Vaughan Gething MS, Minister for Economy
Members will be aware Baglan Operations Limited and the Baglan Group of Companies entered compulsory liquidation on 24 March 2021. An Official Receiver from the UK Government’s Insolvency Service was appointed as the liquidator and has been carrying out statutory duties to ensure a safe wind-down of the company’s operations. These have included ongoing provision of the sole electricity supply to Baglan Energy Park via a private wire network linked to the now-closed Baglan energy plant.
Last September, in an effort to support affected businesses and minimise disruption, I announced that Welsh Government had contracted Western Power Distribution (WPD) to design and build a replacement network for the benefit of Baglan Energy Park, at a cost of approximately £3 million. WPD are working at pace and due to complete significantly ahead of schedule, with the majority of customers expected to have their new connection in place by the start of April 2022.
Further to my written statement of 22 September 2021, late last autumn the Official Receiver advised customers that power through the private wire network would be terminated on 14th January 2022, alongside the close-down of his liquidation work. This would clearly be some weeks ahead of the provision of the new power network arrangements, and would oblige businesses, services and critical infrastructure on the park to bridge the gap mainly through use of diesel generators – a more expensive, less resilient and less sustainable form of energy provision, designed to be used only for brief periods. We do not believe this outcome would have been in the public interest.
Welsh Government has no powers to intervene in the decision-making processes of the Official Receiver; the UK Government (the Department for Business, Energy and Industrial Strategy) have equally been unable to identify any proportionate or appropriate means by which to intervene. In the weeks since the Official Receiver’s announcement, Welsh Government has had extensive discussions with all relevant parties, including BEIS Ministers and the Secretary of State for Wales, to try and secure a sensible solution to the very significant problems the termination of the private wire energy supply would create for businesses and citizens in Baglan. These include, not least, economic harm, and increased flood and pollution risks.
Having pursued all other options, Welsh Government, Dŵr Cymru, Neath Port Talbot Council, together with the largest company on the Energy Park, Sofidel, last week issued legal proceedings to seek to prevent the Official Receiver from discontinuing the private wire network, pending the longer-term solution being implemented. During the course of the coming week, we expect a date for the relevant court hearing to be set. For now the power remains on, with the Official Receiver having given an undertaking to refrain from taking any further steps in connection with the disconnection of the energy supply until after final resolution of the legal actions.
The legal proceedings must run their course, but, working with partners, Welsh Government will continue to do all we reasonably can to protect the health, safety and wellbeing of those potentially affected by any disruption to the power supply. These efforts include ongoing discussions with UK Government on the powers they can bring to bear to help resolve this difficult situation.