Hopes for £1.3bn Swansea Bay tidal lagoon backing

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Plans for a £1.3bn tidal lagoon in Swansea Bay could take a significant step forward if the scheme is backed by a final report on Thursday.

Charles Hendry will publish his report into the viability of the renewable energy technology later.

There are already hopes of developing a network of even larger lagoons around the UK coast.

The UK government still needs to agree on a deal and a marine licence would also need to be approved.

Former UK energy minister Mr Hendry has been gathering evidence for nearly a year for his independent inquiry, including visits to all the potential sites and discussions with industry.

Speaking ahead of the report, Mr Hendry said he believed the tidal lagoon industry was affordable.

“If you look at the cost spread out over the entire lifetime – 120 years for the project – it comes out at about 30p per household for the next 30 years. That’s less than a pint of milk,” he told BBC News.

“That’s where I think we can start a new industry and we can do it at an affordable cost to consumers.”

The Swansea Bay project would involve 16 turbines along a breakwater but is seen as only the start – a prototype for much larger lagoons.

The “fleet” include one off the coast of Cardiff – east of where Cardiff Bay is now – Newport, Bridgwater Bay in Somerset, Colwyn Bay and west Cumbria, north of Workington.

Tidal Lagoon Power (TLP) claims the Cardiff lagoon is being designed to generate enough electricity for all homes in Wales and that it would be the cheapest electricity of all the new power stations in the UK.

One of the key questions will be over the so-called “strike price” – the deal with the UK government to provide a guaranteed price for the energy the lagoons will generate.

Gloucester-based TLP’s contention is that the Swansea project will test the technology but it will come into its own – and could eventually meet 8% of the UK’s energy needs – when the network of more cost-effective, larger lagoons come on stream over the next 10 years.

TLP forecasts that its lagoons would generate power for 120 years and is seeking a 90-year contract at £89.90 per mega watt hour (MWh)

That would be below the £92.50 per MWh agreed for the new Hinkley C nuclear power station.

Tidal energy plans for Swansea Bay first emerged in 2003 but the current project has been developed over the last four years.

At low tide, water would flow from the lagoon into the sea, and at high tide from the sea into the lagoon.

If lagoons are supported it could be a boost for Welsh companies and signal the dawn of a new industrial era, worth £15bn.

Analysis

By Roger Harrabin, BBC environment analyst

There are two big questions over lagoons: will they harm wildlife and can they be built cheaply enough? There’s no evidence yet on wildlife but most environment groups seem willing to see one trial lagoon built, then make an assessment.

On price, the firms backing the technology are confident they can force down costs if they get approval for a series of lagoons around the coastline.

Lagoons involve two long-established technologies – building breakwaters and running hydro-electric turbines – so some will be sceptical.

But recent experience with offshore wind turbines has shown costs can sometimes fall faster than predicted.

The firms hope that as Theresa May’s government has already embraced two mega projects in HS2 and Hinkley Point, it may be enthused by another plan for engineering on a heroic scale.

Follow Roger on Twitter @rharrabin

More than 20 companies earlier this week urged the project to be given the go-ahead, calling it one of the “biggest industrial opportunities in a generation”.

But there are still environmental concerns and Natural Resources Wales (NRW) will be looking at the impact on flooding, fish, birds and marine habitats before it awards the all-important marine licence.

The process started in 2014 with no sign of it being resolved, with TLP and NRW saying they have been in “exhaustive discussions” about the impact on fish.

(Why?)

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