As the bullish case for…
A giant cobalt supply deficit…
Hafren Power Ltd. submitted a plan to the British government to build a £25 billion ($40 billion) tidal-energy barrage across the river Severn, which would generate as much as five percent of the nation’s energy needs.
A government report into the barrage concluded that the project would not offer value for money, and could damage the environment. The government suggested that Hafren must improve its offer if it ever wishes to receive serious consideration.
Tidal barrages are fairly common in other countries, such as in the Netherlands, and generate energy from water as it travels in and out of rivers or bays due to the tide. Water moves into a rivers estuary as the tide increases, and then turbines create electricity as the water recedes with low tide.
Andrew Cox, the global head of energy and natural resources at KPMG LLP, said that “financing such a large asset isn’t currently possible in the private market, not least due to the size of the financing required but also the significant construction risk involved. Government support would be the only means to finance such a scheme.”
The report claims that the project, which would be about 11 miles in length, would need to be supported by the state, in the form of power purchase agreements, for about 30 years, twice as long as offshore wind farms.
In its next plan submission Hafren must include more detail on the potential effect that the development will have on the environment, the economy, jobs, and the local industry.
Cox said that “the scheme would need a significant subsidy compared to current market prices and there seems to be little evidence that the technology can be sufficiently competitive.”
Related Article: UK Could Become Leader in CCS Market with North Sea Plans
Stephanie Merry, the head of marine renewables at the UK`s Renewable Energy Association, said that they should develop a smaller tidal barrage project first, and learn what they could, before attempting a far larger project such as the Severn Barrage.
She also suggested that instead of a tidal barrage the Severn would be a good location to install a tidal lagoon power facility, which can also generate large amounts of energy without the impact on the environment that a barrage has.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com