A newly released macroeconomic impacts study finds that a national fleet of six tidal lagoon power plants would contribute £27 billion to UK GDP over the investment period 2015-2027.
The study, “The Economic Case for a Tidal Lagoon Industry in the UK’, Cebr,was conducted by the Centre for Economics and Business Research. The report examined Tidal Lagoon Power’s plans to build six tidal lagoons in the UK – the first of which, if granted the relevant permissions, will commence construction in Swansea Bay next spring.
The aggregate UK content for Swansea Bay is currently estimated at 71%, with almost 50% of total content being sourced in Wales itself. In operation, the fleet could potentially supply 8% of the UK’s electricity and make an annual contribution of £3.1 billion to UK GDP over the 120-year design life of the plant.
Exports of up to £70bn could be secured by exploiting the UK’s leadership position across international markets. Net exports could be increased by as much as £3.7bn per year - equivalent to 13% of the current trade deficit - through the displacement of fossil fuel imports by indigenous lagoon-generated electricity, the export of tidal lagoon electricity at times of over-supply, and the export of components and expertise to support the roll-out of tidal lagoon infrastructure overseas.
The proposed economic benefits of investing in and operating a UK fleet of tidal lagoons are as follows:
- A twelve-year investment programme with an accumulated contribution of £27bn to UK GDP, creating or sustaining up to 35,800 jobs on average and up to 70,900 jobs at its peak;
- Taking account of the balance of payments effect, the programme could contribute £35.5bn to the UK economy and at its peak account for 0.3% of annual GDP;
- The operation of the lagoons and the electricity they produce will contribute £3.1bn per year to the UK economy, creating or sustaining as many as 6,400 jobs;
- Taking account of the balance of payments effect, a fully operational fleet of lagoons could create or sustain as many as 39,700 jobs, contribute £5.8bn per year to the UK economy and account for 0.24% of annual GDP;
- The annual tidal lagoon export market could be worth as much as £3.7bn per year or an accumulated total of £70bn between 2030 and 2050.
Since many of the components can be sourced within the UK, tidal lagoon infrastructure investment offers one of the best returns in terms of GDP impact per pound invested when compared to other energy investments, advocates say.
paints a compelling picture for the potential contribution of tidal lagoon infrastructure in each of these areas,” said John Cridland, director-general at the Centre for Economics and Business Research. He believes the region needs to upgrade its energy infrastructure and, in the process, capture greater value from green investments such as tidal lagoon power. “We have the resource, and we have the industry.”
Mark Shorrock, CEO of Tidal Lagoon Power, concurs.“Having analysed all of the costs and all of the savings, this study clearly demonstrates that the benefits to the national economy would be enormous, immediate and long-lived."