The Guardian view on tidal energy: cost is not the whole story | Editorial
The UK government's decision to shelve plans to build the world's first tidal lagoon off Swansea Bay is a hard blow for Wales. That it comes in the wake of Airbus's warning that 6,000 jobs at its Broughton factory in Flintshire are being put at risk by continuing uncertainty over Brexit, and on the same day that the Society of Motor Manufacturers and Traders sounded the alarm over the future of car building in the UK, only serves to increase the pain. Ford employs 1,700 people at its Bridgend plant, while a new Aston Martin factory is due to open in south Wales next year. The tidal lagoon project, had it gone ahead, was expected to create 2,200 jobs, plus more in the supply chain. These are the kinds of jobs that Wales, so damaged by steel and coal closures, needs. But the business secretary, Greg Clark, has decided the country can't have them because they would be too expensive.
It's true that tidal lagoon power is costly at the moment. The so-called strike price that the government would have to agree for Swansea's electricity, to get the project off the ground, lay between 92.70 and 150 per megawatt hour (MWh), with the difference accounted for by a Welsh government subsidy, and the duration of the contract. While the UK government's rejection of the scheme - on which the company says it has spent 35m - was based on the higher figure of 150 over 30 years, the company said that, given a longer contract of 60 years, it could supply electricity at 92.70, the same as Hinkley Point C nuclear power station, the government's flagship energy project in Somerset (Hinkley Point's strike price is fixed for 35 years). The Welsh government said that its offer of a 200m subsidy made the Swansea project - meant to be the first of six British tidal lagoons, four of them in Wales - competitive with Hinkley even on a similar time span. Welsh politicians have reacted with understandable fury to Mr Clark's announcement, which comes almost exactly 12 months after the government abandoned plans to electrify the railway from Cardiff to Swansea, and just a day after MPs voted to press ahead with another expensive infrastructure project: a third runway at Heathrow.
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