Welsh Government action resolves threat of blackouts at Baglan Energy Park

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Welsh Government action resolves threat of blackouts at Baglan Energy Park

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Businesses and other organizations at an energy park in Neath Port Talbot, which faced power cuts after a private electricity network was placed into liquidation, are successfully connecting to a newly installed electricity network following Welsh Government intervention.

Businesses at Baglan Energy Park previously received their electricity supply via a private cable network from an on-site gas-fired power plant. In March 2021, the company that owns the private wire network was declared in compulsory liquidation.

This resulted in the company’s operations, including the private cable network, becoming the responsibility of the UK government’s insolvency office, which was tasked with winding down operations.

The Welsh Government has been working closely with partners and affected organizations for over a year to prevent and minimize the impact and disruption to power for organizations that rely on the private cable network.

This involved working closely with Neath Port Talbot Council, Dŵr Cymru Welsh Water, the UK Government, OFGEM, the Insolvency Service, the Official Receiver, Natural Resources Wales and Western Power Distribution to find a solution to this challenging problem.

The Welsh Government has invested over £4 million to support Western Power Distribution, as the local licensed distribution network operator, to rapidly design and build replacement networks. This investment allowed Western Power to speed up the process of building a new network – which would initially take between 18 months and two years to build. The investment also minimizes the significant costs that affected businesses would have to cover to connect to the new network.

As well as financial support, the Welsh Government has provided practical support to businesses, including helping them to map and identify their peak demand requirements, informing the design of the new electricity network.

In late 2021, the UK government’s official receiver announced it would shut down the private cable network in mid-January 2022 – months before the date organizations were scheduled to be connected to the new network.

This action would mean businesses, services and critical infrastructure in the park would have to bridge the energy supply gap with diesel or gas generators, which are more expensive, less sustainable and have the potential to significantly impact local air quality . There was a real risk of a diesel power cut in a storm with potentially catastrophic consequences.

The Welsh Government has taken action to prevent this. Together with Neath Port Talbot Borough Council, Dŵr Cymru and Sofidel, we issued legal proceedings to prevent the UK Government’s official receiver from terminating the private cable network until a new long-term electricity network is in place.

The new electricity connections – which feed directly through the National Grid – have now been completed, with most customers already connected to the new network.

This means that potential disruption to Baglan Energy Park customers has been successfully minimised.

This intervention helped protect businesses that would have been affected by the loss of electricity, potentially jeopardizing up to 1,200 local jobs, and prevented flooding by keeping flood pump stations powered.

Economy Minister Von Götting said:

“I am delighted to have had the opportunity to visit the Baglan Energy Park to meet with some of the businesses affected by more than a year of uncertainty surrounding their energy supply. There is no doubt that this has been a very stressful and uncertain time for them.

“When the UK Government refused to act, the Welsh Government stepped in. Had we not acted then, serious long-term damage could have been caused.

“The action we took came at a significant cost to the Welsh Government. However, I am convinced that the time and money were well spent. We have successfully avoided the risk of major job losses, flooding and potential environmental pollution.

“It was an incredibly frustrating time. It is astonishing that the UK Government has actively opposed our actions in the courts to protect jobs, the environment and the health of tens of thousands of people. By taking this action, the Welsh Government has stood up for the people of Wales. This is another great example of decentralization in action.”

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