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10 | 4th - 10th July 2014 | utIlIty WEEK Interview Matthews bats away the suggestion that such a sprawling, hitherto untested model will be unwieldy. "Not at all," he says. "I was recruited, the board was recruited, the direc- tors were recruited on the basis of being able to manage large organisations. There are lots of organisations that are complex and there are people that are very good at running them and we are very good at running our organisa- tion. I appointed people on the basis of their ability to deliver." The Welsh Government will no doubt be hoping the organisation does deliver, for NRW is integral to the green growth strategy, under which it is hoped the £8 billion the environment currently contributes to the country's econ- omy will expand significantly. The single point of contact on environmental regulation NRW provides, together with its brief to promote – responsibly – the sustainable use of Wales' natural resources, is a key selling point in the country's bid to attract businesses and investors to choose Wales over other feasible areas. Scotland, for instance, has a Hydro Nations strategy and a pro-renewables stance. Matthews notes NRW makes Wales one up: "We are dif- ferent to Scotland because they still haven't combined the principal environmental bodies in the way we have." But aside from its breadth and reach, Matthews says NRW has other success-inducing qualities. As an operat- ing arm of the Welsh Government, it has a "team Wales ethic" and a can-do attitude. "Our board is committed [to green growth]," he explains. "It is our policy to say yes where we can. Where we can't – and there will be cases where we can't – we will be swi and clear." Interestingly, given the body is part-regulator, Mat- thews is also driving a service culture into NRW. He says: "It's been a great honour to work in this role and it has enabled me to put into practice all the things I've learnt in my career in one go. In particular I have learned the impact on customers is very important, so that is very important to me and very important to us. "The project I'm personally committed to is our cus- tomer care project. For us, the customer is anyone with whom we have a transaction: people who buy our prod- ucts, people who apply to us for licences, those who come to us for advice and so on. What is the golden thread? The golden thread is treating all these people as our customers and understanding that we need to delight them. That's a really important driver in terms of making our transformation." NRW also rejects the old wisdom that environment and economy have diametrically opposed interests and that a win for one means a loss for the other. It believes it can manage natural resources "wisely and efficiently" for the benefit of both parties and the people of Wales. Matthews is particularly keen to bring investors along with this ethos; interestingly, the Green Growth Wales prospectus launch last week was held in the City of Lon- don, not Cardiff, and was packed with attendees from the business and financial sectors. Matthews comments: "[For the financial community] provided the regulation and the attitude to develop- ment is not too stringent – in other words, off the scale of reasonableness – the most important thing is predict- ability about how the organisation is going to behave. That's the lesson I brought from Northern Ireland with me [Matthews chaired the province's Utility Regulator before taking the NRW job in 2012]. So I said we've got to build relationships with the rating agencies; we've been talking to banks and so on. Many of these people are from my personal networks I built up when I was working in Northern Ireland. It's really important for someone who deals with the environment to understand that if you're going to integrate the environment and the economy, you need a completely new attitude." NRW has been around for just over a year. Matthews is clearly delighted with progress so far, despite some major unanticipated challenges. He says: "In the theory of management there are two streams: the first is transactional management; the sec- ond is transformational management. In the first year, we have focused on transactional management – that is to say, keeping the show on the road. And there was an awful lot of transactional management we didn't expect – the winter storms, the disease affecting our larch trees and so on, as well as managing budgets and keeping track of the money. And we did very well with all that. "Transformational management is about managing our long-term vision. So we went out to consultation and have developed our first corporate plan [for 2014-17]. Now things have settled down, we will continue to transform. We've already started to see the customer care programme taking a much more integrated approach to development." Part of the business case for the creation of NRW was to save £158 million over ten years. Matthews stresses this is not saving money for saving money's sake. "That isn't just about running a tighter organisation, it's also about releasing money that's going to be reinvested," he says. "So going forward, we do things in very different ways. We will need to get different skills and resources. The old way of doing things will get slimmer." The final piece in the green growth jigsaw is work in progress and involves greater devolution from Westmin- ster. The 2012 Silk Commission advised Wales should have greater financial accountability. The UK govern- ment finally responded in March this year with the Wales Bill, which will provide the country with new borrowing and tax-raising powers. There is also a bid to devolve full control over other policy areas, including water. Wales is already looking like a force to be reckoned with as competition for green business heats up; it's obvious that more control over its own destiny would strengthen its hand. "It is our policy to say yes where we can. Where we can't – and there will be cases where we can't – we will be swift and clear" Water and energy in Wales Because of the integrated nature of natural resources management in Wales, it is difficult to entirely tease out industry-specific issues. However, some obser- vations of interest to utilities are: Water: the Welsh Government is mid-consultation with its action-packed and long-awaited Water Strategy for Wales (see expert view, page 7). Actioning its pro- posals would support the country's wider natural resources management policy. Energy: Wales is abundant with resources for potential renewable energy gen- eration. One key scheme currently in planning is the Swansea Bay tidal lagoon project, which its chief executive Mark Shorrock "hopes is a blueprint" for a series of similar schemes across the country. Speaking at the Green Growth Wales launch, Shorrock couldn't have endorsed NRW more enthusiastically. He said it had been positive, had a thorough understanding of the significance and potential of his development, had assigned sufficient resources to deal with his proposal and had taken a partnering approach. In addition to mainstream renewables, Wales is keen to encourage more distributed energy and heat systems, and more smart grids and buildings. Ecosystem services: Wales is committed to developing markets for ecosystem services around carbon, water and biodiversity.