Chancellor George Osborne has announced today that the UK government is entering formal negotiations on financing subsidy for the Swansea Bay tidal lagoon project.
UK government is opening of the negotiations on the subsidy for the proposed Swansea Bay tidal lagoon.
In his Budget speech, the Chancellor George Osborne said: “We’re opening negotiations on the Swansea Bay Tidal Lagoon.”
The negotiations will establish whether a Contract for Difference (CFD) for a potential tidal lagoon at Swansea Bay is affordable and value for money for consumers.
Any decision to offer a CFD for the Swansea Bay Tidal Lagoon project would be subject to strict value for money considerations, the funds available within the Levy Control Framework (LCF) at the time of a decision, and to State aid approval.
The project is also still subject to a planning decision, which represents a separate process to this negotiations.
Tidal Lagoon Power, the developer of Swansea Bay tidal lagoon project, is asking for the subsidized price of GBP 168 for MW/h with the contract duration of 35 years.
Swansea Bay tidal lagoon has been included in the National Infrastructure Plan, and the project is estimated to cost around GBP 1 bln.
The Planning Inspectorate issued a report of recommendation regarding the construction of Swansea Bay tidal lagoon to the UK Secretary of State for Energy, Ed Davey, on March 10, 2015, and he has 3 months to make a decision on the project.
Tidal Lagoon Power intends to follow the Swansea Bay Tidal Lagoon with five full-scale tidal lagoons in UK waters off Cardiff , Newport, West Cumbria, Colwyn Bay and Bridgwater Bay.
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Image: Tidal Lagoon Power