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Swansea Bay Lagoon Down The Plughole

June 25, 2018

By Paul Homewood

 

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Plans to build the world’s first tidal power lagoon have been thrown out by the UK government.

Ministers said the £1.3bn project was not value for money, despite claims by developers Tidal Lagoon Power (TLP) a revised offer made it cheaper.

The scheme off Swansea Bay also had £200m backing from the Welsh Government and support from the Wales Pension Partnership.

But the UK government said it would not pay TLP the fee it wants for energy.

However, TLP claimed no talks have taken place for more than a year and supporters of the project have vowed to do what they can to make it a reality.

Business and Energy Secretary Greg Clark told the Commons: "Securing our energy needs into the future has to be done seriously and, when much cheaper alternatives exist, no individual project, and no particular technology, can proceed at any price."

First Minister Carwyn Jones tweeted that it was a "crushing blow to Wales".

"The UK government’s decision to pull the plug on Swansea Bay Tidal Lagoon is short-sighted and demonstrates their complete lack of ambition," he added.

Welsh Secretary Alun Cairns said: "I realise the disappointment this decision may cause, but ultimately this project did not meet the threshold for taxpayer value."

There have been a number of calls among Labour MPs for Mr Cairns to go.

Plaid Cymru’s energy spokesperson, Liz Saville Roberts MP, said the UK government’s "decision demonstrates the need for Wales to gain greater control over its own future".

Welsh Liberal Democrat leader Jane Dodds called the decision a "disgrace", as did Gower Labour MP Tonia Antoniazzi.

The announcement brings an end to 18 months of waiting since an independent review, commissioned by the ministers, recommended building the lagoon.

The review by former energy minister Charles Hendry said Swansea should be used as a test of the technology, before allowing other developers to bid to construct further schemes as part of a competitive tendering process.

The UK government has been accused of dragging its heels since then, during which time they repeatedly stated the scheme must prove "value for money".

TLP claims the Swansea project would provide power to 155,000 properties in Wales and is cheaper than nuclear power.

The developers had previously asked for a 90-year contract with the UK government with an average strike price – a guaranteed price for the electricity generated – of £89.90 per megawatt hour.

The new nuclear power station at Hinkley Point C in Somerset was given a strike price of £92.50/MWh for 35 years.

https://www.bbc.co.uk/news/uk-wales-south-west-wales-44589083

 

Inevitably there is a lot of whingeing from Welsh politicians, but as the BBC also point out, all of the proposed tidal lagoons could cost the average British householder up to an additional £700 between 2031 and 2050, or the equivalent of £15,000 for every household in Wales.

If the Welsh government and local MPs want a lagoon at Swansea, let them pay for it.

There is still some confusion over the actual price proposed by Mark Shorrock, though the BBC seem to think it starts at £123/MWh, triple the market rate.

While partial indexing means it will get relatively cheaper over time, that is no consolation to bill payers in the next few decades.

For once the government has made the sensible decision, as far as energy policy is concerned.

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30 Comments
  1. Ian Magness permalink
    June 25, 2018 5:30 pm

    Common sense being shown by the UK government?
    Simply astonishing. you’ll be telling me that England can score 6 goals in a World Cup game next.

  2. June 25, 2018 5:49 pm

    Do I detect a whiff of common sense in the corridors of power?

    Just hope the decision is defended vigorously with projected costs compared with a simple gas turbine facility which needs to put in place to cover the intermittency of all those Welsh wind turbines and would have been necessary in any case to keep the lights on for those 155,000 homes when the tide was inconvenient.

  3. geoffb permalink
    June 25, 2018 6:09 pm

    90 years seems hell of a long time to have a guaranteed strike price.
    So much could change in 90 years. We might have unlimited energy from Nuclear fusion by then.

    Look at Nuclear fission all the following happened less than 90 years ago.

    1932 Rutherford split lithium and confirmed energy release, same year James Chadwick disovered the Neutron (86 years)
    1942 Fermi built the first Nuclear pile with a self sustaining reaction. (Manahatten Project) (76 years)
    1945 Atom Bomb(73 years)
    1955 Calder Hall first commercial Nuclear Power station (63 years)

  4. June 25, 2018 6:10 pm

    Not a single person quoted in the full BBC article has a clue what they are talking about. That is a big problem in this country – ignorant politicians.

    • Ben Vorlich permalink
      June 26, 2018 9:26 am

      Since the UK stopped making stuff à generation ago that situation is unlikely to change any time soon.

    • Gerry, England permalink
      June 26, 2018 10:18 am

      And a totally ignorant legacy media who have no grasp of the subject and so provide no challenge to politicians when they talk rubbish or, as they commonly do, lie. Or in the case of the BBC, have a left-wing agenda that drives everything they do.

  5. Stonyground permalink
    June 25, 2018 6:11 pm

    Has startling new evidence come to light then? What do they know now that the rest of us didn’t know right from the start? How much money has been wasted getting to this point when, if common sense had actually been applied, the whole scheme would have been binned right from the start?

