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« Diary dates, intellectual conformity edition | Main | The Royal Society's latest green campaign »

Competitive insanity

If you think that the government's deal for Hinckley point was the ultimate in state insanity, think again. A week or so ago, the FT reported on a bid by a Gloucester company to create a massive tidal power station in Swansea bay. A similar report appeared in the Telegraph on Monday.

The interesting detail that the FT got, but which the Telegraph overlooked, was this:

The company wants a “strike price” of £168 per megawatt hour, compared with the £92.50 offered to EDF for Hinkley Point.

Words simply fail me.

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Reader Comments (34)

Tell you what - I'll get meself a 1MW genny - and I'd offer my leccy to National Grid for MUCH less than that - say, £150/MWH...

Sorry - you're too late - I thought of it first....

Feb 12, 2015 at 1:41 PM | Unregistered Commentersherlock1

Ed Davey deserves the Nobel Peace Prize along with the many pretentious climate cronies.
Who else could have engineering such stupiidity!

Feb 12, 2015 at 1:44 PM | Unregistered CommenterCharmingQuark

CharmingQuark - how are you spelling 'Peace'..? Would that be with an 'i' and two 'esses'..?

Feb 12, 2015 at 1:46 PM | Unregistered Commentersherlock1

But, but, but...

Interfering with the global tidal distribution could affect the rotation of the Earth resulting in CLIMATE CHANGE! (CHANGE, CHAnge, change...)

Feb 12, 2015 at 2:19 PM | Unregistered CommenterJeff Norman

How about £305 ! " Power Engineering International December 04, 2013
"Support for offshore wind stays at £155/MWh for next year and 2015/16, dropping to £150 in 2016/17 and £140 from 2017/18 onwards.

Onshore wind, however, is being cut by £5/MWh from June’s figure of £100 to £95, and will fall again to £90 from 2017/18.

Other key strike prices published today include £155 MW/h for advanced conversion technologies (with or without CHP); £125 for dedicated biomass (with CHP); £105 for biomass conversion; £145 for geothermal; £120 for large scale solar; and £305 for both wave and tidal projects." Confirmed by the DeCC PDF "Investing in renewable technologies – CfD contract "...
BTW people with the previous round of solarPV on their roof are getting £400/MWh

Feb 12, 2015 at 2:29 PM | Registered Commenterstewgreen

Another good example of Green business modeling.

The Government underwrites a scheme, by fixing prices charged to consumers and tax payers. No economic risk to the developer if it all goes wrong.

Dale Vince of Ecotricity is a beacon of light, when it comes to making money when the sun doesn't shine, and an ill wind fails to blow hard enough

Feb 12, 2015 at 2:41 PM | Unregistered CommenterGolf Charlie

It's Hinkley Point. I live in Hinckley and we don't have nuclear power stations, just sock factories.

Feb 12, 2015 at 2:42 PM | Unregistered CommenterDrD

Don't you also have a motorcycle factory DrD?

Feb 12, 2015 at 3:07 PM | Unregistered CommenterStonyground

Our energy policy really is stupid beyond comprehension. This is what happens when government departments and multiple influential NGOs are stuffed full of earnest advocates of the Green Blob. Welcome to chaos.

Feb 12, 2015 at 3:09 PM | Unregistered Commentercheshirered


Those price "falls" fail to take account of the fact that all prices are indexed to a 2012 base. Despite the fact that we may temporarily see inflation dip below zero in response to falling hydrocarbon prices, normal service will probably be resumed with inflation rates that offset the falls. But indeed we are fortunate if they are not simply signing up to the £305/MWh (+inflation post 2012) on offer via Ed Davey's Expensive Energy Bill. Not sure it's enough to take the wind out of their sales (sic)!

Feb 12, 2015 at 3:14 PM | Unregistered CommenterIt doesn't add up...

I went to a presentation on this proposal last month, given by the developer. The decision to go ahead is due to be made by the next Energy Secretary (ie not Ed Davey) in June 2015. Take it from me, you ain't seen nothing yet. They are looking at future schemes ten times the size, which will have a devastating environmental impact on the estuary, beaches and coastline. The 'carbon footprint' is enormous. But you have to ruin the environment and make electricity unaffordable in order to save the planet. All these schemes would produce intermittent electricity (about 14 hours out of 24 hours) and so there is huge additional cost in providing back-up power for the other 10 hours.

