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Swansea’s £1bn Tidal Lagoon signs up “cornerstone” investment from Prudential

Financing deal signals first step towards bringing renewable energy power station to reality

Insurance and financial service giant Prudential has agreed to provide key “cornerstone” funding for the £1bn Swansea Bay Tidal Lagoon power generation project, to provide a major boost for this renewable energy project.

The tidal energy network in Swansea Bay aims to generate up to 8% of the UK’s electricity from what would be the world’s largest tidal energy provider if and when it opens as planned in 2018. 

“Securing the backing of a world-renowned investment institution marks another major milestone for the Swansea Bay project and is a clear endorsement of our vision to introduce tidal lagoon infrastructure into the UK’s low carbon energy mix,” Mark Shorrock, chief executive, Tidal Lagoon Power.

Prudential’s long-term insurance funds will provide the funding through its European asset management arm, M&G Investments. In the UK, Prudential already manages around £25.8bn of direct infrastructure investments.

“Securing the backing of a world-renowned investment institution marks another major milestone for the Swansea Bay project and is a clear endorsement of our vision to introduce tidal lagoon infrastructure into the UK’s low carbon energy mix,” said Mark Shorrock, chief executive, Tidal Lagoon Power. “Tidal lagoons will employ British industry to harness a British natural resource and return profits to British institutions.”

The project, which is still in early stages of planning process, is expected to generate over 495GWh of electricity every year for 120 years, enough to provide nearly all of the domestic electricity for the Swansea Bay region. 

The project is designated as a “nationally-significant infrastructure development” under the Planning Act 2008, and is currently in the planning process to gain a development consent order. 

The planning application was formally accepted for examination in March 2014, with a recommendation due to be referred to the UK’s Secretary of State for Energy and Climate Change early next year. 

Tidal Lagoons also points out that it will help the UK meet its carbon reduction targets by saving more than 236,000 tonnes of CO2 each year and that construction of the power station, which, subject to planning approval, is scheduled to begin in 201, will create almost 2,000 jobs.

Tidjane Thiam, group chief executive of Prudential added: “Prudential is committed to invest in infrastructure projects that benefit the national economy. We are also proud to play our part in the development of this world-leading renewable energy technology.”

 

Tidal Lagoon Swansea Bay 

  • Installed capacity: 320 MW
  • Annual output (net): over 495 GWh
  • Daily generating time: 14 hours
  • Carbon savings: more than 236,000 tonnes CO2 per year
  • Volume of water through turbines: 100,000 Olympic swimming pools daily
  • Design life: 120 years
  • Area enclosed by breakwater: 11.5 km2
  • Length of breakwater: 9.5 km
  • Height of wall: 5-20m
  • Peak tidal range: c.10.5m
  • Average tidal range Neaps: 4.1m; Springs: 8.5m
  • Construction jobs: 1,900 full time equivalents
  • Jobs in operations, maintenance and associated leisure: 181
  • Capital investment: c. £1 bn
  • Gross Value Added (GVA) during construction: up to £316m
  • GVA in operation: c.£76m per annum
If you would like to contact Antony Oliver about this, or any other story, please email antony.oliver@infrastructure-intelligence.com.