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Green lights could still come on for £1.3blln Tidal Lagoon Power project

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Written by: Andrew Merrell | Posted 19 July 2017 8:11

Green lights could still come on for £1.3blln Tidal Lagoon Power project
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Investors have warned the billion pound-plus Tidal Lagoon project could stall unless the green light is given soon but the author of an independent review into the scheme remains confident.

The Gloucester-headquartered firm behind the hugely ambitious £1.3blln project to build a lagoon in Swansea Bay has been waiting for the go-ahead to start building.

Ministers are yet to set out plans on exactly where they stand on the scheme – which it is thought will lead to other larger projects around the UK coast – but confidence remains high.

Welsh Secretary Alun Cairns has now said he remained supportive of the plans but the Government is yet to respond to the independent review, written by ex-energy minister Charles Hendry.

Mr Hendry, however, remains positive.

“They say they are carefully considering the scheme. The election has delayed that process and the may be other factors too.

“But now with Greg Clark back in place as business secretary I’m hopeful of a definitive answer soon.”

It is understood discussions are now taking place with other departments, including the Treasury, following new research commissioned by Mr Clark.

As part of the process of getting a marine licence a report into the impact on fish and marine environment has also been submitted to Natural Resources Wales.

The Financial Times has reported more than £200 million has been provisionally pledged by backers led by Prudential, the large UK insurer, with Macquarie and Investec, two other major financial institutions, ready to raise hundreds of millions more in debt and equity.

However, investors are refusing to pledge even more cash until the Government approves the scheme.

The lagoon will comprise a six-mile, land-attached, U-shaped seawall, holding back water and then releasing it through 16 turbines on both ebb and flow tides to generate a predictable source of energy, which Tidal Lagoon Swansea Bay has said will be the equivalent electricity used by 155,000 households.

The Conservative Party included the project in its 2015 manifesto, the year it was also granted planning permission by the then Energy Secretary Amber Rudd.

According to a BBC Wales report Government support waned as discussions continued over the ‘strike price’, a guarantee to subsidise the cost of electricity from the project.

Tidal Lagoon Power proposed a price of £89.90 per megawatt hour, guaranteed for 90 years. The West’s own major energy project – at Hinkley Point C in Somerset, has an agreed price of £92.50 per megawatt hour for 35 years.

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