The government acknowledges progress has been made to understand tidal lagoon technology, but says more work needs to be done to determine whether they present value for money. They have commissioned a review of the technology to improve their understanding of how tidal lagoons could contribute to the future of the UK’s energy mix in the most cost effective way.
The review will commence this spring and it will help establish an evidence base to ensure all decisions made regarding tidal lagoon energy are in the best interest of the UK.
Tidal Lagoon Power, the proposed developers of Swansea Bay Tidal Lagoon, and other industry stakeholders will take part in the review while discussions about Swansea Bay Tidal Lagoon continue.
Energy Minister Lord Bourne commented: “Tidal Lagoons on this scale are an exciting, but as yet an untested technology. I want to better understand whether tidal lagoons can be cost effective, and what their impact on bills will be – both today and in the longer term.
“This review will help give us that clarity so we can determine what role tidal lagoons could have as part of our plans to provide secure, clean and affordable energy for families and businesses across the country.”
Commenting on today’s announcement Kepler Energy’s Peter Dixon (Executive Chairman) said: “The opportunity that tidal stream energy offers the UK must not be overshadowed by the hiatus surrounding Tidal Lagoons and Swansea Bay. Kepler Energy is working hard to bring forward plans for a tidal energy fence that will be located in the Bristol Channel and we have shared our outline plans with a range of stakeholders including the Department of Energy & Climate Change, the Welsh Government, the Crown Estate and the Treasury.
“Our tidal energy technology will use the very latest carbon composite technology, and can be deployed in shallower, lower velocity tidal waters around the UK coastline and also in overseas waters, in countries such as China, Korea, Japan and India. Subject to planning and financing, the Bristol Channel tidal fence, which is likely to be located in the Aberthaw to Minehead stretch of water, could be operational by 2025.”
“Kepler Energy’s technology is regarded as environmentally benign and would be subject to a rigorous environmental impact assessment during the planning process to ensure that it carries no significant risk to marine life and other users of the sea.
Dixon added: “Our Bristol Channel tidal fence has the potential to mobilise the carbon composite industry in the UK, as well as to create new and skilled jobs in Wales and the West Country.
“The opportunity that tidal stream energy offers the UK is very significant. Our tidal stream technology at scale can quickly be cost competitive with nuclear generation and offshore wind, and can be deployed quickly and extensively in UK and overseas waters.”
Mark Shorrock, chief executive of Swansea Bay Tidal Lagoon, said: “This is a huge step from the UK Government and a clear signal that it sees potential advantage for the UK energy consumer in very long-dated tidal energy infrastructure assets.
“There is vast potential for tidal lagoon power to provide cheap long-term renewable energy at scale and to be taken formally into national policy.
“We welcome the opportunity to put the case for a major programme of cost-effective power. This is a home-grown source of power, the natural way to power our nation. We have built a supply chain which puts UK companies at the forefront of a new world-leading technology.”
Continuing, Mark Shorrock expressed concern about the continuing delay in considering the demonstration first-of-a-kind tidal lagoon for the UK. He said: “It is imperative that we conclude our structuring and commercial negotiation with Government within the next 6 weeks. This is entirely possible; the review should not impact the finalisation of our commercial discussions. To unlock the potential of tidal lagoon power, we need investment in a demonstration project that will grow the supply chain and build investor confidence that an exceptionally long term project can go forward in today’s UK electricity market.
“Swansea Bay Tidal Lagoon is an appropriately small pilot project that gives rise to large scale projects. Investing in this project could add as little as 10p to householder’s bills. The first large scale lagoon to employ its blueprint could take £5 off householder’s bills
“The project planned for Swansea Bay is ready to go now. We have built a team, secured planning permission, secured equity sponsors, prepared a delivery team and a supply chain. We have received overwhelming support for this project locally, nationally and internationally. If tidal lagoon power at scale is to be a real option for the longer term, we need to start work on Swansea Bay Tidal Lagoon now. Otherwise the opportunity will be lost and the review will be all for nothing.
“We want to give birth to a tidal range industry. We want to return steel workers into jobs. We want to make our own turbines and generators here in the UK, we want to bestow a legacy on Great Britain from Wales of 120 year life power. But none of this will be possible if we don’t start now.
