Tidal Lagoons and UK Energy Strategy

John Penrose Excerpts

Tuesday 6th December 2016 Westminster Hall

[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.

[John Penrose (Weston-super-Mare) (Con)]

Does my right hon. Friend have any views, or evidence of any views, about how the cost per unit, or per bay created, might drop as the industry gets under way? I am thinking of the solar photovoltaic industry, where the cost per unit has decreased dramatically over many years. It is important that we have some sense of how much cheaper tidal lagoon energy might become, because the costs will ultimately be borne by consumers through their energy bills. Many people are struggling for cash these days, and we are trying to drive up the productivity of the UK economy, so lower long-term cost to the consumer if we can make it work will be an important prize to gain.

[Stephen Crabb]

That question goes absolutely to the heart of the matter, and I will address it in a bit more detail later. The figures that I have seen from Tidal Lagoon Power demonstrate that as we move from the pathfinder project in Swansea to the larger full-scale fleet of lagoons starting in Cardiff, the costs of energy generation decrease markedly. That does not even assume any of what economists call project learnings, which help to drive efficiencies in future projects.