Uncertainty still hangs over Welsh tidal lagoon projects

Daily Telegraph Business reports, 9th September 2017: An £8bn plan to build Britain’s first full-scale tidal lagoon power project in Cardiff is moving ahead even as government approval for the controversial technology hangs in the balance.                                                                                       

For over two years the developers of the Swansea Bay Tidal Lagoon have waited for a decision on whether to support the relatively untested technology. This week, in a show of confidence, the group will confirm a milestone agreement with National Grid to connect the full-sized follow up programme planned for Cardiff.

Developers of the Swansea Bay Tidal Lagoon want the Government to sign up for 90 years
Credit: Tidal Lagoon Power

The grid deal is partly designed to pile pressure on the Government to shake it from its paralysis over whether to support tidal power, which faces controversy over steep upfront costs.

Mark Sharrock, the chief executive of Tidal Lagoon Power, is hoping for a government contract that secures the £1.3bn Swansea project a revenue stream of £89.90 per mega-watt hour of electricity delivered to the grid for its entire 90-year lifespan. In return, he has promised that costs for the Cardiff follow-up project will fall to lows of ­between £60-£70/MWh as it benefits from lower supply-chain costs.

Swansea Tidal Lagoon
Credit: Wales News Service

“We’re all pretty confident that the Government is in its final throes and the approval will move ahead,” the green industrialist said.                                                                                                              

The project has been subject to protracted debate and multiple delays, which threaten to dry up the private funds put in by a raft of private investors by the end of the year. In early 2016 the Government demanded a full root- and-branch review to determine whether to offer subsidies to the project or not.                                                                                                                                  
It has continued its indecision for more than nine months since the review, conducted by former energy minister Charles Hendry, gave an unequivocal endorsement of the plans. Phil Sheppard, National Grid’s system operations boss, said his team has worked with the lagoon developers to understand the technology’s characteristics and found that it is ­reliable, predictable and highly flexible.

“This infrastructure project will have a significant impact as we move towards an increasingly low carbon electricity network,” he added. But ministers are understood to be concerned over the impact it may have on consumer bills and the unprecedented 90-year contract.

“In a 10-year economic model the Swansea Tidal project may look very expensive. But over its lifespan it will be a total consumer cost of £500m. The Cardiff project – which will be double the size — will cost half as much,” Mr Sharrock said. Once built the Cardiff Tidal Lagoon would be Britain’s largest renewable energy project, with the same generating capacity as Hinkley Point C but far lower costs than its £92.50MWh deal.

 

Source: Daily Telegraph Business, 9th September 2017. For the full details see www.telegraph.co.uk/business/2017/09/09/tidal-lagoon-developer-sign-grid-deal-8bn-cardiff-project

 


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