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UK to review tidal lagoons

UPDATE: Tidal Lagoon Power gives six-week ultimatum to agree subsidy

UK to review tidal lagoons image

The UK government is to launch an independent review into the feasibility and practicality of tidal lagoons.

The review, which will commence this spring, aims to establish whether, and in what circumstances, tidal lagoons could play a cost-effective role as part of the UK energy mix.

The review will assess the potential scale of opportunity in the UK and internationally, including supply chain opportunities, possible finance structures and whether a competitive framework could be put in place for the delivery of tidal lagoon projects.

Tidal Lagoon Power, developers of the proposed Swansea Bay Tidal Lagoon, and other industry stakeholders are expected to take part in the review while discussions about the 320MW scheme continue.

DECC minister Lord Bourne said more work needs to be done to determine whether tidal lagoons present value for money.

“Tidal Lagoons on this scale are an exciting, but as yet an untested technology,” he said.

“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.”

Tidal Lagoon Power chief executive Mark Shorrock said he welcomed the review but warned the government that unless a Contract for Difference agreement for Swansea Bay was reached within six weeks the project was in jeopardy.

He said: “It is imperative that we conclude our structuring and commercial negotiation with government within the next six weeks.

“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."

Shorrock said TLP has proposed an equivalent CfD strike price for Swansea Bay Tidal Lagoon below that of offshore wind.

“Our structure has a subsidy that reduces over time, meaning that for around half of the proposed 90-year contract, the lagoon pays money to government,” he said.

“By linking Swansea Bay Tidal Lagoon to the successful delivery of a second, full-scale lagoon, this approach further reduces the required and proposed equivalent CfD strike price of Swansea Bay to under £100/MWh, comparable to the Hinkley C nuclear power station.”

Shorrock said a similar financing model would bring down the costs of the proposed 2.7GW Cardiff Tidal Lagoon to £68.30/MWh.

The review will take place in consultation with the relevant government departments – in particular DECC and the Treasury for financial aspects.

RenewableUK deputy chief executive Maf Smith said a decision on the Swansea Bay project needs to be forthcoming to ensure the UK does not miss out on the opportunity to become a world leader in tidal lagoon 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," he said. 

"Each new project that’s built will offer even better value for money due to economies of scale."

Image: Proposed tidal lagoon at Swansea Bay (Tidal Lagoon Power) 

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