“A welcome review should not be. There is a serious and growing gap of electricity generation capacity. We need 16 new large scale power stations. The cheapest new power stations will be tidal lagoons, roof-top solar power and gas fired power stations. We need all three and quickly. And when the nuclear stations are ready, we will probably need them too, but their timescales are more uncertain.
“This country either started or scaled many of the world’s industries, including many of the world’s energy industries. Energy in the UK has become a completely regulated market where all operators and technology forms – from fossil fuel, to nuclear, to renewable – depend on direct or indirect subsidy. All non-hydro low carbon energies – solar, biomass, wind, and especially nuclear – have been conformed to favour foreign providers of the technology. We lose jobs, we lose time. Importantly, we also have lost baseload power.
“The tidal lagoon fleet breaks this unfavourable tradition. We will capitalise on a natural advantage. With speed we will deliver baseload power at a nuclear scale and a lower cost. Today’s review will ensure that we are able to consolidate this understanding in the market.
“We have made a value-for-money proposition to Government. There is no reason not to press on with Swansea Bay Tidal Lagoon negotiations.
“Recognising the extremely long asset life of a tidal lagoon enables the overall financing costs to be significantly reduced.
“The world-first tidal lagoon that carries on its shoulders the launch of a global industry now requires a lower level of subsidy support than any offshore wind farm ever built in the UK.
“We have proposed an equivalent CfD strike price for the 320MW Swansea Bay Tidal Lagoon below that of offshore wind. Our structure has a subsidy that reduces over time, meaning that for around half of the proposed 90-year contract, the lagoon pays money to Government.
“By linking Swansea Bay Tidal Lagoon to the successful delivery of a second, fullscale lagoon, this approach further reduces the required and proposed equivalent CfD strike price of Swansea Bay to under £100/MWh, comparable to the Hinkley C nuclear power station.
“Application of these bespoke support structures to the Cardiff Tidal Lagoon, a 2,700MW capacity project, the equivalent CfD strike price requirement is £68.30/MWh. It is excellent to have an independent review to substantiate how tidal lagoons can bring down electricity bills immediately after demonstration stage while providing Victorian-style infrastructure legacy.
“Our company’s vision is to harness the tides to generate our power, and to establish a new global industry in the UK. Today’s review launch confirms a strong interest from Government in this vision.
“We look forward to continuing to work with Government on the delivery of this vision, including on the most efficient financial support structures for tidal lagoons. But we will be pushing for Government support to demonstrate the potential of tidal lagoon power by giving the go-ahead for the Swansea Bay project, thereby avoiding the still birth of a game-changer for UK energy and UK industry.”
The review will consider:
– An assessment of whether, and in what circumstances, tidal lagoons could play a cost effective role as part of the UK energy mix;
– The potential scale of opportunity in the UK and internationally, including supply chain opportunities;
– A range of possible structures for financing tidal lagoons;
– Different sizes of projects as the first of a kind;
– Whether a competitive framework could be put in place for the delivery of tidal lagoon projects.
This review will take place in consultation with the relevant Government departments – in particular DECC and HMT for financial aspects.
Responsible Energy Investments Could Solve Retirement Funding Crisis
Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.
Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?”
Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.
Tip #1: Focus & Determination
Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.
Tip #2: Minimize Spending
One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!
Tip #3: Visualize Your Goal
You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.
Investing in Clean Energy
One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.
With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.
The Future of Green Biz
As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.
Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.
In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!
What Should We Make of The Clean Growth Strategy?
It was hardly surprising the Clean Growth Strategy (CGS) was much anticipated by industry and environmentalists. After all, its publication was pushed back a couple of times. But with the document now in the public domain, and the Government having run a consultation on its content, what ultimately should we make of what’s perhaps one of the most important publications to come out of the Department for Business, Energy and the Industrial Strategy (BEIS) in the past 12 months?
The starting point, inevitably, is to decide what the document is and isn’t. It is, certainly, a lengthy and considered direction-setter – not just for the Government, but for business and industry, and indeed for consumers. While much of the content was favourably received in terms of highlighting ways to ensure clean growth, critics – not unjustifiably – suggested it was long on pages but short on detailed and finite policy commitments, accompanied by clear timeframes for action.
