The future of the proposed Swansea Bay Tidal lagoon has been cast into doubt, after the Prime Minister expressed concerns over its cost.

The 320MW project would be the first of its kind, providing clean, reliable power for more than 155,000 homes according to Tidal Lagoon Power, the company trying to get it built.

However, the cost of construction has already been raised as an issue, with a report in March 2014 from management consultants Pöyry suggesting a strike price of £168/MWh might be required for the project to be viable.

Speaking before a meeting of the Liaison Committee on Tuesday, prime minister David Cameron said tidal power appealed to him in principle: “I can see the strength of the argument for tidal power, because one of the problems with renewables is whether they can provide base-load power. Nuclear can. Wind cannot, because it is intermittent. But tidal, because the tide is always going in or out, can provide base-load power.”

But, he continued: “The problem with tidal power, simply put, is that at the moment we have not seen any ideas come forward that can hit a strike price in terms of pounds per megawatt-hour that is very attractive.”

Tidal Lagoon Power received planning permission to construct the project in June. However, in October the firm confirmed that the start of construction had been delayed until spring 2017, as the government was taking “longer than expected” to finalise a Contract for Difference.

Responding to the Prime Minister’s comments the company said it was confident the project would still go ahead: “Tidal lagoons will provide long term security of supply from 120 year British power stations. Clearly there is a price at which this prospect becomes viable and through our ongoing negotiation with Government we are very confident that we can hit that price.”

Lisa Rapado, the Wales Green Party Candidate for Rhondda, said: “David Cameron has given has given a thinly veiled warning that the Swansea Tidal Lagoon may now be dead in the water. This is yet another sign that his ‘greenest government ever’ just doesn’t get the need for an urgent transition to cleaner, safer energy.”

What to read next