The Government has refused to back a “world first” tidal lagoon project to generate clean energy from the tides on cost grounds.
The company behind the scheme, Tidal Lagoon Power, wanted subsidies similar to those for new nuclear power to build the £1.3 billion scheme, consisting of a U-shaped sea wall with turbines in Swansea Bay.
The lagoon had been backed as a “pathfinder” project to develop the tidal technology by an independent review for the Government.
But Business Secretary Greg Clark told the House of Commons the project “however novel and appealing” did not demonstrate value for money for consumers and the public purse.
Tidal Lagoon Power’s founder and chief executive Mark Shorrock reacted furiously to the news, arguing Swansea Bay would add just 30p to consumer bills while new nuclear power plant Hinkley Point C would add £12 or more.
He accused the Government of “a vote of no interest in Wales, no confidence in British manufacturing and no care for the planet”.
He pledged to work with the Welsh Government to deliver a UK tidal lagoon industry centred in Wales and said: “Swansea Bay Tidal Lagoon remains key to our vision.”
But he also warned greater emphasis would be put on projects elsewhere in the world, including northern France.
In his statement to MPs, Mr Clark said generating power from the tidal lagoon would be much more expensive than offshore wind or nuclear.
As a result it would not be appropriate to lead the company to believe public funds could be justified, he said.
He said the electricity generated by the lagoon programme by 2050 could cost up to £20 billion more to produce compared to generating that same electricity through a mix of offshore wind and nuclear.
That would cost the average British household consumer up to an additional £700 between 2031 and 2050, he said.
Analysis of additional economic benefits suggested Swansea Bay would only provide 28 long-term jobs and there would be limited scope for innovation and cost reduction in following schemes, he said.
He also played down any export potential of the technology and warned the electricity from the tides would be variable, not constant.
“The inescapable conclusion of an extensive analysis is that, however novel and appealing the proposal, even with these factors taken into account the cost that would be incurred by consumers and taxpayers would be so much higher than alternative sources of low-carbon power that it would be irresponsible to enter into a contract with the provider,” he said.
But the move was immediately criticised by MPs and local politicians from across south-west Wales, who described the news as “devastating” for the region which would have benefited from an economic boost.
The Welsh Conservatives described the decision as “desperately depressing”.
And Plaid Cymru tabled a vote of no confidence in the Secretary of State for Wales Alun Cairns at the National Assembly for Wales following the Government announcement.
The long-awaited decision was also criticised by environmental groups, with Friends of the Earth Cymru warning “bold action” was needed to tackle climate change, which meant investing in innovative new technologies such as tidal lagoons.
Emma Gibson, Senior Campaigner at Greenpeace UK, said: “A government that styles itself as an international leader in tackling climate change has just rejected the opportunity to become the international leader in developing tidal lagoons that produce clean energy day and night, and whose prices would have fallen after this first demonstration project.”
Instead it was preparing to “throw billions of taxpayers’ hard-earned cash” at nuclear power which relied on handouts, saw spiralling prices and delayed delivery, she said.
But the refusal to back the lagoon was welcomed by anglers who had feared the large infrastructure project would cause serious harm to marine and migrating fish populations, and other aquatic wildlife.