FMQs : Circuit of Wales, Water & Tolls

The big story this afternoon is the emergence of a potential "cash for access" scandal. I stress "potential".

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Woodpeckers, Tits & Choughs

(Pic : Centre for Ecology & Hydrology)

In the last few weeks an alliance of environmental, conservation and ecology groups published a State of Nature report for 2016 (pdf). It didn't make good reading when it comes to protecting native Welsh species, with some spots of hope. There's more from the Assembly's Research Service here.

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The Draft Wales Bill (Number Two)

(Pic : ITV Wales)

Yesterday, the Welsh Secretary, Stephen Crabb MP (Con, Preseli Pembs.) introduced the draft Wales Bill to the UK Parliament on behalf of the UK Government – you can read it here (pdf).

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The Green, Green Glas of Home

The National Assembly's Public Accounts Committee have said that while the Glastir
scheme is well-intentioned, there are problems with how it's been managed.
(Pic : Nanhoron Estate)

I don't normally cover farming issues, mainly because such posts often go unread and I don't know anything about farming in the first place.

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Silk II : The Wrath of Paul

On Monday, the second and final part of a wide-ranging review into Welsh devolution was published by the Silk Commission – available here (pdf).

The first part looked at fiscal powers, culminating in the current Wales Bill. This second part, however, looked at the National Assembly itself and its devolved powers, as well as other issues like the Welsh civil service and cross-border cooperation.

It was difficult to decide how to approach this, so I decided to split it into one chunk looking at devolved powers, another at key powers taken off the table and another looking at changes to "the machinery of government" (civil service, the Assembly etc).

What further devolved powers does Silk II propose?

The headline proposals are to devolve policing and youth justice, though
without wider criminal justice powers at present.
(Pic : BBC Wales)

Policing – The headline recommendation, which includes crime prevention and community safety. Devolving the police would mean the National Assembly would have legislative competence for the "governance and administration" of the police in Wales – the only emergency service not currently devolved. Things like the National Crime Agency would remain non-devolved. In terms of funding, the current Home Office grant would transfer to Wales, with an estimate £2-3million bill to set up a specialist Welsh Government policing team. Policing should be devolved by 2017.

Youth Justice - This covers the "treatment and rehabilitation" of those aged 10-17 who commit criminal offences. Many of the factors here are intertwined with devolved and local government services like education, social services, training and health. So it's recommended administration of youth justice services be devolved by 2017, which would cost around £300,000.

Transport – There's a package of powers here, the big ones being devolution of Network Rail funding and the Wales & Borders rail franchise, which is what the Welsh Government and Enterprise and Business Committee have long called for. Also included is ports development, which is important for the economy. Elsewhere in public transport, there are proposals to devolve Traffic Commissioner functions as well as regulation of bus and taxi services. In terms of road transport, there's a recommendation to devolve speed limits and drink-drive limits – in line with what's happened in Scotland.

Energy Project Consent – Because the energy needs of Wales (a net-exporter of electricity) would be out of kilter with wider UK needs, the full devolution of energy consent was rejected – however the limit for the Welsh Government to consent to energy projects would be raised to 350MW from the current 50MW (more from A Welshman's Blog).

Water (Partial) – Powers over sewerage should be devolved, and the boundary for legislative competence should be aligned with the national borders, with a formal inter-government protocol on cross-border water issues.

Local government elections – Including their administration and rules of conduct. Technically speaking, the local government electoral system is devolved, but I imagine this recommendation includes that too.

Teachers' pay – In line with Scotland and Northern Ireland, however pensions devolution has been rejected as it would discourage cross-border movement of teachers between England and Wales. The Scottish and Northern Irish education systems are a bit more independent than the Welsh system anyway.

What devolved powers did Silk II reject?

The Commission rejected the devolution of broadcasting, but included
measures that will give the National Assembly an enhanced role.
(Pic :outcasting.org)

Criminal Justice (for now) – This includes the court system, prisons, legal aid, sentencing guidelines, public prosecution and probation services. The costs of creating a Welsh judiciary are much, much smaller than I was expecting - £2million – but the additional cost of a Welsh court system would be £10million. The Commission say the Assembly should instead start off with powers that impact the "day to day lives" of people (policing). So it's rejected now, along with prisons, but something that "should be contemplated in future", with a full review into devolution of criminal justice taking place between 2018-2025.

