Government says no to Swansea tidal lagoon

The government will not back plans for Swansea’s pioneering tidal lagoon power plant based on figures showing that nuclear and offshore wind can generate the same amount of electricity at a third of the cost.

Business secretary Greg Clark announced in a statement to the House of Commons yesterday (25 June) that developer Tidal Lagoon Power’s plans for a programme of six new plants off the Welsh coast failed to meet the government’s value for money requirements.

Clark said: “However novel and appealing the proposal that has been made is, even with these factors taken into account, the costs that would be incurred by consumers and taxpayers would be so much higher than alternative sources of low carbon power, that it would be irresponsible to enter into a contract with the provider.”

He told MPs that offshore windfarms could generate the same amount of electricity for a third of the estimated £1.3 billion construction cost of TLP’s plant even at today’s prices, which are expected to fall further.

And the minister said the estimated cost of the six lagoons is £50 billion, around two-and-a-half times the cost of EDF’s new nuclear power station at Hinkley that would generate a similar output of electricity. To provide the same level of generation through offshore wind would cost ‘at least’ £31.5 billion less to build, according to Clark.

He said he had received advice that the 30 TWh per year of electricity generated per annum by the full fleet of lagoons would cost up to £20 billion less if it were produced from a mix of offshore wind and nuclear, equating to an average additional £700 on the average British household’s bill over a 20-year period.

Independent advice submitted to the government estimated that innovation and capital cost reduction would only reduce the cost of constructing subsequent lagoons after Swansea by five per cent. Clark also said the energy produced by the tidal lagoons would be relatively unreliable with a load factor of 19 per cent compared to around 50 per cent for offshore wind and 90 per cent for nuclear.

He said: “Securing our energy needs into the future has to be done seriously and, when much cheaper alternatives exist, no individual project, and no particular technology, can proceed at any price.”

The government’s decision was slammed as short-sighted by renewable energy groups and opposition parties.

Former Liberal Democrat energy and climate change secretary Ed Davey said: “This is a betrayal of Britain’s energy and economic future – and will be particularly devastating in Wales. “Britain is an early leader in tidal power and has the potential to become the world champion. Tidal lagoons are the smartest way to take this opportunity. Yet the Conservatives are effectively killing it.

“The government is talking utter nonsense on the price of tidal and have failed to engage in the facts. Swansea Bay, as a pathfinder experiment, would add only 30 per cent a year to people’s bills and the next lagoon would be 80-times cheaper than Hinkley Point C nuclear power station.”

RenewableUK’s chief executive Hugh McNeal said: “This decision is deeply disappointing and shows a lack of vision. Tidal lagoons have massive potential to meet our national energy needs and create jobs, as well as bringing industrial-scale economic benefits to the UK – including opportunities to export worldwide.

“With supportive policy and continued investment, we can rapidly cut the cost of new technologies and build world-leading industries. But at present there is no financial support on offer from government for marine renewables – or any new, innovative technologies. These are high-value new technologies that the UK can export to markets across the globe.”