Lagoon firm’s new subsidy offer to get project off ground
THE company behind the planned Swansea Bay Tidal Lagoon says it needs less subsidy cash than previously – a move which supporters hope can pave the way for the £1.3bn proTh ject to finally get the goThahead.
Tidal Lagoon Power has reportTh edly put forward an offer which would match the structure of the subsidy deal agreed by the UK Government for the new nuclear power station at Hinkley Point.
This would not change the cost of building the privatelyThfunded lagoon, but it would significantly reduce the length of time that a subsidy is required to 35 years from 90 after it starts generating electricity. This in turn would benTh efit consumers, who finance subTh sidies for low carbon energy schemes through their bills.
Swansea East MP Carolyn Harris, who has consistently backed the lagoon proposal, said: “My initial reaction is that this shows the confiTh dence the company has in the prodTh uct they are offering. I don’t think anyone can go further in making concessions to allow the GovernTh ment to make the right decision.”
The subsidy proposal follows an offer by the Welsh Government to lend Tidal Lagoon Power capital to help cover construction costs. MP Richard Graham, who is chairman of the All Party Parliamentary Group for Marine Energy and Tidal Lagoons, claimed the Welsh GovTh ernment would eventually become the 100% equity holder of the proTh ject. The lagoon has planning perTh mission but cannot proceed withTh out a subsidy agreement.
The company also still needs a marine licence from Natural Resources Wales before work on the fourThyear project can start.
An independent review of tidal lagoon energy said last year that the project would be a “no regrets” policy, but there has been no forTh mal response yet from the UK Government.
Referring to the new subsidy proposal and Welsh Government offer, Mr Graham said in a blog: “We still await a formal response, but there have been two developTh ments which make me believe that the Government can now take a positive decision that will above all benefit consumers.”
The MP for Gloucester – the city where Tidal Lagoon Power is based – also felt the plummeting costs of offshore wind power could be replicated by a series of larger lagoons which the developTh er wants to build, including off Cardiff and Newport.
He said: “The Swansea pilot proTh ject proposal is now affordable, has the support of the Welsh GovTh ernment, and will transfer equity and dividends to Wales while establishing a UK supply chain for this new industry.”
It is understood that Tidal Lagoon Power’s proposed subsidy would not replicate the Hinkley Point deal line for line, and that this would therefore make it cheaper for consumers than the nuclear one.
Asked about the 100% equity claim, a Welsh Government spokesTh man said: “We have offered funding to get the lagoon project started.”
Business Secretary Greg Clark wrote to First Minister Carwyn Jones last month, saying he acknowledged the Welsh GovernTh ment’s “substantial equity and/or loan investment” offer, and that he was asking his officials to find out more about it.
One of Mr Clark’s colleagues, MP Claire Perry, said at a commitTh tee meeting this week that talks with Welsh Government officials were under way.”