WTE tried for 5 years, until 2013, to take forward a project for a Wyre Tidal Barrage building on the work done in the early 1990’s and the 1991 Report commissioned by LCC and carried out by Binney’s. This is very useful 400 page report that concludes that a Barrage can be built and would produce 121 GWh of electricity annually, enough for 60,000 people at a 1991 cost of £90m – that represents £200m in today’s prices. The commercials were not favourable then, energy was relatively cheap and there was no renewable generation support from government – that has all changed.
Government support until 2 years ago was in ROC’s (Renewable Obligation Certificates) but these have been replaced by Contracts for Difference (CFD’s) that set a Strike Price for each type of renewable generation. For example, the Strike Price in 2015 for Offshore Wind is £155 per MWh reducing to £150 per MWh next year. This means the government guarantees £155 per MWh to any Offshore Wind generation project creating a firm commercial foundation to developers. If the market price for electricity is lower the government tops it up to £155, if it is higher the operator pays the surplus back to the government. A Strike Price has been set for all renewables – table attached – except Tidal Range – Barrages.
To clarify, there are 4 types of energy from water:
- Hydropower – Power derived from the energy of falling water or fast running water which may be harnessed for useful purposes.
- Tidal Range – A dam with turbines in it that impounds water (upstream of a barrage or in a lagoon) and releases it through the turbines when a suitable “head” is established
- Tidal Stream – Devices in the water that generate power using the energy of naturally occurring currents in water. This will be one-way in a stream or river and two-way in an estuary using the tide.
- Wave Power – A device that generates energy from the naturally occurring water on water.
The government / DECC have not set a Strike Price for Tidal Range because there will only be a limited number of Barrages. They will negotiate them individually. The Swansea Lagoon project is Tidal Range and they have agreed £168 per MWh.
A Wyre Barrage will have to negotiate in the same way but this can only be done once everything about the project was determined and known – Project Ready. The expert opinion we have is that the Wyre will need £190-£195 per MWh to be commercially viable and fundable.
The major problem is the need for funding – high risk funding – to do all the feasibility, consents and planning work, estimated at £2m – £3m, against the background of very strong opposition from RSPB and the other environmentalists. This opposition was a major factor in the Severn refusal. “Barrage” has become a dirty word in environmental circles!
Raising the £200m once the scheme is “Project Ready” will be challenging and heavily dependent on the Strike Price that could be negotiated with DECC but getting a commercially viable project looks challenging against the 168 MWh granted for Swansea.
In 2013 WTE decided that the developing Verderg VETT was the best solution for tidal estuaries with low environmental impact. The VETT Electric Bridge is classified by DECC as a Tidal Stream device and therefore gets a Strike Price currently of £305 per MWh. The energy produced is around 60% of that produced by a Barrage – 75 GWh per annum for the Wyre but the cost is less than 50% of a Barrage – in the £80m to £100m range. The commercial viability is therefore strong.