Further economic powers – The report rejects further devolution of economic powers. Amongst those proposed were DWP work programmes, consumer protection, regulation and inward investment. Instead, the report says there should be better cross-border coordination in policies which overlap (like training programmes).

The Crown Estate – Instead of transferring responsibility for the Crown Estate to Wales, its recommended Wales have similar status to Scotland, with an appointed Crown Estate Commissioner and Crown Estate office.

Broadcasting – As expected, and as I predicted back in September last year, devolution of broadcasting has been rejected due to opposition from both Welsh and UK governments. However, the National Assembly "should take an enhanced role in broadcasting" with a devolved governance body (Welsh BBC Trust), public funding for S4C should be devolved (which doesn't matter as it's moving to whole scale licence fee funding) and appointment of S4C Authority members should require Welsh Government approval. Ofcom should also have a board member with "specific responsibilities for Wales".

Social security – "Social welfare" is devolved to the National Assembly, that includes things like social services and child protection. Social security – aka. the benefits system – isn't, and isn't even devolved in Scotland or Northern Ireland. 46-51% of people polled believed the National Assembly should control the benefits system, however it's rejected because it's an important part of the social and economic union, and the Welsh Government were concerned about exposure to budgetary risks.

What does Silk II outline for the machinery of government?

In addition to reserved powers, by 2021 will this
be home to an 80-member Welsh Parliament?
(Pic : National Assembly of Wales)

Reserved powers – Arguments in favour of a reserved powers model are :

• Certainty in what powers the Assembly has, meaning they can "legislate with confidence".
• Schedule 7 of the Government of Wales Act 2006 is "unclear", because the whole thing has to be consulted before laws are made, while it's obvious in a reserved powers model which powers are explicitly off the table.
• It would "be more stable over time", meaning no challenges to Welsh laws as we've seen in (currently) three cases. A reserved powers model would also reduce the risk of such litigation.
• It would "bring greater consistency" with the rest of the UK, as a reserved powers model is used in Scotland and Northern Ireland.
• It would enable the devolution settlement itself to be redrawn along "clearer and more logical principles" and it would be simpler.

Inter-governmental relations – Welsh and UK governments should share good practice, with a statutory code provided in a new Government of Wales Act. A Welsh-UK Government intergovernmental committee should be established with a new arbitration system for disagreements between the two governments.

The National Assembly itself – Some proposed solutions to the "scrutiny gap" and demands on AMs time have included "smarter working" (which I've covered before) adding co-opted unelected members to Assembly committees (as in local government) or the creation of a second chamber. However, the Commission say it's "convinced the Assembly requires more backbench members....to scrutinise policy and legislation more thoroughly." They therefore propose an increase in the number of AMs from 60 to 80 at a cost of approximately £5.3million. Don't cheer all at once.

Also, the (pseudo-colonial) right for the Welsh Secretary to participate in National Assembly sessions would be removed. The Assembly should also be able to regulate its own financial procedures with the door left open on a possible name change to "Welsh Parliament" – though I don't see the point, personally.

The National Assembly should also be recognised as "permanent" as long as it's the will of the  people of Wales.

The Civil Service & Civil Society – There are no proposals to "devolve" the civil service, and the Commission believe that the Welsh Government should continue to be staffed as part of the "Whitehall" civil service. UK Government departments should also be "clearer about the extent of their responsibilities for the different parts of the UK."

Timescales & The Referendum Question

The proposals will not only mean an increase in responsibilities,
but also an increase in the devolved budget.
(Pic : BBC Wales)

The big thing to note is that the Commission rejects holding a referendum on these extra powers (other than the proposed income tax powers as outlined in the Wales Bill). Instead, it should be a matter left for individual party manifestos in the 2015 UK Election and 2016 Welsh General Election.

I'm not entirely sure I agree with that, for reasons I outlined in Marching out of lockstep.

Some of the proposals can be introduced without legislation, mainly those powers relating to improved inter-governmental working, or things that can be transferred by Orders in Council.

The other powers, and a reserved powers model, would require a new Government of Wales Act. A Bill would be published in autumn 2016 and enacted by summer 2017. If the Bill passes, then the National Assembly would have a reserved powers model following the 2021 Welsh General Election.

