By Dave Elliott
The review of tidal lagoons by former energy minister Charles Hendry MP called on the government to start final negotiations with Tidal Lagoon Power Ltd on a CfD strike price so that the construction of the Swansea Bay plant could go ahead. Ministers are expected to respond to the Review before the March budget and, as reported in my last post, some reservations have been expressed about the high cost. Hendry, however, seems to be very enthused. He says it could be a wise test investment, possibly opening up options for cheaper lagoons in the future.
Interestingly, Hendry claimed that, given technical development and the right level of initial support, lifetime generation costs for lagoons could fall significantly, to well below that for nuclear or even offshore wind, for the subsequent Cardiff/Bridgwater lagoons – perhaps down to as low as £66/MWh. He said it was important for the government to capitalize on the work already done on the Swansea project and a clear commitment to the scheme would deliver earlier benefits and accelerate a future programme.
So Hendry recommended that Swansea Bay be constructed as a small pathfinder project to allow the government to assess its effectiveness and deliverability, before supporting more projects: it should be commissioned and fully operational for a while (5 years) before the government agreed financial support for other tidal projects. He claimed that ‘the costs of a pathfinder project would be about 30p per household per year over the first 30 years. A large scale project would be less than 50p over the first 60 years’.
Hendry suggested that Tidal Lagoon Power Ltd (TLP) find a partner with a track record in delivering major energy or infrastructure projects, and that the government should create a Tidal Power Authority to oversee a competition in which future tidal projects can bid for support.
Looking to the future, he suggested that around 37 GW of capacity could be installed at 18 potentially feasible sites, generating 55 TWh of electricity per year. However, this theoretical assessment did not take into account potential negative interactions between tidal lagoons that could reduce output, or a number of other possible limitations, including financial viability. An optimal programme would therefore include a significantly smaller number of tidal lagoons. Some illustrative portfolios for an optimal programme were analysed and compared with TLP’s proposed programme of six lagoons. It indicated that a programme of the top seven schemes (in terms of comparative cost per annual energy production) would provide 30 TWh per year from a total installed capacity of 18 GW. The Swansea project could be commissioned by 2022, while the first full-scale project could be in place by 2028/29.
Henry wasn’t convinced by claims that a multi site network around the UK coast could deliver firmer power due to the time delay in high tides at the geographically dispersed sites. There were gaps around the coast between suitable sites. In any case it would be a vast undertaking and was, for now, too ambitious – before even one had been built. An analysis on the Energy Matters website concurred. It also pointed out that, at neap tides, all the sites would have low tidal rises, so tidal plant output would vary around the year, as well as every day.
On costs, in his Foreword to the review, Hendry notes that, although these were currently high, lagoons might operate with only minor upgrades for 120 years or more, and ‘it is difficult to compare the value of tidal lagoons with this potential for a long operating life to other low carbon projects with considerably shorter operating lives (25 to 60 years).’
So there was a policy dilemma: ‘Do we want to build long-lasting facilities now, which may initially cost more, but which would be cheaper over the long-term, or do we want the cheapest power available for today’s consumers regardless of the longer-term? Do we want to kick start an industry where the UK can reasonably expect (and plan) to be a global leader or technologies where the economic gain often goes abroad? Do we want to take advantage of a resource which we know for certain will be available for as far ahead as we can see, or to leave the debate still rumbling on with our grandchildren asking why we did not harness the power of the tides, when we knew how to and had the opportunity?’
It is clear which side he has come down on – go for the Swansea project as a small pathfinding exercise, to test whether the idea works technically and economically before reviewing further possible projects, possibly larger ones. The review notes that TLP’s Tidal Lagoon Swansea Bay (TLSB) project had received development consent from the then Secretary of State for Energy and Climate Change in June 2015. ‘First-stage negotiations on the terms of a Contract for Difference are currently ongoing on a bilateral basis. The proposed TLSB project would have an installed capacity of 320 MW, providing power to over 155,000 homes. A 9.5 km U-shaped seawall would be constructed running from Swansea docks to near Swansea University’s new campus. According to the developer, the proposed TLSB would offer community and tourism opportunities’.
TLP were ‘also looking to develop a further five additional tidal lagoons at sites in Cardiff, Newport, West Cumbria, Colwyn Bay and Bridgwater Bay’. The Cardiff scheme, the most advanced proposal of the five, ‘would have an installed capacity of c.3 GW and an annual output of around 5.5 TWh, while the proposed tidal lagoon at Newport would have an installed capacity of between 1.4-1.8 GW and an annual output of between 2 TWh and 3 TWh. It is suggested the Cardiff project would offer improved flood protection for the area as well as opportunities for sports and nature conservation. The developer anticipates submitting its Cardiff proposal for development consent in 2018.’
Hendry also noted a proposal by North West Tidal Energy and Coastal Protection for a 32-km long seawall impoundment from Prestatyn to Llandudno, with 2-2.5 GW capacity, with pumped storage, generating ~4.5 TWh pa using roughly 125 turbines, costing around £7bn over a 6-year build period. There were also proposals from NEW for a 120MW project at Fleetwood on the Wyre, from TEL for a 200MW project on Solway Firth and from NWE2 for one at 5GW on Morecambe Bay/The Duddon. Ecotricity had proposed schemes at various sites ranging up to 900MW, while Halcyon was looking at one from Minehead to Weston super Mare ranging up to 4.5GW. So that’s up to 15GW in all, with the environmental impact seen as being low low, if they were properly sited.
Most environmental groups were in favour – and the initial project would provide an opportunity to check its impact. However, the Policy Exchange group was not convinced about the economics: there were much cheaper green energy options. Tidal Lagoon Power Ltd’s analysis doesn’t back that up: renewables were all getting cheaper, but so would tidal lagoons, with the Cardiff lagoon seen as being the cheapest of all the energy options in terms of energy cost to the consumer. Quite a claim.
The Energy Technologies Institute (ETI) was keener on tidal stream turbines, as in the 398 MW MeyGen scheme in Pentland Firth. It said tidal lagoons ‘currently lie in between the development stages of tidal stream and wave energy and require large levels of investment to demonstrate and then deploy at scale’.
ETI saw CfD supported tidal stream projects as a vital next step. But then so does TLP – for the lagoon. We now await the government response.