Is the Swansea Tidal Lagoon Dead in the Water?

At an estimated cost of £1 billion, the tidal lagoon in Swansea was set to be one of the most ambitious renewable energy projects in the UK since the green agenda began.

Just 10 months ago, things were certainly looking bright. After the Conservative government got in without a coalition to hinder them, Amber Rudd pushed through planning permission pretty quickly and it was hoped that construction would commence in August at the earliest. For many in the renewable industry it was a sign of the bright future to come.

That was about as good as it got for the company in charge of the Swansea Tidal Lagoon. By the turn of last year, there were serious concerns on investment, the cost of the installation when compared to the amount of energy produced, and the need for substantial subsidies to support the venture.

It all seemed to gather momentum far too quickly, causing the Government to back track and call for a review, that time honoured particular way of throwing something into the long grass.

Subsidy Cuts for Renewables

As we know, the Government has been a little harsh on subsidies, cutting them for vital renewable sources such as solar. This change in support has not only sent shock waves through the industry but made investment by outside companies far less attractive.

With the current uncertainty, the tidal lagoon has found it increasingly difficult to bring the right investors on board. From full throated support that saw the project included in the Tory manifesto, the Government has taken a step back and is trying to decide whether the level of subsidy required is appropriate and deliverable.

This February the owners of the project said that a decision needed to be reached shortly if they were to avoid running into severe problems. There are a number of knock on effects from the delay too. The steel work at Porth Talbot was looking to the lagoon construction to save its industry and now faces laying off over nearly 700 staff if there are more delays.

Many outsiders agree that the expected subsidy for the tidal lagoon is too steep for the Government to seriously consider and that the project is doomed. The asking price was some £168 per MW produced over the next 35 years. Compare that to the £95 per MW for the much maligned Hinckley Nuclear Power Station and you begin to see the problem.

Environmental Impact

Despite the speed with which the project was pushed through last year, there have since been concerns raised about the environmental impact of building the tidal lagoon. This is a huge construction that is going to change the coastline of Swansea and Natural Resources Wales feel that the effects of the lagoon, including potential flooding and the damage to wild life, have not yet been adequately addressed.

Cornwall’s Super Quarry

The building materials for the tidal lagoon need to come from somewhere and the company were hoping to create a large quarry on the Lizard Peninsula in Cornwall which would have shipped  millions of tons of rock to the site in Swansea Bay. Unfortunately, a recent court case has put this at risk as locals have protested again at the lack of environmental assessment for such a project. The local council came in for damning criticism over their illegal attempt to push planning permission for the quarry when the proper procedures had not been followed.

This means in essence that the tidal lagoon doesn’t have the raw material to start construction even if it were granted permission to go ahead tomorrow.

It is unlikely that anything is going to happen anyway until the Government have finished their review and this is not due until August. There are serious concerns that the project may well fall into the sea before then. According to Liberal leader Tim Fallon:

“I said that the tidal lagoon in Swansea Bay is a litmus test of this government’s position on green energy, and the environmental and economic case for this project is clear. I am concerned that this review could just be used as a smokescreen to try and justify even more cuts to the green energy sector.”

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