Full devolution of rail and policing would result in the devolved budget increasing by £500million, and full devolution of criminal justice would increase that to £800million. If you include the £300million "fair funding" then I guess that takes it to £1.1billion.

Conclusion : A golden mean?

The shelves must be creaking under the weight all these reports...and the dust.

(Pic : Click on Wales)

I'll come back to the political reaction when this is inevitably debated in the Senedd over the next couple of weeks/months.

Silk II has been argued in a logical, pragmatic manner. It's much better than Silk I and undoes a lot of the mess Peter Hain left in 2006. However, at the same time there's also very little on the table. The powers are similar to those devolved to Scotland under the Scotland Act 2012. Copy and paste, almost.

The question there is if Scotland votes no in September, and as a result acquires further devolved powers or devo-max, Wales will be left behind yet again when - based on this report - Wales is tantalisingly close to achieving parity with Scotland (if criminal justice powers were devolved in future).

A lot of the things have been mentioned so many times before – like devolution of the Wales & Borders franchise, policing, youth justice, reserved powers and teachers' pay – that it's a bit of a damp squib, albeit welcome.

It would've been exciting, and really made a difference to the National Assembly's standing, if we got criminal justice powers alongside that, but we'll have to wait until the 2020s if it's to happen. It's sensible for it to be reviewed thoroughly, but it seems like a largely unnecessary delay.

Having control over policing without criminal justice powers is a bit like like having control of the ambulance service without running hospitals.

Returning to the Assembly itself, it'll be hard to justify 80 AMs until after the devolution of criminal justice powers because those powers really will increase the workload for AMs above and beyond what they currently have. The current 60 should be able to cope with these powers (like policing, teachers pay etc.) as long as they find ways to – as the report puts it, and as myself and others have put it before – "work smarter".

So I'd say I'm neither blown away nor disappointed - it's pretty sensible on the whole. However, as history has shown us, the final versions of visions of grand commissions often end up watered-down. This is going to have to remain a whole package, as I don't think there's any room for compromise here that won't undermine its intent.

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Time to take flooding seriously?

Remember when there was talk of droughts last April?
(Pic : BBC Wales)

Wales has been battered by heavy rain and flooding over the last six months. I don't think there are any parts of the country that have escaped disruption over that period - Bridgend town itself looked perilously close to flooding just before Christmas. It's badly affected rail services, caused landslips and has damaged hundreds of homes and businesses.

The three stand-out flooding events have been Ceredigion and Powys in June 2012, Denbighshire in November 2012 and the aforementioned flooding last month, which affected south Wales particularly severely and still ongoing in some areas.

There's no such thing as "bad weather" really, just bad responses to it.

We're used to rain and some flooding as a residential hazard of living in Wales, but what were "once every 50 year events" are becoming "twice/thrice a decade" events. Climate change will inevitably be blamed - and I'm not going to debate the causes here. However, shifts in the North Atlantic jet stream – which has contributed to the rainfall - are (relatively) predictable, although those shifts are likely to happen more often with climate change.

The excess rain is likely to have been caused by shifts
in the North Atlantic jet stream. Is excess building on
flood plains making flooding worse than it
otherwise would be?
(Pic : BBC)

I think (perhaps many others too) the one reason flooding is becoming perceiveably more common is past and present building on flood plains.

As most flat, developable land in Wales is alongside rivers, you can't blame developers for eyeing it up. But building too many houses right next to rivers without providing extensive flood protection is negligent. It's also negligent to plan for/allow too many houses in these areas. It's probably negligent to move next to a river or stream never expecting it to flood, as is a failure to keep streams and brooks clear of debris.

Llyr Huws Gruffydd AM (Plaid, North Wales), recently called for the establishment of a Flood Action Forum for Wales. England has a National Flood Forum, while Scotland has Community Flood Action Groups. The organisation would be an advocate for flood victims, help promote flood prevention and help plan flood defences. I'm actually surprised Wales doesn't currently have one.

There are other, seedier, effects. Ann Jones AM (Lab, Vale of Clwyd) recently warned of doorstep loan sharks taking advantage of flood victims in Denbighshire. As to what I think of those sharks, insert strong epithet. Sounds like "runts".

