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Released July 04, 2018 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The world's largest tidal power project has been rejected by the U.K. government in favour of cheaper wind power.
The Swansea Bay Tidal Lagoon project would see the construction of a 9.5-kilometer (km), U-shaped seawall running from the entrance to the River Tawe near Swansea Dock out to sea, before curving back to re-join land next to Swansea University. The £1 billion ($1.56 billion) tidal lagoon would be able to generate up to 500 gigawatt hours (GWh) of electricity annually, enough to power 121,000 homes. The lagoon is the first of six proposed by developer Tidal Lagoon Power Limited (TLP), which has the support of industry heavyweights including Alstom S.A. (ENX:ALO) (Paris, France), Costain Group (LSE:COST) (Maidenhead, U.K.), Atkins (Sheffield, England), Macquarie Group (ASX:MQG) (Sydney, Australia) and Dutch marine engineering firm Van Oord (Rotterdam).
However, U.K. Business and Energy Secretary Greg Clark said that the proposed scheme was not financially attractive on a number of grounds, following an 18-month review into the scheme. It would have required subsidies raised through household energy bills for decades, he said, and was too expensive compared with offshore windfarms and nuclear power.
"The cost of electricity is nevertheless a significant one for households and for businesses, and the policy related-costs have been growing," Clark told the House of Commons. "We have made a clear commitment to bear down on costs. The proposal for the Swansea tidal lagoon would cost £1.3 billion ($1.7 billion) to build. If successful to its maximum ambition, it would provide around 0.15% of the electricity we use each year. The same power generated by the lagoon, over 60 years, for £1.3 billion ($1.7 billion), would cost around £400 million ($523.6 billion) for offshore wind even at today's prices, which have fallen rapidly, and we expect to be cheaper still in the future. At £1.3 billion ($1.7 billion), the capital cost per unit of electricity generated each year would be three times that of the Hinkley Point C nuclear power station."
He added: "If a full programme of six lagoons were constructed, the Hendry Review found that the cost would be more than £50 billion ($65.4 billion), and be two and a half times the cost of Hinkley to generate a similar output of electricity. Enough offshore wind to provide the same generation as a programme of lagoons is estimated to cost at least £31.5 billion ($41.5 billion) less to build. Taking all the costs together, I have been advised by analysts that, by 2050, the proposal that has been made--which would generate around 30 terawatt-hours (TWh) per year of electricity--could cost up to £20 billion ($26.1 billion) more to produce compared to generating that same electricity through a mix of offshore wind and nuclear, once financing, operating, and system costs have been taken into account."
Planning permission has already been granted for the 320-megawatt (MW) Swansea Bay Tidal Lagoon, but without government support, raising funding for the project will prove very difficult. For additional information, see June 17, 2015, article -World's First Tidal Lagoon Green Lit for Wales.
The government's decision has been widely criticised by renewable energy groups and the developer has pledged to continue forward with the scheme. Industry body RenewableUK expressed disappointment and said the decision goes against the Government-commissioned Hendry Review, which recommended the U.K. should proceed with "a small-scale pathfinder project (less than 500 MW) as soon as is reasonably practicable".
RenewableUK's Chief Executive Hugh McNeal said: "Tidal lagoons have massive potential to meet our national energy needs and create jobs, as well as bringing industrial-scale economic benefits to the U.K. -- including opportunities to export worldwide. The U.K.'s future energy mix will be powered by a range of low-carbon technologies. We know that with the right support, tidal energy can quickly become competitive on cost with other renewable and low carbon power like nuclear."
Henry Dixon, chairman of project company North Wales Tidal Energy & Coastal Protection Limited (NWTE) commented: "At long last, the U.K. Government has come off the fence and delivered its decision on the Swansea Bay tidal lagoon. That it has made the wrong decision on the development of the pathfinder lagoon in South Wales is regrettable but cannot and will not stop NWTE continuing to develop and promote a North Wales tidal lagoon."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
The Swansea Bay Tidal Lagoon project would see the construction of a 9.5-kilometer (km), U-shaped seawall running from the entrance to the River Tawe near Swansea Dock out to sea, before curving back to re-join land next to Swansea University. The £1 billion ($1.56 billion) tidal lagoon would be able to generate up to 500 gigawatt hours (GWh) of electricity annually, enough to power 121,000 homes. The lagoon is the first of six proposed by developer Tidal Lagoon Power Limited (TLP), which has the support of industry heavyweights including Alstom S.A. (ENX:ALO) (Paris, France), Costain Group (LSE:COST) (Maidenhead, U.K.), Atkins (Sheffield, England), Macquarie Group (ASX:MQG) (Sydney, Australia) and Dutch marine engineering firm Van Oord (Rotterdam).
However, U.K. Business and Energy Secretary Greg Clark said that the proposed scheme was not financially attractive on a number of grounds, following an 18-month review into the scheme. It would have required subsidies raised through household energy bills for decades, he said, and was too expensive compared with offshore windfarms and nuclear power.
"The cost of electricity is nevertheless a significant one for households and for businesses, and the policy related-costs have been growing," Clark told the House of Commons. "We have made a clear commitment to bear down on costs. The proposal for the Swansea tidal lagoon would cost £1.3 billion ($1.7 billion) to build. If successful to its maximum ambition, it would provide around 0.15% of the electricity we use each year. The same power generated by the lagoon, over 60 years, for £1.3 billion ($1.7 billion), would cost around £400 million ($523.6 billion) for offshore wind even at today's prices, which have fallen rapidly, and we expect to be cheaper still in the future. At £1.3 billion ($1.7 billion), the capital cost per unit of electricity generated each year would be three times that of the Hinkley Point C nuclear power station."
He added: "If a full programme of six lagoons were constructed, the Hendry Review found that the cost would be more than £50 billion ($65.4 billion), and be two and a half times the cost of Hinkley to generate a similar output of electricity. Enough offshore wind to provide the same generation as a programme of lagoons is estimated to cost at least £31.5 billion ($41.5 billion) less to build. Taking all the costs together, I have been advised by analysts that, by 2050, the proposal that has been made--which would generate around 30 terawatt-hours (TWh) per year of electricity--could cost up to £20 billion ($26.1 billion) more to produce compared to generating that same electricity through a mix of offshore wind and nuclear, once financing, operating, and system costs have been taken into account."
Planning permission has already been granted for the 320-megawatt (MW) Swansea Bay Tidal Lagoon, but without government support, raising funding for the project will prove very difficult. For additional information, see June 17, 2015, article -World's First Tidal Lagoon Green Lit for Wales.
The government's decision has been widely criticised by renewable energy groups and the developer has pledged to continue forward with the scheme. Industry body RenewableUK expressed disappointment and said the decision goes against the Government-commissioned Hendry Review, which recommended the U.K. should proceed with "a small-scale pathfinder project (less than 500 MW) as soon as is reasonably practicable".
RenewableUK's Chief Executive Hugh McNeal said: "Tidal lagoons have massive potential to meet our national energy needs and create jobs, as well as bringing industrial-scale economic benefits to the U.K. -- including opportunities to export worldwide. The U.K.'s future energy mix will be powered by a range of low-carbon technologies. We know that with the right support, tidal energy can quickly become competitive on cost with other renewable and low carbon power like nuclear."
Henry Dixon, chairman of project company North Wales Tidal Energy & Coastal Protection Limited (NWTE) commented: "At long last, the U.K. Government has come off the fence and delivered its decision on the Swansea Bay tidal lagoon. That it has made the wrong decision on the development of the pathfinder lagoon in South Wales is regrettable but cannot and will not stop NWTE continuing to develop and promote a North Wales tidal lagoon."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
