Lagoons 'cheaper than offshore wind'
A new study of the economics of tidal power “lagoons” has claimed that a portfolio of three projects in operation in the UK by 2021 could supply electricity more than a third more cheaply than offshore wind.
The study, carried out by management consultants Pӧyry for developer Tidal Power Lagoon (TPL), found that the energy plants – concrete-walled structures in which incoming tidal flow is trapped and later released through turbines to generate electricity – could produce power at a levelised cost of energy (LCoE) as low as £90/MWh ($148/MWh). That is a LCoE similar to onshore wind, large-scale solar PV, nuclear and gas-fired generation.
The UK government’s central LCoE assumption for a Round 3 offshore wind farm in 2021 is £131/MWh.
“This study clearly demonstrates that tidal lagoons can rapidly become one of the cheapest sources of electricity in the UK,” says TPL chief executive Mark Shorrock. “The more water we impound, the more power we produce, the less support we require. It really is that simple.
“And with an operating life of over 120 years, tidal lagoons offer future generations even lower cost electricity following their 35 year period of strike price support.”
Pӧyry worked from central assessment of the required Contracts for Difference (CfD) strike price for the first three lagoons studied on a volume-weighted average basis of £111/MWh. Marine renewable energy is currently offered a strike price of £305/MWh and offshore wind £155/MWh.
TPL’s flagship proof-of-concept development, the 320MW Swansea Bay Tidal Lagoon, plans for which were recently handed into the government’s Planning Inspectorate, would need a strike price of £168/MWh, fractionally higher than the £140/MWh being given to offshore wind projects in 2018/19.
A follow-on lagoon development, according to the Pӧyry study, would be cost competitive with offshore wind, at a strike price of £130/MWh in 2020, and a third “significantly cheaper”.
The Swansea Bay project, which would generate energy using an 11.5km sq low-head tidal lagoon, would be the largest tidal power plant in the world, supplying power for over 120,000 homes.
TPL hopes will see construction start in spring 2015, with first power generated three years later.