- Conference
- 2003 Energy Service Group Conference
- Date
- 4 March 2003
- Decision
- Carried
Conference notes with concern the deepening crisis in the electricity sector of the liberalised energy market. This has been demonstrated by
1.The near financial collapse of British Energy which has required the Government to provide guarantees to creditors and institute emergency legislation to ensure the continued operation of the company.
2.The financial difficulties faced by several companies including TXU Europe, which led to the sale of its assets to E.on and the subsequent announcement of 1000 job cuts by its subsidiary company, PowerGen, Aquila (owners of Midlands Electricity Distribution business) and AES Drax Power Limited.
3.The failure of several electricity companies in restoring customers to supply, keeping them informed and compensating them afterwards following the storms in October last year.
4.The impact on wholesale electricity prices of the New Electricity Trading arrangements (NETA) which is leading to the closure of power stations or the mothballing of generating units including environmentally friendly gas stations built within the last 10 years
5.The adverse impact of NETA on renewable energy sources and energy-efficient Combined Heat and Power plants.
6.Increased insurance costs as generating companies reduce their maintenance schedules in order to cut operating costs, which increases the risk to consumers of power failures and threatens the efficiency of the plant.
Conference notes that OFGEM asserts that these events are the result of the “market” addressing the over capacity problem in the generating market. However the so-called over capacity problem is the direct result of the industry’s privatisation and the subsequent “dash for gas”.
Conference also notes that an industry commissioned study by consultants Nera predicts that the country could face power shortages by 2004
Conference calls on the Government to address these issues in its Energy White paper with a view to establishing an energy policy, which has as its central concern the national interest rather than sectional interest of shareholders or an ideological obsession with competitive markets.