NEW HOPE FOR SWANSEA LAGOON PLAN
ANEW task force is being set up to look at ways of resurrecting the Swansea Bay tidal lagoon scheme, which appeared dead in the water just last month.
It follows the publication of a report which said the £1.3bn project could be delivered without the need for a UK Government financing deal.
The report concluded that the lagoon was “fundamentally a strong and deliverable technical proposition”.
Paul Marsh of report authors Holistic Capital said: “We believe the project can be funded independently of UK Government, and potentially delivered as a purely Welsh initiative.”
He added: “We believe, based on our in-depth review, that the original £1.3bn cost of the lagoon can be reduced.
“Together with new funding models, that makes the project significantly more viable than originally proposed.”
The report was commissioned by Swansea University on behalf of the Swansea Bay City Region - a partnership of councils, universities, private businesses and health boards.
Swansea Council leader Rob Stewart said the task force would flesh out alternative options for procuring, constructing, funding and operating the lagoon.
“We are calling this ‘Tidal Lagoon 2.0’,” he said.
Details of the task force are to be announced shortly, but it is expected to include industry leaders, UK and Welsh Government officials, financial experts and local Government officers.
The lagoon would comprise a sixmile, U-shaped sea wall between the Tawe and Neath river channels. Seawater would flow through 16 turbines on the ebb and flow tides, generating the equivalent electricity used by 155,000 households for 120 years.
The privately-funded proposal by Tidal Lagoon Power had many supporters in Swansea and further afield, including former energy minister Charles Hendry who was asked by the UK Government to review the case for tidal lagoon energy.
But, crucially, the UK Government was not convinced about the “pathfinder” project, and it announced last month that the project was too expensive to subsidise.
The lagoon, though, does have planning permission, but still needs a marine licence from Natural Resources Wales.
Holistic Capital said alternative methods of financing the project should be explored.
It has recommended bringing on board well-established construction partners to provide the confidence that a project of this scale could be delivered, using a single construction company rather than two to bring down costs, and creating an energy company to distribute the electricity, to cut out the supplier middle man.
It also recommends moving on from the current financing model used by the UK Government to support renewable energy - known as “contract for difference” - in favour of upfront Welsh Government investment, the issuing of a bond to raise capital, and the inclusion of the project within the new £1.3bn City Deal for the region.
Councillor Stewart said: “The UK Government announced in June that it doesn’t consider the previous contract for difference model viable, but we are determined to find another way of delivering this ground-breaking project.
“There are a number of key aspects of the proposal that can be changed to deliver the project without any UK Government support.”
He is due to introduce the report at a meeting of full council today.
“One of the major differences in approach would be creating an energy company so that the lagoon generates and distributes electricity direct to homes and businesses,” he said. “This would have a dramatic effect on the affordability of the project.”
Councillor Stewart said he and the task force would liaise with Tidal Lagoon Power’s chief executive Mark Shorrock, who spent years trying to secure a financing deal with Westminster.
Asked if Mr Shorrock was the right man to take the lagoon project forward, Councillor Stewart said: “We will continue to look to support the proposal that Mark Shorrock and Tidal Lagoon Power have worked up, including all the options for the best method of delivery for a project people across Swansea and South Wales want.”