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Chinese company wins contract for world's largest tidal lagoon plant in UK

Chinese state-owned China Harbour Engineering Company (CHEC) has won a £300 million ($459 million) contract to provide marine works for what will be the world's first tidal lagoon power plant. 04 Jun 2015

The 320MW installed capacity power plant in Swansea Bay, UK will have net annual power output of over 500 GWh; enough to meet the annual electricity requirement of over 155,000 homes, or over 90% of homes in the Swansea Bay area, Tidal Lagoon Power, the developer behind the project, said in a joint statement with CHEC.

The marine work won by marine engineering contractor CHEC includes the construction of a six-mile lagoon or 'bund' wall in Swansea Bay; sourcing and transporting rock armour and materials to Swansea Bay; and managing all landside and marine crews associated with the marine work. At peak construction, CHEC will manage 500 workers on site, the companies said.

Approximately 50% of the contract's value will be spent in the UK on staff, partners and supply chain purchases, the statement said.

CHEC has established a UK subsidiary, and plans to pursue a programme of infrastructure investment in the UK over the next ten years, the companies said.

Lin Yi Chong, chief executive of CHEC, said: "CHEC has taken the strategic decision to enter the UK infrastructure investment and construction market, and we see the Swansea Bay Tidal Lagoon, a pioneering scheme that could bring the world a new energy option, as the cornerstone project in our business development strategy in the UK and wider Europe."

"We have not invested directly into the Swansea Bay project but we made a proposal to do so and will seek opportunities to invest in similar projects in the UK and Europe.  We will seek to grow our UK presence through significant investment into a subsidiary business and through a programme of UK infrastructure investment and construction," Yin said.

Tidal Lagoon Power will run further tenders over the summer of 2015 for the construction of a turbine assembly plant in Wales, and for the lagoon’s public area and buildings work, the companies said.

The Swansea Bay lagoon is expected to be linked to the grid in 2017. The tidal turbines will be capable of producing power for up to 16 hours a day using ebb and flood tides, with an operational life of around 100 years.

Last month, UK-based Laing O’Rourke won the £200mn contract to deliver the lagoon’s 410 metre turbine house and sluice structure block, and has named Arup as its lead design and engineering partner for the contract.

The turbines themselves are being built by General Electric and Andritz Hydro. The two companies bid together for the £300mn contract to supply sixteen bidirectional turbines, Tidal Lagoon Power said in February.

Tidal Lagoon Power is developing a fleet of six tidal lagoons, aiming to meet up to 8% of UK electricity demand, it said. 

CHEC and Tidal Lagoon Power will also sign a Memorandum of Understanding for the development of tidal lagoon power projects in Asia, particularly at sites along China’s 18,000 km coastline, the companies said.

Mark Shorrock, chief executive of Tidal Lagoon Power, said: "I have huge esteem for China's delivery capability and ability to deliver projects to time and budget. I think China is taking a leadership position in tackling the threat of climate change and so a state-owned enterprise makes a good partner when you wish to deploy multiple tidal lagoons quickly and cost effectively."