Out-Law / Your Daily Need-To-Know

Out-Law News 2 min. read

Expert welcomes 'major milestone' for UK tidal power as Swansea Bay project obtains planning consent


Plans to construct the world's first tidal lagoon in Swansea Bay have cleared what an expert has said is a significant hurdle after the UK government granted planning permission to the project.

Major infrastructure planning expert Robbie Owen of Pinsent Masons, the law firm behind Out-Law.com, said that the announcement marked a "major milestone" for the UK tidal power sector, as well as providing an early success to the relatively new planning system for nationally significant infrastructure projects.

"The secretary of state's decision to grant approval for the project will kick-start the UK's tidal sector and is expected to create the foundations for a global export industry in tidal lagoon construction," he said. "Approval of the UK's first tidal project could lead to development of up to five further, much bigger lagoons in the Severn, North Wales and the north west of England."

"The UK's still relatively new planning system for nationally significant infrastructure projects has shown that it is able to consider and deliver consent for a large, complex and innovative project like this within 18 months, which was unheard of under the old system. This will doubtless encourage the other tidal lagoons to be progressed through planning," he said.

Tidal Lagoon Power Ltd, the developer of the planned project, said that it would now continue negotiations with the UK government over support under the contracts for difference (CfD) subsidy regime. Any decision to offer a CfD will be made on strict value for money grounds and subject to state aid approval, the UK government said.

The Swansea Bay tidal lagoon project could, if built, generate around 500 gigawatt hours (GWh) of UK-generated low carbon electricity per year or enough to power 90% of the area's annual electricity use. It would consist of turbines built into a six-mile horseshoe-shaped sea wall, and would use the ebb and flow of the tides to generate energy for conversion to electricity.

Earlier this month, Tidal Lagoon Power announced that Chinese state-owned China Harbour Engineering Company (CHEC) was its preferred bidder for the necessary construction work associated with the new project. CHEC intends to spend around 50% of the value of the contract on staff, partners and supply chain purchases in the UK, and has established a UK subsidiary through which it will pursue further infrastructure investment opportunities.

Major infrastructure planning expert Robbie Owen said that Chinese interest in UK energy projects was expected to grow significantly over the next 10 years, as forecast by Pinsent Masons in the firm's recent report on Chinese investment ambitions abroad.

"We expect to see major Chinese infrastructure companies such as CHEC becoming a key component in the development of clean energy in the UK," he said. "As to the Tidal Lagoon Swansea Bay project and potentially a number of similar UK projects, Chinese dredging capability will bring greater competition into an area which has traditionally been the safe haven of a number of European players."

"Four out of five of the world's largest construction and engineering companies are now Chinese with a growing appetite for infrastructure investment and with the potential to invest vast amounts of capital in advanced economies in Europe, as well as to construct, and to provide material and equipment from China. The UK is very well placed to take advantage of this given its stable currency, government and rule of law coupled with the potential for upskilling Chinese businesses in technology and management expertise," he said.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.