Alex Meredith

I have been involved in a big renewable energy project that was cancelled due to lack of government support.

I’ll never forget the emotion from the project leader, the ashen faces of colleagues around me, the expletives uttered about the relevant minister, and the slow sullen shuffle for a stiff drink.

That day was in 2014.

In 2018, the same project will shortly be completed on time and under budget.

That experience tells me something – amongst for all the anger, frustration, bitterness and downright opportunistic politicking in the last two weeks, there is hope yet for Swansea Bay Tidal Lagoon.

Big infrastructure projects often have a decade of near-death experiences on the path to realisation. How many times do you think the channel tunnel was proposed before it went ahead? How long have we been talking about the M4 relief road?

At only seven years in the planning, being thrown out could simply be a rite of passage for the Swansea Bay Tidal Lagoon! A watery Phoenix could yet rise from the murky depths of the BEIS dustbin.

Energy

But if it is going to happen, in my view there needs to be a fundamental restructuring of ownership and finance arrangements.

Whilst many people disagree with it on political grounds, the BEIS value for money analysis tells us that tidal lagoons (and Swansea Bay specifically) are not competitive with other forms of low-carbon energy generation.

It would be regressive, and threaten jobs in energy-intensive industries like steel, to load additional costs on to energy bills.

However, that need not be the end of the story. Unlike other renewable technology, this is a project of such longevity that it would be well suited to a more direct form of public ownership.

The marketing materials for Swansea Bay suggest it could run for a century. A similar scheme in France has been going since 1966.

You, me, Tidal Lagoon plc, utilities and banks will come and go during that time, but the state will still be here. We can also be confident that we will all still be using quite a bit of electricity in 2118.

A public ownership model would not need a guaranteed short-term electricity price to secure a quick return on investment.

If we owned the project publicly we could play the long game and ride the ups and downs of market electricity prices with the knowledge that the long life of the asset would ensure we would be repaid with interest over time.

Reward

As well as delivering the most patient of long-term capital and the most secure support, public ownership would ensure that returns from the project remain in public hands to be reinvested in Wales.

In the context of an industry that is claiming that it will grow exponentially and take the technology around the world, this offers a huge opportunity for the public to benefit directly from their investment in a new technology.

There has been a lot of rhetoric this week about how Wales could lead the world in tidal technology and reap the rewards of a global expansion. While the project is in private hands I fail to see how that can be guaranteed.

Companies change management, sell assets, move locations. Look at the litany of private corporate giants – most recently Virgin Money – who have hoovered up public cash, used Wales as a host for a few years before taking their business elsewhere.

That has not stopped the Welsh Government waving the chequebook at the sales team from Tidal Lagoon as if they have learned nothing from The Circuit of Wales fiasco.

Millions of Welsh taxpayers’ pounds have been sunk into a company in England and if the project had gone ahead we could have seen a further £200m heading to Gloucester (the base of Tidal Lagoon plc) which could have become the hub of knowledge and expertise while the earthmovers were sent to Swansea.

Under the current ownership structure, Wales could have found itself providing the cheap labour for a project while the economic and intellectual capital stayed in the Cotswolds. It would have been nineteenth-century plunder all over again.

But by taking control of the project, there is an opportunity to create and build an energy company and industry that is truly rooted in Wales.

Workable

The concept of public ownership in energy is not novel. If you look at the development of renewable technologies in Europe, publicly-owned companies have played key roles in development and innovation in Denmark, Sweden, Norway, France and Germany to name a few.

Publicly-owned companies from these countries have gone on to be world forces in their field – Wales could do something similar in lagoons.

So the Welsh Government must take the initiative. Labour went into the last general election with a commitment to public ownership of utilities, and yet when Carwyn Jones was asked whether there was a model to deliver the project without a CfD his answer was “No”.

It’s time Cardiff Bay started thinking more innovatively and moved from anger to solutions and hard bargaining – a Welsh Green Investment Bank, a not-for-profit like Glas Cymru or perhaps a combination of Welsh Government, local authorities and city regions pooling resources.

Could the finance be raised by long-term bonds, a concession scheme or a public procurement model? Could there be a greater role for community ownership or government borrowing to invest?

Charles Hendry considered some of these options in his report, but there is a lot of work to do to crunch the numbers and find a workable solution.

If the Welsh Government stops the negative politics and rolls up its sleeves to find a solution to bring Swansea Bay into public hands, I am convinced that we could yet make this lagoon part of our nation-building project.