Wales politics

Swansea tidal lagoon numbers are awful, Alun Cairns says

Artist impression of lagoon Image copyright TLP
Image caption The lagoon's backers say it could provide power for 120,000 homes for 120 years

Welsh Secretary Alun Cairns has expressed concern over the cost of the Swansea Bay tidal lagoon, saying the "numbers are awful".

In an email seen by BBC Wales, the minister said the lagoon's output would cost "twice the price of nuclear".

No decision has yet been taken, but the Financial Times has reported the proposal will be thrown out this week.

The Wales Office said the email makes clear Mr Cairns has been a supporter of the project.

In January 2017, a UK government-commissioned report published by former energy minister Charles Hendry recommended that tidal lagoons could play "a cost-effective role in the UK's energy mix".

But ministers in the UK government have continually refused to commit to the £1.3bn Swansea project saying it "must be affordable".

Tidal Lagoon Power (TLP) has asked for a 90-year contract with the government, starting at £123 per megawatt hour of electricity produced in the first year and reducing over time.

An email from Mr Cairns, sent in the last month and leaked to the BBC, said: "No decision has yet been taken and I have been an advocate from the outset but numbers are awful - twice the price of nuclear, without the prospect of any significant savings from lessons learned on first.

"We are talking to other developers with similar schemes, at a much lower cost.

"We are also looking at nuclear provision in Wales that would create 10 times more jobs in construction and more than a thousand extra during operation.

"There are also risks of sludge build up, with the potential of impact on coastline."

Image copyright TLP
Image caption A decision on the lagoon is yet to be made, more than a year after an independent review backed it

A Wales Office spokesman said: "The email makes clear the secretary of state has been a supporter of the project. However, it also raises issues over the cost of energy from the tidal lagoon which have been well publicised."

Asked by BBC Radio Wales if he was minded to proceed with the plans at present, Mr Cairns told the Good Morning Wales programme: "I have to take a decision that considers the wider economy, considers the value for money, and I would really like this project to go ahead.

"If it doesn't, it's simply because the numbers don't stack up."

'Long-term strategy'

TLP defended the projected costs of the energy the lagoon would produce.

A spokesman said: "The pathfinder lagoon can be delivered for a headline power price in line with nuclear, adding just 30p to bills versus up to £15 at Hinkley Point C - as noted in the Hendry Review."

Meanwhile TLP chairman Keith Clarke told BBC Radio 4's Today programme the company could build the lagoon without direct government financial support.

"I think we could, and we're now looking at that option, the problem is you still need an energy policy.

"If government really want to look at this you need a long-term strategy."

Mr Clarke said the Hendry report, which backed the scheme, had been "very clear" there was a need for leadership from ministers.

"To exploit this for the UK - homegrown energy with part of the industrial strategy - you'd have an authority getting a competition going between sites, not a random group of developers competing with each other.

"That doesn't work with large-scale infrastructure.

"It didn't work with the railways with the Victorians, which is why they regulated it, and it won't happen now [with energy]."

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