New tidal lagoon plans revealed for the Severn Estuary

The Cardiff Capital Region is providing funding to assess the viability of what is planned as the first in series of lagoons

Plans for the first in a new generation of tidal lagoons in the Severn Estuary have been revealed by the Cardiff Capital Region.

The region, a statutory body made up of the ten local authorities of south-east Wales, will commit up to £6.4m over the next three years to undertake an extensive exploratory study, with a preferred location off the coast of Aberthaw in the Vale of Glamorgan.

The initial work will include environmental considerations, engineering design, modelling and commercial assessments.

Initial estimates suggest that the project could provide around 600 megawatts of predictable renewable electricity, which would be enough for around half a million homes.

It is being seen as the first in a series of lagoons in the estuary which could generate enough electricity to meet the needs of four million homes.

A lagoon at Aberthaw could generate around £3.5bn in economic value, supporting thousands of jobs and creating significant opportunities for businesses in its supply chain.

A first proof-of-concept tidal lagoon in the Severn Estuary, utilising one of the world’s highest tidal ranges, was recommended by an independent panel commissioned by the now-defunct cross-border Western Gateway Partnership.

Previous plans for lagoons in the Severn Estuary failed to materialise when the first proposed project, the Swansea Bay Tidal Lagoon scheme, failed to get subsidy backing from the then Conservative UK Government in 2018.

A more ambitious Severn barrage, which would generate more than 5% of the UK’s electricity needs, is not being proposed by the city region and was ruled out by the commission when it published its report last year.

Taking any lagoon project through the planning process would have a price tag of tens of millions of pounds, with a construction cost well north of £1bn. This would be beyond the reach of the city region. To be realised, it will require significant investment, potentially from other public and private sources, with a business model showing a return on investment over the long term.

If the project proceeds to the next phase, the UK Government’s £28bn National Wealth Fund could be a potential investor alongside institutional pension funds. The regulated asset base model could also be deployed, with upfront construction costs being partly funded through a contribution made via consumer energy bills.

The city region recently entered into a new partnership that has given it access to the National Wealth Fund’s investment knowledge, expertise and capital, to help develop and grow project pipelines, attract public and private finance, and deliver key infrastructure to support growth and create high-value jobs.

If progressed, initial estimates suggest the lagoon could provide around 600 megawatts of predictable renewable electricity – enough for around half a million homes – and operate for more than 120 years.

Chair of the Cardiff Capital Region and leader of Monmouthshire Council, Ann Brocklesby, said: “This represents a potentially game-changing moment for renewable energy generation in the UK. The Severn Estuary has one of the highest tidal ranges in the world, with the potential to generate predictable, homegrown renewable energy that complements existing wind and solar power.

“In a time when energy security has become increasingly essential, the ability to access reliable and cost-effective renewable energy to power a significant number of homes, while placing Wales at the forefront of innovation in such an important sector, makes this a generational opportunity. I am proud that the Cardiff Capital Region, along with our partners, is taking this exciting project forward.”

The next phase will use environmental and engineering co-design to determine the scale and configuration for a project, ensuring environmental, marine and ecological evidence helps shape its future development while maintaining commercial viability.

Cabinet Minister for Enterprise, Connectivity and Energy, Adam Price, said: “Our vision is for Wales to become a world leader in marine renewables. With the second-largest tidal range in the world, the Severn Estuary presents immense potential to deliver significant renewable energy generation and economic benefits for Wales.

“We will continue to work closely with partners to ensure we maximise the opportunities offered by this unique project as it progresses.

“This project will help us understand how tidal technology can contribute to the transition to clean power, tackle climate change and create good clean jobs in the future.”

Secretary of State for Wales, Stephen Kinnock, said:“Wales has a great track record of innovation and partnership, and Cardiff Capital Region is continuing to harness those strengths with projects that support economic growth, investment and clean energy. I look forward to following the development with great interest.”

The Cardiff Capital Region already owns a 500-acre site at Aberthaw, having acquired the former Aberthaw Power Station from energy giant RWE. It is planning to develop a green energy park at the site, which could also be utilised to support the building of any lagoon.

It is financing the early-stage lagoon work from its £1.2bn City Deal. The city region has adopted an evergreen strategy for most of its funding, with capital and interest payments to proejcts used to make further investments. Its financing contribution could see it taking an equity stake in the lagoon.

The commission set up by the Western Gateway Partnership, which recommended tidal energy in the Severn Estuary, was chaired by Dr Andrew Garrad.

He said: “The Severn Estuary has immense energy potential and the Commission concluded that there is a compelling case to use that potential. Equally, it must be done in the right way – with the unique and internationally important environment of the Estuary remaining at the heart of how the project is designed and developed.

“I am delighted to see Cardiff Capital Region taking forward the Commission’s recommendation for a commercial demonstration project. This investment is an important next step in building the evidence, working closely with environmental organisations, and demonstrating how tidal range can deliver large-scale, clean, economic energy while respecting the Severn’s exceptional natural environment.”

Helen Godwin, Mayor of the West of England Combined Authority (WECA), said: “The Severn Estuary is an extraordinary natural asset and now is the time to let our tides power new jobs and growth in both England and Wales. Building on the Commission’s recommendations, we have worked closely with Cardiff Capital Region to identify a key Welsh location as the right project to lead with, while ensuring the unique environment of our coast remains at the heart of plans.

“Today’s investment from our Welsh neighbours is exciting news for everyone and underlines again how the immense potential of tidal energy can unlock billions for our economy, create new jobs, skills opportunities, and supply chains across the West of England, Wales, and the UK. We will continue working with our partners to help realise this major national clean energy opportunity, here in the natural home of new green jobs.”