There is growing concern about the threat to jobs because of the Government’s failure to make a decision on whether or not to back the Swansea Bay tidal lagoon.
Last week more than 100 workers were made redundant when a steel fabrication business in Sheffield, Davy Markham, went into adminstration.
The company had been lined up to make components for the turbines and turbine housing for the lagoon.
Today Austrian engineering firm Andritz was reported to be “increasingly frustrated” with the lack of progress on the lagoon.
Andritz is one of the world’s largest manufacturers of turbines for hydropower plants. It has been hoping to make turbines for the lagoon at a new manufacturing plant in Swansea.
There are hopes that the new plant could create around 500 new jobs and become the centre of a new global operation building turbines for tidal lagoons in Britain and around the world.
The new plant would be designed and built by a local Welsh firm.
According to the report, Andritz has spent “hundreds of millions of euros” on the scheme but is becoming “increasingly frustrated” at the lack of progress more than a year after the independent Hendry review gave a ringing endorsement to tidal lagoons.
Andritz Hydro boss Peter Magauer told the Mail on Sunday: “We got strong encouragement in the first phase, but recently had mixed signals. We don’t understand why the UK is hesitating.”
In December American engineering giant GE, which would also be involved in making the turbines in partnership with Andritz, announced it was cutting 1,100 jobs at its Rugby and Salford plants.
The plants would have been involved in making parts for the turbines and electrical equipment.
Subsidy breakthrough
The £1.3bn lagoon project has been stuck in the doldrums since former Energy Secretary Charles Hendry gave it the thumbs up in his January 2017 report, describing building it as a “no regrets” policy.
The Welsh Government has offered to help finance the scheme in the hope of bringing down the capital costs and the size of the public subsidy required.
Any subsidy would be have to be paid for out of consumer’s energy bills. Since the Welsh Government’s offer before Christmas the developer, Tidal Lagoon Power, is reported to have reduced the length of time it says it needs a subsidy from 90 years to 35, bringing it into line with the new nuclear power station at Hinkley Point.
However, it’s understood the subsidy for the lagoon would not replicate that for Hinkley Point in every detail, making it cheaper for consumers.
Business Secretary Greg Clark wrote to First Minister Carwyn Jones in January saying he acknowledged the Welsh Government’s “substantial equity and/or loan investment” offer, and that he was asking his officials to find out more about it.
The letter added: “The issues considered by the (independent) Hendry review remain complex as they relate to an untried technology with high capital costs and significant uncertainties.”
One of Mr Clark’s departmental colleagues, MP Claire Perry, said at a committee meeting last month that talks with Welsh Government officials were under way.
“So there are a series of extremely important conversations happening,” she said.
Asked about the 35-year Hinkley Point-style subsidy, a Tidal Lagoon Power spokesman said: “That is one of the possible outcomes of current talks between the UK and Welsh Governments.”
The lagoon also still needs a marine licence from Natural Resources Wales.
