Hopes for Swansea Bay tidal power lagoon to be dashed next week

  • £1.3bn renewable energy project set to be rejected by ministers
  • Subsidy demanded from taxpayers higher than alternative schemes
  • ‘Another kick in the teeth’ for people of Wales, says first minister

Ministers are planning to reject a £1.3bn project to build a tidal power lagoon in Swansea Bay as early as next week.

The proposal by Tidal Lagoon Power, which has provisional financial backing of £200m from financial institutions led by Prudential, would involve building a six-mile horseshoe-shaped seawall with underwater turbines generating energy on the outgoing tide.

The company hoped that it would be the first of a series of new lagoons around the country, with the potential to export the technology overseas.

But ministers have balked at the level of subsidy that TLP has demanded from British taxpayers, which is much higher than alternative low-carbon schemes.

The Welsh government is understood to have offered more than £200m in financial support to get the scheme off the ground, according to senior figures in Cardiff Bay. But the scheme requires the go-ahead of the British government.

One senior government figure, asked what the chances were of the project getting the go-ahead, said there was not a “cat’s chance in hell”.

Another Whitehall figure said that a negative decision was taken a fortnight ago but ministers had been discussing ways to mitigate the political impact by offering support for other new low-carbon energy projects in Wales.

As a result the announcement is expected to be made on the same day that the government announces the go-ahead for the new Wylfa power station, also in Wales.

Carwyn Jones, first minister of Wales, said the rejection of the lagoon project would be “another kick in the teeth” for the people of Wales, not long after the government “reneged” on the electrification of the train line west of Cardiff.

“This is a world-leading technology: it will create 1,000 jobs, both in construction and in terms of maintenance and manufacturing of the kit. It seems, for the UK government, Wales is just not important,” he said.

“It seems the UK government is suffering from that old British malaise of, ‘This is all a bit new; let’s see if someone else does it first, then we’ll try and do it once they’ve done it’.”

Tidal Lagoon Power is understood to have laid off 20 further staff in recent months, leaving a full-time workforce of just 30, as it waits for a breakthrough in the political impasse in London.

The Department for Business, Energy and Industrial Strategy said the government had committed itself to exploring the proposal but said: “We have a responsibility to minimise the impact on consumer bills and the Swansea proposal is more than twice as expensive as the Hinkley power station . . . Any decision on the Swansea Bay tidal lagoon project will have to represent value for money for the UK taxpayer as well as the consumer.”

Andy Field of Tidal Lagoon Power said: “The government’s industrial strategy looks for homegrown and cheap power and that is what tidal lagoons offer.”

He said the unit price from a pathfinder project at Swansea Bay need cost no more than the unit price from Hinkley Point C.

“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.”


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