The good thing about Guardian coverage of the issues is the wide range of additional links they provide. In addition to highlighting the start of negotiations with Government, it points to the peculiar funding arrangements our energy provision seems now depend upon. The article highlights the considerable support in the budget for the offshore oil and gas industry.
Guardian ‘World first proposed for Swansea Bay could increase government’s green credentials but chancellor is also offering subsidy for North Sea oil firms The Tidal Lagoon Power company wants to build its first generating scheme in south Wales, after which it envisages repeating the technology elsewhere. George Osborne will use the budget to unveil an ambitious and costly plan to build the world’s first tidal lagoon to generate green energy. The move comes alongside controversial measures to lower taxes for North Sea oil schemes in a bid to stem plummeting levels of UK oil exploration and production. The government will announce that it is entering formal negotiations on funding a £1bn project to produce electricity from turbines in Swansea Bay, south Wales.
The Tidal Lagoon Power company will be offered the chance to discuss subsidies similar to the “contracts for difference” used on the planned Hinkley Point C nuclear plant in Somerset.
However, the project, which has the initial support of some environmental groups, is likely to generate its own concerns because it will need a subsidy of about £150 per megawatt hour (MWh) – compared with the £98 agreed for Hinkley and wholesale electricity prices of £50 per MWh. The final cost will depend on a range of factors, but proponents appear to have convinced the Department of Energy and Climate Change that if they can successfully build a prototype in south Wales, they will be able to roll out the concept much more cheaply at other locations as part of an eventual £12bn programme.
No Comment