Cardiff Capital Region (CCR) has approved up to £6.4m in City Deal funding to launch exploratory development work on a tidal lagoon in the Severn Estuary, a step that could unlock one of the UK’s largest untapped renewable energy resources. The funding, confirmed in mid-September, will support an initial phase of environmental, engineering and commercial studies at Aberthaw on the Vale of Glamorgan coast, the site of a former coal-fired power station that CCR bought in 2022 with ambitions to turn it into a low-carbon energy park.
If the project proceeds, initial estimates suggest a lagoon at the site could generate around 600MW of predictable renewable electricity, enough to power roughly half a million homes, and operate for more than 120 years. CCR estimates the scheme could deliver around £3.5bn in economic value. With one of the highest tidal ranges in the world at 14.5 metres, supporters argue the wider Severn programme could eventually provide up to 5GW of capacity, equivalent to around 4 million homes.
CCR chair Cllr Mary Ann Brocklesby said the project “represents a potentially game changing moment” for renewable energy in the UK. Welsh and UK ministers, including Cabinet Minister for Enterprise, Connectivity and Energy Adam Price and Minister for Climate Transition Katie White, welcomed the announcement, framing it around energy security and the transition to clean power. The scheme has emerged from joint work between CCR and the West of England Mayoral Combined Authority, following recommendations from the independent Severn Estuary Commission for a commercial demonstration project.
CCR bought the 500-acre Aberthaw site from the energy giant RWE in 2022, and is funding the early-stage lagoon work from its £1.2bn City Deal, which uses an “evergreen” strategy that reinvests returns from earlier projects. Herald.Wales reports that CCR’s financial projections for the scheme, including the £3.5bn economic value estimate, will need to be tested as the proposals develop. AOL reports that CCR’s financing contribution could ultimately see it take an equity stake in the lagoon.
A history of false starts
Wales has a difficult history with large-scale tidal energy on the Severn. A much bigger scheme, the £1.3bn Swansea Bay Tidal Lagoon, was rejected by the UK government in 2018 on value-for-money grounds, and a separate proposal for a full-scale lagoon between Cardiff and Newport never progressed beyond early feasibility work. Backers of the new Aberthaw project argue that a smaller, phased demonstration approach, developed alongside environmental and ecological evidence rather than ahead of it, offers a more realistic route to unlocking the Severn’s tidal potential.
Aberthaw already has considerable renewable energy credentials. As CCR Energy has previously set out to members of the Institute of Directors in Wales, the 489-acre site benefits from two National Grid substations, an operational railroad, and around 18 million tonnes of pulverised fuel ash left over from the old power station, which can potentially be reused as a substitute for cement in concrete production.
The next phase of work will use environmental and engineering co-design to determine the scale and configuration of any eventual project, with CCR and its partners stressing that the Severn Estuary’s internationally important habitats will remain central to how the scheme is designed.