Tidal lagoon: £1.3bn Swansea Bay project to be backed

Media captionCould Swansea’s tidal lagoon become a world first?

Plans for a £1.3bn tidal lagoon in Swansea Bay have been backed by a government-commissioned review.

Charles Hendry’s independent report into the technology’s viability said it would make a “strong contribution” to the UK’s energy supply.

He said it was cost effective and would bring “significant economic opportunity”.

The UK government still needs to agree on a deal and a marine licence would also need to be approved.

Mr Hendry said moving ahead with a pathfinder lagoon off the Swansea coast should be seen as a “no regrets” policy.

“I don’t believe there would be any debate in decades to come about whether this was the right thing to do,” he added.

There are hopes of developing a network of larger lagoons around the UK coast, harnessing power from the ebb and flow of the sea’s tides.

But Mr Hendry believed that was “too ambitious a goal” before even one had been built and “could only be considered properly when more progress had been made”.

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TLP

Image caption

Charles Hendry started examining the tidal lagoon project’s viability in early 2016

Mr Hendry made 30 conclusions, including:

  • The technology would “contribute positively” towards the UK’s decarbonisation goals
  • It was “beyond question” that local economic regeneration would follow a tidal lagoon and it was “probably no understatement” that many companies believe it offers a “lifeline”
  • It offers “significant economic opportunity” for Wales and the UK although it would take an “additional leap of faith” to believe the UK could be the main beneficiary of developing lagoons overseas
  • The potential impact on consumer bills of large scale tidal lagoons “appears attractive, particularly when compared to nuclear projects” in the long term
  • A high level of monitoring of environmental impacts would still be needed
  • A Tidal Power Authority should oversee the new industry
  • Competitive tendering for future projects “to deliver the most substantial cost reductions” – similar to the nuclear industry
Media captionCharles Hendry said the tidal lagoon power plan was affordable

Former UK energy minister Mr Hendry has been gathering evidence for nearly a year for his independent inquiry, including visits to all the potential sites and discussions with industry.

Mr Hendry said: “If you look at the cost spread out over the entire lifetime – 120 years for the project – it comes out at about 30p per household for the next 30 years. That’s less than a pint of milk.

“That’s where I think we can start a new industry and we can do it at an affordable cost to consumers.”

The Swansea Bay project would involve 16 turbines along a breakwater but is seen as only the start – a prototype for much larger lagoons.

The “fleet” includes one off the coast of Cardiff – east of where Cardiff Bay is now – Newport, Bridgwater Bay in Somerset, Colwyn Bay and west Cumbria, north of Workington.

Speaking on BBC Radio 4’s Today programme, Mr Hendry said the lagoon would be a “world first” which was different to barrages elsewhere in the world as lagoons do not block the mouth of a river.

“We know it absolutely works,” he said.

“One of the great advantages is, it is completely predictable for all time to come – we know exactly when the spring tides and neap tides are going to be every single day for the rest of time.”

He said the best way to look at the cost was the subsidy required by the taxpayer over the lifetime of the project.

This calculation gave “a very much lower figure than almost any source of power generation,” he insisted.

In his report he “strongly cautions” against ruling out tidal lagoons because of the hopes of other cheaper alternatives being available in the future.

Swansea Bay would act as a “pathfinder” project, allowing people to learn more about the technology and bring the cost down.

Tidal Lagoon Power (TLP) claims the Cardiff lagoon is being designed to generate enough electricity for all homes in Wales and that it would be the cheapest electricity of all the new power stations in the UK.

One of the key questions will be over the so-called “strike price” – the deal with the UK government to provide a guaranteed price for the energy the lagoons will generate.

Gloucester-based TLP’s contention is that the Swansea project will test the technology but it will come into its own – and could eventually meet 8% of the UK’s energy needs – when the network of more cost-effective, larger lagoons come on stream over the next 10 years.

TLP forecasts that its lagoons would generate power for 120 years and is seeking a 90-year contract at £89.90 per mega watt hour (MWh)

That would be below the £92.50 per MWh agreed for the new Hinkley C nuclear power station.

Analysis

By Roger Harrabin, BBC environment analyst

There are two big questions over lagoons: Will they harm wildlife and can they be built cheaply enough? There’s no evidence yet on wildlife but most environment groups seem willing to see one trial lagoon built, then make an assessment.

On price, the firms backing the technology are confident they can force down costs if they get approval for a series of lagoons around the coastline.

Lagoons involve two long-established technologies – building breakwaters and running hydro-electric turbines – so some will be sceptical.

But recent experience with offshore wind turbines has shown costs can sometimes fall faster than predicted.

The firms hope that as Theresa May’s government has already embraced two mega projects in HS2 and Hinkley Point, it may be enthused by another plan for engineering on a heroic scale.

Follow Roger on Twitter @rharrabin

Media captionWatch Tidal Lagoon Power’s video of how the turbines would work

Tidal energy plans for Swansea Bay first emerged in 2003 but the current project has been developed over the last four years.

At low tide, water would flow from the lagoon into the sea, and at high tide from the sea into the lagoon.

If lagoons are supported it could be a boost for Welsh companies and signal the dawn of a new industrial era, worth £15bn.

More than 20 companies earlier this week urged the project to be given the go-ahead, calling it one of the “biggest industrial opportunities in a generation”.

But there are still environmental concerns and Natural Resources Wales (NRW) will be looking at the impact on flooding, fish, birds and marine habitats before it awards the all-important marine licence.

The process started in 2014 with no sign of it being resolved, with TLP and NRW saying they have been in “exhaustive discussions” about the impact on fish.

Welsh Secretary Alun Cairns said: “We now need to study this report and decide how tidal lagoons could contribute to the nation’s energy needs both in Wales and the rest of the UK.”

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