A deal has been struck to connect Cardiff’s £8bn tidal lagoon to the electricity network

A deal has been signed to connect an £8bn tidal lagoon planned for Cardiff to the electricity grid. The lagoon, which will only go ahead if a smaller pilot project planned for Swansea is approved and is successful, would be the UK’s largest ever renewable energy project.

It would create and sustain 8,000 manufacturing jobs.

The company, Tidal Lagoon Power, plans to create a wave of world first tidal lagoons around the coast of the UK.

It has struck a deal with the National Grid that will ensure that if the project gets the go-ahead then electricity generated would flow into the National Grid, providing energy for homes and businesses across the UK.

The project would be the UK’s largest renewable energy project, capable of powering every home in Wales.

However, the massive 3,240 megawatt at capacity generating scheme, stretching from off coast of Cardiff Bay to the south of Newport, would only have a chance of proceeding if Tidal Lagoon Power first gets the green light from the UK Government – as well as a marine licence from Natural Resources Wales – for the smaller and pathfinder Swansea Bay Tidal Lagoon.

The UK Government has yet to respond to the independent Hendry Commission review, which earlier this year recommended that the £1.3bn Swansea Bay project be given the go-ahead as the first in the series of tidal lagoons off the west coast of Britain creating thousands of new jobs, as well as a new green energy industry.

The UK Government is weighing up whether to give the Swansea project a so called strike, or effectively a green subsidy, of £89.90 per megawatt hour of energy over a 90 year period, Its design would allow it to produce energy for at least 120 years.

A final decision is expected in the autumn, although there are concerns that the UK Government could opt not to back it.

However, even if the pathfinder Swansea Bay tidal lagoon project is agreed, Tidal Lagoon Power could have to bid to deliver the planned and far larger Cardiff project through a competitive tender process, especially, as recommended by Charles Hendry, an independent tidal lagoon authority is set up.

As well as securing the relevant planning and environmental consents, it would also have to get a strike price deal with the UK Government – which could be far less than for the Swansea project.

But having delivered the first project it would be well placed to win any bid, underpinned by the fact that it already has a deal to supply the grid through its agreement with National Grid Electricity Transmission Plc.

And Tidal Lagoon Power is into the third year of preliminary environmental and engineering assessments for the project. Subject to the Swansea project getting the go-ahead, an application for development consent is anticipated in 2019.

It would require a strike price of between £60 to £70 per megawatt hour.

The lagoon would generate tidal energy from the Severn Estuary for 120 years. No exact time frame has been set, but it could become operational in 2025.

It would also:

Create 3,000 jobs during its construction stage.

Create or sustain 8,000 jobs in its UK manufacturing supply chain, with many of those in Wales.

Have a 20.5 kilometre breakwater wall housing up to 108 tidal lagoon turbines and at least two powerhouse units.

On average see 600 million cubic metres of water through its turbines on each tidal cycle – 11 times the volume of the Swansea Bay lagoon.

Tidal Lagoon Power’s chief executive, Mark Shorrock, said: “Our offer to the UK Government is to contract Swansea Bay Tidal Lagoon for a lower subsidy per megawatt hour than Hinkley Point C [new nuclear power station].

” While we await the Government’s response to this offer and to the independent Hendry Review of tidal lagoons, we have continued our development work on the subsequent programme.

“However, we have secured the grid connection for a tidal power station equal in installed capacity to Hinkley Point C. Looking at the pounds per megawatt hour unit cost of new build power stations, nuclear is currently priced in the nineties, the latest offshore wind projects are expected to drop into the seventies and our models show Cardiff Tidal Lagoon beating them all in the sixties.

“What’s more, by leveraging the commanding position taken by UK industry preparing for Swansea Bay Tidal Lagoon, the supply chain contracts awarded for Cardiff Tidal Lagoon will be worth more than £6bn to UK companies.”

National Grid’s director of UK system operator, Phil Sheppard, said: “Tidal power presents a reliable and predictable source of renewable generation that has the potential for highly flexible operation in the future.

“We have worked alongside tidal lagoon developers to gain an understanding of the operational characteristics of the proposed lagoons. This infrastructure project will have a significant impact as we move towards an increasingly low carbon electricity network.”

Financial services giant Investec could be a potential investor in the Cardiff project.

Leader of Cardiff Council, Huw Thomas, said: “We welcome this development as an important milestone in progressing a hugely exciting and potentially transformative project for Cardiff and the wider region.

“The National Grid deal could play a key role in driving the project forward, making this extraordinary vision a reality. There’s little doubt the opportunities are huge.

“Thousands of jobs could be created delivering low carbon energy. Cardiff and the city region could become renowned across the world for driving green technologies.

“We look forward to sitting down with Tidal Lagoon Power to discuss their plans in detail. It’s important Cardiff, its residents and the wider region are all able to capitalise on the opportunities a project of this scale offers.”

Debbie Wilcox, leader of Newport City Council said: “This exciting new project is fantastic news for our city and our partners in the Cardiff Capital Region.

“It represents a massive boost in confidence in the region and the promise of cleaner, cheaper power and thousands of jobs is very welcome. We wish Tidal Lagoon Power all the best in pulling together such a successful project.”

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