Benefits To South Wales Of Severn Barrage

Mr Peter Hain (Neath) (Lab): What assessment he has made of the potential benefits to south Wales of the Severn barrage.

The Secretary of State for Wales (Stephen Crabb): We have made it clear that we remain open to considering any well developed and privately funded proposals that come forward for harnessing the tidal range resource in the Severn estuary. The right hon. Gentleman’s tenacity on this and a great number of other subjects will of course be greatly missed when he leaves this place. I look forward to meeting him next week to talk further about the Severn barrage project.

Mr Hain: I am grateful to the Secretary of State. Is he aware that the company now taking forward the Severn barrage—exclusively for any form of renewable energy—requires no consumer subsidy through a contract for difference? That could be a game changer for the Government.

With your indulgence, Mr Speaker, may I thank my Welsh Labour colleagues for their comradeship, especially during my two years as a Welsh Minister and seven years as Secretary of State for Wales? We can be proud that we established a Welsh Assembly, and it has been a privilege to serve.

Stephen Crabb: I thank the former Secretary of State for his question. As I said, I look forward to talking to him in more detail about the project, and to understanding how the proposal might have changed since he and his associates last presented the ideas to various Committees. Let me add that I am proud to be part of a Government who believe in major infrastructure investment, and who are delivering strategic infrastructure investment in Wales the likes of which we have never seen before.

Energy Prices – Severn Barrage

Mr Peter Hain (Neath) (Lab): I thank the Secretary of State for his revelation that The Sun is now the house journal of the Liberal Democrats. It does him and the Government no credit that their attitude to Labour’s price freeze has veered wildly, initially denouncing it as Marxist, which was a revelation to all Marxist disciples, and now misrepresenting it with a patronising approach that belies the fact that my right hon. Friend the Member for Don Valley (Caroline Flint) and the leader of the Labour party have been proved right all along on this policy, as they will be proved right in the future.

One of the best vehicles for keeping energy prices low is the Severn barrage. This huge infrastructure investment boost makes the Severn barrage a no brainer, not least because it requires no Treasury funding. The £25 billion construction cost will be financed entirely privately, mainly from sovereign wealth funds and other large-scale institutional investors, because they would have a guaranteed revenue stream over a period of 120 years or more. The project will create 20,000 jobs during its nine-year build, and with multiplier effects another 30,000 jobs, making a total of 50,000 jobs and a £70 billion boost to the economy. Many of the jobs will be located in communities in south Wales and the south-west of England, which are crying out for such a boost of investment and high-skilled jobs. Some 80% of the spend will be in the United Kingdom, unlike wind power where 80% is spent abroad because countries such as Germany and Norway have stolen the lead on wind turbine manufacture.

The scheme would harness one of the world’s largest potential sources of renewable energy: the huge tidal range of the Severn estuary—the second highest in the world. Building an 18-kilometre barrage between Brean in England and Lavernock Point in Wales would be one of the world’s largest privately funded global engineering projects.

Madam Deputy Speaker (Dame Dawn Primarolo): Order. I must reluctantly intervene on the right hon. Gentleman. This debate is about energy prices, not energy generation from things like the barrage. He needs to relate his comments to the impact on energy prices and passing on reductions to the consumer.

Mr Hain: I was about to do that, but I need—obviously with your permission, Madam Deputy Speaker—to describe the project in order to do so.

Most importantly, the barrage would produce the cheapest electricity in the United Kingdom—half the cost of alternative sources such as gas, nuclear and coal, as well as other renewables. Previous consortia interested in the project have looked to a period of consumer subsidy lasting less than 25% of its life—very small compared with other renewables. After that initial subsidy period, promoted by previous consortia backing the barrage, it would generate electricity at £20 per MWh for at least a century, less than half the wholesale market price that the economy has been used to.

The latest project backer does not want the consumer subsidy of contracts for difference, a point which I hope the Secretary of State will note. In meetings with him, I have discussed support for the barrage, which he has not been able to give. The barrage has attracted widespread criticism from wildlife groups, but it has considerable other benefits, including low electricity prices over its entire life if the current project is taken forward in this way. In addition, it would have other important effects on the economy. The 1,026 turbines required, each the weight of a jumbo jet, would be built at two factories in the region, most probably at Port Talbot and Bristol. The planned caisson-casting yard at Port Talbot deep-water docks could afterwards be converted into a port for ultra-large container ships. It would also enable us not just to keep prices low, but to export the technology and expertise in tidal barrage construction around the world. So it would keep prices low, which consumers desperately need, and it would support flood protection. Some 90,000 properties and 500 square kilometres of Wales and the south-west, including the Somerset levels, would be supported, and it would act as a barrier against storm surges. Therefore, prices would be kept low and there would be many other benefits from the project.

