Utility Week

Policy & Regulation 14 | 6TH - 12TH JULY 2018 | UTILITY WEEK Analysis H opes for marine renewable energy looked sunk aer last week's move by the government to scuttle plans for a £1.3 billion tidal lagoon project in Swansea Bay. Business secretary Greg Clark announced last Monday that the government would not support Tidal Lagoon Power's (TLP's) watery project. The decision to pull the plug on Swansea also spells curtains for tidal lagoons as an option, argues Doug Parr, head of policy at Greenpeace. "We are not talking about rejecting a pro- ject but rejecting a technology unless some- thing marvellous comes out of Ecotricity," he says, referring to the green energy supplier's rival plans for a lagoon project. And extending the secretary of state's value for money logic, it is hard to see any other marine renewable technologies com- peting with offshore wind, says Richard Howard, head of research at Aurora Energy. Not offering value The decision to axe, which followed nearly a year and a half of procrastination by minis- ters over a government commissioned review that recommended approval, was justified by Clark on value for money grounds. He told MPs that the same amount of electricity that could be delivered by the £1.3 billion tidal lagoon plant would require £400 million worth of offshore turbines at today's prices, which are widely expected to fall further. And the business secretary said the £50 billion estimated cost of the six lagoons is around two-and-a-half times that of EDF's new nuclear power station at Hinkley for a similar output of electricity. Using a mix of offshore wind and nuclear to provide the full fleet's 30TWh per year of generation capacity would cost up to £20 billion less, according to the Department of Business, Energy and Industrial Strategy's (BEIS's) analysis. It says the tidal lagoon fleet could cost an additional £700 to the average British household between 2031 and 2050. At a recent hearing of the BEIS select committee, TLP's chief executive Mark Shorrock admitted the strike price for Swan- sea Bay would be £150 per megawatt hour (MWh) if it were delivered on the same terms as Hinkley without the £200 million support offered by the Welsh government. Aurora Energy's Howard says: "These are expensive electrons to spend consumers' money on. "Other forms of low-carbon electricity are cheaper and getting cheaper every day," he adds, claiming the £150/MWh strike price is four times what onshore solar and wind could achieve if they were allowed to bid in contracts for difference (CfD) auctions. The climate for all low-carbon electricity has inevitably been transformed by last Sep- tember's CfD auction for "less established" renewable energy technologies. The strike price of £57.50 achieved by offshore wind during this exercise was "probably the final nail in the coffin" for the Swansea bay project, says Howard: "Relative to that, Swansea Bay looks incredibly expen- sive: that was a complete paradigm shi." 'Romantic' but expensive Former MP Tim Yeo, who is now chair of the pro-nuclear campaign group New Nuclear Watch Europe, says that while the lagoons have a "romantic appeal", the project doesn't stand up to "hard-headed analysis". And while offshore wind construction costs have fallen dramatically, analysis con- ducted for BEIS suggests the price of future lagoons would only be 5 per cent lower than the Swansea Bay pilot project. Howard says: "We won't see the cost declines on tidal lagoons that we've seen on solar where there is huge production in China and it gets cheaper all the time. Tidal lagoons will be bespoke massive civil engi- neering projects which don't tend to get cheaper over time." TLP was quick to cry foul following the announcement. While Swansea Bay may be expensive in MWh terms, it will end up cost- ing consumers far less than Hinkley because it is much smaller: 30p as opposed to £12, What now for tidal lagoons? Greg Clark's decision to pull the plug on Swansea could be the end for tidal lagoons, if marine renewable energy's figures really don't stack up against offshore wind and nuclear, says David Blackman. Timeline 2011 2012 2013 2014 2015 Seven years in the life of the Swansea Bay scheme The Tidal Lagoon Power (TLP) team begins its work on a national fleet of UK power stations. UK government announces the start of negotiations on a Contract for Difference for Tidal Lagoon Swansea Bay (TLSB) in its Budget statement. TLSB features in Conservative Party General Election Manifesto. TLP unveils plans for a national fleet of six tidal lagoon power plants and begins work to scope sites in international waters. The initial formal planning document for Cardiff Tidal Lagoon, the first full-scale project in the fleet, is submitted to the Planning Inspectorate. Swansea Bay tidal lagoon is awarded a development consent order. Swansea Bay Tidal Lagoon features in the UK National Infrastructure Plan. The first formal planning document for Swansea Bay Tidal Lagoon, a pathfinder for the fleet, is submitted to the Planning Inspectorate. Swansea Bay Tidal Lagoon features in the UK Renewable Energy Roadmap.

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