I have more information if anybody wants it.

Feb 12, 2015 at 3:47 PM | Registered CommenterPhillip Bratby

It looks set to become a sort of inverted price war – whoever charges the most gets this business!

The British government is genius!

Why has no-one ever thought of this before?!

Feb 12, 2015 at 3:52 PM | Registered CommenterRadical Rodent

Phillip Bratby

Yes please I would like a link to this info. As these tidal turbines, unlike solar or wind will operate nearly every day of the year for 50/100 years, and the output is predictable, I am surprised at the high strike price proposed as the O&M costs must be marginal.

Feb 12, 2015 at 4:01 PM | Unregistered CommenterSpen

If idiots like this ran companies like Samsung or Sony, the fabulously spec'd flat screen TV I just bought for £500 would have cost many thousands - and would continue to increase in price regardless of development.

Feb 12, 2015 at 4:24 PM | Unregistered CommenterHarry Passfield

@Spen; I doubt O&M costs in tidal waters will be 'marginal.'

Feb 12, 2015 at 4:27 PM | Unregistered CommenterSlywolfe

Phillip Bratby, Yes, please. I would appreciate more information.

This sounds another push for the Severn Barrage plan to destroy the birdlife of the estuary.
Slimbridge will be devastated.

Feb 12, 2015 at 4:52 PM | Unregistered CommenterMCourtney

EDF - France Electricity - has a tidal station.

La Rance Barrage is the world's first tidal power station. The facility is located on the estuary of the Rance River, in Brittany, France. Opened on the 26th November 1966, it is currently operated by Électricité de France (EDF), and is the largest tidal power station in the world, in terms of installed capacity. With a peak rating of 240 Megawatts, generated by its 24 turbines, it has an annual output of approximately 600 GWh.
The development costs were high but these have now been recovered and electricity production costs are lower than that of nuclear power generation (1.8c per kWh, versus 2.5c per kWh for nuclear).

I do not know when it was written, but the cost are interesting. Also, if it was/is so successful, why have they not built any more ? It is well worth a visit if you are in the area.

More info at

Feb 12, 2015 at 4:57 PM | Unregistered CommenterJohn de Melle

It is like the "Barrage de la Rance" tidal power station; peak output at 240 MW and average 62 MW. This is so successful the French never built another one.

The Swansea tidal power station will have a capacity factor of 25%, so that is about the same as a windmill on land. It will be subject to neaps and springs modulating the output. The power output can be predicted, but maximum power may come when the demand is low and vice versa.

20 MW (average?) is a tiny output. The Swansea power station must cost about a billion to build; I guess that is why the strike price has to be so high.

It seems another useless project to me, but I suppose too many people are shouting that tidal is the answer.

Feb 12, 2015 at 4:57 PM | Registered CommenterAlbert Stienstra

The Rance barrage was a one-off because of its unique geology. The tide fall in Brittany is about 8metres. The river passes through a narrow gorge about 5km south of St Malo so the barrage is only 750m wide and houses 24 turbines, as opposed to the 10 km Swansea Barrage with 16 turbines..
Beyond the gorge is a low flat marshland forming a natural lagoon of about 22.5 sq km. The peak flow is somewhat awesome viewed from the barrage (strictly - Defense de Beigneur). It is probably the best site in western Europe, economically as well as geographically. It power costs are broadly similar to nuclear but it is still a variable, although predictable.

Feb 12, 2015 at 6:30 PM | Unregistered Commenterdiogenese2

The tidal barrage project at Swansea ( which is a good development in my view) is likely to proceed. However the bad news for other green projects is that it will largely devour the pot of subsidy available.Several wind projects in the Swansea area are unlikely to go ahead unless they get the OK before 2017. I will point out that is not a moot point, but the actual situation.

Feb 12, 2015 at 6:34 PM | Unregistered Commentertrefjon

The same group has registered companies for Cardiff, Newport, Colwyn Bay, West Cumbria and Bridgewater Bay (all in the format Tidal Lagoon (placename) PLC.