In conclusion, this is the biggest single investment project coming from the private sector, needing no consumer subsidy at all in contracts for difference, according to the latest backer of the project, which I hope the Government will meet. I hope that people will see this as something that should have been backed already, and that now all parties will back it as a—

Madam Deputy Speaker: Order.

Lagoons No Alternative To Barrage

Western Mail

It’s real a shame that Cardiff and Bristol councils are together exploring lagoons instead of the Cardiff Weston Barrage for the Severn estuary

Lagoons in the Severn would produce only a fraction of the enormous power of the Barrage which is the only way of harnessing the full potential of the Estuary.

For example, the lagoon proposed for Swansea Bay would generate one fiftieth, less than 2 per cent, of the Barrage – and its electricity would cost twice to three times as much.

The power generated by tidal range technology, which includes lagoons and barrages, is proportional to the area enclosed times the height of the tidal range.

A lagoon has to build a relatively long perimeter wall to impound an area of water – in Swansea’s case, a 9 kilometre wall to create an area of 5 square kilometres.

The Barrage, by contrast, only needs an 18 kilometre long wall to enclose an area of 570 square kilometres: twice the length to enclose almost 100 times as much area.

Lagoons are simply not cost effective, which means that electricity from lagoons will be much more expensive.  Small projects like Swansea could easily complement the Barrage but Cardiff-Bristol are chasing an illusion if they imagine lagoons are a serious alternative.

Cardiff-Bristol suggest that lagoons take less space. But the Swansea lagoon is the size of 1,500 football pitches. That is massive.  Yet it would take 50 of them to equal the power of one Barrage. Where in the Severn – or the UK, for that matter – could we fit 50 lagoons of that size?

It is often claimed by wildlife and environmental groups that a lagoon will not have as much impact on the environment as the Barrage.   Obviously that would be the case for one lagoon – but what about 50 cluttering the estuary?  What would the impact be then?  Unless of course this cop-out option is not really about harnessing the full power of the Severn, merely a fraction of it.

The truth about lagoons, according to experts, is that we don’t know what the environmental impact will be. What will be their effects on tidal currents, waves, suspended sediment, sediment deposition, coastal morphology and water quality? We simply don’t know – particularly if we built so many of them, cluttering the estuary and affecting navigation for ports like Bristol where the Barrage locks allow easy shipping.

But we do know the environmental impact of the Barrage: this has been studied and modelled for years, and solutions to any impacts on fish and bird life have already been developed.

We need to think seriously about the future of energy in this country. Our demand for electricity is increasing every year and our supply is decreasing. According to the government, by 2025 there will be a 60 terawatt-hour gap between electricity supply and demand – that is 15 per cent of our electricity consumption.

Where will that supply come from? What is the point of investing in expensive technologies that generate miniscule amounts of electricity? Why should we spend time building a lagoon that generates one fiftieth the electricity of a barrage, with electricity that costs two to three times as much?

The barrage would generate as much electricity as three to four nuclear power stations and at around the same cost. But, in addition, it has a lifespan of at least 150 years, far longer than any other power plant – offshore wind farms last for 20 years, nuclear power stations like Hinkley for 60 years.

Do we want to keep the lights on?  Are we serious about combating climate change? If we do not make big decisions now, in few decades’ time, when parts of Somerset and South Wales are under water due to sea-level rise, the largest ships refuse to nagivate the dangerous estuary waters up to Bristol Port, and the estuary is clogged with lagoons, our children will ask why we didn’t think long term and prevent it all with the Barrage.

Lagoons will not protect against sea level rise, unlike the Barrage which will defend 500 square kilometres and 90,000 properties from flooding

At a time when our energy policy is in disarray and the costs to consumers are escalating, when our nuclear industry is in turmoil and being sold to France and China, and when the government wants to risk polluting our water table exploring for shale gas, we need big, cheap, long-term solutions – not the short-termist tokenism of lagoons in the Severn: a code for ‘do next to nothing’.

The answer is for City Councils like Cardiff and Bristol to join the Welsh Government in getting behind the Barrage – and its £25 billion of private investment (at no cost to the Treasury) generating 50,000 jobs putting Britain in the lead of bi-directional turbine technology.

UK Nuclear Energy Programme

Mr Peter Hain (Neath) (Lab): Even accepting the case for Hinkley, why is the Secretary of State not giving in-principle support to the Severn barrage, which would deliver clean green energy at half the price, at a similar strike price, over three to four times the lifespan of Hinkley and with three times the number of jobs? I just do not understand it.

Mr Davey: I am grateful for the right hon. Gentleman’s persistence in this issue. He knows that I have met him. I have looked at the figures that have been produced by those who want to see a Severn barrage created. It would not be at half the price; it would probably be at double the price; it is extremely expensive. No one would be more delighted than I if we could see tidal power coming in the Severn. I believe it will come, but the price will have to come down because we must protect the consumer.

No hope of £25bn Severn Barrage being built

Western Mail

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.