The Welsh Government has flood action plans and strategies, and works with the Environment Agency and Dwr Cymru to plan flood defences out of its capital budget alongside water management.

The (Welsh) Environment Agency is due to merge with the Countryside Council for Wales and Forestry Commission to form Natural Resources Wales in April. I doubt that will affect the flood protection programme, but obviously merging three large bodies like that could cause administrative problems for the sheer scale of it.

It also doesn't help that the Welsh Government are cutting £30million in capital spending on flood defences over the next four years. That could blemish their – to date - decent record on the environment.

As all things, prevention is the best cure – stop building on flood plains, or at the very least, where flood plains need to be built on, provide extensive flood protection. That could become a statutory requirement as part of planning reforms, or form part of Section 106 agreements.

The Welsh Conservatives included the creation "Blue Belts" in their 2011 manifesto, maybe it's time for the Welsh Government to consider that in any sustainable development or planning bills. If any of these things make a development site "unviable", then developing such a site in the first place should be reconsidered.

By extensive flood protection I mean :

• Concrete walls/flood barriers
• Redirection of rivers and streams
• Levees/Dykes/Embankments
• Fines/prosecutions for not adequately maintaining watercourses

Are more extensive flood defences required in large
parts of Wales? Will they need to be funded by developers?
(Pic : South Wales Argus)

The last should apply to smaller streams as much as rivers. Recently, a blockage in a stream on Network Rail land flooded a block of flats in Brackla, Bridgend - providing an example of poor maintenance leading to flooding.

We also need to consider flood preparation and emergency planning. Concerns were recently raised by the Wales Audit Office about the Welsh Government's responses to civil emergencies.

Some of the criticisms seem a little unfair to be honest. I think the Welsh Government, emergency services and local authorities do a good job in emergencies. Most of the criticism stems from confused boundaries when it comes to responsibilities – so more administrative than practical.

I believe a major issue there is that flood warnings are never taken seriously enough by the media or the public.

Once an emergency becomes apparent, the media are quick to provide extensive coverage – especially local radio and via Twitter feeds etc. But in the period building up to an emergency, they seem reluctant to point out the seriousness of a situation, perhaps in fear of "crying wolf". People usually only take action when it's too late or when a situation becomes life-threatening.

Does the flood warning system in Wales
- and elsewhere - need another revamp?
(Pic : floodwarn.co.uk)

I've mentioned an "emergency alert system" before. I think warnings - not just for flooding but all sorts of severe weather (and perhaps missing children too - aka "Amber Alert") - are going to have to become more invasive. Yes, that means interrupting TV and radio programmes if necessary, perhaps even an expansion of text messaging services that the Environment Agency already provide.

This doesn't need to be Wales-only. It can't anyway as broadcasting isn't devolved. But maybe it's something the UK Government can re-visit. If the climate is going to get rougher over the coming decades, then the public need to be more aware – or at the very least treat a changing climate and severe weather as an immediate danger.

It should also mean greater use of the military (in particular Territorial Army units) in emergency preparations as and when required. It's supposed to be a "Ministry of Defence" after all. How can the UK spend £35billion on defence every year, yet not properly protect its own citizens from excess rainfall?

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Wales : An Economic Profile I - Primary Industries & Energy

I was originally going to take a look at local government reforms in relation to independence this summer. However, I decided to change that.

We won't know where we're heading, or where we could go, economically (union or no union) until we have some idea of where we stand right now. Over the next fortnight, in six parts, I intend to provide an "at a glance" (ha!) look at the fundamentals of the Welsh economy, including : sector profiles, prominent Welsh businesses, opportunities & threats, trade statistics and where Wales' economy is placed at UK, European and global levels.

Firstly, a disclaimer. I'm not an economist, I just consider myself a keen amateur. Any conclusions/conjecture should be considered "educated guesses", not the truth, nor standing up to any significant academic rigour. There will almost certainly be errors, though I'm hoping minor ones.

The first part today looks at the primary sector of the economy and energy production.

