A Government autumn “yes” or “no” to UK tidal energy lagoons could trigger large-scale infrastructure developments for an innovative technology with significant export potential. However, as ministers also contemplate the future of new nuclear power stations, a negative response might see a world first go to India’s Gujarat province. Jon Herbert looks at the details.
Hinkley Point C is not the only massive UK-energy infrastructure decision nudged into the autumn 2016 long grass. A bold plan to build the first of up to six tidal lagoons generating 14-hour-a-day energy using the moon and sun’s gravitational pull is also waiting for a Government thumbs up or down. An announcement could be made in the Chancellor’s Autumn Statement.
Swansea Bay is the first proposed site. It has Planning Inspectorate permission but needs Government backing for what proponents say is a sustainable alternative to a fleet of six new UK nuclear plants. They foresee tidal lagoons eventually providing up to 8% of UK power for costs matching offshore wind power that will also quickly open up a much-needed UK export window.
The Government says the decision is not so simple, given the need to safeguard public finances. Initial Swansea Bay project proposals are costed at an estimated £1.3 billion. Hinkley Point C comes with a price tag of £18 billion plus. Tidal lagoon life could last for 120 years. Somerset coast nuclear developments could be extended to 60 years. Lagoons produce no nuclear waste, but the need for millions of tonnes of concrete and aggregate would impact sea life and wading birds.
The Government, which negotiated for a year with the company behind the first proposal designed to harness enormous tidal ranges across the southern Welsh Coast, Bristol Channel and English Channel, said nuclear and tidal lagoons are not comparable and must be treated differently.
Deadlock followed. In February, ministers announced a six-month tidal lagoon power review. The decision was taken before June’s EU referendum and was followed by radical energy department changes and new 10 and 11 Downing Street incumbents.
What eventually comes out of the 2016’s autumn review could hint at how the Government’s new sustainable low-carbon energy mix strategy will pan out. Meanwhile, it has the making of a confrontation between optimistic entrepreneurs and ever-watchful central Government guardians of limited public finance.
Of sealing wax and cabbages — plus public costs
Lewis Carroll’s legendary The Walrus and the Carpenter verse explored the vagaries of Victorian Britain’s coastal life. A more modern analysis signposts broad factors that must come together in the Government’s new policy for secure energy, public infrastructure subsidy spending and investment strategy. Ministers worry about low levels of private finance, high-subsidy levels (contract for difference (CfD)) and a broad-knowledge gap over the feasibility, operation and long-term performance of an untried technology.
The counter-argument made by tidal lagoon champions is that investing in a relatively small-sized Swansea Bay demonstration plant could prove the concept in practice and reassure investors. They add that economies of scale would mean that further plans for a Cardiff scheme 12 times larger will generate home-grown green electricity at very advantageous prices for consumers over more than a sustainable century.
Post-Victorian scale modern histories
UK nuclear and tidal lagoon projects both have histories. As the Government points out, Britain’s nuclear industry has a long pedigree, even though a new generation of nuclear stations would be based on French know-how and finance, plus Chinese money and eventually reactor technology.
Tidal lagoons are also a different concept from tidal stream. Lagoons, or barrages, trap high tides and use their hydrostatic head to turn low-speed turbines. They also generate on incoming tides as seawater flows in. In contrast, tidal stream turbines anchored to the seafloor intercept powerful tidal currents in seaways such as the Pentland Firth. Other tidal generation developments tackle the opportunities in different ways.
Tidal Lagoon Power (TLP) took part in extensive Government talks during 2015 to agree energy prices for a 320MW Swansea Bay lagoon proposal which will involve the construction of a six-mile long seawall horseshoe-shaped enclosure off the local coastline.
TLP Executive Director and Entrepreneur, Mark Shorrock has made his view clear. “We will be pushing for government support to demonstrate the potential of tidal lagoon power by giving the go-ahead for the Swansea Bay project, thereby avoiding the stillbirth of a game-changer for UK energy and UK industry,” he says.
TLP also wants planning permission for larger Cardiff and Newport schemes in 2017 and 2018. Together, these would represent 4000MW of generating capacity at a capital cost of £10 billion.
However, the former energy department, Department of Energy and Climate Change (DECC), called a February halt for fear of ambiguity in the proposals. It announced that former energy minister, Charles Hendry, would head a detailed review. Coincidentally, former Prime Minister, David Cameron, noted that his enthusiasm for Swansea Bay had been “reduced” over affordability issues.
