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Home » Swansea tidal lagoon: ‘Substantial’ offer from Carwyn Jones

The first minister has offered cash to help kickstart plans for a £1.3bn tidal lagoon energy project in Swansea Bay.

Carwyn Jones said the Welsh Government would offer a “substantial” investment, but did not say how much. He accused the UK government of “dragging its heels” over the scheme, nearly a year since an independent review recommended it be backed.

The company behind the scheme is trying to agree a subsidy with UK ministers for the electricity it would generate. In December Welsh Secretary Alun Cairns told a committee of MPs the scheme’s approval depended on it being “value-for-money”.

Mr Jones claimed the UK could become “a world leader in a new global industry”.

Lagoon backers welcomed the pledge of Welsh Government support as “the breakthrough our project needed”.

In a letter to Prime Minister Theresa May, Mr Jones said: “I want to make clear that I am prepared to consider a substantial equity and/or loan investment by the Welsh Government if that would enable the project to move forward.

“This investment could help to reduce the cost of capital for the project and hence reduce the subsidy requirement over the lifetime of any contract for difference.”

In January 2017, a report by former energy minister Charles Hendry ordered by the UK government recommended that tidal lagoons could play “a cost-effective role in the UK’s energy mix”, adding that there was “considerable value in a small pathfinder project”.

Confirming his appeal to the prime minister, Mr Jones said: “This would be the world’s first tidal lagoon power plant, which would create thousands of high quality jobs, supply a significant proportion of the UK’s energy needs and position Britain as a world leader in a new global industry.

“And, yet, the UK Government has been dragging its heels for over a year. This is leading to a growing sense of frustration among the Welsh business community and an increasing risk that the lack of a decision will turn into a decision not to proceed.

“Now is the time for the UK Government to stop stalling and get on with agreeing a strike price so we can make this transformative project a reality.”

The strike price is an agreed price which customers would pay above the market rate for energy from a particular project in order to cover the costs of construction.

Tidal Lagoon chief executive Mark Shorrock welcomed the Welsh Government’s backing, saying: “This is the breakthrough our project has needed.

“We thank the First Minister and his team for their leadership,” he said.

“We look forward to working alongside the Welsh Government to now close the deal for Swansea Bay Tidal Lagoon with the UK government.”

Plaid Cymru’s energy spokesman Simon Thomas also welcomed the offer, saying he had previously urged the Welsh Government to take a stake in the scheme.

“Let us be clear – if we had power over this type of project rather than Westminster we would have given the green light already,” he said.