As Christopher Booker points out, the Swansea Barrage is an absurd idea. Not because the idea of tidal power itself is absurd, but because we've actually studied this version of it and come to the conclusion that it is, well, absurd:
Yet, as I reported on April 18, under the headline “Will Welsh eels scupper the craziest 'green’ project ever?”, in practical terms this scheme should be a non-starter. On the developer’s figures, the 16 tidal-powered giant turbines, built into a six-mile long breakwater round Swansea Bay, will intermittently generate only a pitiful amount of the most expensive and heavily subsidised electricity in the world. They will require constant back-up from fossil-fuel power stations for all the many hours when they are producing little or no power. In return for the developers receiving a mind-boggling £168 per megawatt hour for electricity, including a subsidy of 240 per cent, even more than that for offshore wind, we shall on average get just a derisory 57 megawatts. Yet the £1 billion gas-fired power station recently built down the coast at Pembroke can produce 35 times as much electricity, whenever needed, without a penny of subsidy.
As one of us pointed out some time ago this really does not make economic sense.
There's been a large study of all of the different variations of a plan to generate tidal power from the Severn Estuary. They compared the cost of that tidal power against the cost of natural gas fired stations. And they included the cost of the gas rising into the future, the taxes that would have to be paid on CO2 emissions and so on and on. It was a proper cost benefit analysis done properly. And they found that the larger we built the tidal power plant the more money we lost on it. This being indicated by the net present value of each of the different variations of the plan. The larger it was the greater the negative amount showing up as that net present value.
We can get to the same result by looking at the price for that contract for difference for the energy to be produced. All in costs (including carbon taxes!) for gas fired plants are in the £80 to £100 level. Anything that costs us more than this loses us money. We might, maybe, perhaps, accept small installations that are loss making as a method of encouraging a new technology. Vast monsters of plants designed to work for a century and more do not meet this test, of course.
It's really very simple indeed. Whatever is it that we need to do about climate change deliberately setting out to do so in a manner that makes us poorer just isn't the right way to start. Yet that's what the Swansea Barrage does, as we can see from the two sets of numbers we can use to check it. It has a negative net present value and a requirement for a contract for difference vastly above other potential power sources.
We just shouldn't even be entertaining the idea of building it. Well, not with our money, at least. Someone wants to go and lose their own on it then fine: but that means no contract for difference.