News story

Government seeks views on a new contract negotiation process for Swansea Bay Tidal Lagoon project

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Views are being sought from stakeholders on the approach the government would take if it decides to enter into Contract for Difference (CFD) negotiations for the Swansea Bay Tidal Lagoon project in South Wales.

This is part of the Government’s drive for transparency and engagement with stakeholders in developing new arrangements for applying for a bespoke CFD.

As set out in the National Infrastructure Plan published in December 2014, we are exploring the potential for a future lagoon programme. As part of this, we are starting closer discussions with Tidal Lagoon Power Ltd to establish whether a potential tidal lagoon project at Swansea Bay would be affordable and provide value for money for energy consumers.

The proposed six-mile horseshoe shaped sea wall scheme, which would generate around 0.5 TWh per year, enough to power almost 120,000 homes, is currently being considered by the Planning Inspectorate.

Energy and Climate Change Secretary Ed Davey said:

“Britain has some of the best tidal resources in the world – tidal lagoons could provide 8% of our electricity needs, replacing foreign fossil fuels with clean, reliable home-grown electricity. That’s why it’s important we consider what might provide the best value for money for bill payers.

“The Russia-Ukraine crisis showed us the importance of having our own supplies of energy, whilst scientists have made it clear that we need to curb our emissions and move to a low-carbon economy as quickly as possible.”

Secretary of State for Wales Stephen Crabb said:

“I am right behind this project. With our highly skilled workforce and tidal range, Wales is ideally placed to be a world leader in the next generation of low-carbon technology.

“Using the very best of Welsh innovation, this scheme has the potential to create thousands of jobs and inject millions of pounds into the Welsh economy through regeneration, tourism and supply chain opportunities.

“It will also send a clear signal that Wales is at the forefront of tidal technology and be a major boost for other potential tidal projects in Wales.”

Contracts for Difference are part of the Government’s radical reforms to the energy market. They provide developers with more price certainty for the electricity generated by the plant, stimulating significant investment in renewable energy projects.

Further information

If you’d like to submit your views visit the publication page on GOV.UK and send your response to by 20 February 2015.

The Planning Inspectorate is currently considering TLP’s application under the Planning Act 2008 for development consent, and will provide its report and recommendations to the Secretary of State. The Minister responsible for making the planning decision will then have up to three months to reach a final decision on the application. The process for development consent is separate from that for a CFD.