  6. It doesn't add up... permalink
    June 25, 2018 6:19 pm

    The government statement is worth a read:

    https://www.gov.uk/government/speeches/proposed-swansea-bay-tidal-lagoon

    The proposal for the Swansea tidal lagoon would cost £1.3 billion to build. If successful to its maximum ambition, it would provide around 0.15% of the electricity we use each year.

    The same power generated by the lagoon, over 60 years, for £1.3 billion, would cost around £400 million for offshore wind even at today’s prices, which have fallen rapidly, and we expect to be cheaper still in future.

    At £1.3 billion, the capital cost per unit of electricity generated each year would be 3 times that of the Hinkley Point C nuclear power station.

    If a full programme of 6 lagoons were constructed, the Hendry Review found that the cost would be more than £50 billion, and be 2 and a half times the cost of Hinkley to generate a similar output of electricity.

    Enough offshore wind to provide the same generation as a programme of lagoons is estimated to cost at least £31.5 billion less to build.

    Taking all the costs together, I have been advised by analysts that, by 2050, the proposal that has been made – which would generate around 30 TWh per year of electricity – could cost up to £20 billion more to produce compared to generating that same electricity through a mix of offshore wind and nuclear, once financing, operating, and system costs have been taken into account.

    That could cost the average British household consumer up to an additional £700 between 2031 and 2050, or the equivalent of £15,000 for every household in Wales.

    However, in recognition of the potential local economic benefits that might result from a lagoon in Swansea, I asked officials to go back and consider what additional benefit could be ascribed to a number of other factors, including a beneficial impact on the local economy.

    For £1.3 billion a Swansea lagoon would support, according to the Hendry Review, only 28 jobs directly associated with operating and maintaining the lagoon in the long term.

    Officials were also asked to make an assessment of the potential for valuable innovation and cost reductions for later lagoons that might come from embarking on a programme of construction.

    Independent advice concluded that the civil engineering used in Swansea Bay offers limited scope for innovation and capital cost reduction – estimated at 5% – in the construction of subsequent facilities.

    I asked for an assessment of the export potential of embarking on a programme of implementing the technology, but the Hendry Review concluded that it would take a “leap of faith to believe that the UK would be the main industrial beneficiary” of any such programme.

    In terms of energy reliability, the generation of electricity would be variable rather than constant with a load factor of 19% compared to around 50% for offshore wind and 90% for nuclear.

    The inescapable conclusion of an extensive analysis is that however novel and appealing the proposal that has been made is, even with these factors taken into account, the costs that would be incurred by consumers and taxpayers would be so much higher than alternative sources of low carbon power, that it would be irresponsible to enter into a contract with the provider.

    Wow. An honest appraisal.

    • Chilli permalink
      June 25, 2018 9:40 pm

      I wish they’d do a similar fact-based economic comparison of wind against gas turbines and draw similar conclusions. Still – it’s a welcome baby step back towards reality.

      • July 2, 2018 3:05 pm

        Chill:

        Until they include storage costs into the equation for intermittent energy any comparison is void.no matter what other facts are considered.
        Electrical storage is hugely expensive and will be for the foreseeable future.

    • June 26, 2018 7:40 am

      Stupendous. So much for the great loss to the local economy Plaid Cymru are whinging about. Or were they counting on tens of thousands of tourists coming to see it😉😁😁

  7. Robert Fairless permalink
    June 25, 2018 6:51 pm

    Why do they not repeal the Climate Change Act 2008.? It is a folly beyond measure, wastes many billions of pounds, places an unnecessary financial burden on every household and achieves nothing worthwhile.

    • BLACK PEARL permalink
      June 25, 2018 7:18 pm

      Until we get a strong patriot in charge like the Donald it will never happen in our life times.
      Too many benefits gleaned from taxation and subsidies to the rich & influential to keep them onside and continued compliance to the EU so as not to rock the boat, plus they’ve done such a good job indoctrinating the public over the last 30 years its still on the whole treated as gospel, so it would be an embarrassing reversal. It will probably ebb away slowly over a decade or more like all the other past scares leaving the taxation (renamed) in place.

    • Phoenix44 permalink
      June 25, 2018 8:33 pm

      The same could be said for an abundance of things over the last 20-30 years.

      I find it difficult to think of one, good, sensible, helpful thing any government has done since around 1995.

      It is astonishing we continue to find ways to grow and make the world better despite the best efforts of politicians and civil servants. Imagine how much richer we would be if even 30% of government’s mistakes had never happened!

      • BLACK PEARL permalink
        June 25, 2018 9:42 pm

        +10

      • CheshireRed permalink
        June 25, 2018 10:10 pm

        20 years of liberalism has brought us to where we are today. A production line of Globalist policy bollocks from Blair’s New Labour in 97′ through Cameron’s Con-LibDim coalition to Theresa May’s Not The Conservative Party. And look where we are; chaos everywhere.
        Killing the CC Act is well overdue, but reputation and vested interest won’t allow it until a new broom sweeps clean. The correct (and brave, given the pressure) decision to ditch Swansea tidal may be the turning point.

