The real impact of declining the Swansea Tidal Lagoon?

You’ve probably seen the Tidal Lagoon mentioned across the news and in your social media feed – if you’re from Wales then you’re guaranteed to have heard about it by now, but what’s the true impact?

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Lots of people have their own opinions on this, with renewable campaigners in outrage and the far right condemning the entire idea in the first place. Without many opinions being based on fact, we thought we’d weigh in with some input from our industry experts.

Strike Price

Due to a fixed strike price, having a tidal lagoon in Wales – or anywhere in the UK really – wouldn’t do anything to lower the price we pay on our energy. If anything, the change in price would be unpredictable as the high strike price and the large investment to build may produce cheap energy eventually, but also has the potential to bump up the non-commodity costs.

Considering that the requested strike price was £89.90/MWh over a 90-year contract, prices wouldn’t be dropping any time soon. In comparison, Hinkley Point C was given a strike price of £92.50/MWh for 35 years.

There are plenty of arguments, including from Ecotricity, claiming that the tidal lagoon could be completed at a significantly lower cost.

So yes, in the long, long run we may see prices drop but unfortunately, it isn’t something we can guarantee.

 

Renewable Energy Benefit

One of the big positives for the Tidal Project was the enhancement volume in renewable energy, providing a predictable volume on a daily basis. However, the actual capacity provided would be dependent on lunar cycles, so it isn’t guaranteed that the maximum capacity would be achieved.

While it’s undeniable that the tidal lagoon would have gone an extra step in providing energy resilience, there are other, proven, options which could be implemented in its place – things like offshore wind which can be delivered, subsidy-free, with a wholesale power price of just £53/MWh and a 15-year contract period.

We do need to embrace more methods of renewable energy, but more than anything it needs to be cost-effective and make logical and practical sense. Maybe this will spur the supporters of the tidal lagoon forward in finding a more cost-effective way to develop this exciting new technology further.

 

Benefits to the local economy

Here’s where the real value lies – a boost to the local economy. The Welsh government had promised to deliver £200m to help build the lagoon, a huge amount of money that, according to Suzy Davies from the South Wales West Assembly would “unleash an economic revolution in Wales.”

It would bring a huge amount of jobs to the area and would be an amazing starting point for experts in development, management and running of tidal lagoons. This in itself has a wealth of potential, benchmarking Britain as being world-leaders in this new technology.

 

Commitment to Development in Infrastructure Projects

You don’t need to be into politics to know that the UK is incredibly lacklustre when it comes to commuting to new developments of infrastructure. This project would have taken some steps towards changing that, proving that the investment potential is there and showing commitment to change.

Unfortunately, this move puts the UK on the back foot again. It negates any progress that looked to be made through innovative technology and new developments. Worse still, it makes it look as though the UK isn’t hungry for change or sees the need for improved energy resilience.

 

Thinking of the Future

The way we work at amber considers the entire scope of a project, looking at future costs and savings, building efficiencies into every aspect and ensuring that it delivers the best possible result.

If the Tidal Lagoon project and indeed the government officials who rejected the application had taken this same approach, then we could be looking at an entirely different scenario. Both the arguments for and against took a logical approach and a few changes made to either side could have completely tipped the balance.

Now, I guess we’ll just have to wait and see.

 

 
NewsJoe Hickman