30 August 2012 Last updated at 15:57 ET

Wales 'not fulfilling potential' despite green growth

By Daniel Davies BBC Wales News website political reporter

The report says the green economy has been a rare success story, but one expert says we could still be doing more

Wales has been warned that it is not harnessing the full potential of its natural environment.

Peter Davies, an adviser to the Welsh government on green policy, was responding to a report that the green economy is withstanding the recession.

Mr Davies, the sustainable futures commissioner, said Wales was not yet a "go-to location" for green businesses.

More than 41,500 people in Wales work in what are classed as low-carbon or environmental jobs.

That is more than the motor trade or financial services, but well short of the biggest employers such as the health sector where more than 190,000 people work or retail, which employs 140,000.

The report from the environmental think tank Green Alliance said the UK's green economy had remained healthy since the banking crisis.

It pointed to UK government figures showing 41,506 work in low-carbon or environmental industries in Wales, including nuclear power, wind energy, pollution control and recycling.

The figure is up from 41,063 four years ago, but is just 4% of the UK total. The south-west of England has double that proportion, for example.

Mr Davies said Wales' coastline, tidal range and weather gave it "advantages in terms of energy generation and renewable capacity".

"I don't think we are necessarily delivering on the scale of potential that those natural advantages bring us in respect of this low-carbon growth sector," he said.

He cited legislation being prepared by the Welsh government which will put sustainable development at the centre of all decisions taken by public sector bodies.

Mr Davies said: "Really Wales should be seen to be a place where this sector can locate and grow because it's got favourable conditions.

"I don't think at this point we are necessarily recognised and identified as being the go-to location, if you like.

"We have got a good story, as the whole of the UK has got. I can't say that Wales is powering ahead in the lead."

He said the green economy's success was due to government incentives to go green, pressure on resources and big businesses such as supermarkets increasingly looking for environmentally-friendly suppliers.

The report says that £443m was invested in renewable energy in Wales last year.

But it also shows that 6.29% of the electricity used in Wales comes from renewable sources - lower than the UK average of 7.45% and way behind Scotland's 22.45%.

Anne Meikle, head of the conservation body WWF Cymru, said many people did not realise that the sector was a "broad spectrum" that included building technologies such as insulation and the people who install in it.

She said: "Then if you think about the water or sewage services, or recycling services or the companies that make products out of stuff that we used to throw away but they are now turning into useful products, those are all part of that sector.

"This report shows it's becoming easier to attract private investment into low-carbon projects and we're seeing signs of that in Wales with companies and investors taking advantage of the resilience and potential of the green sector."

'Difficult message'

Martin Rhisiart, from Glamorgan Business School, said there were around 2,200 companies in Wales forming part of the low carbon goods and services sector.

He said: "Regulation is a key driver for the industry and we have to recognise that but it's there because of societal reasons as well.

"So in terms of investment, companies are looking for longer-term stability and where governments internationally and in the UK have this commitment to improve their environmental activities and performance, then it's a relatively stable driver for companies."

Keith Baker, chief operating officer of Pure Wafer in Swansea, which builds solar panels, said it had been "quite difficult getting the message over" but more people were beginning to embrace renewable energy.

He said: "We started off with customers just looking for an investment and now there are quite a few that are moving to become grid free and independent of the utility companies."