The report found that as enabling contracts are replaced by new competitive contracts, costs were being reduced and claims that the lifetime cost to consumers of its proposed Swansea Bay tidal lagoon could be the same as EDF’s Hinkley Point C nuclear plant.
Over its operational lifetime of 120 years, tidal lagoon power could cost consumers an additional £25.78 per MWh on their energy bills based on a 90-year Contract for Difference (CfD). Hinkley Point C costs £25.78 per MWh, based on a 35-year CfD and operational life of 60 years but the costs are based on a load factor of 20% for Swansea Bay tidal lagoon and 91% for Hinkley Point C.
The report also highlighted that over solar technology’s lifespan there are significant reductions in cost to consumers. In 2012 under the Feed-in-Tariff (FiT) scheme, solar cost £89 per MWh but this reduced to £50.88 per MWh by 2015. Under the new Contracts for Difference (CfDs) in 2017 the cost to consumers of solar is expected to be £18.68.
The cost of wind technologies will halve, reducing from £43.37 for onshore wind under FiT in 2012 to a predicted £20.07 in 2019.
Tidal Lagoon Power analyst and author of the report Mike Edge said: “A mix of solutions is necessary to achieve the sustainable and secure supply we need. New nuclear and offshore wind can achieve this at scale and a competitively low cost.
“Without very high usage, gas cannot. While the longer lifespan, proven technology and comparatively low construction risk of tidal lagoons can be leveraged to generate, also at scale, the cheapest electricity on the system.”
The study from the developers of Swansea Bay tidal lagoon, Tidal Lagoon Power, also found that where new generating technologies are introduced, including new nuclear and tidal lagoon power, their consumer costs are shown to come in on-trend.
Tidal Lagoon Power non-executive chairman Keith Clarke said: “It’s widely acknowledged that the UK has a looming power deficit. We must invest in new power stations and the simple fact is that whichever generating technology is employed, an additional cost will be passed on to consumers.
“Given the breadth of technologies, risks and contracts involved, it’s not surprising that the true nature of these costs is all-too-often misunderstood. We wanted to cut through the confusion and uncover the real consumer cost of new build power stations.”
The company plans to update its cost to consumer analysis for these technologies annually.