Tidal lagoon energy review announced by government
10 February 2016
A review into the potential for tidal lagoon energy in the UK has been announced by the Government amid negotiations on a "world first" project.
Renewable energy firm Tidal Lagoon Power has been working to secure subsidies for a £1 billion scheme to build the world’s first lagoon power plant which would harness the energy of the tides in Swansea Bay.
While the Government has expressed backing for tidal lagoons, Prime Minister David Cameron recently warned his enthusiasm had been “reduced” by the costs, with much higher subsidies than nuclear or offshore wind mooted at one stage.
The company claims the Swansea Bay lagoon would be a proof-of-concept project opening the way for a series of lagoons around the coast, costing less due to economies of scale and meeting 8% of the country’s power needs for 120 years.
The Government has announced an independent review into whether the lagoons represent value for money and how they could contribute to the UK’s energy mix in the most cost-effective way.
Ministers said the review would start in the spring and would establish an evidence base to make sure all decisions were made in the interests of the UK.
The announcement comes days after the development of tidal lagoon schemes received a boost with a commitment of millions of pounds to the technology in the UK and India.
The investment by the Gupta family, thought to be around £10 million, gives it a substantial stake in Tidal Lagoon plc, a holding company set up to finance the development of full-scale tidal lagoons to generate clean power in the UK and abroad.
The Government said it expected that Tidal Lagoon Power and other stakeholders would take part in the review while discussions about Swansea Bay continued.
Energy minister Lord Bourne said: “Tidal lagoons on this scale are an exciting but as yet an untested technology.
“I want to better understand whether tidal lagoons can be cost-effective, and what their impact on bills will be – both today and in the longer term.
“This review will help give us that clarity so we can determine what role tidal lagoons could have as part of our plans to provide secure, clean and affordable energy for families and businesses across the country.”
The Department of Energy and Climate Change said the review would consider if the technology could play a cost-effective role in the energy mix and the scale of opportunity in the UK, including supply chains for the lagoons.
It will also look at a range of ways to finance lagoons and whether a competitive framework could be put in place for delivering projects.
Mark Shorrock, chief executive of Tidal Lagoon Swansea Bay, a company set up by Tidal Lagoon Power to build the Swansea scheme, welcomed the review as showing strong interest from the Government in the technology.
But he warned the review should “not be a substitute for action” and negotiations on Swansea Bay must be concluded within six weeks.
The Swansea Bay project was ready to go now, he said, with a financing system that could bring subsidies under £100 per megawatt hour (MWh) – lower than offshore wind and close to nuclear – or just 10p on people’s bills.
A second, much larger scheme, in Cardiff could be delivered with subsidies of just £68.30/MWh, he said.
“If tidal lagoon power at scale is to be a real option for the longer term, we need to start work on Swansea Bay Tidal Lagoon now. Otherwise the opportunity will be lost and the review will be all for nothing.
“We want to give birth to a tidal range industry. We want to return steel workers into jobs.
“We want to make our own turbines and generators here in the UK, we want to bestow a legacy on Great Britain from Wales of 120-year life power. But none of this will be possible if we don’t start now.”
He called on the Government to give the go-ahead for Swansea Bay, “thereby avoiding the stillbirth of a game-changer for UK energy and UK industry”.
Tidal lagoon technology is the latest attempt to harness clean energy from the power of the Severn Estuary, which has the second highest tidal range in the world.
Reviews in recent years of the possibility of a barrage right across the estuary to harness its tidal power have concluded there was no proven case for implementing such a scheme.
Industry body RenewableUK’s deputy chief executive Maf Smith said: “Swansea Bay is a large and innovative infrastructure project and Britain has a unique opportunity to take the world lead in this technology.
“We are confident that this review will show the huge potential tidal lagoons have to the UK; boosting the economy and providing clean energy for generations to come.
“Each new project that’s built will offer even better value for money due to economies of scale.
“It’s important to note though that a decision on the Swansea Bay project needs to be forthcoming, and that further delays could jeopardise these opportunities.”
Liberal Democrat leader Tim Farron said: “I am concerned that this review could just be used as a smokescreen to try and justify even more cuts to the green energy sector.”
He accused the Tories of unravelling support for the green energy sector since the Lib Dems left Government.
He said: “Britain could be the world leader in green technology if the Government would back the industry, rather than cutting support and creating more uncertainty for those willing to invest.”
Photo from Tidal Lagoon Power / PA Wire