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Tidal Lagoon Desperately Needs “Mouth Watering Subsidy”!

October 15, 2015

By Paul Homewood  




Agreement on subsidy for the £1bn Swansea tidal lagoon project is "desperately needed", Welsh Economy Minister Edwina Hart has said.

The UK government is yet to confirm the "strike price" it will pay for energy generated by the planned lagoon.

Mrs Hart said that without "certainty" on subsidy it was difficult for the project to attract investment.

The firm behind the scheme has told BBC Wales it would be "catastrophic" if the delayed project collapsed over funding.

Addressing AMs at a business committee meeting in Swansea, Mrs Hart said: "There is an elephant in the room.

"The tidal lagoon project, if they can’t get certainty on strike price it’s going to be very difficult for investment.

"We haven’t got clarity on the UK government’s energy policies which makes it very difficult for the sector and we can’t afford to have that.

"I know the strike price is absolutely mouth-watering compared to nuclear at Hinkley but we have to do something about it.

"We desperately need that strike price.



Of course, there is a very simple solution, Mrs Hart. Pay the subsidy out of Welsh Government coffers.

  1. 1saveenergy permalink
    October 15, 2015 12:01 pm

    “The firm behind the scheme has told BBC Wales it would be “catastrophic” if the delayed project collapsed over funding.”

    But only for them & their life-styles !

    catastrophic for consumers if it goes ahead

  2. lorraine seath permalink
    October 15, 2015 12:42 pm

    Ask gov. for ‘Corporate welfare’. Virgin got paid 28million for a call centre in Wales.

    Date: Thu, 15 Oct 2015 11:50:45 +0000 To:

  3. NeilC permalink
    October 15, 2015 1:25 pm

    It would be a lot cheaper opening the old coal mines and bringing coal fired power stations back into action. S. Wales has a lot of coal beneath its feet.

  4. October 15, 2015 1:35 pm

    Oxford Professor of Energy Economics Dieter Helm reckons that the Swansea Bay project would even make off shore wind look cheap. He say the government should take a radical axe to the Contracts Case for Difference which is a sophisticated way of making money for traders often using gullible investors and costing the commercial and private consumer a fortune. Appealing to common sense probably won’t make a difference as it looks as though the disgraceful French/Chinese nuclear project at Hinckley Point has the go ahead.

  5. SteveB permalink
    October 15, 2015 1:37 pm

    Surely Edwina Hart meant to say the strike price is absolutely eye-watering, not mouth-watering (unless you are an investor). Also, elephant in the room? Wouldn’t white elephant be more appropriate?

    • October 15, 2015 3:21 pm

      Yes I noticed that bit about mouth watering.

      Freudian slip maybe, as it must be mouth watering for the investors!

  6. robin herbert permalink
    October 15, 2015 1:54 pm


  7. Tom O permalink
    October 15, 2015 2:56 pm

    Wouldn’t it be nice if an energy project was planned that would only require help building it, not need a subsidy on the output that makes the output competitive? It is one thing to, say, get a grant to build something that is going to be competitive, but to require a subsidy to make the output competitive? that’s a road that goes on forever.

  8. Christopher Booker permalink
    October 15, 2015 3:07 pm

    Paul, it would not of course be the Welsh government that would pay the subsidised strike price of £168 per MW hour the Swansea developer Mr Shorrock is demanding, but all of us through our electricity bills. Since this is even more expensive than the current strike price of £155MWh we pay for offshore wind (itself representing a subsidy of 200 percent on the going rate for conventional electricity), it would make the average 57MW Mr Shorrock hopes ot get out of his tidal lagoon easily the most expensive electricity in the world, Yet without it, he says, his project would not be viable, The only rational answer to how his problem should be solved is staruing both him and the government in the face.

    • Billy Liar permalink
      October 15, 2015 8:53 pm

      Unfortunately, in the UK, madness usually prevails.

  9. October 15, 2015 3:22 pm

    ‘We haven’t got clarity on the UK government’s energy policies which makes it very difficult for the sector and we can’t afford to have that.’

    UK govt. energy spokesperson: ‘Our indecision is final’.

    There you go 🙂

  10. October 15, 2015 5:52 pm

    With its massive carbon footprint and constant need for backup, this is certainly an eye-wateringly expensive way to increase CO2 emissions. Much cheaper to use Welsh coal.

  11. October 16, 2015 4:25 am

    #1 That BBC Report ends “Source: Tidal Lagoon Power Ltd”
    So it has to be breaking the BBC rules as it is basically a Tidal Lagoon Power Ltd PR sheet with a BBC stamp on it.
    Have you ever noticed a BBC fracking story where the photos and videos are supplied by the fracking company ?

  12. October 16, 2015 4:27 am

    #2 Doesn’t it pull a fast one by saying “the £1bn Swansea tidal lagoon” and then talking about the subsidy cos the £1bn construction cost and on going year by year subsidy are 2 different things.

  13. October 16, 2015 4:34 am

    #3 How much is the subsidy ? roughly £200m/year ….. I calculate
    The Welsh Government is given a budget of £16,000m/year

    So if she is desperate and pays “the subsidy out of Welsh Government coffers”. It’s about 1.3% of the Welsh Government budget, but takes £6 billion from the Welsh over 30 years.

    Rough calculations
    strike price’ of £168 per MWh hour,
    “155,000 homes” quoted
    I’ll assume each house has annual £800 electric bill, split as £400 fuel component +£400 network and other costs.
    So with coal @£40/MWh that fuel component is £400, but with tidal that rises to £1,680/house
    So the tidal fuel subsidy is £1,280/house/year

    £1,280 times 155,000 homes = £198.4 million/year
    Over 30 years =£6 billion

  14. October 16, 2015 10:03 pm

    The law of conservation of mass makes me wonder how much energy it will take to construct this. Hypothetically it should work. If it does work, and it should, then those 155 k homes will be very expensive. Trouble is that the number of users is fixed. Every additional development will require either additional sources of power or the demolition of existing loads. Additional investment is obviated.

  15. Dave permalink
    October 19, 2015 1:05 pm

    What exactly are the qualifications of Edwina Hart which allow her to say anything about energy or science?

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