In May, a year after leaving Parliament, having served as an energy minister in the early years of the Coalition, he was appointed to lead an independent review to consider “the strategic case for tidal lagoons and whether they could play a cost effective role as part of the UK energy mix”.
Charles Hendry served as energy minister in the early years of the Coalition Credit: Eddie Mulholland
He is due to submit the review’s findings to the Government by next week, in a report that could decide the fate of the technology, and affect the wider tidal power sector.
Britain is widely acknowledged to have some of the best tidal resources in the world.
The Government has long been bullish about their possibilities, saying in 2013 that marine energy could “make a significant contribution to meeting the UK’s future energy needs”.
Tidal range technologies, such as lagoons, which function in similar fashion to a hydroelectric dam and exploit the height difference between high and low tide, could theoretically one day have a capacity of up to 30 gigawatts (GW), meeting 12pc of the UK’s electricity needs, the Government said.
Tidal stream technologies, more akin to underwater wind turbines, turning with the tidal flow, and wave power technologies could together eventually provide 20pc of the UK’s needs, it estimated, with up to 27GW of capacity by 2050.
For now, marine energy is providing virtually zero UK electricity.
What the world’s first tidal lagoon power plant may look in Swansea Bay Credit: Tidal Lagoon Power/PA Wire
According to RenewableUK, just 16 megawatts (MW) of wave and tidal stream technology has been deployed to date, primarily prototypes.
Tidal range hopes were for years focused around the idea of a Severn barrage, effectively building a dam across the Severn estuary. But that proposal was rejected by the Government in 2010 (and again in 2013) amid major cost and environmental concerns.
Around the same time, the green energy entrepreneur Mark Shorrock founded Tidal Lagoon Power and began drawing up detailed plans for tidal lagoons, starting with the 320MW Swansea Bay project.
The proposal won heavyweight backing, even being featured in the Conservative manifesto, and gained planning consent in June 2015.
But like most new energy projects it is not economic without subsidy – and in January, almost a year after the Government began talks on a financial deal, David Cameron dealt a major blow to the project.
“The problem with tidal power, simply put, is that at the moment we have not seen any ideas come forward that can hit a strike price in terms of pounds per megawatt-hour (MWh) that is very attractive,” he said.
Amid such concerns, the independent review was launched.
However, Shorrock, a relentless optimist, claims it is “inconceivable” that Hendry’s meticulous examination will not find in favour of his plan.
“We think we have done an amazing job,” he says. He is seeking an unprecedented 90-year subsidy contract for Swansea Bay, as well as a government loan of more than £150m.
The contract would guarantee the lagoon income starting at £123/MWh, paid for on consumer energy bills – even higher than the £92.50/MWh controversially agreed for the Hinkley Point nuclear plant.
However, unlike Hinkley, the Swansea price would be only partially indexed to inflation, which Shorrock’s company claims means it is actually equivalent to £89.90/MWh.
Shorrock’s pitch also centres on Swansea being the prototype for a series of much bigger lagoons to follow that, he pledges, would come in at the equivalent to £60-£70/MWh. “Large lagoons make cheap power,” he says.
Shorrock says Hendry “got the scale bit very quickly” and moved on to question the industrial potential: “Can we genuinely make turbines and generators here?”
Artist’s impression of the Swansea Bay tidal lagoon Credit: Tidal Lagoon Power
Tidal Lagoon Power is also lobbying hard on this front, claiming that 84p of every £1 on its lagoons could be spent in the UK and that a large-scale rollout of tidal lagoons combined with exporting the technology represent a £71bn “industrial opportunity”.
Richard Graham, the Conservative MP for Gloucester and chairman of a cross-party group on marine energy, says he thinks Hendry “cannot fail to have been impressed by the way in which really every stakeholder imaginable in Wales is supportive” of the Swansea plans.
Compared with other big infrastructure projects such as Hinkley, Heathrow or HS2 “the absence of political opposition is very striking indeed”, Graham says.
But other powerful voices are still critical of the project.
Gillian Guy, chief executive of Citizens Advice says: “While constructing a tidal lagoon could bring lots of benefits to an area, including new jobs, regeneration and tourism, it needs to be at a price which is affordable for consumers.
“The prices for onshore and offshore wind power, as well as solar, have been consistently decreasing over the last few years, while tidal remains an expensive low-carbon option. Developing tidal lagoons would be worthy of serious consideration if the costs for tidal power were brought closer in line with other energy sources."
Artists impression of the Swansea Tidal lagoon Credit: WALES NEWS SERVICE
Shorrock claims that Hendry’s verdict on tidal lagoons will be seen as a “litmus test for the entire industry”, showing whether it is a “yes to homegrown marine energy in the UK”.
Others in the industry agree that a positive decision would help confidence elsewhere in the sector as tidal stream developers, too, seek to make the financial case for continued support.
Tidal stream projects are just beginning to scale up from prototypes, often in receipt of R&D grant funding, to commercial-scale deployment.
In September, Atlantis Resources unveiled the first turbines in what it hopes will eventually be the largest planned tidal stream energy project in the world, a 398MW project, in the Pentland Firth, off the north coast of Scotland.
But only the first four turbines, with a capacity of 6MW, are expected to qualify for the current subsidy scheme, which offers subsidies worth roughly £200/MWh on top of the market price of power, before it shuts in March.
Thereafter, what support will be available is unclear.
Hugh McNeal, chief executive of RenewableUK, says the tidal industry has “racked up an unprecedented set of world firsts and world-only milestones this year”, but he warns: “We’re at a crucial moment, and right now we risk losing our hard-won advantage. We need the right framework to unlock the great potential we offer, so that we can continue to innovate and grow.”
Shorrock is adamant what the first step must be. “What we need from Hendry is a strong recommendation to green–light Swansea Bay, that’s the number one thing,” he says. “No Swansea Bay, no industry.”
A number of issues are raised here, (and I must say I am pleased to see alternative points of view raised here).
1) The idea that Charles Hendry’s review of the project is in any way “independent” is laughable, as he is absolutely wedded to the goal of decarbonisation at any cost.
2) Talking of costs, Shorrock admits that the deal will involve paying £89.90/MWh, index linked for 90 years. This makes the £92.50/MWh to be paid for 35 years to Hinkley Point look a bargain.
Even then, the deal involves a cheap government loan of £150 million.
3) Shorrock also holds out the prospect of much lower prices for future, larger scale lagoons. This is little more than jam tomorrow, and is a worthless promise.
4) Much is made of the promise of manufacturing jobs created, but subsidised jobs are only created at the cost of other jobs elsewhere.
5) Above all, we should not lose sight of the ridiculously small amount of electricity Swansea Bay will produce. Rated at 320 MW, it is likely to generate no more than 420 GWh a year, at a cost of £1.3 billion.
Compare that with the newly built CCGT plant at Carrington, which is capable of producing 6500 GWh a year, on demand, and for under £50/MWh.
It is really a no-brainer!