Agriculture

Wales might be stereotyped as home to more sheep than
people, but dairy cattle are the more "productive" Welsh livestock.
(Pic : ITV Wales)

Welsh agriculture is dominated by the pastoral (livestock) sector. According to the latest Welsh Government statistics, in 2011 only 7.65% of the 23,135 active farm holdings in Wales were aimed at crops, horticulture or were a mixture of the two. In addition, some 17,765 holdings were "dormant". Wales has 18% of the UK's total supply of permanent pasture land, and 9% of the UK's total supply of general agricultural land.

The livestock estimates for 2011 were:

• 8.6million sheep
• 8.1million poultry (chickens, ducks, geese etc.)
• 1.1million cattle
• 30,000 pigs

Wales, unsurprisingly, is home to more than a quarter of the UK's sheep (27%), and an above population share of cattle (11%). Livestock numbers are lower than 2001, perhaps on ongoing recovery from the 2001 foot and mouth crisis. The sheep population, for example, is recovering, but the population is still lower than in 2001 (9.9million).

The amount of land set aside for agricultural use has slowly increased over the years, from 1.62million hectares in 2001 to 1.71million hectares in 2011. Of that, some 84.5% of it is permanent grassland or rough grazing land.

When it comes to production, Welsh agriculture is dominated, not by sheep, but by cows. 30% of gross output is dairy products, 23% is cattle (presumably beef). Only 19.4% of agricultural output was based around sheep (presumably meat), but this figure doesn't include wool.

Dairy farming is the most "lucrative" element of Welsh agriculture, providing an estimated income in 2011-12 of £63,900 per farm - compared to the all-farm average of £38,200. However, this figure should be treated with caution due to the well-documented issues surrounding the retail price of milk in particular, as well as possible inflation of incomes via grant schemes.

Some £316million of grants were paid to Welsh farmers in 2011, with £263.4million (83.4%) of that being from the Single Payment Scheme, which is part of the EU's Common Agricultural Policy.

Agricultural exports amounted to £166million in 2011, rising steadily over the years from £127million in 2005, dipping during the recession, but experiencing the sharpest rise between 2010 and 2011. This could be due to schemes like Hybu Cig Cymru (Meat Promotion Wales) - a co-operative meat promotion scheme. It may also have aided by the Third Assembly's Red Meat Industry Measure 2010. The measure, introduced by former Rural Affairs Minister, Elin Jones AM (Plaid, Ceredigion), made it a statutory obligation to promote the Welsh red meat industry.

The official export figures could be underestimated. Recent figures suggest lamb & beef exports alone were worth £200million in 2011. However, agricultural exports made up just 1.2% of total Welsh goods exports in 2011.

As an employer, the agricultural sector provided 58,400 jobs in 2011, with around 43% of workers working on a part-time basis.

In my own opinion, one area that could be targeted for further growth in the same way as red meat are processed dairy products. Wales obviously has a ready supply of milk, so why aren't our cheeses - for example - being promoted to the same extent? That's not to mention other potential marketable spin-offs : creams, butter, ice creams, gelatos & yogurts.

Finding alternative incomes (farm diversification) is a goal for many farmers – for example tourism. In 2009-10, some 24% of farms were actively diversifying, compared to 20% in 2006. The Welsh Government has its own Farm Diversification Schemes, one of which provided £1.3million in support to farmers in Powys.

Wales' largest agriculture-related companies (2011)
(Click to enlarge)

If we're looking for specific farming/agriculture success stories, there's one that stands head and shoulders above all others. Llansantffraid-based Wynnstay Group, one of the UK's largest agricultural suppliers, is Wales' 15^th largest company in the Top 300 2011 list, with a turnover of £234million (pre-tax profits of £5.9million), employing around 770 people.

I think we can conclusively say that the Welsh economy is not "reliant on sheep". We can lay that popular tongue-in-cheek myth to rest. It looks like agricultural exports - in particular meat - have a bright future. But we must remember that prices are volatile, and agriculture is still an (unfairly) low-margin, subsidised, low value added sector, with heavy competition from elsewhere for similar products (New Zealand lamb for example).

Farmers could help lead the way in processing, marketing and promoting their goods, more on that in Part II later this week.

