This week the project developers confirmed a £100 million investment from InfraRed Capital Partners which matches the investment made by Prudential to smooth the way for a financial close in the summer with construction scheduled to begin immediately after.
The rest of the £1bn scheme will be debt financed by up to 26 banks.
Analysts at RBC Capital said on Thursday morning that the developers are seeking a 35 year support guarantee through the government’s contracts for difference (CfD) regime at a strike price of £168/MWh.
“A prior two-year cross-government Severn tidal power feasibility study could not see a strategic case for public investment in a Severn tidal scheme in the immediate term, yet Tidal Lagoon Power and its investors managed to make a business case of the project. Hence the challenge will be for Tidal Lagoon Power to convince the government of its findings and thereby justify a higher strike price,” said an investor note from RBC Capital.
“If successful, Tidal Lagoon Power plans a further five schemes, each with installed capacity up to 2GW,” the note added.
The government has estimated the UK’s total theoretical tidal range resource of 25-30GWs.
Tidal Lagoon Power chief executive Mark Shorrock said: “The Swansea Bay Tidal Lagoon provides a scalable blueprint for a UK-led global industry that delivers true value to the nation. Tidal lagoons will employ British industry to harness a British natural resource and return profits to British institutions.”