Views are being sought from stakeholders on the approach the government would take if it decides to enter into Contract for Difference (CFD) negotiations for the Swansea Bay Tidal Lagoon project in South Wales.
This is part of the UK government’s drive for transparency and engagement with stakeholders in developing new arrangements for applying for a bespoke CFD.
The UK government is starting closer discussions with Tidal Lagoon Power Ltd to establish whether a potential tidal lagoon project at Swansea Bay would be affordable and provide value for money for energy consumers.
The proposed six-mile horseshoe shaped sea wall scheme, which would generate around 0.5 TWh per year, enough to power almost 120,000 homes, is currently being considered by the Planning Inspectorate.
Energy and Climate Change Secretary Ed Davey said:
“Britain has some of the best tidal resources in the world – tidal lagoons could provide 8% of our electricity needs, replacing foreign fossil fuels with clean, reliable home-grown electricity. That’s why it’s important we consider what might provide the best value for money for bill payers.”
Contracts for Difference are part of the Government’s radical reforms to the energy market. They provide developers with more price certainty for the electricity generated by the plant, stimulating significant investment in renewable energy projects.