dow jones article

By Selina Williams
Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--Wales may have been well-known in the past for its coal mines and
polluting heavy industry but now the region wants to cash in on the growing financial
opportunities in low carbon development by combining its natural resources in renewables
with innovation in clean technology.
By 2025, Wales wants to generate all its electricity from renewable sources and even
become a net exporter - an aim analysts say is feasible. In the meantime, the regional
government is working to attract companies involved in the research and innovation side
of the sector with a view to becoming a leading center for alternative energy research
and development in the U.K.
"We're very committed to achieving this goal but we can't do it on our
own," said David Jones, vice president of International Business Wales, the trade
and investment arm of the Welsh Assembly, the regional government. "We realize that
if it's just the public sector it probably wouldn't happen so we had to try to
encourage innovators to come to Wales."
Wales, with its windy weather, long coastline and huge tidal range in the River Severn
Estuary, is well placed to become a significant producer and exporter of green energy,
particularly with its location close to the huge market in England.
Although investment in renewable energy in Wales has so far been around GBP1 billion,
the regional government's plan to increase green electricity to 16 gigawatts by 2025
from 400 megawatts now will require around GBP26 billion, said Ron Loveland, director of
sustainable energy and industry at the Welsh Assembly.
Wales is betting on two huge projects - the GBP15 billion Severn Estuary tidal barrage
and the largest biomass plant in the world in Port Talbot to generate the bulk of
electricity, while wind farms, biomass and marine energy such as wave power and tidal
power would supplement the total.

Wales Less Bureaucratic

In tandem with the renewables targets, Wales is working to boost investment in clean
technology - a sector that includes solar photovoltaic cells and hybrid cars as well as
research into energy efficiency in buildings and power stations.
Companies and analysts say the streamlined bureaucracy and decision making process in
Wales, access to skilled labor as well as proximity to universities for research and
development have made the region an ideal location to set up a clean tech business.
"Wales has a good track record of attracting inward investment and getting its act
together to generate economic development in a specific area," said Jonathan Johns,
head of renewables at consultancy Ernst & Young.
"It's also got very good natural resources as well as a strong technical base
so it's very well placed for research and development in the clean tech
sector," he added.
For the smaller companies that are typical of this sector, these sorts of incentives
are important as many of them are working on tight budgets, as they are yet to raise
revenue while they concentrate on converting cutting edge ideas and technology into a
finished product.
G24 Innovations, which has invested $75 million in a factory in Wales to manufacture
lightweight and durable silicon-free thin film solar cells to power mobile phone chargers
in countries such as India or across Africa where electricity grids aren't
widespread, but mobile telephone penetration is increasing.
Company president J. Clemens Betzel said G24i initially looked at the greater London
area but prohibitively expensive real estate prompted them to look elsewhere.
"We found a very good site for the factory in Wales, the level of bureaucracy
limited and the turnaround time on the site very quick as the land was owned by the Welsh
Assembly Government," Betzel said.
G24i, which has contracts with Vodacom in Tanzania, Lesoto and Kenya and a distribution
deal with the U.S.'s Bright Star Ventures Ltd. (BSVLF), is planning to ramp up
output this year to several million units as further deals develop with Motorola Inc.
(MOT) and Vodafone.
Vodacom, jointly owned by South Africa's Telkom SA Ltd. (TKG) and the U.K.'s
Vodafone Group PLC (VOD),hopes to expand the applications of its thin film to include
chargers for laptops and other electronic devices such as surveillance systems and base
stations for mobile telephone stations.
Connaught Engineering Ltd, which produces a hybrid system that can be retrofitted to
commercial vehicles, has invested half of a GBP12 million investment package in South
Wales where it has just commissioned a factory.
The company, which says its hybrid system increases fuel efficiency by 15-20% while
reducing carbon emissions, expects orders of around 4,000 hybrid units a year once trials
are completed this year with U.K. supermarket chain Tesco PLC (TSCO.LN), construction and
engineering company Balfour Beatty (BBY.LN), U.K. building company Rok PLC. (ROK.LN) and
others.
It's also involved in the development of four other hybrid systems for other types
of vehicles.
Connaught Engineering CEO Tony Martindale said that the strong automotive expertise in
Wales, home to Toyota Motor Corp. (TM) and Ford Motor Co. (F) engine manufacturing
plants, combined with the research at the universities would help the company to develop
new products.
"We use a lot of the research programs at the universities as the research and
development feed for future developments in our business," Martindale said.
Other companies in the clean tech sector in Wales include Japan's Sharp Corp.
(6753.TO), which is doubling production capacity for solar photovoltaic modules at its
plant in North Wales to 220 megawatts a year. The plant in Wales is the company's
second largest outside Japan.
Ernst & Young's Johns said as well as attracting companies the Welsh Assembly
is very skilled at getting funding from the U.K. government or from the European Union
for research and development projects and channeling it to the right place, be it
companies or institutes.
"Partly that's down to the degree of devolvement and merging of budgets so
that money can be focused and given to initiatives rather than being dispersed across
lots of different projects," Johns said.
One such grant winner is Corus, the European arm of Tata Steel Ltd. (500470.BY), and
Australian solar photovoltaic company Dyesol Ltd. (DYE.AU) that recently secured funding
from the Welsh Assembly for their joint project on developing solar cell technology on
steel for building integrated photovoltaic applications.
The new "Wales Low Carbon Research Institute" is one of the research
institutes expected to receive "significant" money from the European
Union's GBP1.4 billion convergence fund for Wales, said the Welsh Assembly's
Loveland.
"The institute has already received a grant of GBP5 million to increase the number
of academics involved in low carbon research, but they're expected to get
significant money from the E.U. fund, which has around GBP60 million for climate change
projects and GBP100 million for innovation," he said.
-By Selina Williams, Dow Jones Newswires, +44 207 842 9262;
[email protected]

(END) Dow Jones Newswires
April 14, 2008 08:09 ET (12:09 GMT)
Copyright (c) 2008 Dow Jones & Company, Inc.

Monday 14 April 2008 22:09:00.000 AEST