon budget, which runs from 2021-2025. Net Zero Wales goes further than setting out emission trajectories and plans to 2025, with many actions extending to the end of the decade and beyond. The plan aims to present the climate and nature emergencies as interconnected challenges with the solutions being equally interconnected.

Just transition

There is much to be applauded in the Net Zero Wales plan including the holistic approach taken in setting the over-100 policies and proposals contained in the document, the first of which is to ensure a ‘Just Transition’. The recognition that decarbonising Welsh society can be a vehicle for achieving social justice is threaded throughout the plan.


To help achieve a just transition, there is repeated reference to the need to focus on skills and training, recognising that “the transition to net zero will have implications for jobs at all skill levels and across all occupational groups”. The Plan places the green transition alongside other threats to labour such as automation and digitalisation while also framing it is a significant opportunity to be grasped.  

To begin the process of reskilling for a net zero future, the Welsh Government intends to publish a Net Zero Wales Skills Action Plan in spring 2022. We look forward to reviewing this and hope that it sets out actionable priorities across key sectors such as energy efficiency retrofit, heat decarbonisation and electric vehicle (EV) infrastructure.


Wales has huge potential in renewable energy generation, already producing more renewable electricity than it consumes but exporting a significant proportion. Recognising this opportunity, Welsh Government has set the same 2035 decarbonisation target for the power system as the UK Government, with a Wales-specific commitment of installing 1GW of new renewable capacity by 2025.

The Welsh Government’s approach to achieving this leans more heavily on smaller scale renewables planned in local areas. It continues to see a prominent role for community and local energy projects, and for renewable projects with an element of local ownership. This involves thinking about how the role of the Welsh Government Energy Service will evolve.

At the larger scale much of this chapter was given over to the well-documented grid constraint issues that are hampering new projects in some areas of Wales. The extent that Welsh Government can address these issues itself is limited but they committed to working with UK Government, National Grid and the energy companies on solutions.

There were some proposals that might have raised an eyebrow or two, including a call for consenting decisions for offshore renewables to be devolved to Welsh Ministers in the same way that they are in Scotland. Currently, if a company wants to build an offshore wind turbine or deploy marine renewables, they must have permission from the Crown Estate and enter into a form of rental agreement.

The Welsh Government would like to have greater control over these powers of consent by devolving the Crown Estate to the Senedd with UK Government support. Another interesting proposal was to “establish a Welsh Government or public energy developer to accelerate the delivery of renewables.” This could prove an effective way of rolling out renewables at pace while delivering a greater share of the benefits to local communities.


Transport featured heavily in the Net Zero Plan with reducing emissions from transport seen as critical this decade. We didn’t see many proposals or policies not already included in the Llwybr Newydd long term transport strategy and EV Charging Strategy, which were published in the last few months. Welsh Government wants to see a 22% reduction in passenger transport emissions from 2019 levels by 2025, with 48% of new car sales being EVs by the same date.

It was welcome to see a commitment to reducing overall car miles (down 10% by 2030) and boosting the proportion of trips taken by active and public transport (increasing the proportion to 35% in 2025 and 39% in 2030). This stands in contrast to the UK Government’s EV-led approach. To help achieve this, the government is considering a range of measures to make active and public transport more appealing. These include:

  • Supporting work hubs and low-traffic neighbourhoods.
  • Ensuring all new developments make provision for walking and cycling.
  • Reducing the default speed limit in built up areas to 20mph from 30mph.
  • Developing multi-modal ticketing like the Transport for London Oyster card.
  • Exploring novel approaches like mobility-as-a-service.

These approaches will be supported by behaviour change programmes and the possibility of financial assistance for people who wish to adopt ebikes and EVs.

Homes and heat

When it comes to reducing emissions from homes, there are some very strong commitments to improve new build standards in both the social and private sectors, and to continue to build on the excellent work of the Optimised Retrofit Programme, which is exploring a range of retrofit pathways through several (mostly) social housing pilots. Overall, the Welsh Government wants to see 148,000 homes retrofitted by 2025 (around 10% of homes).

Where we felt the plan lacked ambition was around support for people who own their own homes or rent, but are not on low incomes, to retrofit their properties. This was also a gap in the UK Government’s Heat and Buildings Strategy.

Despite stating that its “focus between 2021 and 2025 will be on optimising the thermal and energy efficiency of other existing [non-socially rented] Welsh homes”, the Welsh Government firmly states that it will only financially support households in fuel poverty. While it’s likely that many in the ‘able to pay’ sector will end up retrofitting their homes using private financing, according to the CCC this likely won’t form a significant part of the market until the middle of decade.

We feel that a range of finance options should be available depending on circumstance, and that there is a role for Welsh Government (or perhaps the Development Bank of Wales) to play in supporting early adopters by offering low or zero-interest long-term loans to households in the private sector to jump start the retrofit market. This does not need to be prohibitively expensive, as the finance would be in the form of loans rather than grants for the majority. This is a model already being used in Scotland through Home Energy Scotland.

Some key decisions have not been taken as part of the Net Zero Wales Plan, with Welsh Government waiting for the outcome of the UK Government’s private rented sector minimum energy efficiency standards consultation. This will decide what Energy Performance Certificate (EPC) rating a rental property must have before it can be sold or rented and should force landlords to improve the efficiency of their properties. However, this leaves a gap in support until at least early 2023, when we expect to see a heat strategy for Wales published.

On reducing emissions from heat, the government wants to see the proportion of electrified heat in Wales increase by 3% by 2025. There is little mention of policy support around heat pumps and heat decarbonisation, with commitments to fund research into behaviour change and the possibility of new energy tariffs that could help to mitigate the costs of switching to electric heating. Language around heat networks is far stronger, with this being seen as a low regrets option in many circumstances.


It is welcome to see the Welsh Government set out longer term commitments than it is legally required to do as part of the carbon budget process. It is equally welcome that many of the policies and proposals it makes are ambitious, with clear thought gone into how they will interact with one another.

Priorities such as investing in skills and training and targeting a just transition are given far more attention and detail than we saw in the UK Government’s strategies. Proposals on transport decarbonisation are particularly strong, while it’s clear that on renewable generation, some of the most significant levers remain reserved matters out of Welsh Government hands. Despite this, it’s good to see the continued support for locally-led renewable projects and energy planning and a recognition of the opportunity renewable energy and new technologies present for Wales.

Progress continues to be made in decarbonising social housing and there are exciting announcements regarding new build homes. But the lack of support available to private tenure households to improve energy efficiency or install low carbon heating is disappointing.

Last updated: 18 November 2021