IT’S OUR WATER?

While Wales's voice has been significantly strengthened since 1999, we still do not have the same degree of control of our natural resources as Scotland or Northern Ireland. Amongst our rich resources is the literal stuff of life – water. Water is likely to be a valuable resource for the people of Wales in future years, and who controls it, one of the key issues, of dispute between Westminster and Cardiff Bay.

The issue of water understandably raises strong emotions and stirs long memories here in Wales. Three years ago Boris Johnson (then solely Mayor of London, but, after May 2015 an MP) started wittering on about a network of canals being needed to carry water from the wet North to the dry South (for the ‘wet North’ read much of ‘Wales).

Now Boris's revolutionary thought, was no new idea, back in 1973, the then Water Resources Board, the government agency (now defunct) produced a major report that advocated building a whole raft of infrastructure to aid the movement of water, not to mention constructing freshwater storage barrages in the Ouse, Wash and Morecambe Bay, using a network of canals to move water from north to south, extending reservoirs and building new aqueducts, not to mention constructing a series of tunnels to link up river basins to aid the movement of water.

The plan for water in 1973

Despite the demise of the Water Resources Board in 1974 (two years before the 1976 drought) and its replacement by regional water management bodies, which were privatised in the 1980’s thise issue has never really gone away. In 2006, the Environment Agency produced a report entitled "Do we need large-scale water transfers for south-east England?", in answer to its own question at the time was ‘no’. 

Yet faced with a prolonged period of drought in the South East of England, DEFRA itself held a drought summit on the 20th of February of 2012. The then Con Dem Government stated that it remained committed to the remaining legislative measures set out in its Water for Life agenda, which later became the Water Industry (Financial Assistance) Act.

That is as they say history, but whatever Westminster eventually decides to do in relation to water resources, we in Wales still need to have full democratic control of our own resources. We could begin the process with repatriating control of the Crown Estates and transferring control of lands in (and off-shore) to the Welsh Government in Cardiff. For the life of me I can see no realistic reason why this feudal anachronism cannot be consigned to the dustbin of history. 

This needs to be followed up by taking a long hard look at our water resources and what we get for them and how we can develop them. I see absolutely no reason why the Welsh people cannot fully benefit from any future exploitation of Welsh resources, including our water. We need a whole Wales strategy to develop and to conserve our water supplies and our planning regulations will need to be tweaked or rewritten accordingly. 

Cofiwch Dryweryn

Most people will not be particularly shocked to discover that coincidentally that the Government of Wales Act (2006) thanks to Peter Hain (amongst others) specifically excludes the Assembly from making any laws relating to water supply – hmm – odd that isn't it? 

The bottom line is that our water resources should belong to the Welsh people, not to Private corporations or to the UK Government. Whether or not the new draft Wales Bill to strengthen the powers that we in Wales have over our natural resources and associated planning processes remains to be seen…

POWER FROM THE PEOPLE?

As winter approaches it won’t be long before the National Grid warns about its  capacity to supply electricity this winter as per last year when it reported that capacity would be at a seven-year low due to generator closures and breakdowns. Spare electricity capacity, which ran at about 5% over the winter months in 2012/2013 and that it would be nearer 4% for 2014/2015, four years ago the margin was 17% for 2011/2012.

Hydro-turbine installed at the National Trust's Hafod y Llan farm in Snowdonia.

 

The loss of generating capacity is actually symptom of a much bigger more systematic sector wide problem as a result of the model for energy production, distribution and ownership being fundamentally flawed. Our energy production and distribution model was restructured to primarily benefit the big 6 energy cartel members, their interests and their (City) profits.

From the perspective of energy consumers and smaller scale energy producers, or anyone who wants things to change the problem is that all the Westminster based political parties have quietly bought into this cartel dominated model of energy production and ownership (or perhaps were quietly bought). The reality is that the UK’s cartel dominated model for energy production and distribution is not necessarily the norm everywhere in Europe or around the world.

Now contrary to what you might think, alternatives exist and actually prosper, a particularly good example of a balanced and healthy energy mix can be found in Germany. Small may very well be beautiful, even with a geographically sizeable state, especially in relation to energy, in 2012 some 22% of the countries energy came from small scale green entrepreneurs.

