Swansea Tidal Lagoon

Stephen Kinnock Excerpts

Tuesday 8th March 2016 Westminster Hall

[Stephen Kinnock (Aberavon) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Brady. I congratulate the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) on securing this debate. The presence of so many hon. Members here today shows why the project is of such importance. I rise today to urge the Government to give this vital project the go-ahead soon.

I believe that the tidal lagoon should be approved for the following reasons. First, it offers Wales, and the Swansea bay region in particular, an unrivalled opportunity to place itself at the forefront of what this year’s World Economic Forum in Davos called the “fourth industrial revolution”—an industrial revolution that will be characterised by new forms of renewable energy and by the exponential outward expansion of technological innovation. We can be at the vanguard of that revolution, and the Swansea bay tidal lagoon could be a catalyst for it.

To have the first project of this type in Wales—not only in Wales, but in my constituency of Aberavon and, I hasten to add, that of my hon. Friend the Member for Swansea East (Carolyn Harris)—would be a source of tremendous national and local pride. The project would also provide a significant alternative to carbon-intensive industry.

This is a chance to harness the natural environment and the unique nature of Swansea bay to our advantage. It is an opportunity to use the environment to protect the environment, power the local community and local homes and to save money—because, secondly, the tidal lagoon will help not only to tackle climate change, but to save money in the long run. The lagoon requires a strike price of £96 per MWh. That is 16% below the cost of any offshore wind farm ever granted a contract.

[Antoinette Sandbach (Eddisbury) (Con)]

I am interested in that strike price. Will the hon. Gentleman explain what period that is over? My understanding is that it is over a period of 90 years, rather than the 35 years that would apply, for example, in a wind farm contract.

[Stephen Kinnock]

The hon. Lady is correct. My argument is still that that strike price, as a unit price, is very attractive, particularly when we consider the economies of scale that would come from the construction of further tidal lagoons. We will see a downward trend in that strike price, which is a very convincing economic argument.

[Huw Irranca-Davies]

rose—

[Mr MacNeil]

rose—

[Stephen Kinnock]

Two Members rose at the same time. I will, in a very biased way, give way to my hon. Friend.

[Huw Irranca-Davies]

I understand that the Government want to get the financial details right and the best value for money for the taxpayer and bill payer, but on the basis of such unanimous cross-party support throughout Wales—at Assembly, ministerial and MP level, as well as right across society; there are no dissenting voices—should it not be the case that at the end of the consultation we have the deal on the table and we go ahead?

[Stephen Kinnock]

I agree entirely with my hon. Friend and also with the hon. Member for Gower. There is a cross-party consensus and what seems to be a rare outbreak of unanimity. Let us take that opportunity to move forward.

[Mr MacNeil]

I am grateful to the hon. Gentleman, who is losing time because of interventions; he is very kind. To put the matter into some context, the strike price for nuclear will be for 35 years, but we must remember that nuclear has been on the go for 60 years in the UK. So 60 years after it first came along, it is still getting support for a further 35 years—95 years in total—and the strike price being talked about for the barrier is for only 90 years. I do not want to get into a debate about tidal versus nuclear, but that is interesting for context and background.

[Stephen Kinnock]

I agree with the hon. Gentleman, and I would add that we have seen a disastrous overrun in the cost and timing in Flamanville and in Finland, so let us give the tidal lagoon a chance, because in the long run it looks like a very good investment.

Over the project’s lifespan, it will deliver cheaper-than-wholesale electricity. The combination of the Swansea and Cardiff tidal lagoon projects, the first two of their kind in the world, would, over the course of their lifetimes, deliver the cheapest form of electrical generation on the UK grid. Thirdly, the project will create thousands of highly skilled, well paid jobs locally, supporting hundreds of local businesses. Indeed, it is already having a positive impact in the local area, as my hon. Friend the Member for Swansea East mentioned, giving rise to plans for many small businesses in the city bay region and feeding into the strategy for the Swansea bay city deal. This is exactly the kind of project that must go ahead if we are to see the rebalancing of the economy that this Government are so keen to talk about, but are apparently not always so keen to act upon. Well, here is the chance: approve the tidal lagoon and create jobs; support small business in the area; help to rebalance the economy and produce green energy.

Finally, as hon. and right hon. Members will be aware, the Welsh steel industry is going through testing times. Nowhere is that more acutely felt than in my constituency, where we are recovering from the devastating news two months ago of 750 job losses at the Tata steelworks in Port Talbot. With the Swansea bay tidal lagoon, there is a real opportunity to support not only the local community, but the local steel industry. The turbines and generator package are worth around £300 million, and Tidal Lagoon Power has committed to sourcing all the major components from the UK.

The company has detailed plans in place for a turbine manufacturing plant in Swansea docks and heavy fabrication in Pembroke, and the generators are to be manufactured in Newport and Rugby. This is all welcome, but I want to see the Government go further when approving the project, and show real leadership by committing to help to source all or as much of the steel for the turbines from the British steel industry. Not only would that help to create jobs across the Swansea bay area, helping some of those highly trained and skilled men and women who were made redundant at Port Talbot in January; it would also help to support local jobs at the Port Talbot steelworks, supporting local jobs and Welsh steel.

[Jessica Morden (Newport East) (Lab)]

I thank my hon. Friend for giving way so near to his closing remarks. I want to reiterate that we in Newport also urge the Government to get on with the Swansea bay lagoon. We can also see the benefits further down the line in terms of procurement—my hon. Friend mentioned the steel industry—and in terms of investment, construction and long-term jobs.

[Stephen Kinnock]

My hon. Friend and I stand shoulder to shoulder on this issue.

A positive decision on the lagoon would put a much needed tick in the Government’s green credentials and deliver a massive boost to the local economy and steel industry. This project needs and deserves rapid advance. The Government need to get off the fence and fast, because each day of delay is costing months or years of progress. The recently announced review cannot be another airport-style case of kicking things into the long grass. While welcoming the review, the chief executive of Tidal Lagoon Power, Mark Shorrock, stated:

“A welcome review should not be a substitute for action.”

He made it clear that unless work starts on the lagoon now, and unless structuring and commercial negotiations are concluded in the next six weeks,

“the opportunity will be lost and the review will be all for nothing.”

That was almost a month ago to the day. That gives the Government just two weeks if the project is to go ahead on schedule. The clock is ticking. If the Government want to know what the time is, it is time to act now.