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Will Swansea Bay Tidal Lagoon Disappear Under The Waves?

November 25, 2015
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By Paul Homewood  

   

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http://www.independent.co.uk/news/business/comment/the-new-wave-of-green-power-is-bubbling-under-in-swansea-bay-a6747671.html

 

The “Independent” reports:

 

We should hear plenty about infrastructure investment in George Osborne’s Spending Review and Autumn Statement, with the High Speed 2 railway, “Northern Powerhouse” and a fleet of new nuclear stations all likely to be name-checked.

But one notable omission in the Chancellor’s speech a could be the Swansea Bay tidal lagoon. This £1bn project is the brainchild of Gloucester-based Tidal Lagoon Power (TLP) and is backed by around £200m of equity cheques from the Prudential and InfraRed Capital Partners.

The first of its type in the world, a man-made breakwater would create power from tidal movement, with hydro-turbines generating electricity when water flows through the blades. Once operational, TLP executives hope to roll out another five of these plants along the west coast of England and Wales and generate around 8 per cent of the UK’s electricity.

The idea is unique and therefore unproven, so, unsurprisingly, it has been hit by difficulties. Planning permission was obtained in June, but the start of construction has been delayed from spring next year to 2017.

There have been protracted talks with officials at the Department of Energy and Climate Change (DECC), and these could be slowed still further  by the cull of 200 civil servants – one in eight of the department’s staff – as part of the settlement that Energy Secretary Amber Rudd has negotiated with the Treasury. 

Although the project would replace dated carbon-based power plants and so help the Government meet renewable energy targets, the DECC is nevertheless vetting some of TLP’s claims. Officials want to make sure that dumping construction materials into Swansea Bay will not have too many ill-effects on fish and the broader ecosystem, and also want to verify the private investment case for a project whose price tag has nearly doubled from the initial estimates.

Most important, they are unsure about suggestions that this technology could be Britain’s next great export, and need to be convinced that overseas governments really are interested in snapping up TLP’s intellectual property once Swansea Bay is operational and proven to work. 

TLP and the Government would liked to have confirmed some advances in the project as part of the announcements, which also come in the week before the Paris climate change talks. Billed as one of the most important environmental summits in history, showcasing the turbines would have been a boon for the Government’s green credentials.

In many ways this feels a bit of a fantasy project, but behind the scenes the lagoon is starting to make progress. For example, the Crown Estate, which owns the seabed, and the Welsh government are both thought to be close to granting the licences needed for work to start, with confirmation likely in the new year.

Just as important, well over 30 banks have expressed an interest in providing the £800m of debt needed to fund Swansea Bay, meaning TLP will be able to spread the debt among several institutions, so lessening their risk and the interest repayments.

 

Apparently this is what passes for “Business journalism” at the Independent these days!

Just as a reminder for those who may have forgotten, the Tidal Lagoon project is looking for something in the region of a guaranteed price of £168/MWh, for every unit of electricity they produce, indexed linked for the next 35 years.

This compares to a current market price of under £50/MWh.

And for what? The lagoon will produce about 429 GWh a year. In comparison, the new 880 MW gas-fired plant, currently being built at Carrington, is capable of generating 14 times as much.

Furthermore, the lagoon cannot even generate power all the time when we need it.

As for the idea that anybody else in the world would want to buy our “intellectual property” in how to produce electricity at three times the normal cost, the mind boggles!

 

So we will end up paying a guaranteed subsidy of £50 million a year to a project which will actually generate little more than a pittance in terms of electricity.

It is hardly surprising the banks are hovering  like flies around a jam jar!

Fortunately, we no longer have Ed Davey in charge of the asylum. I predict that this time next year the scheme will have been dumped once and for all, no doubt much to the anguish of our friends at the Guardian and the “Independent”.

18 Comments leave one →
  1. November 25, 2015 9:59 pm

    In south Wight we are awaiting a decision from the MMO in respect of the Perpetuus Tidal Energy Company’s application to construct wave piercing turbines off the south coast of the Island. The company has no experience in the industry and has not invested any capital in the project. The project was found to be unacceptable in terms of investment by major engineering companies such as Siemens. It is a vanity project conceived by an Island Council which has an appallingly inept record in respect of its dealings with the private sector, but which has loaned PTEC £! million.
    The MMO has been accused of bowing to political pressure, so it remains to be seen if this project will be approved given the change of steer from Number 10.

    • Billy Liar permalink
      November 25, 2015 11:17 pm

      How were they going to get around the fact that most of the south of the IOW is all sand and clay and continuously falling into the sea?

