Interview: Andrew McNaughton on Tidal Lagoon Power’s £30bn renewable ambition

As engineering and construction director for Tidal Lagoon Power, former Balfour Beatty chief executive Andrew McNaughton plans to start generating power at Swansea in 1300 days to kick start a £30bn zero carbon tidal power industry for the UK.

Granting of planning consent for a new £1bn tidal lagoon station at Swansea was a major milestone for the Tidal Lagoon Power business and its ambitions to create a new fleet of tidal energy power generation stations across the UK and around the world/

For engineering and construction director Andrew McNaughton, former chief executive of Balfour Beatty, it underpins his decision to braek away from a career in civil engineering contracting to join this fledgling zero carbon utility business.

Having cleared the first planning hurdle, the challenge at Swansea remains huge as McNaughton steers the £1bn “world first” project through local planning, financial close, government negotiation and procurement to meet a Spring 2016 start of marine works.

But as a “pilot” project – albeit a large one – Swansea represents the start of a much bigger ambition to create a fleet of six tidal lagoon stations in the UK and, with a new industry established in the UK, further stations around the world. 

Interview by Antony OIiver

Government’s consent for Swansea is a massive step forward for the project and the business. So what happens now?

There are a quite a few things that are now happening in parallel. We are in negotiations with government for a CfD [Contract for Difference, to set the price per unit of electricity generated] and have local arrangements to agree with the local planning authorities particularly around the public amenities. We also need to agree a financial close with our investors. Every single piece of that is doable but it is now work that must be done.

Could anything still stop this project at Swansea? 

Planning consent underpins our funding – we have to go through a process of demonstrating that the business plan is viable. And while we don’t have any major concerns about that, the key element is that we have to have a a lot of operations going on in parallel. The consent order means that we have a project that is real. Until then it was all still up in the air.  It allows us to implement a power generating plant off Swansea Bay with the ability to generate 320MW of power. It is now over to us to get the other elements out of the way so we can get out there and start construction in Spring.

So next Spring is a realistic start date?

We need to use the marine season so we are focusing on a Spring start - that is our aim. We have a planned advanced works phase to develop the designs and to develop the procurement plans and an integrated schedule between all the different [contract] packages. Ultimately we have to get to a position of having a robust cost plan that we can put to financial close. 

What is your role on the Swansea project? 

My main focus is that in just over 1300 days we want to be a power generating company - to ensure that we can deliver power to the grid in the Spring of 2019. I have people absolutely focussed to move from a development company to a owner and operator of a power company in that time.

Your marine works preferred bidder is China Harbour Engineering Company. Were there no UK based skills available?

My honest answer is that there is no UK company that has the skills, capability or equipment to deliver the marine works for Swansea Bay or any of our other lagoon projects. Significant marine craft are needed and they don’t exist in the UK so we had to run a global competition to find the people capable of delivering it. The Chinese were able to demonstrate not only their skills and experience but also the way that they were going to operate it UK. It reflects the reality that across Europe there has been an absence of major marine work. I wanted to ensure that we were minimising the risk.

While Swansea is a world first and in many ways a pilot for the next five lagoon projects planned. What progress is being made with this bigger plan?

We are already underway with the early phases for the Cardiff and Newport projects and we are aiming to be on site at Cardiff [with an 1800MW capacity plant] before we finish at Swansea. Each of the lagoons has to be modelled in their own right to ensure that we are sympathetic to the local environment. If we want to attract investors to put £30bn into the organisation we need to be credible to do so.

Your target is to generate 8% of the UK’s electricity using tidal lagoons - is that realistic?

Will there be debate over the timescale? Yes probably. And while we are confident that people will invest, clearly it will take some time. We believe that this will create a new industry but also a new export capacity because there are already other countries watching to see if the UK government would be bold enough to go forward with this. 

How will your role develop?

I didn’t join to build Swansea. I joined to build the vision of tidal lagoon power which is over the next ten years or so to create a major power generation company in the UK and internationally. We believe it is of its time. The ability to create large scale renewable power generation needs a step change in thinking around how it will be done. 

Does this project signal the demise of nuclear?

In terms of timescale to delivery we believe tidal is more doable. But does in rule out nuclear for the future? I don’t think so. Both are credible sources of renewable power and if you have a managed energy policy then both can sit in harmony together. Clearly it’s a different investment proposition.

Given the scale of your £30bn ambition, is not having a marine contracting capability a missed opportunity for the UK? 

I’m not so sure. In terms of prefabrication and design the result will be huge. We are definitely using the project to drive modern style technologies - bearing in mind that this is an underground station we will be looking for all the innovation and ingenuity that we can get from across the while supply chain because absolutely we want to do this differently. I am looking at durability, maintainability of the asset and how we operate it efficiently.

So with much to do and many negotiation to navigate can anything stop this project? 

We are in negotiations [over the strike price], and we will aim to come to a conclusion in a time frame that allows us to be on site in Spring. Clearly we must ensure that we have a design that works and a team that is ready to go. 

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