Erring on the side of caution, Energy Minister, Lord Bourne added in February that, “Tidal lagoons on this scale are an exciting, but as yet untried technology. I want to better understand whether tidal lagoons can be cost effective, and what their impact on bills will be — both today and in the longer term. This review will help give us the clarity so we can determine what role tidal lagoons could have as part of our plans to provide secure, clean and affordable energy for families and businesses across the country.”
The review due this autumn is considering five key factors.
- To establish whether, and in what circumstances, tidal lagoons could be a positive part of the UK energy mix.
- Examine the scale of UK and global opportunities, plus a new supply chain.
- Possible financial structures.
- Size options for early projects.
- The Government is keen to know whether a competitive framework for lagoons is the best way forward.
On the plus side
Meanwhile, there is considerable support for tidal lagoon energy; the Swansea Bay project formed part of the Conservative Party’s Welsh election manifesto in 2015 and heavyweight commentators have waded in.
Former coalition government minister, Dame Lynne Featherstone, has said of the present Government, “If it does not proceed with Hinkley Point C, what is the Government’s Plan B for the security of our energy supply in future years, given that the support for renewables industries has been completely undermined by the Government.” She noted that there is still no commitment to Swansea Bay which would provide energy for up to three times longer than a nuclear power station.
Former Conservative cabinet minister, David Jones MP, added that tidal lagoons built on a Victorian scale would last for “many decades if not centuries”.
Labour MP Paul Flynn, has commented that tidal energy is “free, British and of immense power, whereas the source of energy for Hinkley Point is an imported form of fuel that will leave a legacy for all time”.
However, Energy Minister Andrea Leadsom, says that while Swansea Bay was in the manifesto, the Government, “… is absolutely determined to prioritise keeping costs down to be on the consumer’s side and to decarbonise at the lowest price while keeping the lights on”.
The final argument is yet to be made.
During initial talks, DECC was reported to have baulked at a Swansea Bay subsidy cost over 30 years of £168/MWh. The position moved at the beginning of 2016 to £96.50/MWh, slightly more than for Hinkley Point C.
Shorrock adds that TLP is offering a lower price to the Government over 90 years rather than just 35 years. He also points out the advantages of economies of scale.
“By linking Swansea Bay Tidal lagoon to the successful delivery of a second full-scale lagoon, this approach further reduces the required and proposed equivalent CfD strike price for Swansea Bay to under £100/MWh comparable to the Hinkley Point C nuclear power station. Applications of these bespoke support structures to the Cardiff Tidal Lagoon, a 2700MW capacity project, the equivalent CfD strike price requirement is £68.30/MWh,” he explained recently. Costs could fall further.
However, TLP is not alone in working to be the first to build and operate tidal lagoon around the UK coast. Ecotricity wants to be the winner and says pricing can be even more attractive. Founder, Dale Vince believes that the Government is very interested in the technology but put off by the price. He has previously said that tidal projects of this kind can be built around Britain at close to £90/MWh. However, the company’s current thinking and plans have yet to be revealed later in 2016.
With figures flowing fast and loose, the Government is anxious to nail down an accurate statistical picture before taking any further decisions.
Others in the tidal steam
Meanwhile, tidal stream advocates are hoping that the review does not cause any delays to their innovative projects. Kepler Energy, an example company based on University of Oxford expertise is working on a tidal energy fence proposal for the Bristol Channel that it hopes will be operating between Aberthaw and Minehead by 2025. Kepler’s technology could work in shallower, lower velocity tidal waters around the UK. The company believes this too could have export opportunities in India, Korea, Japan and China.
Joker in the pack
While the UK takes its time in considering the true role of tidal energy lagoons, Sanjeev Gupta, Executive Chairman of the Liberty Group and global energy commodities firm Shipping, Industry, Mining, Energy and Commodities (SIMEC) and a financial backer of TLP and the Swansea Bay scheme, wants to see similar projects built in India.
He describes the tidal energy case as “compelling” and “overwhelming”. A joint venture between SIMEC and TLP could see large-scale lagoon development in India. Feasibility studies in the Gulf of Khambhat are to be carried out within a Memorandum of Understanding (MoU) with the Government of Gujarat.
Time to check the tide tables!
Published by Croner-i on 27 September 2016