The Swansea Bay tidal lagoon project was designed as a pathfinder for UK tidal energy, offering a predictable and long lasting renewable energy option by harnessing British sea power to generate electricity. However, in 2018 the UK Government announced that it would not subsidise the project, which was predicted to cost £1.3bn, stating that it was simply too expensive.
While the decision was a huge blow to the project, it’s not been the end of the story. In February 2019, Tidal Lagoon Power resurrected plans to build the power station within six years without government funding.
The prospect of private funding has not changed the blueprint for the project, which is scalable in its design from UK based company, Tidal Lagoon Power.
It consists of a u-shaped man-made lagoon capable of generating power four times a day as the tides rise and fall. The lagoon’s 9.5km breakwater wall would contain 16 hydro turbines, which would have 60m long draft tubes. As the water pours through the tubes it would rotate the 7.2m diameter hydro turbines, producing 320MW.
According to its designers, the lagoon has the potential to generate electricity for 155,000 homes for a staggering 120 years and would bring a huge economic benefit to Swansea and South Wales, directly creating 2,232 construction and manufacturing jobs and £316m in Gross Value Added to the Welsh economy during construction. Following completion of the lagoon, it is predicted to add £76m each year to the local area for over a century.
The project was first formally proposed and submitted to the Planning Inspectorate in 2012. Following this, a number of studies and reports were undertaken, such as the Environmental Impact Assessment Scoping Report, and further engineering and design work was undertaken.
In 2015, the tidal lagoon was awarded a Development Consent Order, priming it for construction. Planning work continued throughout 2016, while the project awaited subsidy decisions from the UK Government.
In 2017, an independent government review produced by former energy minister Charles Hendry urged the government to stop dithering, and subsidise the lagoon. Hendry called the Swansea Bay project a “no regrets option,” and suggested it could pave the way for at least five larger scale projects around the country.
“I don’t think I have ever been to a community where people are so enthusiastic about a power station. They see this as the project that will bring about the city’s regeneration,” said Hendry.
However, despite the extensive work and the £35m spent in planning, studies and investing in the local area, in June 2018 the UK Government announced that it would not subsidise the project.
“The inescapable conclusion of an extensive analysis is, however novel and appealing the proposal that has been made is…the cost 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,” said then business secretary, Greg Clark.
Clark claimed that a fleet of lagoons could cost the average household as much as £700 a year more than a mix of nuclear and wind power by 2050. It was predicted to cost £1.3bn to construct, and given a strike price of between £92.70 and £150 per MWh. The large difference in these prices is due to the nature of the Welsh Government subsidy, and the duration of the contract.
The UK Government made its cost estimates using the higher potential strike price over just a 30 year period.
However the company argue that given a contract of 60 years the strike price becomes £92.70, the same as controversial nuclear power plant Hinkley Point C’s is set for 35 years. The company still believes these costs predictions to be the same.
The decision was met with widespread criticism, and the government was accused of failing to both support clean energy and to support Wales.
“This is a vote of no interest in Wales, no confidence in British manufacturing and no care for the planet,” said Mark Shorrock, chief executive of Tidal Lagoon Power.
After a period of quiet, however, Tidal Lagoon Power has announced that it believes that the project can be funded without government help. It said that a number of important companies, including property company Land Securities, Cardiff airport, and developer Berkeley Group, had already expressed their interest in Power Purchase Agreements (PPA) with the company.
The company is now hoping to secure enough PPA’s by the end of 2019, to enable a final investment decision to be made in early 2020. This would allow the lagoon to begin generating power by 2025.
Tidal Lagoon Power is now also looking at the possibility of including floating solar within the project, which would increase its capacity by a third, from 572GWh, to about 770GWh.
Given the stalling of nuclear power in the UK, and the need for increasing renewable power to both meet demand and carbon reduction targets, many hope that the Swansea Tidal Lagoon could still provide a key source of clean energy.
“It is becoming widely understood that there is a huge hole left in our long-term energy demands and after the latest cancellation of expected new nuclear capacity our choices if anything have become simpler – saturate the UK coastline with offshore wind or invest in groundbreaking solutions like Swansea Bay,” said Chris Nutt, the business development manager at Tidal Lagoon Power.