Swansea scheme in balance as government announces review of tidal lagoon energy

In a move which is sure to cast big doubts on schemes like the long-awaited Swansea Bay tidal project, the government has announced that it is to review the feasibility and practicality of tidal lagoon energy in the UK.

Last month, the prime minister expressed his concerns at the high cost of tidal lagoon schemes hinting that he remained to be convinced about their financial viability. The announced review will come as a big setback to backers of the Swansea Bay scheme.

While recognising that “tidal lagoons have the potential to provide the country with clean and secure energy,” announcing the review the Department of Energy and Climate Change (DECC) said that more work needs to be done to determine whether such schemes represent value for money. To this end DECC has commissioned a review of the technology to work out how tidal lagoons could contribute to the future of the UK’s energy mix in the most cost effective way. 

The review will start in the spring and DECC says it will help establish an evidence base to ensure all decisions made regarding tidal lagoon energy are in the best interests of the UK. DECC also said that they expect that Tidal Lagoon Power, the proposed developers of Swansea Bay Tidal Lagoon, together with other industry stakeholders will take part in the review while discussions about Swansea Bay Tidal Lagoon continue. 

Commenting on the review, energy minister Lord Bourne said: “Tidal Lagoons on this scale are an exciting, but as yet an untested technology. I want to better understand whether tidal lagoons can be cost effective, and what their impact on bills will be - both today and in the longer term. This review will help give us that clarity so we can determine what role tidal lagoons could have as part of our plans to provide secure, clean and affordable energy for families and businesses across the country.”

The remit of the review is to consider:

• An assessment of whether, and in what circumstances, tidal lagoons could play a cost effective role as part of the UK energy mix;
• The potential scale of opportunity in the UK and internationally, including supply chain opportunities;
• A range of possible structures for financing tidal lagoons;
• Different sizes of projects as the first of a kind;
• Whether a competitive framework could be put in place for the delivery of tidal lagoon projects.

Mark Shorrock, Tidal Lagoon Swansea Bay chief executive, said it was "imperative" that negotiations with the government were concluded within six weeks and urged DECC to reconsider the timing of its review "otherwise the opportunity will be lost and the review will be all for nothing," he said.

"The project planned for Swansea Bay is ready to go now.  We have built a team, secured planning permission, secured equity sponsors, prepared a delivery team and a supply chain. We have received overwhelming support for this project locally, nationally and internationally. If tidal lagoon power at scale is to be a real option for the longer term, we need to start work on Swansea Bay Tidal Lagoon now," Shorrock said.

Further information about the review will be announced shortly.