By Richard Digard
A CALL earlier this month by Reform Jersey leader Deputy Sam Mézec for Island Energy – the gas utility company – to be taken into public ownership, following the near week-long outage affecting around 4,000 homes and businesses, raises an important CI issue: what’s the point of propane? Or, if you prefer, does gas have a future?
It’s an elephant-in-the-room question that receives very little air time, with attention focused on net-zero and a dash for renewables, but could really, as Deputy Mézec highlights, be centre stage of any energy debate.
Calls for nationalising private businesses are quaintly old fashioned these days and I guess even Jersey Gas/Islands Energy Group’s best friend would be cautious about recommending it as long-term investment, because this is clearly a utility under pressure.
Doubts raised by the supposed gas explosion in St Helier last December, the reputational damage caused by the total closure of the supply this month and the switch away from fossil fuels inevitably accelerate the rush for other energy sources.
My interest in this started when the States of Guernsey began publishing power-use statistics some years ago and the drift away from the stuff became apparent.
There had been a spike in use a while back because, I think I’m correct in recalling, the then gas company offered free boilers to property developers creating new units. Smart move. It locked tenants/owners into long-term-supply contracts and – crucially – helped to defray the massive fixed cost of the gas production and distribution network.
And it’s this that Deputy Mézec seems to have in mind with his calls for nationalisation.
In Guernsey, for example, the latest statistical digest shows that, in 2022, 56.8 GWh of gas were consumed in the island, which was 16% less than in 2021 and 24% less than five years earlier – a massive 40% decline in that period and one that is not sustainable.
Islands Energy Group knows all this, of course, which is why it is in a massive transformation process. As it says: ‘We’ve made being a role model for net-zero a strategic business objective which is steering changes in how we operate and what services and products we offer.’
Two things here. The first is to stay in business despite currently being at the forefront of the carbon emitters. The second is that the group represents a rich history of energy provision in Jersey, Guernsey and the Isle of Man.
For instance, gas first lit the streets of St Peter Port in 1830 and a year later in St Helier. Large crowds gathered in King Street to watch the dazzling effects as shops and other establishments were lit up for the very first time, while the Isle of Man experienced the same in 1836.
These were all separate companies back then, but used the same process – roasting coking coal to drive off the so-called town gas which was collected in huge gasometers (which some of you will remember) before it was piped to customers. As a result of technology, the supply now used in these islands is liquefied petroleum gas, derived from oil. Cleaner, certainly, but still fossil-fuel based.
And therein lies the problem – can a gas company ever be seen as green? IEG chief sustainability officer Alex Herschel says they need to reduce the company’s operational carbon footprint while increasing support for local environmental initiatives at the same time as diversifying into new products and exploring alternative energy sources such as green hydrogen.
Jo Cox, the group’s chief executive, puts it this way: ‘We’re committed to achieving net-zero, but this won’t happen overnight. Gas will continue to have a place in the energy mix as it is vital for the success of our islands’ energy transition – and we plan to be a big part of the net-zero future so we can continue to provide energy for every generation.’
So, yes. After supplying fossil fuel gas for the best part of 200 years, it can apparently make that leap. It certainly intends to try.
It’s ambitious and a couple of things are at play here. Most of us see the move to reduce CO2 emissions as a switch to electricity. As indeed does Deputy Mézec. Challenged on this on Twitter, now known as X, he said: ‘Agreed. But a private company will never be an effective partner in that transition. If we start reducing their customer base, they could eventually just go bust, leaving homes and businesses without their supply.’
So, he says: ‘We should nationalise with the aim to transition them out.’
Not my favourite course of action at all – but it could happen by default if there was ever a real possibility of the company going under. Would the Crown Dependencies really leave an estimated 40,000 customers hanging without heat, hot water or cooking power and no immediate alternative? Especially after Jersey’s recent experiences and damage to the hospitality sector.
The other aspect, however, which I hadn’t considered until browsing IEG’s website, is whether gas can help wean us off our dependence on oil. According to a recent paper from Policy Centre Jersey, of the total energy consumed in the Island, 58% is provided by oil, 38% by electricity and 3% by gas. It will, I assume, be broadly similar in Guernsey.
Like thousands of others in the island, I use oil, but an old, poorly insulated cottage and inadequate electrical supply in the road mean a heat pump isn’t a practical green alternative to our energy needs now we need to replace the boiler – no matter how keen we are to reduce our carbon footprint.
Can a truly net-zero gas company (if such a thing exists) help reduce the islands’ dependence on oil over an acceptable timeframe until alternatives develop? IEG certainly thinks so (as its vision states) via ‘a modern approach under a future-focused lens to meet the needs of every generation, now and in the future’.
Let hope it’s right. Otherwise the Jersey taxpayer might be funding Deputy Mézec’s nationalisation aspirations simply to keep the last remaining customers warm and fed.
