£1.3bn Swansea Bay Tidal Lagoon thrown out: What’s the impact?

The UK government has rejected plans to build £1.3bn Swansea Bay Tidal Lagoon on grounds of cost. The Manufacturer explores the implications the decision will have on the nation's manufacturing and energy sectors, and economy?

The cost to UK households annually from the project was just estimated at 20-30p.
The cost to UK households annually from the project was estimated at just 20-30 pence compared to Hinkley Point’s £12+.

The project was set to be the world’s first tidal lagoon power plant and could’ve offered an abundance of benefits to the UK.

Some of these benefits include; supply chain opportunities, contracts for small and large British manufacturers, access to sustainable energy, and increased investment in tidal power across the nation.

The government rejected the plans in a statement this week (25 June), which said they do not believe the lagoon meets the requirements for “value for money”.

Chair of Swansea Bay Tidal Lagoon, Keith Clarke commented in a statement that the lack of engagement from the government on the project in recent years has been “highly disturbing”.

He said: “In light of [this week’s] statement and having heard next to nothing from the government for two years, the Board will be meeting in two days’ time to consider its next steps.”

Clarke said the rejection made a “mockery” of the government’s Industrial Strategy. He added: “The reality is that indecision sucks the life out of innovation and timid leadership will condemn Brexit Britain to the 20th Century.”

Read the full statement from the chairs of Swansea Bay Tidal Lagoon.

The impact on UK manufacturing 

According to the Tidal Lagoon website, more than 2,000 manufacturing and construction jobs could have been directly sustained by the build, and this could’ve supporting thousands of connected jobs in the wider economy.

Mark Shorrock, founder and chief executive, Tidal Lagoon Power said in statement: “This is a vote of no interest in Wales, no confidence in British manufacturing and no care for the planet. Justified through a faux concern for consumers who would readly invest in a British tidal power industry for today and for future generations.”

The project was reportedly estimated to contribute £316m in to the Welsh economy during the build, followed by £76m in each year of operation.
The project was reportedly estimated to contribute £316m in to the Welsh economy during the build, followed by £76m in each year of operation.

British-based manufacturers of turbine technology would’ve formed a central part of the lagoon, with two new Welsh manufacturing facilities planned; the first for machining and assembly of the turbines and the other focused on the fabrication of steel parts.

In fact, 65% of the capital expenditure for generators and turbines for Tidal Lagoon Swansea Bay was planned to be used on UK production, with UK manufacturers of any size able to have tendered for project-related supply contracts.

The project was also reportedly estimated to have contributed £316m to the Welsh economy during the build, followed by £76m during each year of operation.

Affects on energy

Further from this, the project could’ve offered sustainable, locally-produced electricity and expertise regarding tidal lagoons.

This knowledge could’ve been exported nationally and internationally, creating a ripple affect and making Britain a world-leader in harnessing tidal power and the broader renewable energy sector.

The site had 16 hydro turbines planned and a 9.5km breakwater wall, which would reportedly have generated enough electricity to power 155,000 homes for the next 120 years.

Shorrock commented: “The Secretary of State is clearly misinformed as his briefing yesterday was very misleading. He says Swansea Bay Tidal Lagoon will cost three times nuclear. This is incorrect. Swansea Bay Tidal Lagoon will add just 30 pence to consumers’ bills whereas Hinkley Point C will add £12 or more to bills.

“The offer to the UK government for Swansea is AT THE SAME PRICE as nuclear for a small pathfinder which as he acknowledges is 0.15% of the UK’s energy requirements.”

However, Welsh First Minister Carwyn Jones disagrees with the decision.

The project’s timeline:

2011

  • Project scoping and feasibility studies
  • Design development, plus early consultation with public and private stakeholders

2012

  • Continued engineering and design work
  • ‘Options consultation’ – informal consultation with public and private stakeholders, looking at various scheme options
  • Environmental Impact Assessment Scoping Report submitted to the Planning Inspectorate and Environmental Impact Assessment begins

2013

  • ‘Preferred option consultation’ – statutory consultation on the preferred scheme with all public and private stakeholders (under the Planning Act 2008).

2014

  • Application for Development Consent Order submitted to the Planning Inspectorate for determination by the Secretary of State for Energy and Climate Change and application for a Marine Licence submitted to Natural Resources Wales for determination on behalf of the Welsh Government.
  • Prudential named as cornerstone investor

2015

  • Development Consent Order granted in June
  • InfraRed Capital Partners named as second equity investor
  • General Electric and Andritz Hydro appointed as Turbine Preferred Bidders
  • Macquarie Capital named as the Mandated Debt Financial Advisor
  • Laing O’Rourke appointed as Turbine Housing Preferred Bidder
  • Alun Griffiths Ltd appointed as Ancillary Works Preferred Bidder

2016

  • Completion of independent Hendry Review into tidal lagoons

2018

  • Construction was expected to start on site.
  • Project rejected by government (25 June)
  • Meeting is requested with government by Tidal Lagoon Power