The First Minister for Wales Carwyn Jones has written to the UK Prime Minister Theresa May stating his intention to provide ‘substantial’ investment for the Swansea Bay tidal lagoon if that would enable the project to move forward.
Jones called UK government’s continued delay to green-light the Swansea Bay tidal lagoon ‘regrettable’, voicing also the fears of a growing risk that the continuing lack of a decision will turn, by default, into a decision not to proceed with the project.
The move comes a year after the government-commissioned review, conducted by the former UK energy minister Charles Hendry, backed the project stating that moving along with the ‘pathfinder’ Swansea Bay tidal lagoon was a ‘no-regrets policy’.
The First Minister said in the letter to May that he was ready to consider substantial investment by the Welsh government for the project to kick-start its development.
Jones said: “The key to enabling the Swansea Bay project to proceed lies, of course, with the UK government agreeing an appropriate contract for difference arrangement.
“However, I want to make clear that I am prepared to consider a substantial equity and/or loan investment by the Welsh government if that would enable the project to move forward.
“This investment could help to reduce the cost of capital for the project and hence reduce the subsidy requirement over the lifetime of any contract for difference.
“Any investment by the Welsh government would, of course, be conditional on the UK government agreeing to an appropriate contract for difference arrangement and the project securing any necessary licenses and consents.”
Tidal Lagoon Power, the developer behind the Swansea Bay tidal lagoon, is still awaiting the subsidy agreement with the UK government.
The company has deemed Jones’ proposition to the UK government as ‘breakthrough’ for the project.
Mark Shorrock, CEO at Tidal Lagoon Power, said: “This is the breakthrough our project has needed. We thank the First Minister and his team for their leadership. We look forward to working alongside the Welsh government to now close the deal for Swansea Bay Tidal Lagoon with the UK government.”
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.