Fisheries

Shellfish is a primary Welsh maritime product, finding
ready and willing export markets. However, the overall
fishing industry in Wales is small by UK standards.
(Pic : UK Student Life)

The Welsh fishing industry is tiny by UK standards. According to the Rural Development Plan 2007-2013, only around 1,400 people worked full or part-time in the industry in 2007. Most of the industry is based around Pembrokeshire, Ceredigion, Anglesey and Gwynedd, and has obvious competition from the Irish, the more-developed Cornish deep-water fishing fleet, as well as (infamous) Spanish trawlers.

Having said that, Wales has a plentiful and high-quality supply of shellfish – cockles, mussels, scallops, lobster, crabs, crayfish etc. - but even these are under threat. It's been reported that Welsh restaurants struggle to source local fish as most of it is exported to mainland Europe - especially France and Spain. The Swansea & Carmarthenshire area is also famous for its cockles and laver - what the Japanese would call nori , and a key ingredient in Japanese and Korean cuisine. Some local businesses are already expanding by exporting laver to Japan.

The proposed creation of "Marine Conservation Zones" by the Welsh Government is proving contentious, with Environment Minister John Griffiths (Lab, Newport East) likely to face a legal challenge from commercial fishermen.

With pressure on fishing quotas, a tiny maritime zone, as well as possible pressure from Marine Conservation Zones, you could say that deep-water fishing is under threat in Wales. It's not impossible it could be reduced to nothing more than a cottage industry in the medium to long term. Sadly, the only way I can see a future for commercial fishing in Wales will be via inland/near water "fish farming."

Forestry

In 2010, 14.3% of Wales' total land area was woodland, though only 38% of this is owned by the Welsh Government - and this is increasing steadily. When woodland is lost, more than half of it (85 hectares) was to quarrying and golf courses between 1997 and 2010. Only 6 hectares were lost to wind farms, and 13 hectares to general urbanisation.

Although not entirely related to Welsh forestry, paper & packaging exports were valued at £210million in 2011. According to Forestry Commission Wales, the forestry sector was worth £340million to the Welsh economy, and employs as many as 16,000 people. There are comprehensive plans for marketing and export of timber, and that's before considering Welsh forestry's contribution to tourism and the environment.

According to a woodlands survey for 2011, and 78% of woodland visitors travelled less than 5 miles. Overall visits are increasing, especially for walking and cycling/mountain biking. So you could conclude that Welsh woodlands and forests are a valued local amenity.

Welsh primary sector, paper/packaging and energy exports
from 2005-2011
(Click to enlarge)

Through diversification - such as providing mountain biking facilities - the numbers of tourists from further afield visiting Welsh forests will inevitably grow. This could result in more pressure being exerted to build higher-quality, more comprehensive, tourist facilities in forestry areas (for example in the Afan Valley), which could damage the environment in a way the likes of the Forestry Commission were set up to prevent.

Forestry is a potential "jewel in the crown" for Wales, but it will need to be developed sustainably - whether that's for energy, supplies of timber, or for tourists. When a single environment body is established by the Welsh Government in the the coming years, it'll be down to them to make sure it isn't sold off, under-utilised or, indeed, overdeveloped.

Water

Water is something Wales has plenty of - we all know that - but we need to avoid complacency. Dwr Cymru's Water Resource Management plan estimates that only 3% of rainwater in Wales is utilised for public water supply, compared to 50% in parts of south east England. Due, mostly, to the decline of heavy industry, water demand in Wales is on a steady decline, from 1,090 million litres per day (ML/d) in 1995-96 to around 820 ML/d in 2009-10.

Water company catchment areas are based (largely) on drainage basins of major rivers. Dwr Cymru provides water for the bulk of Wales and Herefordshire, while Severn Trent provides water for north Powys, Wrexham and parts of Flintshire. Dwr Cymru is a subsidiary of Glas Cymru - a company limited by guarantee - based in Nelson, Caerphilly. Glas Cymru is Wales' fourth largest company by turnover - standing at £688million - employing around 3,000 people.

With recent concerns over water shortages in south east  England this spring, it's been suggested that Wales could export more water to England in the future. It's currently unclear how much Wales actually exports – for example, to the West Midlands and Merseyside. It's also unclear how much those exports are worth. John Osmond of the IWA put the figure at £4.5billion per year, while others have suggested a more modest figure of around £100million.That's a big margin for error, though I suspect the latter figure is closer to the truth.

