The Cabinet Ministers of the United Kingdom have reportedly lost confidence in the viability of the Swansea Bay tidal lagoon over high costs.
Almost a year after positive recommendations made in the Hendry Review for the Swansea Bay tidal lagoon, the project has not yet received the final green light from the UK government.
Now, the support among the cabinet ministers for the project seems to be dwindling as they have concluded the proposed Swansea Bay tidal lagoon does not justify value for money for taxpayers, according to the Financial Times.
The paper has cited another government official who said the ministers ‘got cold feet’ when it comes to the project, due to falling prices for other renewable energy sources, particularly offshore wind, which in the latest UK contracts for difference auction reached the price of £57.50/MWh.
“The government should make a decision on projects such as the Swansea Bay Tidal Lagoon. If they don’t think it can make a contribution, then they should be honest about that and explain what other measures they will take to reduce our carbon emissions,” Rachel Reeves, Chair of the Business, Energy and Industrial Strategy Committee, was quoted as saying by the Financial Times.
The proponents of the project have been allegedly seeking a 90-year contract with the UK government, with a guaranteed price of £123 per MWh, that would fall under £100 in subsequent years.
Responding to the reports, a spokeswoman for Tidal Lagoon Power, the developer behind the scheme, said:
“Swansea Bay Tidal Lagoon will act as a catalyst for highly skilled jobs in British engineering, manufacturing, steel and construction today and for decades to come. Tidal lagoons will also tackle head on low productivity levels in some of the nation’s most economically deprived regions.
“The government’s own independent review found that tidal lagoons can compete on price with the alternatives and challenged government to unlock this potential via a strategic investment in a pathfinder lagoon costing UK households less than a pint of milk per year.
“The UK’s new Industrial Strategy is barely a month old. The people of Swansea Bay, manufacturers across the UK and politicians of all persuasions now eagerly await confirmation that its words will translate into actions.”
If constructed, the £1.3 billion Swansea Bay tidal lagoon will have the capacity of 320MW. It will comprise 16 hydro turbines, a six mile breakwater wall, and be capable of generating electricity for 155,000 homes for the next 120 years.
More than £200 million has been provisionally committed by the investors headed by Prudential.
About £35 million has been spent on developing the project so far, financed privately, with the exception of a commercial loan from the Welsh government.
Most of the project’s £1.3 billion capital spend would be on content sourced in Wales and across the UK, according to RenewableUK.
Swansea Bay tidal lagoon is considered to be a ‘pathfinder’ for the tidal lagoon industry as Tidal Lagoon Power is also looking to develop tidal lagoon plants in Newport, Cardiff Bay, West Cumbria, Colwyn Bay and Bridgwater Bay.