The proposal to build a £1.3 billion energy generating tidal lagoon in Swansea Bay is reportedly set to be rejected by the UK government in an announcement rumored to be made next week.
The decision to reject the proposal has already been made, according to a source cited by Financial Times.
The ministers were prompted to make such a decision due to high level of subsidy the developer Tidal Lagoon Power would put on UK taxpayers’ backs should the government have given the scheme a go-ahead, the Financial Times has reported.
Tidal Lagoon Power’s CEO Mark Shorrock revealed on May 9, 2018 that the company had proposed a joint funding package for the Swansea Bay tidal lagoon scheme to the UK government to ensure the lagoon’s Contract for Difference (CfD) would be no greater than that offered for the Hinkley Point C nuclear power plan.
Namely, the tidal lagoon developer proposed 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.
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.
Tidal Lagoon Power ‘blind’ to UK government’s intentions
According to Tidal Lagoon Power’s spokesperson, the company has no confirmations on the information in the media reports, calling it all ‘rumors’ at the moment.
“We have repeatedly offered to meet BEIS Ministers and have not been given the opportunity to do so.
“We are therefore blind with regards the Department’s intent on timing or content of any announcement.
“Government’s Industrial Strategy looks for homegrown and cheap power and that is what tidal lagoons offer. The unit price of power from a pathfinder project at Swansea Bay need cost no more than the unit price of power from Hinkley Point C, which has already received government backing.
“The first full scale project to follow at Cardiff offers nuclear-scale capacity but for 88 times less subsidy than Hinkley. All major parts will be manufactured in the UK, allowing government to buy British power stations in addition to those it buys from the French, Chinese and Japanese.
“We look forward to learning from government what would be an appropriate unit price for both the pathfinder tidal lagoon and the full-scale tidal lagoons it allows to follow,” the company said in a statement.
The 320MW Swansea Bay tidal lagoon has been designed to last for 120 years. The project would comprise 16 hydro turbines, a six-mile breakwater wall, and be capable of generating electricity for 155,000 homes.