The total cost to supply processed water is currently around 0.2p per litre. The roughly 400million litres per day (20% of Severn Trent's total output) supplied by Dwr Cymru is, notionally, worth around £292million per year (fully processed). There are other companies that use Welsh water too - United Utilities for example.

Unprocessed costs are likely to be much, much lower – judging by the lower end estimates above (£100million), perhaps up to 50% lower. This suggests the value is in providing processed water directly to consumers and businesses and associated services, not the "raw" water itself. So, Wales wouldn't really benefit - economically - from water exports unless a Welsh company, presumably Dwr Cymru, was providing the service themselves.

Even in its unprocessed cost, water exports would certainly provide a "nice little earner", and if transferred via Dwr Cymru onto consumers, might result in lower water bills for their customers. But we shouldn't consider it some magical, lucrative export proposition. We'll probably have to look further afield for that.

Wales' Top 10 Utilities & Energy Companies.
Glas Cymru, based in Nelson, Caerphilly, is #1
*NB - W&W Utilities turnover is £312.8million obviously
(Click to enlarge)

Water is likely to become an increasingly valuable commodity, especially in places like the Middle East, and perhaps even parts of southern Europe. Syniadau wrote on the possibility of exporting water to the Middle East before, citing an example from Flanders.

In simple terms, water's returned in tankers used to carry liquefied natural gas. MH suggested in the comments that there's the potential margin of around $250,000 (~£160,000) per full water tanker returned from Pembrokeshire (where we have an LNG terminal) to the likes of Qatar. That would require investment in new water storage facilities in the area, but with their bottomless pockets, I'm sure the Qatari's would be able to fund such facilities quite easily.

Energy

Wales' non-renewable sources
(Click to enlarge, edited from
d-maps.com)

I'll have to explain my methodology behind this first of all.

There are many different way to measure energy outputs, I've decided to go for the easiest option of simple generating capacity in megawatts (1MW = 1million watts) or gigawatts (1GW = 1000MW). I haven't accounted for energy lost in transmission, and I also haven't counted very small energy schemes, or micro-generation (home solar panels etc.). This is aimed at being a rough guide, mainly focusing on where and how energy/electricity is produced in Wales – not how it's used.


The technicalities of energy policy and independence will have to be revisited another time, but Syniadau has probably done more work than anyone else on this subject and I recommend you look there for more detailed analysis.

Energy is one of the big boys of the Welsh economy, perhaps the single biggest sector. Energy exports - which in 2011 totalled £4.06billion - make up just over 30% of all Welsh goods exports. Is this a good thing? It's a steady export stream, that's for sure. But Wales, of all places, should have learnt by now that putting all your export eggs into few baskets isn't smart – a point raised in the Offa's Gap report.

It's also important to note that it probably includes petrochemicals in that figure, but I'll be looking in a little more detail at that in Part II later this week. This is focusing almost entirely on electricity generation. Actual (physical) oil and gas exports from Wales are minuscule – only £22million worth was exported in 2011.

Energy exports from Wales have more than tripled in value since 2005. But the questions I'm going to attempt to answer now is, where does it come from currently? And where will it come from in the future?

Proportions of non-renewables : current and proposed.
(Click to enlarge)

Although coal played an important role in Wales' industrial past, there are only two coal-fired power stations in Wales (though a few more use some coal) – Aberthaw and Uskmouth B – total generating capacity of 1.89GW.

In terms of fuel, estimates in 2005 suggest there's as much as 250million tonnes of coal reserves left in Wales in 1979 (roughly 50-75 years worth). Small scale mining is still ongoing, but mainly opencast, with some drift mining still being undertaken in the Neath Port Talbot area.

Although coal has other uses – for example steel-making - it doesn't dominate the Welsh non-renewable energy production sector. That honour goes to gas. If/when Wylfa B is built, then there'll also be more nuclear energy produced in Wales than from coal.

There have been hopes that carbon capture and storage based "clean coal" technology could be developed in Wales. Clean coal, for now, is prohibitively expensive and untested, currently at the experimental stage in places like the United States. Perhaps though, some sort of underground coal gasification could be an alternative to shale gas "fracking". However, this still produces high levels of greenhouse gases, and I'm sure the concerns about geological instability will remain.

