U.K. tidal lagoon verdict said to be delayed to after budget

Prime Minister Theresa May’s government needs more time to assess whether to subsidize the world’s first project generating power from a tidal lagoon, delaying a decision until after the budget due next month, people familiar with the discussions said.

Government support is needed for the 1.3 billion-pound ($1.6 billion) Swansea Tidal Lagoon to move forward and probably won’t come until after the Treasury’s budget is released on March 8, according to two U.K. energy officials who asked not to be identified because they aren’t authorized to speak with the press.

May’s cabinet is facing pressure to offer a long-term contract for the project. It would generate electricity from the the rise and fall of the tides in Swansea Bay in south Wales, which has the second-largest tidal range in the world.

Potential U.K. tidal power locations

The development would enclose a section of the bay behind a 7.1 mile-long rock wall. Closing gates in wall for three hours would build a 4.3 meter (14 foot) difference in water levels, which would drive 16 turbines capable of generating 320 megawatts of electricity. The project could be the first of six planned plants of its kind developed by Tidal Lagoon Plc.

More than 100 lawmakers signed a letter to Business Secretary Greg Clark urging him to respond to a review of the project conducted by former Energy Minister Charles Hendry.

“I’ll be meeting with Greg Clark shortly and I look forward to discussing this with him then,” said Richard Graham, chairman of the All-Party Parliamentary Group on Marine Energy and Tidal Lagoons, in an e-mailed statement on Wednesday.

The current energy minister, Jesse Norman, pledged to lawmakers in January there wouldn’t be a “dragging of heels” that would delay the decision. The people close to the government’s thinking said ministers are still trying to determine the value of a possible investment.

Hendry’s review, submitted to ministers in December, urged the government to move forward with the lagoon, saying it would cost much less than other forms of new low-carbon generation such as nuclear power and create jobs as the U.K. prepares to leave the European Union.

The two people in the discussions said Hendry’s review didn’t adequately address value-for-money assessments of the project and that the government is still analyzing the issue.

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