  2. BLACK PEARL permalink
    November 25, 2015 10:38 pm

    Yeah lets hope good old British common sense prevails on this one
    Crown Estates again wanting to make money out of the peasants by taxing the seabed

  3. November 25, 2015 11:40 pm

    Mr Homewood

    “I predict that this time next year the scheme will have been dumped once and for all, no doubt much to the anguish of our friends at the Guardian and the “Independent”.”

    Would be nice if all this fake ROR investment went the way of the Dodo bird, but I think it’s too entrenched at the big institutional houses, esp Goldman.

    Why do you think it will die by next year ?

  4. Randy Hall permalink
    November 25, 2015 11:41 pm

    Wow renewable power. It’s available on Monday’s at noon to 2pm, then Saturday all day, Maybe!

    • 1saveenergy permalink
      November 26, 2015 1:27 am

      Don’t be so ridiculous, stupid boy….

      ..it’s not that reliable.

  5. John F. Hultquist permalink
    November 26, 2015 1:58 am

    The first of its type in the world, …”
    Well no, it doesn’t exist so it is, as yet, just a plan.

    “… will not have too many ill-effects on fish …
    Hint: they will either move, die, or both.

    … price tag has nearly doubled from the initial estimates.”
    The initial estimates were just wild guesses and thus wrong. Two times “wrong” is double wrong. Final cost will be known about 5 years after completion. A good guess might be 10X the initial estimate.

    “… spread the debt among several institutions, …
    That way maybe none of them will go belly-up. There is still lots of time for smart folks to get their money out of any of the investing institutions.

    “… once Swansea Bay is operational and proven to work.
    In Australia they built a wave-power-generator and it proved not to work. It sank. <a href="http://www.illawarramercury.com.au/story/635260/wave-goodbye-to-rusting-sea-monster/ rusting sea monster
    This one can’t sink, but it can wash away.

  6. November 26, 2015 7:44 am

    Don’t forget my article on the Swansea Bay Tidal Lagoon at http://www.bishop-hill.net/blog/2015/6/9/the-proposed-swansea-bay-tidal-lagoon.html

    Let us pray that sanity prevails and we don’t end up having to subsidise this environmental and financial disaster.

    • Keitho permalink
      November 26, 2015 4:46 pm

      I am hearing that BTL are about to wind up. They can raise no cash and the govt has told them to get lost.

      Looking at their marketing material it is 90% about people walking along the breakwater and messing about in boats in the lagoon. Not much about electricity and return on investment etc. Rather similar to most of these “green” scams.

  7. November 26, 2015 8:13 am

    Really interesting changes in BBC jingoism about COP 21. They choked over the Indian “get lost we’re burning coal, stuff your INDCs” then have started talking about economic carbon reduction with supply reliability as the important requirement for COP21. Hazzbin was conspicuously missing too.

    Maybe they are visiting Pauls blog!

  8. November 26, 2015 9:01 am

    ‘In comparison, the new 880 MW gas-fired plant, currently being built at Carrington, is capable of generating 14 times as much.’

    Slight problem – it’s still just a plan, because they’ve ‘so far failed to secure financial backers for the project to go ahead at all’.

    ‘Blow to UK energy plans as new gas plant in doubt’ – October 2015
    http://www.telegraph.co.uk/news/earth/energy/11925444/UK-energy-crisis-Trafford-gas-plant-in-doubt.html

    ‘If Carlton Power fails to secure investment for the Trafford plant by next summer its subsidy contract will lapse and it will face an £8 million penalty.’

  9. CheshireRed permalink
    November 26, 2015 10:53 am

    If Osborne (who is clearly calling the long-term policy shots already prior to Camron’s departure) wishes to extend his return-to-sanity policies on energy then this project absolutely has to get the chop. 3+ times the going rate, guaranteed for 35 years BUT producing in the grand scheme of things, sweet FA, doesn’t represent VFM.

  10. November 26, 2015 12:25 pm

    As my late father said: “The purpose of a bureaucracy is to perpetuate itself and ever expand.” That their projects are demonstrated not to work as promised does not even figure into the equation.

  11. NeilC permalink
    November 26, 2015 12:38 pm

    Let me think about this project, as a simple purchaser of electrical power would I be willing to pay 3X more for my electricity, mmmm… of course not.

    We already have the most expensive energy prices in the developed world based on a wrong theory about the impacts of CO2.

    Do our leaders ever think about the consequenses on the people who elect them?

  12. November 26, 2015 10:29 pm

    Could it be that the Govt. has finally realised that the Big Green Lie relating to trace gas called CO2 has anything to do with Climate Change is total nonsense.But they have to whittle away at the subsidies gradually, so as not to upset their EU and UN comrades.
    Plus there are thousands of workers put out of work in the aluminium industry,coal miners,power stations,steel industry etc.who will be rather angry when they know that it was all a lie by a useless bunch of lying,cheating politicians.

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