What progress is being made in delivering green jobs and growth?

Published 09/06/2025

One of the First Minister’s key priorities for the remainder of the Sixth Senedd is green jobs and growth.

Ahead of this week’s Plenary debate on the Economy, Trade and Rural Affairs (ETRA) Committee’s report on the green economy, this article explores what progress is being made against this priority. We’ve focused on green skills in a separate article that has also been published today.

What are the potential economic opportunities from decarbonisation, and how are these progressing?

In 2023, renewable energy generation represented 53% of Welsh electricity consumption. Due to increased demand for electricity, renewable generation will need to increase fourfold by 2035 to meet the Welsh Government’s target of 100% electricity consumption being from renewables.

RenewableUK Cymru, Marine Energy Wales and Solar Energy UK claim the renewables sector will “deliver ‘green jobs and growth’ at an unprecedented scale”. Their recent report highlights that jobs in renewables sectors pay 26% higher than the average Welsh salary, and says the sector can potentially deliver annual Gross Value Added (GVA) growth increases “equivalent to 68% of annual real growth seen in the Welsh economy over the past decade”.

The Crown Estate is currently in the final stages of its offshore wind leasing round for Wales and south-west England, which is expected to award rights this summer for three new floating offshore wind farms in the Celtic Sea. Research commissioned by the Crown Estate says these new wind farms could support the creation of over 5,000 jobs, and boost GVA by up to £1.4 billion. Decisions on the ports used by the successful bidders will be key to ensuring Wales sees jobs and growth from these wind farms – the Crown Estate says there is “strong potential for Port Talbot and/or Port of Bristol to play a key role”. The Welsh Government has called for devolution of the Crown Estate to Wales to “better align the management of Crown assets [such as renewable energy projects] in Wales with the needs of Welsh citizens”, however this is not supported by the UK Government

The Welsh Government has recently taken an £8 million equity stake in Menter Môn’s Morlais tidal energy project, which will be operational from 2026. Once completed, this will become the largest tidal energy consented project in Europe, and generate energy for up to 180,000 households.

What action is needed to maximise potential benefits?

The Welsh Government is hosting an investment summit later this year, which it says will “bring to Wales investors in that greener economy, it will present the opportunities that this country has to offer and the energy transition that has already begun”.

However, the renewables sector says the transition to renewables in Wales is “lagging behind other UK nations”. It wants the Welsh Government to:

Adopt a ‘Maximising Renewables’ approach to development;
Set minimum targets for renewable energy technologies;
Create an improved regulatory and policy framework; and
Accelerate progress on a sector deal.

The ETRA Committee says the Welsh Government “must maximise its influencing power” to encourage the UK Government to support the development of the Welsh economy through its upcoming industrial strategy and the National Wealth Fund. However, Net Zero Industry Wales argues that currently Wales is “not getting its fair share of funding” from the UK Treasury to decarbonise the economy. It calls for a more assertive Welsh approach to securing UK Government support.

To ensure greater benefits for communities from renewable energy developments, the Institute of Welsh Affairs has called for a Welsh Wealth Fund to be created. M-Sparc has called for more strategic thinking about community benefits funding, where “a more ambitious approach is required”. The Welsh Government is reviewing its guidance to ensure wealth is retained by host communities, while the UK Government is currently consulting on proposals to legally require renewable energy developers across Great Britain to pay into community benefit funds.

The UK Government has brought forward £300 million initial funding to support the offshore wind supply chain through Great British Energy. It has also allocated £544 million for its Clean Industry Bonus, which will incentivise offshore wind developers to invest in regions that most require investment.

To support community energy generation, the Welsh Government has established Ynni Cymru, and set a target that 1.5 GW of renewable energy capacity is locally-owned by 2035, although the Future Generations Commissioner has called for this to be doubled.

What are the key barriers to delivery, and what’s being done to tackle them?

Widespread concerns have been expressed about the speed at which planning and consenting decisions are made for renewable energy developments. The Welsh Government is responsible for consenting all onshore wind above 10MW, and projects using other technologies from 10-350MW, with the UK Government responsible for larger developments. RenewableUK Cymru said:

Consenting and planning delays pose significant risk to our renewable energy and net zero ambitions in Wales – which will inevitably impact related economic opportunities.

The Welsh Government has provided additional funding to enable organisations to employ more staff to respond to planning and consenting applications, and legislated through the Infrastructure (Wales) Act 2024. Over the coming months it will be clearer what impact this will have.

Developers have also raised challenges in obtaining grid connections, with Statkraft describing this as “a significant barrier to maximising the benefits of the green economy”. The National Energy System Operator has had plans to prioritise clean energy projects for grid connections approved by Ofgem.

Our article on green skills sets out the skills challenges Wales faces, and how the Welsh Government is seeking to address these.

What economic challenges does decarbonisation present, and how can these be addressed through a just transition?

The transition to a net-zero economy will have an uneven impact across communities. The Wales Centre for Public Policy (WCPP) says while new industries and services could develop in rural Wales as a result of the transition, “there is a less optimistic picture” for industrial areas.

To address these challenges, there have been widespread calls for a ‘just transition’. The WCPP suggests targeted skills and retraining support, good infrastructure, and transport links are needed, along with incentives for businesses to locate in affected areas. TUC Cymru has set out five principles for a just transition – a clear and funded pathway to a net-zero economy; a worker voice in shaping the transition; strong employment protections; employers prioritising their workforce; and funded retraining.

The Climate Change Committee, a statutory body that advises the UK and devolved governments on climate change, says lessons need to be learned from the transition at Port Talbot steelworks. It says the challenges at Port Talbot were well-known, and the UK and Welsh governments should have acted proactively to tackle them. For example, through making it more attractive to invest in green steel, ensuring retraining programmes were in place well before the blast furnaces closed, and developing a local industrial strategy.

The ETRA Committee and the Climate Change Committee have both called for the Welsh Government to work with partners to develop just transition plans to support those most likely to be adversely affected by the transition to net-zero.