Having grown up in Swansea, I know the spot this lagoon is planned for very well, between the docks and the University. The tide rise/fall can be up to 13m there, so I can see why it's attractive. I guess the amenity it may provide for water sports may contribute to its value. I hope they've modelled the effect on the popular sandy beaches, as those are a big draw for tourists, and allowed for visual intrusion on one of the most beautiful bays in the country.

As a power generation project, as others note above, its impact is useful but not significant, and the cost does not seem to hang together as an economic case until you throw in huge subsidies. I just hope all the people in Swansea are clearly told that all that money will be added onto their utility bills.

[MCourtney - this is nowhere near where the Severn Barrage would have been, and will have no impact at all on Slimbridge, or anywhere else in the Bristol Channel.]

Feb 12, 2015 at 6:51 PM | Unregistered CommenterCumbrian Lad

Burrowing through their website I found this

On page 21 they say
"The Lagoon would harness the 8.5m tidal range of Swansea Bay (average Spring tides) to generate renewable electricity for 14 hours per day, for 120 years, with a net annual output of 400GWh.

At 8760 hours per year I calculate 400/8760 = .046GW.

All that to produce 46MW????

What's wrong, my maths or my sanity?
Please help!

Feb 12, 2015 at 8:12 PM | Unregistered Commenterauralay

auralay -
Maths seem to be fine: 46 MW average, ~80 MW peak.

More to the point, if the strike price given above of £305/MWh is accurate, the 400 GWh/year would reap £122 M/yr.

The operating cost for La Rance was given above as 1.8 c/kWh = €18/MWh = £13/MWh. While it may not be a perfect basis for comparison, at the same rate 400 GWh/yr would cost £5.2 M/yr to generate.

Feb 12, 2015 at 9:20 PM | Registered CommenterHaroldW

"The company wants a “strike price” of £168 per megawatt hour, compared with the £92.50 offered to EDF for Hinkley Point."

Chicken feed.

Wik informs us about STOR:

"They are contracted to come on line within twenty minutes, and to stay on for up to two hours, with a recovery period of twenty hours. Typically they will start for about twelve times in any one year, and are paid around £7,000/MW per year plus fuel and operating costs."

Feb 12, 2015 at 9:40 PM | Unregistered CommenterJoe Public

I think there's nothing wrong with auraly's sanity either. You have to be crazy to do all that for 46MW average.

It's French Grandeur, I suppose, so they do not want to own up to a big mistake. And now, it looks like the UK will be following them...It will take many years before the building cost has been earned back and the Swansea tidemill is down to operating AND maintenance cost.

Feb 12, 2015 at 10:48 PM | Registered CommenterAlbert Stienstra

hi Philip Bratby
You said you have more information?...I would be very grateful for anything you have.

Feb 12, 2015 at 11:42 PM | Unregistered Commenterfenbeagle

There is no farming so easy and so profitable has subsidy 'farming '
Meanwhile any reasonable sized tidal power station in any bay is going to have an impact on the environment, you simply cannot take power out of the system without it effecting elements which that power would otherwise have influenced. And hydrology is by no means an exact science on large scale so the reality is , they will do it and then see what that means becasue the 'models' are not going to do it on their own.

Feb 13, 2015 at 1:02 AM | Unregistered CommenterKnR

And Hinkley Point is doing what right now -- Nothing!

May 2014: EDF begins the second stage of preparatory works at the site including building roundabouts and construction roads.

September 2014: Austria vows it will bring a legal challenge against any decision by the EU to approve Hinkley Point.

October 2014: EC gives state aid approval for the project and says the plant will in fact cost £24.5 billion.

December 2014: EDF says it wants to take a decision by the end of March 2015.

February 2015: EDF appears to abandon the March deadline, saying only that a final investment decision is "possible in the next few months" and warning of long list of outstanding issues including agreeing deals with the Government and with investors.
"We are in the final phase of negotiations, but that phase can take a considerable amount of time, depending on the number of problems left to resolve," Jean-Bernard Levy, EDF group chief executive, says.


So much for an over generous 'strike-price' getting the project moving quickly and efficiently.

Feb 13, 2015 at 5:12 AM | Unregistered Commentertom0mason

This could be quite amusing if the project gets approval.

