The decline in the cost of offshore wind can be replicated by tidal lagoons if the UK government backs the proposed 320MW Swansea Bay, according to a Parliamentary group.

All-Party Parliamentary Group on marine energy and tidal lagoons chairman Richard Graham said the £57.50 per megawatt-hour for offshore wind secured in last year’s Contract for Difference (CfD) auction is “good news” for tidal lagoons.

“It shows that the leadership of this government, working with the alternative energy sector, can bring costs down dramatically over time,” he added.

“The reward for the UK, after years of subsidies for offshore wind at more than double today’s prices, is to have created both a viable source of energy and a new industry in which we’re now the world leader.”

Graham admitted the government's independent Hendry Review, which recommended a 60-year CfD at a starting cost higher than the £92.50/MWh awarded to EDF’s Hinkley Point C nuclear plant, was both "financially and politically challenging".

Developer Tidal Lagoon Power has proposed the same terms for the Swansea pilot as the government accepted for Hinkley Point C – a 35-year, index-linked CfD index - plus a 65% British supply chain including Welsh steel.

“It is no longer more expensive in the short term than nuclear, with huge potential for future efficiencies,” said the Conservative MP.

“What is now needed is for all of those involved to get around the table, and agree a sensible deal for investors, purchasers of the energy and energy customers alike.”

Image: Tidal Lagoon Swansea Bay