Tidal Lagoons and UK Energy Strategy

Angus Brendan MacNeil Excerpts

Tuesday 6th December 2016 Westminster Hall

[Stephen Crabb]

I agree with my hon. Friend, and I will address that point later. It is with a long-term view and an appropriate framework of support for the right projects that the prospect of a new UK tidal energy industry is within reach, and with it a source capable of providing 10% or more of the UK’s total electricity requirements.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The right hon. Gentleman is making a fine speech. The strike price over 90 years is £96.50, which compares with the Hinkley Point strike price of £92.50 over 30 years, both at 2012 prices. Of course, it is often forgotten that nuclear has had 60 years of support, and 44% of the budget of the former Department of Energy and Climate Change was spent on addressing the legacy of old nuclear. Putting all that together, Swansea bay and other tidal lagoons represent very good value for money.

[Stephen Crabb]

The point about comparability is well made. Although the purpose of this debate is not to do down any other energy source, I recognise that drawing such comparisons is right and proper in this context.

A tidal lagoon industry would mean multi-billion-pound infrastructure investments in two areas of the United Kingdom with ideal conditions for tidal lagoon infrastructure: the Severn estuary and the Liverpool bay and Irish sea area. I understand that about a dozen viable sites have been flagged to Charles Hendry as part of his investigations, and that Tidal Lagoon Power is working on specific projects for five of those sites, starting with a pathfinder project in Swansea bay and moving shortly afterward to the first full-scale lagoon in Cardiff.

New manufacturing facilities to serve the various lagoon sites across England and Wales will be served by a UK-wide supply chain. Original manufacturing will be spread throughout the UK; particularly important components will come from a number of regional centres of excellence, mirroring the UK’s historic manufacturing heartlands, including South Yorkshire, south and west Wales, the west midlands, western Scotland, Tyneside and Teesside.

A UK tidal lagoon industry would represent a world first. The wide body of bespoke maintenance and engineering expertise it would build up could lead to the export of skills, knowledge and human resource to projects in the first phase of international tidal lagoon deployment, potentially securing up to 80% of global market value in that space. That is absolutely what UK industrial strategy should be all about: renewing and enlarging world-class manufacturing and engineering skills right across the United Kingdom.

--- Later in debate ---

[Stephen Crabb]

Again, my hon. Friend demonstrates his knowledge of the potential industry that we are discussing. His point is well made.

It is envisaged that the machining and pre-assembly of the turbines will take place at a new purpose-built facility in the Swansea bay city region. Heavy fabrication of steel components will take place at a new purpose-built facility, also in the region. Final full assembly of the turbines will take place on site in the turbine housing itself. The turbines’ control systems and generators, which connect to the turbines and generate renewable electricity, will be manufactured in Rugby, also from a majority of British-made parts. Meanwhile, a Stafford facility will provide high-voltage switch gear and control and protection systems, all of which demonstrates the UK-wide potential for the supply chain to serve a new tidal lagoon industry.

Quite simply, the development of a fleet of tidal lagoons, starting with Swansea, would provide an enormous boost to UK civil and electrical engineering, our manufacturing sector and our domestic steel industry. According to Graham Honeyman, chief executive of Sheffield Forgemasters:

“Being part of the Tidal Lagoon project would be an important win for this business. The prospect of working on a new power generation concept is an exciting one and is inspiring to our team. The possibilities for this concept, which could play a huge part in addressing the global power deficit, are vast. For such a project to be delivered through British designs and implementation would also be a great boost to the UK economy.”

[Mr MacNeil]

I am grateful to the right hon. Gentleman for giving way again; he is making a fine speech. What he and other Government Members have been talking about is first mover advantage. We could make a strong case for first mover advantage. I hope that the Department for Business, Energy and Industrial Strategy is listening to that point. It should not be seen in any way as a cost to consumers. The previous Department was obsessed with snapshots of the cost to consumers in the present, whereas we should be looking towards long-term savings to consumers that will eventually be achieved through this work and the first mover advantage.

[Stephen Crabb]

The hon. Gentleman makes an excellent point. If we are serious about rebalancing the economy, revitalising our industrial sector and creating new high-quality manufacturing jobs and apprenticeships, we need real and substantial projects to enable that to happen. The proposals for a tidal lagoon industry comprising five or more lagoon projects around the UK represent exactly the kind of new thinking that we need for our industrial strategy.

Tidal lagoons would mean new jobs, requiring new skills for a new industry. To give one example, there is currently no UK facility of sufficient size to serve the tidal lagoon sector with caissons, the large watertight chambers in which construction work may be carried out underwater. Tidal Lagoon Power and its partners have identified a number of potential sites for such a purpose-built facility around the Welsh and Scottish coastlines. The construction of such a facility would further enhance the UK’s civil engineering capability and upskill our industrial workforce.

In a report to Tidal Lagoon Power extending its earlier work for the Welsh Government, Miller Research and SEMTA found that the development of four tidal lagoons in Welsh waters would support 22,000 jobs in manufacturing and assembling the main component parts of the turbines, generators and sluices, which equates to 15% of the total number of people working in manufacturing in Wales in 2014.