On the 25th of June 2018, Greg Clark the relatively new minister for the relatively new Department for Business, Energy and Industrial Strategy (BEIS) delivered a statement rejecting the development of the Swansea Tidal Lagoon based on the fact that it didn’t represent value for money for the UK taxpayer.
In 2010, Greg Clark worked for the shadow cabinet of the Department of Energy and Climate Change, during a period when the government (after 15 year hiatus) announced a nuclear renaissance, with a fleet of eight new nuclear reactors planned across the country.
Since then, wind power has come of age and the renaissance has been reduced to four new nuclear power stations, including Hinkley C, Sizewell C, Sellafield and Wylfa. 2010 was also the year that a tidal barrage across the Severn estuary was rejected.
Why is the Swansea Tidal Lagoon the right decision for the taxpayer?
Greg Clark is naturally not making these important infrastructural investments decisions alone, he is informed by special interests, who support the maintenance and development of new nuclear capabilities. The University of Sussex paper written by Prof Andy Stirling and Dr Phil Johnstone clearly links the civil and military nuclear programmes in the UK. This is the reason why the powers that be in the UK government are supporting nuclear power at the cost of other more reasonable energy infrastructural investments, like Swansea tidal lagoon.
The UK government’s argument against the lagoon was cost. The strike price for the lagoon was fixed at an average of £89.90 on a 90 year contract. The cost would start at £123/MWh for the first year and will then reduce over time. By the end of the 90 year term, the strike price would be just £43/MWh. Given that the lagoon’s developers predict it could keep going for 120 years – for the last three decades it would be generating free power. This price will have little if no impact on electricity prices for the billpayer as it represents not even 1% of our electricity supply.
Consider that the strike price for electricity from Hinkley C is £92.50, increased annually by inflation over the 35 year tariff period. Two windfarms – the Hornsea 2 project off the Yorkshire coast and the Moray offshore windfarm in Scotland – secured a guaranteed price for their power of £57.50 per megawatt hour (MWh) from the government.
If all new nuclear is agreed at this strike price, which is more than twice the current wholesale price of electricity, this could increase electricity bills. So instead of imbedding price declines overtime, Hinkley C and the nuclear power programme imbed price increases.
The Economic Argument
The Welsh government was supportive of the plan because they saw its potential to make Wales a world leader in tidal energy, bringing untold environmental and economic benefits to their communities. The Swansea Tidal Lagoon is considered as a pathfinder project that could pave the way for lagoons across Wales from Newport to Colwyn Bay.
Plaid Cymru have filed a motion for a no confidence vote from the Welsh assembly to the rejection of the plan on the grounds of taxpayer value. Jane Dodds of the Welsh Lib Dems said:
The cost of building the lagoon is estimated at £1.3billion taking four years to construct. The power capacity of the plant is 320MW. This translates to a construction price of £4 per MW, compared with the estimated cost of the Hinkley C nuclear power plant at £24 billion for 3.2GW of capacity of £7.4 per MW. Hinkley C is estimated to take 10 years to build. Both the tidal and the EPR technology used for the Hinkley C plant are unproven technologies as there is no nuclear power station using the EPR technology in operation anywhere in the world.
The tidal lagoon plant is estimated to operate for 120 years.
Nuclear power plants will operate for approximately 60 years.
The taxpayer will pay the decommissioning costs of nuclear power plants. The liability at present for the UK’s nuclear legacy is estimated at up to £260 Billion.
The developer TPL will pay the decommissioning costs of the tidal lagoon. Just based on the long term liabilities associated with nuclear power, any new nuclear power plants could never equate to value for money for the taxpayer. And yet in a massive U turn in policy the UK government will invest £5 billion in the construction of the new nuclear power plant at Wylfa
The power generated from the lagoon is as predictable and steady as the tides and creates no waste products.
The power generated from nuclear is predictable and steady and produces a waste product that lasts for tens of thousands of years and is highly radioactive, toxic and carcinogenic.
Tidal Lagoon Power (TLP) – the company behind the Swansea Bay tidal lagoon proposal – has called the UK department of energy’s statement on tidal lagoons ‘deliberately misleading’.
It is clear that we cannot rely on Government policy makers to choose the right decisions when it comes to the future of our energy supply. This is why we believe its time for communities to take control by moving towards energy independence.
The technology exists to generate and store our own clean, renewable energy, which will make bills more affordable and the industry more equitable for everyone involved. You can join the community energy revolution today by becoming a member of BHESCo. We can’t wait to welcome you aboard.