Memorandum submitted by Tidal Electric
Limited
As Chairman of Tidal Electric Limited, I welcome
the opportunity to submit evidence to the Committee inquiry. The
inquiry comes at an important time for the country: oil and gas
prices are significantly increasing, there is no clear policy
on new nuclear and the Government's target of 10% market share
for renewables by 2010 appears unlikely to be reached.
A. TIDAL ELECTRIC
1. Tidal Electric is a British-based development
company that was established in 2000 with the sole intention of
building a tidal lagoon electricity generation scheme in UK waters.
B. TIDAL LAGOON
GENERATION
1. Offshore tidal lagoon power generation
utilizes the vast potential of the ocean's tides. Using an offshore
impoundment structure built of rubble mound construction materials
(loose rock, sand, and gravel) sited in a shallow tidal flat with
a large tidal range, predictable and sustainable electricity can
be generated by the rise and fall of the tides. It is not directly
comparable to a tidal barrage scheme (such as the Severn Barrage)
as the power is generated offshore via the impoundment structure.
The tidal lagoon scheme enables tidal energy to become a mainstream
technology choice.
2. Offshore tidal power generators use familiar
and reliable low-head hydroelectric generating equipment, conventional
marine construction techniques, and standard power transmission
methods.
3. The optimal site for offshore tidal power
generation is the shallow water of near-shore areas, away from
major shipping lanes that require deeper water. The offshore siting
is the distinctive characteristic of the design and one of the
fundamental claims of its patents. Turbines are situated in a
powerhouse that is contained in the impoundment structure and
is always underwater. Power is transmitted to shore via underground/underwater
cables and connected to the grid. The structure need not be more
than a few yards beyond the low tide level and the optimal site
is one that is as shallow as possible, thereby minimising the
cost of building the impoundment wall.
4. The impoundment wall structure is a conventional
rubble mound breakwater, with ordinary performance specifications
and is built from the most economical materials. In the event
of a failure of the structure, the consequences do not include
safety issues or major property damage. The most likely cause
of a failure would be a strong nearby earthquake (unlikely in
UK waters) and the most likely type of damage would be a breach
of the impoundment structure. Thus, the principle consequence
of failure would be economic (temporary interruption of service)
and, therefore, economics are the primary driver in choosing the
materials and the construction method.
5. Two sites in UK waters have been identified
as suitable for the construction of the world's first tidal lagoon
generation scheme: Swansea Bay and the North Wales coastline,
off Rhyl. Both areas have high tidal ranges and relatively shallow
waters. Feasibility work started in 2000 and preliminary consultation
with local planning authorities has been undertaken. There has
generally been a favourable response to our proposed schemes as
they provide a sizeable renewable and predictable generation resource.
Swansea Bay has a capacity of 60MW and North Wales has a capacity
of 420MW.
6. We have also identified a number of other
potential sites around the UK coast which meet the requirements
of high tidal range and shallow tidal flats. We believe that it
would be possible to generate from numerous sites, approximately
21 TWh, representing 8% of current UK electricity consumption.
C. COSTS—CONSTRUCTION
AND GENERATION
1. Tidal Electric's financial advisers,
NM Rothschild, have undertaken a detailed analysis of the construction
and generation costs of tidal lagoons. They conclude that our
generation, excluding subsidisation and economies of scale, is
competitive with offshore wind, and arguably with more conventional
methods of generation. The graph below highlights Tidal Electric's
costs compared to all other forms of generation, except nuclear.
2. The cost per unit output of the offshore
tidal power generator is less than that of the tidal barrage for
the following reasons:
Depth
Hydrostatic and hydrodynamic forces increase
markedly with depth. The impoundment structure is built on near-shore
tidal flats proximal to the low tide level and avoids deeper areas.
In contrast, the barrage must span an estuary and must cope with
whatever depths exist on the site. In the case of the Severn Barrage,
the depths are up to 40 meters below low water.
