Tidal Lagoon Power’s CEO Mark Shorrock revealed on May 9 that the company had proposed a joint funding package for its Swansea Bay tidal lagoon to the UK government to ensure the tidal lagoon’s Contract for Difference (CfD) would be no greater than that offered for the Hinkley Point C nuclear power plant.
Namely, the tidal lagoon developer proposes incorporating the recently pledged Welsh government’s investment alongside a CfD that the UK government would award, so the project is secured to run at a strike price similar to that agreed for the nuclear power station, which is £92.50/MWh.
Discussing the project economics, Shorrock said the subsidy period should be set at 60 years with the price supporting it descending, as recommended by Charles Hendry in his review, rather than a 35-year period with the subsidy being allocated in an ascending manner.
In the case of a 60-year subsidy structure and without funding from the Welsh government, the project would have a strike price of £92.70/MWh, while a scenario looking at a 35-year subsidy period without backing from Wales would mean the tidal lagoon coming at a price of £150/MWh.
The company’s CEO discussed this at a meeting held as part of a joint inquiry by the Business, Energy and Industrial Strategy (BEIS) Committee and the Welsh Affairs Committee, who are investigating the UK government’s decision-making process regarding the project and examining delays and obstacles in reaching the final decision on whether to approve the tidal energy lagoon.
Marine Energy Staff