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Vaughan Gething MS, Minister for Economy

First published:
22 September 2021
Last updated:

As Members will be aware, Baglan Operations Limited and the Baglan Group of Companies entered compulsory liquidation on 24 March, following a period of financial distress.

Baglan Operations Limited is responsible for the Baglan electricity generation plant, which is now closed and is also the sole electricity supply to Baglan Energy Park via a private wire network, which is license exempt.

An official receiver from the UK Government’s Insolvency Service has been appointed as the liquidator and will carry out their statutory liquidation duties to ensure a safe wind down of the company’s operations including addressing any health and safety hazards on site. The official receiver is currently making the site safe, with a view to disclaiming or selling the power station as soon as practicable.

In this interim period, while the site is made safe, the electricity through the private wire network is being maintained by the official receiver to the benefit of the customers, businesses and organisations which rely on the private wire network for their energy.

However, all parties recognise that a long-term energy solution is needed should the official receiver move to close down the private wire network, which remains outside of the UK’s supplier of last resort regulatory framework.

While the supply of power to businesses is a commercial matter between the energy supplier and its customers, the Welsh Government recognise the significant impact that any disruption to power would have on customers and the wider local economy.

It is for that reason, I am pleased to announce that the Welsh Government has contracted Western Power Distribution, as the local licensed distribution network operator, to design and build a replacement network for the benefit of Baglan Energy Park, at a cost of approximately £3m.

This measure will provide new infrastructure to the energy park, affording the opportunity to customers impacted by the liquidation of the power station the option to connect to a new OFGEM-regulated distribution network.

This action will significantly reduce the cost implications for organisations that would need to secure a new connection to the grid, and ensure that the future network is brought into full regulatory oversight.

The local taskforce, which has been convened to focus on contingency planning, will be contacting customers of the private wire network to notify them about this decision and to take forward the detailed discussions about the final connections alongside Western Power Distribution. The taskforce will continue to explore contingency support in the event the official receiver terminates the power through the private wire network before Western Power Distribution has completed its infrastructure work.

We continue to monitor the situation closely and are working with partners, including the Insolvency Service and the UK Government to explore all possible options to minimise the impact of any disruption to the power supply on organisations that rely on the private wire network.