Widespread criticism as UK govt rejects Swansea Bay Tidal Lagoon

25 June 2018

The UK Government has formally rejected plans for a 240MW tidal lagoon in Swansea Bay, with the decision widely criticized throughout the industry.

In a statement, Business and Energy Secretary Greg Clark said that “the project and proposed programme of lagoons do not meet the requirements for value for money, and so it would not be appropriate to lead the company to believe that public funds can be justified.”

The government said that the proposal for the Swansea tidal lagoon would cost £1.3 billion to build. If successful to its maximum ambition, it would provide around 0.15% of the electricity the UK use each year. The same power generated by the lagoon, over 60 years, for £1.3 billion, would cost around £400 million for offshore wind at today’s prices, with the UK government expecting it to be cheaper still in future.

The capital cost per unit of electricity generated each year would be three times that of the Hinkley Point C nuclear power station, Clark said.

The Welsh Government said the decision to not support the scheme was a ‘crushing blow to Wales’. In January this year, Wales’ First Minister Carwyn Jones pledged financial support to help kick-start the project, and called on the UK government to “stop stalling” its decisions on the project. Jones said at the time that he is “ready and willing” to provide “further substantial investment” in the project to help it get off the ground. A figure of between £100 million and £200 million had been put forward by Jones’ government to kick-start development of the scheme.

Developer Tidal Lagoon Power (TLP) has already been granted a £1.25 million loan from the Welsh government but the project is largely privately financed. The main backers are Infracapital, the Gupta family, Good Energy and over 300 individual investors.

In early 2017 a review into tidal lagoon technology commissioned by the government recommended the backing of the Swansea project in order to spur the development of a new industry in the UK.

Following the news this afternoon that the project was effectively dead in the water, Ocean Energy Europe released a statement saying that it regrets the UK government’s decision not to include tidal lagoons in its energy mix.

 “The benefits of tidal lagoons were well recognised, the cost of support comparatively cheap, and the long-term perspective very promising. Today’s decision is therefore regrettable,” said Rémi Gruet, CEO of Ocean Energy Europe. “The UK government should now make sure it doesn’t miss out on other emerging technologies such as tidal stream or wave energy. The UK is the global leader in tidal stream, and the world’s most advanced projects are generating electricity in UK waters today.

Environmental groups are also criticizing the Government’s decision. Emma Gibson, Senior Campaigner at Greenpeace UK, said: “Today the people of South Wales learnt that they won’t be hosting the first tidal lagoon in the world, losing the potential for new jobs, a new export industry and a new source of reliable, clean energy. A government that styles itself as an international leader in tackling climate change has just rejected the opportunity to become the international leader in developing tidal lagoons that produce clean energy day and night, and whose prices would have fallen after this first demonstration project. Instead the government is preparing to throw billions of taxpayers’ hard earned cash at a nuclear industry that has been relying on hand outs for 60 years, as its prices just keep spiralling and delivery is delayed year after year. Instead of supporting a potential success, the government has decided to continue propping up a failure."

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