Tidal lagoons could deliver large-scale clean energy at a significantly lower cost than offshore wind, a study suggests.
The development of three tidal lagoons by 2021 would cost about £100 per megawatt hour (MWh) on average over their lifetime compared to the Government's central assumption of £131 per MWh for offshore wind in 2021, according to energy economists at management consultancy Poyry.
The lagoons, which generate renewable energy by capturing and releasing tidal water through turbines, would become cheaper as larger projects are developed and the third lagoon would generate power at a cost of about £90 per MWh – broadly similar to onshore wind, nuclear and gas-fired generation – according to the study.
The research was carried out on behalf of energy company Tidal Lagoon Power, which has submitted plans for the world's first tidal lagoon power plant in Swansea Bay. The firm hopes to start building next year with the aim of generating power by 2018.
Chief executive Mark Shorrock said: "This study clearly demonstrates that tidal lagoons can rapidly become one of the cheapest sources of electricity in the UK. The more water we impound, the more power we produce, the less support we require. It really is that simple.”
Like all forms of low carbon generation, the project will require Government support through a guaranteed price for its electricity, known as a "strike price" and the study found the first scheme, which aims to prove the lagoon concept, would require a strike price of £168 MWh – more expensive than the £140 required for offshore wind projects in 2018/19.
But it found that developing two more projects at larger sites with higher tidal range would be cheaper – a second lagoon would require a strike price of £120 MWh in 2020, making it cost competitive with offshore wind, and the third lagoon would need support of £92 MWh.
Because the lagoons are expected to generate electricity for 120 years, they will continue to produce low-carbon power long after the 35 year period of Government support ends, making them relatively cheaper compared to more short-lived power schemes.
Tidal Lagoon Power plans to build a series of lagoons around the UK coast to harness tidal energy.
The second and third lagoon have been taken from their pipeline of developments but the company has not named where they would be.
Nick Medic, of wind and marine energy industry group RenewableUK, said: "Given the UK's increasing reliance on imported energy, coupled with our emissions reduction targets in the Climate Change Act, it's certain that we will need all the sources of low-carbon energy currently in our toolbox.
"There's space for both offshore wind and tidal, particularly as both technologies will be depreciating in cost. We should remember that offshore wind is already powering millions of UK homes and, if we continue to develop it, costs will continue to be reduced and over the next decade we could see up to 45,000 people employed in the sector."