( I wrote this post earlier in the year. In the wake of this week's announcement of possible government support for this wonderful scheme as part of the UK infrastructure plan, I'm putting it up on the site again)
The irrepressible Mark Shorrock has submitted the 5,000 page planning application for the Swansea tidal lagoon. A wall of enormous sand bags covered with stone will stretch almost 10 kilometres around the bay, trapping the tides twice every day. 240 megawatts of electricity will be generated by turbines turned both by the inrushing and the outflowing water. Completed by 2018 – if all goes to plan - Swansea Bay will be the world’s first power station built in a man-made coastal lagoon. This is an enormous construction project using 3 million tonnes of rock and the best part of a million tonnes of concrete. The total cost is estimated at over £800m. What do Shorrock and his investors get for this? About one seventh of one percent of UK electricity demand and, not unimportantly, a major new sports and leisure facility in Swansea bay. Even more interestingly, the development team wants us to think about how tidal lagoons compare with nuclear power. A table at the bottom of this post illustrates the closeness of the two options.
I guess that the scheme will get planning permission with very few objections raised. Shorrock’s team has been extraordinarily diligent in winning local support and responding carefully to the (quite limited) environmental concerns. The more difficult problem is how to get DECC to agree a price for the electricity the turbine plant will generate. The fund-raising prospectus now online suggests that the company hopes to get a satisfactory figure from government by the middle of this year. Experience suggests that this far too optimistic.
What price does the Swansea tidal lagoon actually need? Informal comments by Shorrock to the press suggests that he thinks he’ll require a figure of about £155 per megawatt hour if he is to attract the £800m to build the turbine hall and lagoon. This is the same figure as offshore wind is being offered for the next couple of years. The coincidence is unsurprising: government has always indicated that it sees the offshore wind price as the maximum it is prepared to pay for large scale generating technologies. (Other marine technologies are offered much more but few see them making much contribution to electricity supply in the next few years, despite the good results being generated by companies such as Aquamarine Power).
At £155 a MWh the lagoon will make about £65m a year from mainstream electricity sales. There may also be money to be made from adjusting the rate of output of the plant in response to urgent requests from the National Grid. Gas turbine plants, for example, are getting a little less reliable as they work more intermittently in the face of growing production from wind farms. Swansea lagoon might well earn good money upping its power output for an hour or so while other power plants are being restarted.
Let’s say that Swansea earns £70m a year in total, from which must be deducted its limited operating costs. This is not a huge return on £800+m investment. But to many pension funds and other long term investors an index-linked return in the middle single digits may well be enough. The return on UK government index-linked bonds hovers around 0% today and the reliable cash stream from Swansea may well look very attractive indeed to investors facing defined long-running liabilities which rise with inflation. And compare it with the couple of percent an individual can get in an ISA and the attractions increase still further.
Shorrock’s team doesn’t want to stop at one scheme. They show off a map that has 17 sites around the UK for financially viable lagoons, some very much larger than Swansea Bay. Having learnt their lessons in South Wales, they expect to be able to reduce the construction price and gain some economies of scale. Some of their targets seem to be at least five times Swansea’s size and the team tells me that they expect to push their electricity price requirements down to £115 a megawatt hour or less for the next four lagoons. By the time they’ve completed ten the cost will fall below nuclear, they hesitantly whisper. And these lagoons will produce a peak of 10 GW of power, about a quarter of the UK’s average need and more than current nuclear output.
This set me thinking. How do tidal lagoons and nuclear power stations compare? Could tidal power – a source of energy that the UK has unique amounts of – actually be a better bet than nuclear?
One point needs to be addressed first. A single tidal lagoon provides very reliable and easily forecastable output. If you asked Shorrock what his Swansea plant will produce in the second week of June 2021 he could tell you. Electricity will be generated about 14 hours a day from the twice daily swing of the tide in an entirely predictable way years in advance.
The times of high and low tide vary around Britain. One of his proposed sites off the North West coast of England has today (11th February) a low tide that almost exactly matches the high tide at Swansea. Other sites are aligned at half a cycle away from the Swansea times. So multiple lagoons around the British coastline could produce predictable and almost flat electricity output. This has huge value and compares well to wind power which will vary unpredictably. As importantly, the output of individual wind farms is strongly correlated with all other wind turbines across the UK.
It might look therefore that tidal lagoons could provide baseload power very much equivalent to nuclear power stations. This would be the wrong impression. The problem that tidal power faces is not managing the daily cycle of tides but rather of coping with the monthly swing between ‘spring’ and ‘neap’. High tides at periods of ‘spring’ will produce a lot of power. ‘Neap’ tides are only 50% of the typical ‘spring’ tidal range and electricity output will be correspondingly less. And unlike the daily swings, period of ‘spring’ and ‘neap’ are almost precisely correlated around the UK. (The height of the tide depends on the position of the moon). So in some weeks tidal power would produce twice the output of a period two weeks earlier in the lunar cycle.
This is not so good for tidal lagoons. They will need complementing at periods of ‘neap’ with other sources of power. Nuclear, by contrast, can work reliably 95% of the time, usually only coming offline for planned maintenance at times of low electricity demand.
Put this problem aside for a second. How do tidal lagoons and nuclear compare otherwise? I’ve extracted the data in the following table from published information about Hinkley C and Mark Shorrock’s plans. Perhaps you’ll say that since no tidal lagoons have ever been built in the UK we must be cautious about his figures. My response is to say that we should probably have similar concerns about EDF’s plans for Hinkley.
Here’s how Shorrock’s plans for five lagoons by 2023 compares with EDF’s figures for the two reactors at Hinkley Point.
*The lower figure is my extrapolation from the estimates from one lagoon (Swansea) up to 10 sites. So I multiply the Swansea figures ten-fold. The higher figure is multiplying the Swansea figures by 40 to reflect the expected multiple of power output from the following nine, much bigger, lagoons. The real figure will be between the two extremes.
What should we take from this table? I think we can say that if Mark Shorrock is right he is working on a technology that can compete with nuclear as the replacement low-carbon source of power that the UK so urgently needs. Of course successful entrepreneurs like Shorrock are optimistic by nature; they wouldn’t achieve what they do if they were as downbeat as the other 99% of us. Nevertheless, scepticism aside, it seems to me that tidal lagoons, capturing the UK’s almost uniquely large tidal ranges, deserve urgent and enthusiastic support as baseload power. Personally, I was struck by one of the company’s comments about tidal lagoons: ‘it is what the Victorians would have done’.
And, as I always say, we need Power to Gas to store the surplus electricity from ‘spring’ tides ready for the ‘neap’ tides two weeks later.
(Shorrock’s company is fundraising for its final £2.5m or so of development (pre-construction) finance. The prospectus is here. Disclosure: I may put some money in myself but I'm in no sense recommending an investment).