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Planning costs may pull the plug on Severn Barrage

Plans for a £21bn Severn Barrage are facing the axe because private sector backers see the £250M cost of getting the project through planning as too great a risk.

It is feared that the government will pull public funds for the project in next month’s Comprehensive Spending Review, leaving its fate in the hands of private investors.

But taking the scheme through the planning phase could cost £250M and take up to six years, which would be too much of a risk for the private sector.

The Department for Energy and Climate Change (DECC) is currently considering five different options for the scheme based on a feasibility study drafted by Parsons Brinckerhoff. It is expected to make a final decision on a preferred option in the next two months.

But it is believed that energy minister Charles Hendry is concerned over cost escalation on the mammoth scheme.

The largest option is a barrage between Weston Super Mare in England and Cardiff in Wales with an installed capacity of 8.6GW. Parsons Brinckerhoff estimated that this would cost £21bn. Sources close to the project fear that this is too much given the current economic climate.

“It won’t be a surprise if the government pulls the funding,” said Renewable Energy Association head of marine Steph Merry, who sits on the project’s steering group.

“The spending review has put the final nail in the coffin for the project. Finance is the biggest problem. The project is impossible without public funds. There is too much risk,” she said.

“The spending review has put the final nail in the coffin for the project. Finance is the biggest problem. The project is impossible without public funds. There is too much risk.”

Steph Merry

Government watchdog the Sustainable Development Commission agrees that the project must be publicly funded and owned to ensure the price of electricity generated by it is competitive. The Severn estuary has the second largest tidal range in the world and could generate up to 5% of the UK’s energy requirements.

Environmentalists have voiced their concerns over the scheme, particularly the Cardiff-Weston option. The Wildlife Trust believes that 80% of the intertidal habitat in the estuary will be lost because the scheme effectively eliminates low tides upstream of the barrage.

The intertidal area feeds the mud with fresh sediment and nutrients which in turn feeds the living organisms at the bottom of the food chain. “We believe more research is required in the new types of power generation such as tidal reef and tidal fence technology.

This should be combined with a much smaller barrage or lagoon option,” said Wildlife Trust living seas officer Lissa Goodwin.

These technologies were developed in conjunction with the feasibility study and funded by the government through its UK Low Carbon Transition Plan costing £500,000 (NCE 15 July 2009).

Merry disagreed with the Wildlife Trust’s opinion to build a smaller lagoon or barrage upstream because it will sterilise any further development of the “Severn’s phenomenal tidal head resource”.

She said a better solution would be to ditch the Severn plans and focus instead on building similar barrages across smaller estuaries such as the Mersey, Dee or Solway.

Five shortlisted schemes

- 8.64GW Cardiff-Weston barrage - £20.9bn
- 1.05GW Shoots barrage - £3.2bn
- 0.625GW Beachley barrage - £2.3bn
- 1.36GW lagoon at Bridgewater - £3.8bn
- 1.36GW lagoon at Welsh grounds - £4bn

Readers' comments (4)

  • As I've stated previously, this scheme should have been built over 40 years ago when it was first proposed and would have been "subsidised" by the costs saved from not building 2 Severn Bridges. Even now its still more than viable!

    This scheme would have a very long term working life, with minimal maintenance and replacement equipment costs, and provide a massive amount of reliable and manageable base load power generation - all renewable.

    What sort of investment and project appraisal models are people using to assess such schemes when, apparently, the planning approval is considered too risky a venture and where its costs are considered to be excessive - rendering the scheme non-viable and/or unaffordable. What else are we going to have to spend money on to keep the lights burning, particularly with renewable energy? Far more expensive subsidies for wasteful, unreliable and inefficient wind farms and solar panels requiring even more costs for dependable and available parallel base load power generation?

    Given proper leadership, the Planning Application and review could be streamlined to reduce costs and time and increase any IRR on the project commercial model. Nature is proven to be adaptable and flexible enough to accommodate such schemes and given a definite "go" signal relatively little money with nature's assistance would overcome any reasonable concerns on environmental matters. The actual costs of the Planning and Environmental Engineering and adjustment involved would be minimal compared to even a small proportion of saved windfarm subsidies, the actual capital costs of the barrage, and its long term manageable cost renewable power supply capabilities?

    Even in this period of austerity, following the chaotic period of non-management of public finances, critical long term investments such as this are urgently needed for both security and energy cost reasons and are a very good investment when properly measured over say a 50-100 year asset life period.

    If private finance is needed then the perceived risk of an aborted project at Planning stage needs to be minimised immediately by government action. The PFI type project development also needs to be re-visited in an attempt to drastically reduce the non-engineering cost elements of the scheme to assist in a cheaper and more rapid project start up and implementation.

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  • This article surely highlights the folly of disbanding the Infrastructure Planning Commission which aimed to reduce the planning process of schemes such as the Severn Barrage down to a year.
    I'd be interested to see if the coalition's replacement Major Infrastructure Unit will have any effect on the planning period and yet i have my doubts.
    Once again this shows the blinkered approach by the coaltion towards cuts, removing any chance of private sector funding making up the shortfall for their cut, purely to allow save costs on "quangos" in the short term!
    BC

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  • So, having studied the Big Barrage to death (a thousand cuts?) we have the coup de grace by bureaucracy. Grim humour - we need a Brunel to see through the mess and cope with our IMMEDIATE/URGENT energy needs, never mind if we are foolish enough to accept the 70 million population predicted by our glib statisticians.

    "we would need typically about 100 lagoons to give the same potential power as a barrage, with each lagoon being 2.5 times the size of Cardiff Bay" - Professor Roger Falconer

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  • I agree with Mr Peter Wilson. This project should have been built 40 years ago, financed by North Sea oil. However it was not and north sea oil was squanderd. Today we have a new problem. South is England, north is Wales. The RSBP rules. Ducks Rule, OK. Why not build a barrage betwen Dover and France. Forget a tunnel. Too expensive?

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