Tidal Power: Swansea Bay

Department for Business, Energy and Industrial Strategy written question – answered on 26th June 2020.

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Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

To ask the Secretary of State for Business, Energy and Industrial Strategy, pursuant to his Answer of 9 June 2020 to Question 51817 on Tidal Power: Swansea Bay, what range of hurdle rates, comparable to those more established renewable energy technologies, such as solar PV, onshore wind and large hydropower, were used for the Swansea Bay tidal lagoon value for money assessment.

Photo of Kwasi Kwarteng Kwasi Kwarteng The Minister of State, Department for Business, Energy and Industrial Strategy

An error has been identified in the written answer given on 23 June 2020.

The correct answer should have been:

The hurdle rates applied across the portfolio of tidal lagoons in the Department’s value for money assessment[1] are shown in Table 1. The hurdle rates for other low carbon technologies estimated at the time of the value for money assessment are shown in Table 2.

Table 1: Range of hurdle rates applied to proposed programme of tidal lagoons[2]

Hurdle Rate Scenario

Hurdle rate (real terms, pre-tax)

Low

6.2%

Central

8.0%

High

9.2%9.0%

Table 2: Selected hurdle rates for other low carbon technologies (up to date at time the assessment was undertaken)[3]

Technology

Hurdle rate (real terms, pre-tax)

Onshore wind

6.7%

Offshore wind

8.9%

Solar PV (>5MW)

6.5%

Nuclear

8.9%

Gas with CCUS (first of a kind)

11.3%

Hydro (>5MW)

6.9%

[1] Available at: www.gov.uk/government/publications/swansea-bay-tidal-lagoon-value-for-money-assessment

[2] Source: BEIS commercial advisory

[3] Source: BEIS Electricity Generation Costs Report (2016), available at: www.gov.uk/government/publications/beis-electricity-generation-costs-november-2016

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Photo of Kwasi Kwarteng Kwasi Kwarteng The Minister of State, Department for Business, Energy and Industrial Strategy

The hurdle rates applied across the portfolio of tidal lagoons in the Department’s value for money assessment[1] are shown in Table 1. The hurdle rates for other low carbon technologies estimated at the time of the value for money assessment are shown in Table 2.

Table 1: Range of hurdle rates applied to proposed programme of tidal lagoons[2]

Hurdle Rate Scenario

Hurdle rate (real terms, pre-tax)

Low

6.2%

Central

8.0%

High

9.2%9.0%

Table 2: Selected hurdle rates for other low carbon technologies (up to date at time the assessment was undertaken)[3]

Technology

Hurdle rate (real terms, pre-tax)

Onshore wind

6.7%

Offshore wind

8.9%

Solar PV (>5MW)

6.5%

Nuclear

8.9%

Gas with CCUS (first of a kind)

11.3%

Hydro (>5MW)

6.9%

[1] Available at: www.gov.uk/government/publications/swansea-bay-tidal-lagoon-value-for-money-assessment

[2] Source: BEIS commercial advisory

[3] Source: BEIS Electricity Generation Costs Report (2016), available at: www.gov.uk/government/publications/beis-electricity-generation-costs-november-2016

Does this answer the above question?

Yes0 people think so

No0 people think not

Would you like to ask a question like this yourself? Use our Freedom of Information site.