Load Factor
Barrages must generate primarily in one direction
(on the ebb tide) in order to minimise progressive disruption
of the intertidal zone that would eventually lead to the silting
up of the head pond. The offshore tidal power generator is free
to utilise both the ebb and the flood tides for generation, thereby
roughly doubling the load factor of the barrage. Double the load
factor is equivalent to halving the capital cost per unit output.
Efficiency
Both the impoundment structure and the barrage
are intended to hold back water. The power of the tides lies only
in the tidal range, the difference in water levels between high
tide and low tide. The impoundment structure is built so as to
perform only that function, whereas the barrage also holds back
all the water below low water level and all the water in the intertidal
zone. None of this water produces any power, yet it is very costly
to contain.
Generation Equipment
The offshore tidal generator uses conventional
low-head hydroelectric generation equipment and control systems.
The equipment consists of a mixed-flow reversible bulb turbine,
a generator, and the control system. Low-head hydroelectric generation
equipment has been in existence for more than 120 years and state-of-the-art
equipment is mature, mechanically efficient (96%+), familiar (over
100,000 units in use world-wide), reliable, and durable (the equipment
comes with performance guarantees and a design life of over 50
years.) Manufacturers/suppliers include Alstom, GE, Kvaerner,
Siemens, Voith, Sulzer, and others.
5. The estimated capital expenditure cost
of constructing the Swansea Bay 60MW lagoon is £79 million,
and the capex cost for the North Wales scheme is £375 million.
D. DEVELOPMENT
TIMETABLE
1. To date, the proposed schemes have been
welcomed by Swansea Council, xxx Council, Friends of the Earth
and the RSPB as well as a number of Members of Parliament and
Peers, and members of the Welsh Assembly. In order to develop
each scheme, we will require the consent of the DTI and other
government departments and agencies. Discussions with the DTI,
the Crown Estate, the Environment Agency and the Welsh Assembly
are on-going.
2. To assist us in taking our projects forward
Tidal Electric has assembled an experienced, advisory team consisting
of: NM Rothschild (finance), WS Atkins (civil engineering consultants),
APBmer (marine engineering consultants) and RW Beck (hydrology
consultants).
3. Subject to receiving the necessary planning
consents and environmental permissions, the timescale from first
construction to operation is two years.
4. During the construction phase, construction
jobs will be created. Once each scheme starts operating, we expect
that there will be permanent jobs for maintenance and operation.
Secondary business activities and tourism will also add to the
local economies.
E. FINANCIAL
INVESTMENT
1. The project economics will allow the
effective use of project finance for the development of Swansea
Bay and/or the North Wales coast scheme, subject to receiving
the necessary consents from government. Importantly, this means
that we will not be reliant on financial support from the taxpayer.
2. We have strong indicative interest from
a number of UK and overseas financial institutions, for both debt
and equity financing. In addition, we are also in discussions
with several major energy companies with respect to potential
equity financing of one or more facilities.
F. RELATIVE MERITS
OF ALTERNATIVE
TECHNOLOGIES
1. While understanding the need to prioritise
the development of additional and alternative sources of energy,
we believe that the overall needs in the UK (and in the world
as a whole) will eclipse the capacity of any one technology and
necessitate the ongoing development of a range of technologies,
including nuclear. As tidal lagoon generation does not compete
for resources (eg land, tidal flow etc), we believe that the technology
is complementary and additive to other technologies.
G. CONCLUSION
1. We consider that tidal lagoon generation
could be applied in many sites around the UK coastline and so
could reasonably generate 8% of the UK's generation needs by 2020.
2. Tidal lagoon generation offers the UK
clean, renewable and predictable generation at a comparable cost
to offshore wind and arguably others forms of generation. It also
has potential social, economic and environmental benefits, including
the protection of the North Wales coastline from further erosion
and flooding.
3. Importantly, this new form of generation
will help to meet the UK government's renewable and climate change
targets. It would also be a significant step in the commercial
development of the marine renewables sector. We are determined
that this project will succeed and so enable Wales (and ultimately
the rest of the UK) to showcase the technology to the rest of
the world.
20 September 2005
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