Businesses and organisations at a Neath Port Talbot energy park have avoided having their electricity supply cut off after a private power network was placed into liquidation. Businesses at Baglan Energy Park previously received their electricity supply via a private wire network from an on-site gas-fired power station.
In March 2021 the company that owned the private wire network was placed into compulsory liquidation. This resulted in the company’s operations, including the private wire network, becoming the responsibility of the Insolvency Service, who were tasked with winding down operations.
The Welsh Government has invested more than £4m to support Western Power Distribution, as the local licensed distribution network operator, to rapidly design and build replacement networks. This meant accelerating the process of building a new network – which would have initially taken between 18 months to two years to build. The investment has also minimised the significant costs affected businesses would have had to meet to connect to the new network.
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At the end of 2021 the Official Receiver, which is an executive agency (much like the JVCI that advises on vaccinations) in the Department for Business, Energy and Industrial Strategy (BEIS), announced it would be shutting down the private wire network in mid-January 2022. Unfortunately this was months ahead of the date when organisations were scheduled to be connected to the new network.
This would have meant businesses, services, and critical infrastructure on the park having to bridge the gap in energy supply with diesel or gas-fired generators which are more expensive, less resilient, and have the potential to significantly affect air quality in the local area. There was a real risk of diesel power failing in a storm event with potentially catastrophic consequences.
The Welsh Government, together with Neath Port Talbot County Borough Council, Dŵr Cymru, and Sofidel issued legal proceedings to seek to prevent the Official Receiver from discontinuing the private wire network until a new long-term electrical network was constructed. The new electricity connections, which are directly powered through the National Grid, are now complete with most customers now connected to the new network potentially saving up to 1,200 local jobs. It has also prevented floods by maintaining power to flood water pumping stations.
There was a fundamental disagreement between the Welsh and UK Governments during the process. Ministers within the BEIS and then secretary of state for Wales Simon Hart maintained they had no power to prevent the private wire network from being switched off whereas the Welsh Government disagreed.
Welsh Government economy minister Vaughan Gething said: “I am pleased to have had the opportunity to visit Baglan Energy Park to meet some of the businesses impacted by more than a year of uncertainty around their energy supply. There is no doubt this has been a very stressful and uncertain time for them.
“When the UK Government refused to act, the Welsh Government intervened. If we had not acted then serious long-term harm could have been caused. The action we have taken came at significant cost to the Welsh Government. However I am confident that it was time and money well spent. We have been able to successfully avoid the risk of major job losses, flood incidents, and potential environmental pollution.
“This has been an incredibly frustrating time. It is staggering that the UK Government actively opposed our action in the courts to protect jobs, the environment, and the health of tens of thousands of people. In taking this action the Welsh Government stood up for the people of Wales. This is yet another great example of devolution in action.”
A UK Government spokesmansaid: “Any contingency planning has always been the responsibility of the Welsh Government. As has been the case throughout these proceedings, the UK Government is continuing to support the Welsh Government in delivering its responsibility to ensure those impacted on the Baglan Energy Park get the help they need.
“The Official Receiver and liquidator has acted in line with his statutory duties at all times throughout the liquidation of the Baglan companies and the court dismissed the applications brought by the Welsh Government and others earlier this year.”
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