Renewable energy project condemned as "appalling value for money"

February 25, 2015 5:12 PM

An energy-generating tidal lagoon has been condemned as “appalling value for money” by Citizen’s Advice. The project is said to be aiming for a guaranteed price for the energy it generates of £168 per megawatt-hour (MGw) - far more than even the infamously expensive off-shore wind.

This price level would be guaranteed for 35 years, 20 years longer than for wind energy, a very odd decision indeed in a world of volatile energy prices. The cost of energy in the UK is predicted to decrease with effective incorporation of shale gas in a liberalised market, leaving the subsidy for this scheme looking even more inexcusable as it increases energy bills for households already heavily burdened.

This guarantee of above-market prices for non-carbon energy is nothing new.  Offshore wind plants receive £140/MWh and the widely condemned contract for difference offered to Hinkley Point is £92.50/MWh – 45% less than the tidal lagoon project’s reported aim.

The lagoon may provide some benefit as a flood defence, and private investment in flood defences should be encouraged, however, it is far from clear if this is a cost effective way of achieving that. Even if it is, should flood defences really be subsidised by increasing already high energy prices?

Latest Blogs:

TaxPayers' Alliance Icon

Taxing holidays doesn't fly

12:01 AM 14, Aug 2017 Duncan Simpson

How to end the housing crisis

10:48 AM 11, Aug 2017 Rory Meakin

TaxPayers' Alliance Icon

Could the end be in sight for stamp duty?

2:23 PM 09, Aug 2017 Jan Zeber

TaxPayers' Alliance Icon

Stamp Duty Land Tax - What is it?

12:29 PM 09, Aug 2017 Rory Meakin

TaxPayers' Alliance Icon

Action on Sugar leave a bad taste in the mouth

11:15 AM 08, Aug 2017 Ben Ramanauskas

TaxPayers' Alliance Icon

It's not more money that the NHS needs...

10:00 AM 04, Aug 2017 Ben Ramanauskas