High construction costs mean Mersey scheme won’t be viable without a change in policy on renewable incentives
A £3.5bn tidal power scheme that could provide electricity for 200,000 homes has been put on hold after a feasibility study found a lack of available funding for long-term green investments.
The report by Peel Energy and the Northwest Development Energy, found that the upfront £3.5bn construction costs would not be recouped faster enough for potential investors.
Peel Energy blamed an emphasis on short to medium returns in both financial sectors and renewable energy incentives.
It said it would halt all development on the scheme until regulatory frameworks started providing incentives for investors on long-term infrastructure projects.
Anthony Hatton, Peel Energy’s development director, said: “We need to identify an appropriate funding structure that recognises the long term low cost of electricity, security of supply and wider economic benefits that investments such as this provide for future generations.”
Peel Energy said the cost of electricity produced by the plant would be very competitive and over its 120 life the scheme would pay for itself.
The Feasibility Study reports can be found at www.merseytidalpower.co.uk