Peter Hain has issued a withering attack on the Government for ignoring the benefits of a Severn Barrage – admitting the project is effectively dead in the water.
Mr Hain, who resigned from Labour’s Shadow Cabinet last year to campaign for the Barrage, blamed the UK Government for scuppering a project that would have provided 5% of the UK’s electricity needs.
Speaking to WalesOnline the Neath MP released letters between himself and Chancellor George Osborne which he said left him with no hope that the Barrage could make progress while the current Government is in power.
The Barrage would be built from between Brean, near Weston-super-Mare in Somerset, to Lavernock Point, seven miles south of Cardiff.
In a letter to Mr Osborne last month, Mr Hain expressed his frustration at what he saw as the Department of Energy and Climate Change’s (DECC) negative approach to the Barrage.
He wrote: “I am very concerned that, following the meeting I had with you several months ago, there has been no progress on the Severn Barrage – indeed, such comments as there have been from Government seem negative.
“I am now asking that you personally and your officials look afresh a what I am convinced is a fantastic, entirely privately funded £25bn investment in what will be by far the cheapest energy over the next 100 years or more for Britain.”
Mr Hain told the Chancellor the Barrage would have the projected capability of producing electricity output equivalent to three or four nuclear power stations, adding: “As such it is axiomatic that it will benefit from the economies of scale and, from a cost point of view, be infinitely more cost effective than a series of small, high cost renewable schemes that would generate at two to three times the cost.
“The Barrage will keep prices down. In truth it will be perhaps the only genuinely cost-competitive renewable technology.”
Mr Hain said the “strike price” for electricity generated by the Barrage – the amount paid to companies for power generated from renewables, to help overcome high initial costs – would come in well below the £155 per megawatt hour currently being offered by the Government to those generating power from offshore wind.
The cost would, he said, also be lower than the £135 strike price for offshore wind due to be paid in 2018-19.
The former Welsh Secretary’s letter said: “The ability of hydroelectric and tidal-range schemes to produce virtually free electricity, once built, can be seen at the La Rance barrage in Brittany, and at countless hydro schemes around the world.
“Norway, which invested in hydroelectricity a few decades ago, produces 98% of its domestic electricity from hydro. Their consumer bills are consequently now 65% lower than in the UK, after the initial period of subside.”
Mr Hain said that crucially, the Severn Barrage would last far longer than either wind farms or nuclear plants, while requiring little more consumer support than nuclear and less than wind.
He rejected criticism made by the Commons’ Energy and Climate Change Committee about the supposed thinness of the business case for the Barrage, stating: “The [committee] did not ask a single question about [the] cost breakdown, nor have DECC officials. The select committee report’s conclusions were, astonishingly, based on the 2010 DECC study for a barrage very different to that proposed by Hafren Power and not on the several hundred pages of evidence provided by Hafren Power, much of which the select committee chose not to publish.”
Mr Hain said smaller tidal schemes would most likely require the maximum draft strike price of £305 per Megawatt hour, while generating nowhere near as much electricity: “For example, the Swansea Bay lagoon, which is deceptively large and actually the size of 1,500 football pitches, would generate one fiftieth of the power of the Barrage.
“Where in the Severn could we possibly find space for another 50 lagoons? If we did, the impact on navigation and environment would anyway be completely unacceptable.”
Mr Hain appealed further to Mr Osborne, stating: “To keep the lights on, the future for the UK energy sector may well need to include nuclear power, though delivery of this is not certain. The potential of shale gas has still to be verified.
“Surely the Government must also capture the longevity and awesome, nature-gifted, power of the Severn Barrage, boosting our domestic energy security.
“Simply to ignore a vast national resource, like the second highest tidal range in the world, does not appear rational and many of the arguments which have been marshalled against it bear all the hallmarks of a heavily subsidised campaign designed to create doubt, uncertainty and fear on spurious grounds.
“On energy, your Government has asked for value for money for the economy, consumers and business. The nation simply cannot beat this Severn Barrage.
“The wider benefits to the economy would be enormous, with 50,000 direct and indirect jobs created and 80% of the £25bn spend being in the UK, unlike wind power for example.”
Rejecting Mr Hain’s call for a further meeting, the Chancellor responded: “As you know, DECC is encouraging Hafren Power to undertake more work on the details of the project, particularly the environmental aspects.
“We appreciate that they have already done some work in this area, as presented in the business case you attacked, and that doing further work would be costly.
“However, as this would be such a large, novel and complex infrastructure project, more evidence surrounding the cost, benefits and impacts is needed before we can look at it in greater detail.
“You are right to note that affordability is one key constraint on this project. The Government would need to be convinced that the costs of the Barrage would be less than the generation technology that it would displace and that the financing of the project could be structured to limit the upfront cost to bill payers.”
Mr Hain said: “Frankly I have been quite shocked by the sheer contempt towards the Barrage shown by DECC officials and ministers.
“I have spent more than a year campaigning behind the scenes in a non-partisan way for a project which would provide 50,000 jobs in Wales and the South West of England.
“There is nothing on the horizon which would provide such a vast number of employment opportunities, and it is a tragedy that it is not being welcomed with enthusiasm by the UK Government.
“George Osborne’s response shows that the Government is willfully refusing to back the project. There is a 120-page business case that sets out the rationale for the project in detail.”
Mr Hain said he was convinced that opposition to the Barrage led by Bristol Port had turned the Government against the project.
“Bristol Port’s opposition to the barrage, which in my view is wholly irrational, undoubtedly led to a change in attitude by the Government. It has to be borne in mind that the joint owner of Bristol Port [David Ord] is a leading Tory donor who has attended fundraising events with David Cameron.
“With opposition from the Government, whose support is crucial in getting an enabling Bill through Parliament, the investment from sovereign wealth funds that would underpin the project simply won’t be forthcoming.”
Mr Hain said that while he was convinced the project has no future at present, he hoped it could be resurrected under a future Labour Government.