The developer behind plans to build a £1.3 billion tidal lagoon plant in Swansea Bay has accused the government of distorting figures used to justify its decision not to back the scheme.
Tidal Lagoon Power (TLP) has carried out an audit of the Business, Energy and Industrial Strategy (BEIS) department’s value for money assessment of the project, which has been reviewed by the Centre for Economics & Business Research economics consultancy.
According to the audit, the BEIS assessment has not taken account of the longer life span of the Swansea Bay project, which is expected to keep generating power for 120 years, twice the estimated lifespan of nuclear power plants.
Spreading out the expense of constructing the tidal lagoon project over this longer period means that the capital cost per unit of power generated by Swansea Bay would be 1.5 times higher than that produced by the Hinkley Point C nuclear plant. The BEIS assessment stated that the capital cost per unit of power produced by Swansea Bay would be three times as high as that from Hinkley.
And the larger tidal lagoons which TLP plans to build after Swansea, would cost about the same as new build nuclear plants using the same methodology, TLP’s audit concludes.
The overall programme of six lagoons planned by TLP would cost 1.2 times more than the nuclear generation capacity required to produce the same amount of electricity as opposed to the 2.5 ratio stated in the BEIS assessment.
The audit also rebuts the BEIS assessment that offshore wind farms could produce the same amount of electricity as the Swansea Bay lagoon for £400 million, a third of the lagoon’s £1.3 billion construction cost.
On the basis that turbines wear out after 25 years of operation and wind generation is intermittent, the TLP audit estimates that the true cost of providing power using this technology would be £1.5 billion over the 120-year life of the lagoon.
And while BEIS concluded that it would cost £31.5 billion less to secure the same amount of power from offshore wind as that likely to be produced by TLP’s planned six lagoons, the company finds that it would cost £28.5 billion more.
Keith Clarke, chair of TLP, said: “Readers of the audit can and will draw their own conclusions. Ours is that the BEIS statement on tidal lagoons was a manifest distortion of the truth.
“The audit demonstrates that the figures employed by BEIS to support its position on tidal lagoons are inaccurate by orders of magnitude, which raises serious questions about the approach taken and the conclusions drawn.
“BEIS’ inaction is still holding up tidal lagoons. The department has not released a full and thorough value-for-money assessment for Swansea Bay Tidal Lagoon, has not responded to the Hendry Review of tidal lagoons, and has continued to ignore our requests to meet with ministers for a fuller explanation of the position and approach taken.
“This is irresponsible and obstructs our appraisal of the options available to bring further funding into the business and to work up alternate approaches for delivering a pathfinder tidal lagoon at Swansea Bay without the award of a contract for difference from the UK government”.
The BEIS department has been contacted for a response.