UK government gives planning green light to Swansea tidal lagoon power scheme

High-profile plans for a £1bn tidal lagoon in Swansea Bay off the coast of Wales took a major step forward today after the project secured planning permission from the UK government.

The Department for Energy and Climate Change (DECC) confirmed the much-anticipated decision this afternoon, paving the way for the 320MW scheme to potentially start construction next year.

However, the final decision to proceed with the project depends on its ability to secure a price support contract from the government under its contract for difference (CfD) regime. Mark Shorrock, chief executive of Tidal Lagoon Swansea Bay, said the project would have a 120-year lifespan and could potentially "transform our industrial economy and the UK's energy mix".

"Through a single project we have the opportunity to create a whole new industry," he added. "And in a single step, that project can take us to low-cost, renewable energy on a nuclear scale. We see it as a game changer, a scalable blueprint, paving the way for a fleet of lagoons that can work in harmony with nature to help secure the nation's electricity for generations to come."

Commenting on the decision, DECC minister Lord Nick Bourne, who is also a Wales Office minister, said the scheme would boost the local economy in the Swansea area. "We need more clean and home-grown sources of energy, which will help to reduce our reliance on foreign fossil fuels. Low-carbon energy projects like the tidal lagoon in Swansea Bay could bring investment, support local jobs and help contribute to the Welsh economy and Swansea area."

Attention will now turn to whether the project can secure the CfD price support contract deemed necessary to secure the investment the project needs.

Any decision on financial support would be subject to State Aid approval from the European Commission and subject to "strict value-for-money considerations", DECC said.

Critics of the project have argued it will require a CfD that is significantly higher than that offered to other sources of low-carbon power, such as offshore wind farms or the proposed new nuclear power station at Hinkley Point.

However, Tidal Lagoon Swansea Bay maintains the project will be followed by a fleet of lagoons that will bring average costs for the nascent sector down to a level that is competitive with other sources of clean power.

The company has also highlighted that the project will provide clean power long after the contract expires and predicts that if the development gets the go-ahead, it will drive export opportunities for the UK marine energy industry.

This article, including the image, has been adapted from article published in Business Green.