Fresh doubt cast over £1.3bn Swansea tidal lagoon but ministers vow to not give up

Rumours the UK government could soon walk away from a proposed £1.3bn Swansea bay tidal lagoon project have been described as “another kick in the teeth” to Wales with the country’s politicians vowing to not give up on the development and seek alternative arrangements to delver it.

The defiant response comes after the Financial Times reported UK ministers were ready to throw out plans with the government not prepared to pay Tidal Lagoon Power (TLP) the fee it wants for energy despite a revised offer being made.

TLP has responded to the news with bewilderment and claims no talks have taken place for more than a year. The firm said it has continuously offered to meet those making the decision to discuss what price the government would pay for power. TLP had previously asked for a 90-year contract with the UK government with an average strike price of £89.90 per megawatt hour.

The proposed major project in the Welsh city would generate electricity on both the incoming and outgoing tides and have the capacity to supply electricity for 155,000 homes for the next 120 years and create more than 2,000 construction jobs, according to the company. Despite receiving planning permission and a large amount of backing from various parties within Wales, it cannot proceed without a subsidy agreement.

A spokesperson for Tidal Lagoon Power compared the project to the proposed nuclear power station in Somerset and suggested the firm believed the government had no reason to walk away especially when it came to cost.

“The government’s Industrial Strategy looks for homegrown and cheap power and that is what tidal lagoons offer,” the spokesperson added. “The unit price of power from a pathfinder project at Swansea Bay need cost no more than the unit price of power from Hinkley Point C which has already received government backing. We are therefore blind with regards the department’s intent on timing or content of any announcement.”

Commenting on the possible government withdrawal, Wales first minister Carwyn Jones said: “If these rumours prove to be true, the UK government will be delivering a massive blow to Swansea and Wales more widely – yet another kick in the teeth after their decision to abandon electrification of the train line west of Cardiff. The Welsh Government remains committed to the Swansea Bay Tidal Lagoon and we stand ready to provide significant financial backing to help make it a reality. Rather than seize the opportunity presented by the project to position Britain as a world leader in a new global industry, the UK government continues to block the development of renewable energy schemes in Wales.”

Swansea council leader Rob Stewart added: “We will not give up on this project, Sustainable renewable Welsh energy for future generations is too big a prize to give up. There have already been discussions with Welsh Government and they have already made a significant offer of support to the project. We will evaluate how this support – together with a revised funding model can deliver this project.

Back in March, the business secretary Greg Clark told MPs the government did not want to “close the door” on the Swansea tidal project but raised concerns by adding it was “more than twice as expensive as the Hinkley nuclear power station”. Despite this he told the House of Commons that ministers remained in discussions with the Welsh Government and continued to “find a way to justify it as being affordable to consumers”.

His statement followed an earlier government commissioned report in January by Charles Hendry which said the lagoon would make a "strong contribution" to the UK's energy supply, while it was cost effective and would bring "significant economic opportunity".

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