UK tidal lagoon boosted as investment target reached

The £1bn Swansea Bay tidal lagoon power plant project received a boost on Thursday with the news that it has met its target of raising £200m from two British institutional investors.

The next step for Tidal Lagoon Power, who are running the tidal power project, is to negotiate a longer guaranteed price for the electricity generated. The company is looking for that price to cover 35 instead of 15 years by virtue of the fact that the plant will have a 120-year lifespan.

The investment was secured through InfraRed Capital Partners and another £100m from Prudential, with up to 26 banks ready to provide the £800m of debt to complete the financing.

Mark Shorrock, chief executive of Tidal Lagoon Power, told FT the plant could be built within three years and the company wants a “strike price” of £168 per megawatt hour, compared with the £92.50 offered to EDF for Hinkley Point.
Swansea tidal lagoon project
The Swansea project, which will generate 320 MW of power, enough for 155,000 homes, is in talks with the three turbine suppliers — Alstom, Voith, and Andritz Hydro. The breakwater will be fitted with sluice gates and 16 turbines which would generate electricity as the tide comes in and as water is later released.

65 per cent of the value of the components and services could be sourced from UK suppliers, 45 per cent from local Welsh companies.

If successful, the company plans a further five schemes, each with installed capacity up to 2000 MW, equating to 8 per cent of the UK’s installed capacity.

Tidal lagoon power offers predictable power output and uses a proven technology, adapting turbines very similar to those used in hydroelectric schemes.

Supporters say lagoons are the best way to trap the power of the sea, bigger in scale than freestanding turbines in so-called tidal streaming projects in Scotland, more proven than wave power, and less economically and environmentally disruptive than barrages which block rivers and estuaries.

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