Albert Owen distorts reality over Anglesey Aluminium closure again

Yesterday it was announced that Anglesey Aluminium will officially commence decommissioning the holyhead plant meaning that aluminium smelting will never again return to Anglesey. In response to this bad news, Albert Owen MP has popped up to once again to apportion blame for the plant's closure on anyone other than his own Labour government. Previously Albert has blamed "Conservative hypocrisy" for its closure, this time he lays the blame squarely on Anglesey Aluminium itself, saying "If the company was serious about continuing to smelter it would have taken up the generous government offer in 2009 to help bridge the gap over a difficult economic period".

Just as Albert never tires in peddling these blame-avoiding half truths, the Druid never tires in setting the record straight here. 

The UK's declining energy capacity
compared to rising peak demand levels
(Source: The Economist)

Anglesey Aluminium was forced to close because it used to consume daily 12% of Wales' total electricity and therefore depended on a cut-price electricity deal with the nearby Wylfa nuclear power station. Now, It was clear for years that the Wylfa reactor - which has been producing electricity since 1971 - would need to be decommissioned around this time, and when that happened the economic viability of Anglesey Aluminium would be severely compromised unless a new reactor was already in place at Wylfa. Unfortunately, as we all know, the previous Labour government's obsession with 'renewable energy' and expanding the proliferation of windmills across the country led it to take its eye of the ball of preserving our essential power supplies. The fact is that most nuclear plants (including the current Wylfa reactor) and half of UK's coal plants are due to close over the coming decade and the Labour government had no concrete plan on how to replace them. The Department of Energy and Climate Change itself estimated last year that, of a total of around 75GW in generating capacity, 20GW will disappear by 2015. And as the current peak demand is around 65GW and growing, that means that the UK could be facing energy blackouts by as soon as 2015.

Anyway, as the current Wylfa reactor inevitably neared the end of its working life, it was acquired by the Government's Nuclear Decommissioning Authority (NDA) to be decommissioned. Now essentially government owned, the NDA's lawyers had to inform Anglesey Aluminium that Wylfa would no longer be able to supply it with the cut-price electricity on which it depended as that would constitute 'state aid' under EU law. Indeed, this was made clear by the NDA in January 2009 when its spokesman said this:

"There’s been no breakdown in the relationship between ourselves and Anglesey Aluminium but we have explained to them the situation. We cannot extend the current contract with them due to new European legislation on providing subsidies to private companies.”

Furthermore, Anglesey Aluminium was anyway sensing difficulties ahead due to the then Labour government's pledge to reduce UK carbon emissions by a staggering 80% by 2050 (incidentally this pledge was made by Ed Milliband - the very man Albert Owen is now backing to become Labour leader). To meet these goals, the EU has introduced a carbon trading scheme - an administrative approach to control pollution (in the shape of 'carbon') by providing economic benefits to companies for achieving reductions in the emissions of carbon. During a debate about the closure of Anglesey Aluminium in the Houses of Parliament, Robert Goodwill MP, the then shadow transport secretary, had this to say about the EU scheme:

"is not the fundamental problem the operation of the European Union emissions trading system, which is making it increasingly difficult for primary metallurgical industries to operate in the EU? It would be all well and good if it resulted in the reduction of global CO2, but it merely results in carbon leakage to other economies such as China and India, which are not constrained in the same way."

Exactly right, and precisely what happened in the case of Anglesey Aluminium - many of whose managers were headhunted to work at Dubai's new state-of-the-art aluminium smelter, operating safely outside the EU's emissions trading system. The simple fact is that charging for carbon adds yet another layer of anti-competitiveness for already struggling heavy industries operating within the UK or Europe.

Due to this 'double whammy' affecting its future viability, is it any surprise that Anglesey Aluminium -without a secure supply of cheap energy - decided to turn down a pre-election bribe of £48m from a panicking Labour government eagerly trying to paper over the cracks of its incompetence and lack of foresight in the field of Energy Policy? 

Bonus Extra: If you need any more persuasion then please read this blogpost where I explain how both the Corus Steelworks in Teeside and Anglesey Aluminium died of the same causes.