Community based co-operatives (both urban and rural), farmers and homeowners are part of the 1.3 million renewable energy producers and part of the energy mix. In Germany, citizens’, cooperatives, and communities own more than half of German renewable capacity. Small-scale electricity generation is having a knock on effect encouraging change throughout the energy system.

In Berlin, a cooperative (Burger Energie Berlin – literally Berlin Citizens Energy) continues to campaign to take control of the capital's electricity grid with some 35,000km of underground cables. The cooperative is a free, cross-party coalition of citizens who are committed to a sustainable, sustainable and democratic energy policy in Berlin. Members have one vote regardless of the amount their deposit and anyone who wants the power network to be in civil hand, is welcome.

Ordinary Berliners have invested their cash in the venture with the intention of producing a reliable 100 percent renewable energy supply. The aim is to promote the integration of renewable energy into the grid and to invest a portion of the profits from this directly into the transition to renewable energy.

At present the Berlin electricity grid is run by Vattenfall (whose concession runs out this year) regularly generates millions in profits, members of the co-operative believe that the profits from the grid operation should flow to Berlin’s citizens.

This is grass roots energy generation that has potentially the power to change the nature of the energy supply system (in Germany and elsewhere). They aim to build an energy grid that is better handle the rise of green power and allows local use of locally produced energy. This may well be a case of small being both beautiful and perhaps deeply disturbing from the perspective of Westminster and Cardiff Bay something that it is both community beneficial and community owned.

In Germany, there is a deliberate promoted policy of energy transition (or ‘Energiewende’) – this is a very different approach to what is practised in these islands (at least south of the Scottish border). For a start the ‘Energiewende’ is driven by a desire to reduce and eliminate any dependency on nuclear energy.

The introduction of the Feed-in-tariff (EEG) in 2008 was an important part of this process, along with (post Fukushima) the almost unanimous across the board political commitment to a wide range of targets (in 2011) which included a commitment to reduce energy demand (with a 50% reduction in primary energy use by 2050) and the achievement of an 80% renewable electricity share of total consumption (by 2050). This has resulted in a significant uptake of renewables in Germany.

It is worth noting that:

• In early 2012, around 25% of Germany’s power was generated from renewable sources;
• Costs for wind generated power have fallen by around 50% since 1990
• Costs for solar systems has fallen by around 80-90% since 1990
• In 2011, over 380,000 people were employed in the renewable energy sources industry
• Only 13% of Germany’s 60 GW of renewable energy is owned by utilities, with the rest being owned by households, communities, and farmers among others
• In less than 7 years, an energy market with 4 main suppliers has turned into one with more than a million suppliers
• Solar supply has already met peak lunchtime demand on several occasions.

Another of the benefits of the Energiewende is more local ownership of the means of energy production, more jobs, more security of supply and real meaningful action to tackle climate-changing emissions from energy.

The real striking difference is that the operation of the grid in Germany means that generated renewable electricity is used first and that distribution network operators (DNOs) are also seeking to reduce demand. This is so radically different from the way the energy is generated, distributed, exported and used here in our country.

A significant difference, aside from the scale and pattern of investment (in Germany), is that small businesses, co-operatives, individual households and local authorities benefit from investment distributed by a network of local banks (something we pretty much entirely lack in Wales). The whole thing is supported by the KfW (state investment bank) to the tune of 23.3 billion euro in the area of environment and climate protection (2012 figures).

These developments are a million miles away from the so-called ‘Free market’ for energy that exists in the UK, which is pretty dominated by the ‘Big 6’ energy cartel members. The fact that some former politicians have found rewarding post political career employment within the energy sector may be co-incidental but suggests that there is little desire for improvement within Westminster.

The way the current set up works, it is difficult to imagine ‘Government’ at most levels (at least outside of Scotland and perhaps Northern Ireland) in the UK grasping the concept, the practicalities and real possibilities of genuine community owned beneficial energy generation projects.

We have a Conservative government in Westminster which is hand in glove with despotic oil producing regimes in the Middle East and has little interest in renewables. This government is also actively working to pull the rug out from under the renewables sector by cutting the feed in tariff something that has cost highly skilled jobs here in Wales.

A CHANGE OF FOCUS?

