Tidal Power: Swansea Bay

Department for Business, Energy and Industrial Strategy written question – answered on 23rd 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, what value assumptions his Department made in the Swansea Bay tidal lagoon project value for money assessment for years 36 to 120 of the project's lifespan, beyond the life of the 35-year contract for difference assumption.

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

The key categories of assumptions used are listed in Annex B of the Department’s value for money assessment for the proposed programme of tidal lagoons.[1]

Test 2a of the assessment considered levelised cost, expressed in £/MWh terms, of the proposed lagoons over their full assumed asset life of 120 years.

Test 2b (costs of the GB power system) and Test 3 (household bills) assessed the proposed lagoons over the period to 2050. In these cases the costs of the lagoon were spread over the full 120 year asset life. This means that for a tidal lagoon commissioning in 2035, only 15 years’ worth of costs will have been factored in and compared to any benefits occurring over those same 15 years. This approach avoids a mismatch between costs and benefits in the value for money assessment.

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

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