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Recent reliance on on-island electricity generation is going to take its toll on Guernsey Electricity this year, according to the President of STSB, as the utility firm forecasts a £5m. loss.
Since the failure of the GJ1 cable in 2018, the company has been scrambling to secure a more reliable connection with Jersey to get access to its main source of electricity once again.
Since the Vale Power Station became Guernsey's main generation point again, Guernsey Electricity has been facing monthly running costs of between £800,000 and £1m., and emissions have increased around four fold.
Pictured above: Deputy Peter Ferbrache, President of the States Trading & Supervisory Board.
Deputy Peter Ferbrache made the announcement during an update to the States during the monthly meeting, which started yesterday, when he also confirmed a contract for a new cable has been signed.
He said quick progress had been made on getting plans for that new cable in place, since the local utility announced it would need to splash out for a new one following the break down. The replacement cable project is now expected to cost £30m. It will be funded by long-term loans, some of which will be provided commercially and some of which - approximately £15m - the Policy & Resources Committee has agreed to provide using the States' Bond.
Deputy Ferbrache said: "Despite the repairs undertaken last year, I have to advise the Assembly that there remain significant concerns over the cable's integrity. Ongoing monitoring since the cable was re-energised has identified at least one further potential off-shore fault. The fibre optics that run through the cable have failed at the location concerned.
"As such, our reliance on on-island generation continues. The impact on GEL's financial and environmental performance is significant. By any measure, this is not a tenable position. However, GEL has kept the STSB fully and regularly briefed on the matter and we have been reassured by GEL's focus on the need not just "to keep the lights on" in the short-term, but also on ensuring that the Island has an affordable, secure and environmentally sustainable supply of electricity in the long-term.
"So, today I am pleased to advise the Assembly that GEL has now entered into a contract for a replacement cable between Guernsey and Jersey that will restore very quickly a resilient supply of low-carbon and affordable electricity imports to the Island. As shareholder, the business case for this project has been approved by the STSB. The cable is now being manufactured and a cable laying ship has been secured. It is expected that the new cable will enter service this October."
GEL CEO Alan Bates.
As part of the new project to install the fresh cable, the States Trading Supervisory Board have ensured Guernsey Electricity can be sure of the following:
Deputy Ferbrache also spoke about Guernsey Electricity's long term subsea cable strategy. It is continuing to develop a business case for a cable to France, he confirmed, but he also acknowledged the importance of looking at renewable energy in the future.
He said: "There are many inter-dependent issues that need to be balanced here, including the security, affordability, sustainability and independence of our electricity supplies. A decision on a second cable direct to France cannot be taken in isolation and can only be considered once the States has updated its Energy Policy. This policy will be pivotal for setting the direction for such a significant investment decision.
"In closing, I think it would be fair to characterise the last few months as having been very testing for GEL. It would be very easy to underestimate the substantial amount of work that has been involved for the Company, its Board and staff in accelerating by several years its plans to replace the GJ1 cable."
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