£1bn Swansea lagoon wins planning but awaits key deal

Energy and climate change secretary Amber Rudd has granted development consent for the £1bn tidal lagoon proposed for Swansea Bay

If built, the scheme is predicted to generate a net annual power output of over 500 Gwh – enough to meet the annual electricity requirement of more than 155,000 homes – from the rising and falling tide in the Severn Estuary.

Although planning permission for the project has been awarded, the Tidal Lagoon Swansea Bay, the company behind the project, is still in negotiations to agree a Contract for Difference (CfD) with the government. 

It is believed that the company is looking for a strike price of £168/MWh for 35 years, which is much higher than that agreed for the nuclear reactor at Hinckley, where a strike price of £92.50 has been agreed. However, TLSB argues that the Swansea project could become the first in a series in UK coastal waters, with development and running costs substantially reduced as each project is rolled out.

Mark Shorrock, chief executive of Tidal Lagoon Swansea Bay, said: “We now have some further permissions to secure and must successfully conclude CfD negotiations on our way to financial close, but the vision is now closer to reality than ever before and our delivery team is readying itself to start on site and start delivering for Swansea Bay next spring.

“With the Swansea Bay Tidal Lagoon becoming a reality, locking in 120-year life, zero carbon energy infrastructure, we have the potential to help transform our industrial economy and the UK’s energy mix.”

“We see it as a game-changer, a scaleable blueprint, paving the way for a fleet of lagoons that can work in harmony with nature to help secure the nation’s electricity for generations to come. The tidal lagoons that follow – at Cardiff, at Newport, elsewhere in the UK and overseas – must each make their own compelling social, environmental and economic case to proceed. But they have a pilot project to guide them and a blossoming technical and industrial network to support them.” 

The announcement of the development consent order was widely welcomed by politicians. The Liberal Democrats’ Peter Black, a member of the Welsh Assembly for the South Wales West, told Construction Manager: “This decision is good news for Swansea and for the cause of renewable energy. It will bring much-needed employment and investment to the city as well as putting Swansea on the map as a leader in using the tide to generate electricity.

“Subject to some outstanding issues around the environmental impact of the lagoon being resolved I look forward to work beginning on installing it in Swansea Bay.”

Meanwhile, a spokesperson for the Welsh government told Construction Manager: “We welcome this decision. Wales is well-placed to exploit the potential of marine energy and the Swansea Bay Tidal Lagoon project could create thousands of jobs during the construction and hundreds of permanent ones. We will continue to work with the developers and other partners to ensure the benefits of this project are maximised across the Welsh supply chain.”

Lord Bourne, a minister for energy and climate change and the Wales office, added: “We need more clean and home-grown sources of energy, which will help to reduce our reliance on foreign fossil fuels. Low-carbon energy projects like the tidal lagoon in Swansea Bay could bring investment, support local jobs and help contribute to the Welsh economy and Swansea area.”

The lagoon is set to be built by China Harbour Engineering Company (CHEC), that has been named preferred bidder for the £300m marine works contract, along with Laing O’Rourke, preferred bidder for the £200m civils contract and Welsh civil engineer Alun Griffiths Contractors, preferred bidder for the £25m ancillary works package.