Tidal Lagoon Swansea Bay, a £1 billion (€1.4 billion; $1.6 billion) project that would become the world’s largest tidal plant if completed, has received planning consent from the UK government.
The green light removes a significant hurdle for the lagoon to be developed, though separate negotiations over whether it can benefit from a Contract for Difference (CfD), the UK’s framework agreement for renewable energy subsidies, are still ongoing.
“The process for development consent is completely separate from that related to the negotiations over a potential CfD and will not affect that process,” the UK’s Department of Energy and Climate Change said in a statement.
The Swansea Bay Tidal Lagoon, located in Swansea Bay, Southern Wales, will have a capacity of 320 megawatts if completed as planned in 2018. It will generate about 500 gigawatt-hours during an expected lifetime of 120 years, according to its proponents.
If successful, it could also be the first step towards the development of a network of six coastal lagoons which could eventually generate up to 8 percent of the UK's electricity needs.
“The tidal lagoons that follow – at Cardiff, at Newport, elsewhere in the UK and overseas – must each make their own compelling social, environmental and economic case to proceed. But they have a pilot project to guide them and a blossoming technical and industrial network to support them,” said Mark Shorrock, chief executive of Tidal Lagoon Swansea Bay.
The scheme is backed by UK insurer Prudential and London-based fund manager InfraRed Capital Partners, which invested £100 million in the project in October 2014 and February 2015 respectively.
About £22 million of additional equity is provided by developers, while the balance of the project’s cost will be covered by debt. A financial close is expected in the summer with construction to begin shortly thereafter.