43% of Welsh energy production is fuelled by gas at present (4.09GW) , with an additional 4.09GW of gas-fired energy projects forthcoming - such as the new/proposed Pembroke and Port Talbot power stations. There's also the £70billion worth of coal shale gas, but for this exercise I've discounted it.

Renewable energy in Wales - current and proposed
(Click to enlarge)

What of renewables? Currently it's dominated not by wind, but by hydroelectricity – big schemes such as Dinorwig in Gwynedd. 87% of current renewable energy in Wales is generated from hydroelectricity, and I think the potential for further hydroelectic power has been ignored in favour of "cheaper" wind schemes.

It isn't a simple case of "build dam, install turbines, get electricity" because of how hydroelectricity is generated and used in the first place (usually to meet a short term spike in demand). The prospect of "drowning" more Welsh valleys would also no doubt be contentious. But what if it were carried out by a Welsh company, under a Welsh Government mandate, instead of foisted on us from elsewhere? Maybe the prospect would be more palatable.

Although somewhat controversial, wind power currently only generates 320MW (13% of renewable energy currently generated in Wales). However, if every single proposed wind scheme is constructed in Wales, or off Wales' coast, then that will rise to 2.7GW (48% of Wales' future renewable energy supply, discounting the Severn Barrage). Wind clearly has a future, but issues remain around wind subsidies and arguments around noise, efficiency and aesthetics. Considering Wales is one of the windiest places in the UK, it would be sensible to make full use of a clean, renewable source on our doorstep.

Wales' renewable sources of energy
(Click to enlarge, edited from d-maps.com)

A lot has been said of waste incinerators, but they're a fairly minor player - even in the future. Of the three schemes currently on track for delivery (Cardiff, Deeside and Hirwaun), they'll only generate around 50MW of energy between them (not counting the Deeside scheme). Whether you would consider these "renewable" or "sustainable" is another matter.

Biomass energy is due to increase in influence over coming years, rising from just 10MW of generating capacity now, to around 730MW from the likes of the Llynfi, Holyhead and Baglan Bay biomass plant schemes. Once again, questions should be asked about how "sustainable" these are considering their fuel is often transported long distances. To prove how up to date this is, I've only included the Chirk biomass scheme this afternoon, but it isn't included in the overall energy totals because I don't know the generating capacity.

Wales isn't associated with sunshine, but a lot of micro-generation in Wales is provided by solar panels. It's hard to quantify how much is produced this way, but there are scaled-up proposals for "solar farms" in Pembrokeshire and Carmarthenshire (combined 8MW) and Sarn on the outskirts of Bridgend (5MW).

Proportions of non-renewables v renewables : current, future
and including the proposed Severn Barrage
(Click to enlarge)

Taking the Severn Barrage out of the equation, although sheer renewable and non-renewable generating capacity in Wales is going to increase over the next decade or so, the proportions aren't going to change dramatically. This is slightly depressing/worrying, as Wales has enough potential to meet twice its own energy needs through renewable energy alone.

It would certainly help things along if we had a devolved government that wanted the power to deal with meaningful-sized energy projects – like Scotland's continuous examples - not muck about with tiny schemes. Is Wales' current policy sacrificing renewable energy targets to prop up exports/attract "investment" in big, new non-renewable power schemes?

Out of date energy consumption and demand statistics (available here, Annex C) suggest that Wales produced 35 Terrawatt hours (TWhrs) in 2005, and consumed 24 Twhrs. Though it's difficult to pin down the exact figures, Wales is clearly a net exporter of energy and energy-related products (petroleum etc.).

More recent figures on Syniadau, suggest that Wales exports 7,092 gigawatt hours (GWh) of renewable electricity to England – almost as much as Scotland.

Most of Wales' generating capacity is in north Wales. Because there's no "north-south" electricity link (more on this, once again, at Syniadau), while north Wales and Wales as a whole are net-energy exporters, south Wales is a net energy importer.

This results in the anomaly of south Wales paying some of the highest energy prices in the UK. This is likely to be offset in future by increased energy generation in the south, but a good "north-south interconnector" is vital – not just to ensure we have appropriate infrastructure, but perhaps to help combat fuel poverty too.

Part II – looking at the secondary sector (manufacturing), IT as well as science & technology - will be posted later this week.

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