The numbers are farcical.

10 km of sea wall, up to 20 metres high, with openings for a few turbines, capacity of 320 MW, built in two years at a cost of £850m.

Now what could possibly go wrong with that? Why not build two, or three?

Has no one looked at the projected build costs of the Severn Barrage project, the scale of the building that barrage, the benefits of that project, and then compared those figures with this idiocy, and asked questions?

Feb 13, 2015 at 9:04 AM | Unregistered CommenterCapell

The plans have nothing to do with a Severn Barrage. Tidal lagoons are an alternative to the barrage and they have the advantage that you can start off with a small lagoon, like the proposed one at Swansea Bay, and then when lessons have been learnt from that, go on and build larger lagoons.

The price per unit of electricity should be less with the later lagoons. After all, in any major engineering enterprise you would expect the first of its kind to be expensive. If Bishop Hill's argument had been applied at the dawn of the digital computer we would still be using abacuses.

Feb 13, 2015 at 9:33 AM | Unregistered CommenterRoy

Once again we see that big green has nothing to do with the environment except to use it to make money for themselves. And to do it in the most environmentally destructive way possible at the expense of the tax payer.
Messing up a tidal estuary to make power at a ridiculous cost to allegedly save the world from CO2 is like carpet bombing a village to save it from the insurrection. Tidal energy is completely unsustainable except at huge cost to rate payers assigned by government mandates. To destroy a tidal system in the name of getting a few highly over priced watts of power when the tide changes is obscene.

Feb 13, 2015 at 10:18 AM | Unregistered Commenterhunter


The trouble with the Swansea lagoon is that it is certainly smaller than the Severn Barrage lagoon, but the sea wall required is close to half the length of the larger scheme. In this case, small is NOT beautiful. And it is a certainty that the project will be mired in huge overrun costs.

But lessons will be learnt at Swansea; hopefully we'll learn not to build any more and progress to the main barrage.

Feb 13, 2015 at 3:43 PM | Unregistered CommenterCapell

@ Robert Christopher reports new story in Sunday Telegraph: Swansea Bay tidal lagoon 'appalling value for money', says Citizens Advice
Electricity from world-first tidal lagoon would be more expensive than that from any other major UK green energy project to date, consumer charity warns
"Plans to build the world’s first ‘tidal lagoon’ in Swansea Bay have suffered a setback after influential consumer charity Citizens Advice said the project was “appalling value for money” and should not receive subsidies.
Ministers are preparing to begin formal bilateral negotiations with developers over the proposed green energy scheme – a £1bn, six-mile sea wall with turbines to harness the power of the tide, which has already been included in the National Infrastructure Plan.
Tidal Lagoon Swansea Bay is thought to be seeking a guaranteed subsidised price of about £168 for every megawatt-hour (MWh) of electricity it generates over a 35-year period – almost four times the current market price of power.
New offshore wind farms are offered about £140/MWh while onshore wind gets about £90/MWh, both for 15-year periods.
...If built, the tidal lagoon would be “per unit of output, the most expensive significant renewable energy project in Britain”, Citizens Advice said."

Feb 22, 2015 at 4:21 PM | Registered Commenterstewgreen

someone who knows what,they are talking about wrote the actual Citizens Advices pdf
(I note Wales Online covers the story in adverts for the project)
1. Criticises bad transparency attitude citing problems with the Hinckley process.
( Contracts for Difference =CfDs)
- DECC have failed to 'foster competition between low carbon technologies'
2 "We recognise the desire to take calculated gambles on immature technologies to see what can be learnt; whether there is a potential that they could mature and be cost-effective in the future. But we are acutely uncomfortable with DECC making these gambles through bill levy funding. "

3. The fact that there are no,other tidal barrier projects/competition is not a good sign rather it shows its risky .

"cannot be considered a contribution to any global improvement in the technology, nor to tackling climate change as a global phenomenon" ...'nor even UK level'

and more good points including -Minsters signaling already that they will approve the CfD is a bad negotiation tactic.
-'stop keeping these contracts secret from the consumer .. they pay for them'
(remember Citizens Advice recently took on an extended role previously done by Consumer Focus)

Feb 22, 2015 at 4:32 PM | Registered Commenterstewgreen

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