Description of the goods or services required
Context & Opportunity
To maximise the benefits associated with the Freeport program, it is imperative to attract the right level of investment, as early as possible, within the program, as well as maintain public trust that the program (and associated investment), is delivering significant benefits to Welsh communities and Future Generations.
Key elements to ensure the investment can be attracted whilst maintaining public trust, are as follows:
• Access to low carbon infrastructure
• Timely planning & consenting process
• Complementary innovation program
• Robust reporting framework & methodology
NZIW are planning provide support in all of these 4 areas for the Celtic Freeport, but for the purpose of this tender, we solely focus on “Access to low carbon infrastructure”- element.
Access to low carbon infrastructure
To decarbonise Welsh industry and reduce up to 18 million tons of CO2 emissions, an estimated £36billion of investment is required between now and 2040.
This investment allows Wales to position itself as a leading Clean Energy Transition Hub, remain a Cornerstone to the UK Industrial Base, and make strong & significant contributions to the UK Government’s economic growth ambition. This strategy builds on the pivotal role that Milford Haven plays within the overall energy security of the UK, Wales’s large potential to generate low carbon energy at a nationally significant level and Wales’s role as a manufacturing nation. In the latter, Port Talbot plays a vital role.
With clear and significant financial support announced in the Industrial Strategy & Comprehensive Spending Review, for clusters in the North of England and Scotland, Wales hasn’t been provided with the equivalent level of support (apart from some industry in the North of Wales, linked to the Hynet cluster), despite having a well-developed & strong economic growth plan.
Timely access to low carbon infrastructure, i.e. carbon capture & storage, hydrogen and electricity infrastructure, is vital to attract Freeport investment and ensure its sustainability whilst delivering the Welsh Government decarbonisation targets. Current timelines for confirming and/or enabling access are at best 2-3 years away, at worst over 5 years.
Therefore NZIW proposes to make use of regulatory experimentation, such as sandboxes (e.g. the OFGEM Energy Regulation Sandbox), to help bring innovative technologies and services to market, as outlined in the Industrial Strategy Zone Action plan, published alongside the Industrial Strategy.
The proposal is to explore the use of regulatory experimentation of the following three infrastructure challenges:
- Enable a large emitter in the Celtic Freeport to bid into the Power CCUS business model support mechanism, utilising a non-pipeline-transport (NPT) solution to access one of the four UK CO2 storage locations. NPT enabled projects are not currently able to bid into the CO2 business model support.
- Enable the continued development of a dedicated hydrogen distribution main, connecting Milford Haven and Port Talbot, in the absence of clarity on the Hydrogen Transport Business Models and regulatory approvals, to continue the detailed design & associated development activities. This will enable financial investment decision of the proposed distribution main.
- Enable better utilisation of the existing electricity transmission and/or distribution network to enable earlier connection timescales, in the absence of significant investment in the electric grid infrastructure in the short to medium term.
The successful tender is expected to lead, with support from NZIW, the development of the detailed regulatory experimentation (e.g. sandboxes) proposals for these three infrastructure challenges, in close collaboration with the relevant regulator (e.g. OFGEM), UK & Welsh Government departments and the relevant infrastructure and/or project developers, with the aim to have full proposals developed for each three by the end of October 2026.
It's important that this part of the work is completed within the outlined timescales, to maintain progress of these key infrastructure projects and ensure that these sandboxes receive the required level of support from Welsh Government, post-election.
This work will be undertaken in close collaboration with the relevant infrastructure company (Wales & West Utilities and National Grid Electricity Distribution), who will have to sign off the work upon completion for it to proceed to the next stage, i.e. the sandbox process
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