A Strategy, Instead of a Plan
But should we really be surprised? The answer, in all honesty, is probably not really. BEIS ministers had made no secret of the fact they would be publishing a ‘strategy’ as opposed to a ‘plan,’ and that gave every indication the CGS would set a direction of travel and be largely aspirational. The Government had consulted on its content, and will likely respond to the consultation during the course of 2018. And that’s when we might see more defined policy commitments and timeframes from action.
The second criticism one might level at the CGS is that indicated the use of ‘flexibilities’ to achieve targets set in the carbon budgets – essentially using past results to offset more recent failings to keep pace with emissions targets. Claire Perry has since appeared in front of the BEIS Select Committee and insisted she would be personally disappointed if the UK used flexibilities to fill the shortfall in meeting the fourth and fifth carbon budgets, but this is difficult ground for the Government. The Committee on Climate Change was critical of the proposed use of efficiencies, which would somewhat undermine ministers’ good intentions and commitment to clean growth – particularly set against November’s Budget, in which the Chancellor maintained the current carbon price floor (potentially giving a reprieve to coal) and introduced tax changes favourable to North Sea oil producers.
A 12 Month Green Energy Initiative with Real Teeth
But, there is much to appreciate and commend about the CGS. It fits into a 12-month narrative for BEIS ministers, in which they have clearly shown a commitment to clean growth, improving energy efficiency and cutting carbon emissions. Those 12 months have seen the launch of the Industrial Strategy – firstly in Green Paper form, which led to the launch of the Faraday Challenge, and then a White Paper in which clean growth was considered a ‘grand challenge’ for government. Throughout these publications – and indeed again with the CGS – the Government has shown itself to be an advocate of smart systems and demand response, including the development of battery technology.
Electrical Storage Development at Center of Broader Green Energy Push
While the Faraday Challenge is primarily focused on the development of batteries to support the proliferation of electric vehicles (which will support cuts to carbon emissions), it will also drive down technology costs, supporting the deployment of small and utility-scale storage that will fully harness the capability of renewables. Solar and wind made record contributions to UK electricity generation in 2017, and the development of storage capacity will help both reduce consumer costs and support decarbonisation.
The other thing the CGS showed us it that the Government is happy to be a disrupter in the energy market. The headline from the publication was the plans for legislation to empower Ofgem to cap the costs of Standard Variable Tariffs. This had been an aspiration of ministers for months, and there’s little doubt that driving down costs for consumers will be a trend within BEIS policy throughout 2018.
But the Government also seems happy to support disruption in the renewables market, as evidenced by the commitment (in the CGS) to more than half a billion pounds of investment in Pot 2 of Contracts for Difference (CfDs) – where the focus will be on emerging rather than established technologies.
This inevitably prompted ire from some within the industry, particularly proponents of solar, which is making an increasing contribution to the UK’s energy mix. But, again, we shouldn’t really be surprised. Since the subsidy cuts of 2015, ministers have given no indication or cause to think there will be public money afforded to solar development. Including solar within the CfD auction would have been a seismic shift in policy. And while ministers’ insistence in subsidy-free solar as the way forward has been shown to be based on a single project, we should expect that as costs continue to be driven down and solar makes record contributions to electricity generation, investment will follow – and there will ultimately be more subsidy-free solar farms, albeit perhaps not in 2018.
Meanwhile, by promoting emerging technologies like remote island wind, the Government appears to be favouring diversification and that it has a range of resources available to meet consumer demand. Perhaps more prescient than the decision to exclude established renewables from the CfD auction is the subsequent confirmation in the budget that Pot 2 of CfDs will be the last commitment of public money to renewable energy before 2025.
In short, we should view the CGS as a step in the right direction, albeit one the Government should be elaborating on in its consultation response. Its publication, coupled with the advancement this year of the Industrial Strategy indicates ministers are committed to the clean growth agenda. The question is now how the aspirations set out in the CGS – including the development of demand response capacity for the grid, and improving the energy efficiency of commercial and residential premises – will be realised.
It’s a step in the right direction. But, inevitably, there’s much more work to do.
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