  8. Doug Brodie permalink
    June 25, 2018 9:16 pm

    So sad to see so much irrationality displayed by so many members of parliament when this announcement was debated in the House of Commons, Hansard record here: https://hansard.parliament.uk/commons/2018-06-25/debates/02B6422D-3556-4219-B419-5D4942F7FC53/EnergyPolicy

    This is a scheme which would deliver low grade (variable) electricity at a cost per unit according to the minister of three times as much as Hinkley Point C which they all complain about, which would supply just 0.15% of UK annual electricity and therefore around 0.03% of UK annual energy supply and which would have to be expensively part-duplicated by conventional power systems to smooth out its variable supply. Yet these morons think this scheme is a vital necessity towards creating their mythical “low-carbon economy”.

    One can’t help noticing that the climate alarmists who support such madness are mostly left-wingers and that includes quite a few so-called Conservatives. Not directly related (although mentioned by some in the debate), on to-day’s midday BBC radio news shadow chancellor John Macdonald said that the Heathrow expansion was a “threat to the planet” and that “we would never be taken seriously on climate change if we let it go ahead”. Needless to say the BBC interviewer did not challenge this. We’re all doomed I tell you, doomed!

  9. Dr Ken Pollock permalink
    June 25, 2018 9:46 pm

    Huge sigh of relief that that this expensive intermittent source of electricity has been ruled out by the government. Common sense prevails after strong lobbying of MPs. We need to back small modular reactors for dispersed sources of electricity as a reliable cheap alternative.

    • June 26, 2018 10:25 am

      The main point of small modulars is the low cost, even lower if deployed in large clusters, given the need to protect them from eco-terrorists.

      • June 26, 2018 11:39 am

        I’m a fan of small modular molten salt reactors. Can’t for the life of me understand why the greenblob hates them

  10. June 25, 2018 11:45 pm

    After watching all the bleating of the troughers and hearing the snittiness of the BBC R4 News announcement – I just think of some words uttered by that redoubtable Welshman Windsor Davies.

    Oh Dear, How Sad …. Never Mind

  11. Obie permalink
    June 26, 2018 7:03 am

    For me the news that Swansea Bay has been cancelled is on a par with the news that the UK is leaving the EU behind and the US pulled out of the Paris fiasco.

  12. Coeur de Lion permalink
    June 26, 2018 8:05 am

    That the BBC said what it said is astounding

  13. June 26, 2018 8:49 am

    A 90-year guaranteed generous contract price would have been ridiculous, not least because this scheme has no equivalents elsewhere.

    If the idea must be pursued, try a small pilot scheme somewhere.

    • It doesn't add up... permalink
      June 26, 2018 9:22 am

      One of the lies about Swansea was that there are no equivalents elsewhere. Just over the Channel next to St Malo there is La Rance which has been operating since the 1960s. Its advantage is that it only needed a short 750m barrage, much of which is power station, sluices and a lock, to enclose its lagoon. It is building the ?9 ?11km sea wall (an ancient technology going back at least to Roman times) which is a large dead cost that kills the project economics. Furthermore, there is also Lake Sihwa in Korea, operating since 2008: originally it was supposed to be a freshwater lagoon, but that became putrid, so the power station they put in got its sea wall for free, and the lagoon is salty, but with enough flow to deal with the putrid water. Both of these use turbines that are very similar to those planned for Swansea. Both projects are of similar size to Swansea in terms of power generation.

      • Gerry, England permalink
        June 26, 2018 10:23 am

        And the Rance scheme was so successful it was replicated in……ah, it wasn’t.

      • It doesn't add up... permalink
        June 26, 2018 3:13 pm

        Rance did/does OK. However, there aren’t many sites which you can dam so economically with high tidal ranges. Also, because it is limited in size, it wasn’t too difficult to accommodate in the French grid. Its output is highly variable just over a twice daily tide cycle and more so over the lunar month between high spring tides and weak neap tides, and it even uses power to pump over additional quantities of water close to high or low tide sometimes (the level having been mainly changed by gravity, the extra pumping can repay when the levels inside and outside diverge). Swansea alone would probably not be too much problem for the grid, but plans for large scale tidal power should be regarded as predictably intermittent, in need of full backup.

  14. Bidefordcamel permalink
    June 26, 2018 9:44 am

    The usual voices are crying foul but it might be worth recalling a few facts about TLP Chief Executive Mark Shorrock. From the BBC in May this year;

    Swansea Bay tidal lagoon firm boss’s evidence queried by MPs – http://www.bbc.co.uk/news/uk-wales-politics-44137926

    Also this from Wales on Line;

    https://www.walesonline.co.uk/news/politics/mps-answers-swansea-tidal-lagoon-14668271

    This electricity bill payer doesn’t want to bankroll Mr Shorrock thank you.

  15. June 26, 2018 4:04 pm

    A Good first step. Now if it could get fracking going in northern England you might actually have cheap energy.

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