Mondragon Co-operative Principles (copyright@Mondragon)

We need a change of economic focus and a new government from next May (2016).  Our country is littered with the remnants of failed models of economic development, most of them having failed to deliver long-term economic benefits and more than a few long-term jobs to our people and our communities. What is needed is to step away from the centralised state dependent model of economic development as applied by successive Westminster and Welsh governments who have failed to deliver for Wales.

We badly need some fresh economic thinking and to find other economic models that can deliver long-term jobs and lasting material benefits to our communities and to our country. Our over-dependence on Westminster or Cardiff Bay to solve our economic problems is understandable considering the nature of our economic and political history, but it is simply compounding the error and won’t solve our economic problems or create sustainable jobs.

The days of bringing in significant amounts of ‘inward investment’ are probably over, Westminster has better things to spend its money on. As far as it is concerned the current Welsh Labour government is fresh out of ideas. We need indigenous home grown businesses which will put down roots and stick around when economic times are tough rather than pulling up sticks and bugging out when the grant money runs out. We need to develop small to medium sized enterprises or local co-operative industries that could provide medium to long-term sustainable job opportunities. 

The co-operative model works well in both Ireland and in the Basque country, there is no reason why it should not work well here. The Basque cooperative model, as personified by Mondragon co-operative suggests what can be accomplished. Additionally to grow local businesses and local jobs we are going to have create a real Bank of Wales, perhaps using the German Sparkasse and Landesbanken model.

For too long far too many small and medium sized businesses in our country have been denied credit by banks and this has prevented the growth of our private sector. The German Sparkasse and Landesbanken operate on a geographical basis, and have developed special expertise in the local industries so that they are better equipped to make investment decisions. The over centralised dividend driven rootless banking model that has been followed in the UK is incapable or unwilling to deliver or support economic development in our country.

Adam Price noted, “there are some great contemporary examples of Welsh co-operation at work.  Time-banking was a great idea developed by American Edgar Cahn, but it’s in the south Wales Valleys that it’s taken deepest root.  Antur Aelhaiarn, the UK’s first community co-operative, is still going strong after thirty years.  Glas Cymru is such a unique example of utility-based mutualism that Harvard has made it a case study.   But these wonderful examples are so often beacons without bridges, lone successes that have never scaled into a full-flung Mondragon-like movement”. 

Mondragon which is a collective of around 257 companies and organisations based in the Basque Country has proved to be one of the more resilient economic success stories in recession-hit Spain. The Basque co-operative may well be the world's largest worker co-operative, it is certainly helping the Basque economy to try and resist the worst ravages of the recession in Spain. The company was established in 1956, in the province of Gipuzkoa; employs around 74,114 people (2014 figure) with a business philosophy built around co-operation, participation, social responsibility and innovation.

It began small, with a group of workers in a disused factory, literally using hand tools and sheet metal to make oil-fired heating and cooking stoves. It is now a large conglomerate with over 257 manufacturing, retail, financial, agricultural, civil engineering and support co-operatives and associated businesses; and 15 Technology Centres. Mondragon has annual sales in excess of  €11,875 million (2014 figures). The Cooperative competes on international markets using democratic methods within its business organisation, helps to create jobs, and is committed to the human and professional development of its workers and pledges to development with its social environment. 

Some parts of the co-operative are wholly owned, others are run as joint venture operations, with some 125 local and overseas subsidiaries, which are committed to converting to employee ownership on a case-by-case basis, being consistent with local laws, customs and other cultural and economic considerations. The Mondragon group’s credit union (Caja Laboral) practically became one of Spain’s largest banks and recovered from an initial 75% reduction in its profitability, unlike the other Spanish banks which are still struggling.

Co-operative members as equal co-owners of their own workplaces enjoy job security and individual capital holdings, with an equal sharing of profits on a proportionate basis and an equal ‘one-member one vote’ say in the way their enterprises are run. Pay within the cooperatives is strictly egalitarian, with the highest rates payable other than in exceptional circumstances being no more than six and a half times the lowest.

We in Wales can learn a great deal from the example Mondragon and its methods when it comes generating and retaining sustainable jobs. There is no reason why the co-operative approach cannot be used to bring in a community upward slow burn approach to economic development, something that will not just provide local jobs but real community beneficial sustainable developments which can transform our communities and our country’s economic potential.