The Department for Energy and Climate Change has today announced that planning consent has been given for construction of the £1 billion Swansea Bay Tidal Lagoon project, the world’s first tidal lagoon.

Announcing the decision, Energy and Climate Change and Wales Office Minister Lord Bourne said:

“We need more clean and home-grown sources of energy, which will help to reduce our reliance on foreign fossil fuels. Low carbon energy projects like the tidal lagoon in Swansea Bay could bring investment, support local jobs and help contribute to the Welsh economy and Swansea area.”

Last week the China Harbour Engineering Company Ltd was named as preferred bidder for the £300M contract to provide marine works for the Swansea Bay Tidal Lagoon.

Separately from the planning consent, the project is still subject to Contract for Difference (CfD) negotiations to establish whether a 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 and affordability, and to State aid approval. 

The process for development consent is completely separate from that related to the negotiations over a potential Contract for Difference and will not affect that process.

The Department for Energy and Climate Change announced in December 2014 that it had started to explore the potential for a future lagoon programme that would help meet the UK’s future energy needs. In March 2015 the previous Government announced it was starting the first phase of negotiations over a potential Contract for Difference with Tidal Lagoon Power Ltd, the developer of Swansea Bay Tidal Lagoon, to establish whether the tidal lagoon project at Swansea Bay is affordable and value for money for consumers.

Mark Shorrock, chief executive of Tidal Lagoon Swansea Bay Plc commented:

“With the Swansea Bay Tidal Lagoon becoming a reality, locking in 120 year life, zero carbon energy infrastructure, we have the potential to help transform our industrial economy and the UK’s energy mix. “

“From Rugby to Pembroke Dock, from Sheffield to Swansea Bay, from Chepstow to Neath Port Talbot, companies are working in the supply chain to prepare for the delivery of a new approach to energy infrastructure. Through a single project we have the opportunity to create a whole new industry. And in a single step, that project can take us to low cost, renewable energy on a nuclear scale.”

Scheme is a gamechanger and scaleable blueprint for a fleet of lagoons

He went on to describe the scheme as a game-changer and a scalable blueprint which paved the way for a fleet of lagoons that could help secure the nation's electricity for generations to come, adding:

 “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.”

The company is planning to create an opportunity for both the local community and ordinary people across the country to part-own the lagoon, later in the year.

Juliet Davenport OBE, CEO and founder of renewable electricity company Good Energy, one of the first organisations to invest in the project said:

“Innovation is in Good Energy’s DNA, that's why we led the way with an early stage investment back in 2014. Our stake includes the right to purchase 10% of the lagoon’s electricity output. This will enable Good Energy to further diversify our sources of renewable electricity to supply our growing customer base.”

“Once operational, the development will provide electricity for more than 155,000 homes for at least 120 years – an amazing contribution to the UK’s renewable electricity mix. Looking further ahead the opportunity is truly game changing. We now look forward to the government working in partnership with the project to give it the support it needs.”

In a letter announcing the decision, the Secretary of State said he accepted that financial viability in respect of completion of the whole project does not have to be demonstrated prior to commencement of the development.

The news has also been welcomed by Gareth Clubb director of Friends of the Earth Cymru who said:

“This project still has a few environmental hurdles to clear - such as the source of the rock to be used - but provided these concerns can be managed and mitigated, tidal lagoons could make a significant contribution to a 100% renewably-powered UK.”

“Investment in the huge potential of tidal power is an exciting step forward, but the Government must also make the most of the proven renewable sources we already have, such as offshore wind and solar, where costs are falling rapidly.”