Tidal Lagoon Power has to cut headcount after delays over decision on £1.3bn project

This article is more than 2 years old

This article is more than 2 years old

Britain’s energy minister will have to explain to MPs why no decision has been made on whether to support a tidal lagoon in Swansea – nearly 18 months after an independent government review backed the plan.

Claire Perry will face the business, energy and industrial strategy (BEIS) committee on Monday afternoon to answer questions on the £1.3bn clean energy project, which has been left in limbo.

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Tidal Lagoon Power, the Gloucester-based firm that wants to harness the power of the tides across the UK’s west coast, has been forced to cut its headcount from 50 to 30 as a result of the delays.

Downing Street had said an announcement was due on the clean energy project nearly a fortnight ago but nothing has materialised.

Government sources have suggested the scheme will be turned down on cost grounds.

A decision could come before the hearing with Perry on Monday but that is thought unlikely.

Energy industry figures said the government’s slow process risked the UK losing out as global companies choose other countries in which to invest.

“Clearly the more you delay decision-making, the more timetables slip, then the more uncomfortable people feel about making their own business decisions,” Louise Kingham, the chief executive of the Energy Institute, told the Guardian.

“There is a danger that investment capital can go somewhere else.”

Tidal Lagoon Power last week wrote to the business secretary, Greg Clark, and the first minister of Wales, Carwyn Jones, arguing that the lagoon would contribute more than £2bn to the UK economy over its lifetime.

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The firm said the project could be built for a guaranteed price of power, known as a contract for difference (CfD), at the same level as that awarded for the Hinkley Point C nuclear power station in Somerset.

“Subject to a mutually agreed arrangement with the Welsh government, which is under discussion, the pathfinder tidal range project in the UK requires the same level of CfD support as new nuclear power station Hinkley Point C,” a company presentation said.

The government, by contrast, has said it believes the lagoon would be twice as expensive as Hinkley.