Swansea’s $1.5bn tidal lagoon “delayed for year”2 October 2015 | By David Rogers
A $1.5bn tidal energy lagoon at Swansea Bay in Wales has been delayed by a year over funding uncertainties.
The project’s developer, Tidal Lagoon Power (TLP), is negotiating with the UK government over the price to be paid for the electricity and how much the government will contribute toward construction.
It said the decision to delay work was a “pragmatic” response to uncertainty surrounding those issues.
TLP is also waiting for a marine licence from Natural Resources Wales and a lease from the Crown Estate.
Tidal Lagoon has previously said it wanted an agreed price of £168 ($255) per megawatt hour for its electricity, but believes it will be able to reduce this figure to below £100 if it is allowed to proceed with a number of follow-up lagoons.
The present price for wholesale electricity in the UK is about £45 ($68) MW/h.
The scheme had been due to begin on site next year, and the first power was expected to flow in 2019 or 2020.
China Harbour Engineering Company (CHEC) had been named preferred bidder for the $460m contract to build the lagoon’s dam.
CHEC had also proposed becoming an investor in TLP, which is acting as the scheme’s special purpose vehicle.
An investigation is presently under way into the whether the contract with CHEC was properly awarded, with rival contractors complaining that they did not have a chance to compete for the work.
A spokesman for Tidal Lagoon told The Guardian: “As said previously, we ran a series of robust and intensely competitive tenders for the Swansea Bay project. In accordance with procurement best practice, we have now also offered and given feedback to the unsuccessful bidders and addressed any issues raised.”
TLP, which was backed by the Conservative Party in its recent election manifesto, received its development consent order from the Department of Energy and Climate Change in June.
The 320MW scheme has a design life of 120 years and a net annual power output of more than 500Gwh – enough to meet the annual electricity requirement of about 155,000 homes.
The project’s major delivery partnerships are Atkins as client’s engineer, General Electric and Andritz Hydro as turbine providers and Laing O’Rourke as the constructor of turbine housing.