Swansea Bay Tidal Lagoon construction delayed by a year

Tidal Lagoon Power’s engineering and construction director Andrew McNaughton confirmed that work on the £1bn project would not start until next spring and that the completion date for the project had been moved from 2019 to 2021.

Mr McNaughton said that the company had hoped for financial close by the end of the year, which would have paved the way for construction to begin in 2016.

However, Tidal Lagoon Power has been unable to agree the level of subsidy from the government for the electricity produced by the lagoon, known as its contract for difference.

A spokesman for TLP said: “Our board has updated the target for the construction programme.

“The building needs to start in the spring, but first we need the remaining permissions, contract for difference and financial close. So the pragmatic decision for spring 2016 is to move to spring 2017.”

In June, energy secretary Amber Rudd granted planning permission for the project and it has also been publicly backed by prime minister David Cameron and chancellor George Osborne.

The announcement by Ms Rudd came a week after the China Harbour Engineering Company had been named as preferred bidder for a £300m marine works on the power plant.

Other contractors working on the scheme include Laing O’Rourke, which won one of the main civil engineering and construction packages for the Swansea Bay Tidal Lagoon, worth £200m.

Welsh contractor Alun Griffiths was also appointed to a £25m deal to provide ancillary civil engineering for the £200m project’s public realm works.

Tidal Lagoon Power confirmed that negotiations over the CfD were continuing with the government.

The level of subsidy needs to be agreed before work can start on the plant and failure to do so could lead to further delays to construction.

It could also affect Tidal Lagoon Power’s plans to build six more lagoons in the Severn estuary and off the north coast of Wales.