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YesCymru Milford Haven - Nationalisation of energy in Wales

Yes Cymru recently launched a petition to demand that the Welsh Government has full control of natural resources in Wales. In the midst of a cost-of-living crisis not seen for forty years, this week we explore whether energy should be nationalised in Wales. 

While the rise in wholesale gas prices has led to energy suppliers passing the costs on to customers, the news that some energy firms in the UK have noted record profits in the midst of a cost-of-living crisis, has sparked renewed calls for the price cap to be reduced. 

Shell reported record profits of $9.1bn for the first quarter of the year, and Centrica, announced a 500% increase in quarterly profits in July, totalling £1.34bn in profit. 

It has since been announced that the energy price cap will rise 80% this year, amounting to roughly £3,549 a year for those on average use, direct debits and dual fuel. Martin Lewis and Cornwall Insight have also predicted that energy prices could rise 50% further by January 2023, and have warned that without government assistance, people could die, as more continue to cut down on food and heating. 

In response to this crisis, MS Carolyn Thomas has called for energy companies to be brought under public ownership, arguing that doing so would reduce the costs for many consumers. 

The spectre of nationalisation has been part of the national debate before the current cost of living crisis emerged. 

It was reported in 2019 that as many as one in ten people were living in fuel poverty and research by National Energy Action and E3G found that there were 17,000 deaths in the UK due to cold living conditions during the winter of 2018. 

The lack of support with the energy crisis is all the more significant given the fact that energy is recognised as an essential service, and suppliers are required to provide equitable access to services in line with the Government regulator, Ofgem’s regulations. 

However, it is clear that consumers are not being protected. 

Nationalisation could see the creation of a National Energy Agency to own and maintain transmission infrastructure, while also shifting to wholesale renewable energy provision. Plaid Cymru’s 2021 manifesto also proposed the development of a Wales-owned energy company. 

In Europe, Denmark’s transmission grid is publicly funded; water, gas and electricity networks are all publicly funded in the Netherlands; and the city of Munich in Germany is developing 100% municipal and 100% renewable energy by 2025.

However, neither the UK Government nor the UK Labour party favour a move to nationalisation. 

The UK Parliament Welsh Affairs Committee in 2021 recognised that Wales is the fifth largest exporter of electricity in the world, producing 25% of all its’ generated electricity from renewables, and generating double the energy it consumes (30.2 TWh to 14.9 TWh). 

Yet, despite this, Welsh consumers are not benefiting from Welsh energy production and are on average, paying the highest energy rates in the UK, according to recent analysis of ONS data. 

As reported last week, Wales also has the highest rates of poverty in the UK and it is likely that Welsh households will also suffer the brunt of the rise in energy costs. 

In order to address this crisis, the Welsh Government must urgently explore the potential of developing a Welsh energy company and energy agency. 

However, only full control of our infrastructure projects through independence can hope to mitigate the impact of the crisis. 

This is an article written by Maria Pritchard of Yes Milford Haven and published in the Pembrokeshire Herald newspaper on 16.09.2022

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