Asked by: Paul Maynard (Conservative - Blackpool North and Cleveleys)
Question to the Department for Business, Energy and Industrial Strategy:
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.
Answered by Kwasi Kwarteng
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
Asked by: Paul Maynard (Conservative - Blackpool North and Cleveleys)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what assumptions were made in the Swansea Bay tidal lagoon project value for money assessment on the number of green jobs that would be created by the fleet of tidal lagoon projects, starting at Swansea Bay.
Answered by Kwasi Kwarteng
The Department’s value for money assessment for the proposed programme of tidal lagoons[1] considered the wider benefits, including the value of jobs supported.
The estimated number of direct jobs underlying this part of the assessment peaked at around 18,000 FTE in any one year across the lagoon fleet. The number of direct jobs maintained across the lagoon fleet once construction had completed was estimated at around 1,000 FTE per year. Indirect jobs were also considered, with a range tested around 2 indirect jobs per direct job.
[1] Available at www.gov.uk/government/publications/swansea-bay-tidal-lagoon-value-for-money-assessment
Asked by: Paul Maynard (Conservative - Blackpool North and Cleveleys)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, pursuant to his Answer of 21 May 2020 to Question 46026, what was the assumed cost of capital used in the value for money assessment into Swansea Bay tidal lagoon published on 25 June 2018.
Answered by Kwasi Kwarteng
The value for money analysis undertaken by the Department used a range of different cost of capital assumptions. This included scenarios in the lower range using hurdle rates which were comparable to those for more established renewable energy technologies, such as solar PV, onshore wind and large hydropower.
Asked by: Paul Maynard (Conservative - Blackpool North and Cleveleys)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, whether he plans to review the value for money assessment into Swansea Bay Tidal Lagoon in light of £200m loan from the Welsh Government.
Answered by Kwasi Kwarteng
The value for money assessment undertaken in 2018 took into consideration all potential public sector funding, including funding from the Welsh Government. The analysis concluded that the Swansea Bay Tidal Lagoon and proposed programme of follow on lagoons did not meet the Government’s value for money criteria.
Asked by: Paul Maynard (Conservative - Blackpool North and Cleveleys)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, when he plans to publish the Government's response to the Hendry Review into tidal lagoon power; and if he will make an assessment of the potential merits of the Tidal Lagoon Swansea Bay project being an electricity rather than a hybrid project.
Answered by Kwasi Kwarteng
My Rt. Hon. Friend the former Secretary of State made a statement to the House on Monday 25 June 2018 setting out our position on the support for the proposed Swansea Bay Tidal Lagoon project.
The Department published its summary value for money assessment in June 2018. A copy can be found at: https://www.gov.uk/government/publications/swansea-bay-tidal-lagoon-value-for-money-assessment
The Department’s analysis of the proposal considered the energy generation from the proposed project and follow-on programme of lagoons but also took account of potential wider economic benefits which might arise from it. The analysis concluded that it did not represent value for money. This remains the Department’s position.
Asked by: Paul Maynard (Conservative - Blackpool North and Cleveleys)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the implications for his Department's policies of the Hendry Review recommendation to enter a timely final-stage negotiation to explore robust and satisfactory terms that might be acceptable to both the developer and the Government.
Answered by Kwasi Kwarteng
My Rt. Hon. Friend the former Secretary of State made a statement to the House on Monday 25 June 2018 setting out our position on the support for the proposed Swansea Bay Tidal Lagoon project.
The Department’s analysis of the proposal to generate electricity from the lagoon and the proposed follow-on programme of lagoons was that it did not represent value for money. This remains the Department’s position.
Asked by: Paul Maynard (Conservative - Blackpool North and Cleveleys)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, with reference to the Hendry Review into tidal lagoon power, whether the Government plans to announce a programme to bring forward additional tidal projects.
Answered by Kwasi Kwarteng
My Rt. Hon. Friend the then Secretary of State made a statement to the House on Monday 25 June 2018 setting out our position on the support for the proposed Swansea Bay Tidal Lagoon project. The Department’s analysis of the project and the proposed follow-on programme of lagoons was that it did not represent value for money.
The Government has said it is open to considering well developed, privately developed tidal range projects. However they must be able to demonstrate credibly that they would represent value for money.
Asked by: Paul Maynard (Conservative - Blackpool North and Cleveleys)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what low carbon energy projects the Government is assessing to meet its net zero 2050 target.
Answered by Kwasi Kwarteng
Since 2010, over £94bn has been invested in clean energy in the UK and the Government has spent a total of £30.7bn on renewable electricity through the Renewable Obligations, Feed-in-Tariffs and Contracts for Difference (CfD) schemes. We recently set out ambitious plans at the Budget including investing £270m new funding for heat networks and £100m for heat pumps and biomass.
The Contracts for Difference (CfD) scheme is the government’s main mechanism for supporting new large-scale renewable electricity generation projects in Great Britain. We are continuing to improve the route to market for renewables by making up to £557 million available for CfD schemes. In the latest CfD allocation round, contracts were awarded to 12 renewable projects with the potential for nearly 6GW of new renewable capacity – enough to power over 7 million homes.
Our sustained support for clean energy has led to dramatic falls in the costs of some renewable technologies. The auction prices of offshore wind reduced by around two-thirds between the 2015 and 2019. The new projects and lower prices are another step towards decarbonising our energy system as we work toward net zero emissions by 2050, creating jobs and economic opportunities across the UK.
In addition, we are investing over £3 billion in low-carbon innovation through to 2021 – going beyond the £2.5 billion we committed to in the Clean Growth Strategy – and this investment will help to grow our low carbon economy. We are focusing our innovation spend where this can bring down the systems costs of delivering our climate targets and where the UK has expertise, building on our strengths in sectors such as advanced manufacturing, automotive, aerospace and nuclear.
We will be focusing on continuing to develop our net zero strategy in advance of COP26 – including through strengthening our plans for decarbonisation in key sectors. We published the first phase of our transport decarbonisation plan on 26 March 2020, and will be setting out further plans including our forthcoming Energy White Paper later this year.