Charles Hendry to lead tidal power review

The former energy Minister Charles Hendry will lead the indepenent review of tidal lagoon energy, government has announced. The review, announced in February is due to report its findings in the Autumn, assessing the strategic case for tidal lagoons and whether they can play a cost effective role in the UK's energy mix.

Charles Hendry served as Minister of State for Energy from May 2010 until September 2012, since when he has held positions including President of the British Institute of Energy Economics and chair of the Forewind Consortium. 

The review was announced after reported difficulties with the financing of the proposed Swansea Bay tidal lagoon project, which was awarded planning permission in 2015. After government initially expressed support for the project, David Cameron indicated to a Parliamentary Liaison Committee in January that government had 'cooled' on the idea due to the high costs involved. It is understood that initial investment cost of around £1bn necessitated a strike price of over £140/kWh to make the financing of the scheme viable over a 30 year period.

By comparison the Hinkley nuclear project has secured a strike price of around £90/kWh. However, offshore wind projects have been awarded strike prices of around £140/kWh and promoters of tidal lagoon energy argue that the funding of tidal power should be considered over a far longer timeframe and that it provides greater certainty of base load energy.

The remit of the independent review is to investigate:

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.