Swansea tidal lagoon: £200m offer from Welsh Government to get it built

An artist's impression of the lagoon across Swansea Bay

Wales' first minister has offered £200m to get the Swansea Bay tidal lagoon built, amid reports the UK government is on the point of throwing it out.

The £1.3bn energy project was backed by an independent review, but UK ministers have insisted on value for money.

Carwyn Jones has written to offer a "substantial" stake or loan from the Welsh Government.

But a Whitehall source suggested that the money offered by the Welsh Government was not enough.

"There are offers, and there are serious offers. £200m doesn't really touch the sides," he said.

Welsh Secretary Alun Cairns has said he supports the lagoon but in an email warned that the "numbers are awful".

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The project was backed in January 2017 by a UK government-commissioned report published by former energy minister Charles Hendry, which recommended that tidal lagoons could play "a cost-effective role in the UK's energy mix".

But ministers in the UK government have refused to commit to the project put forward by Tidal Lagoon Power (TLP) saying it "must be affordable".

On Monday, it emerged that Mr Cairns had queried the cost of the energy produced in an email, saying it looked "twice the price of nuclear" and offered a fraction of the jobs.

Mr Jones wrote to Business Secretary Greg Clarke on Tuesday, saying the Welsh Government was prepared to put in cash to "enable the project to move forward".

"When we spoke yesterday, I raised the possibility of the Welsh and UK Governments making a joint offer to Tidal Lagoon Power in relation to the Swansea Bay project," the first minister said in his letter.

"Such an offer would, I believe, strike an appropriate balance between supporting a pathfinder, low carbon energy generation project, in line with the findings of your own Hendry Review, while providing value for money."

Mr Jones told Mr Clarke he would "welcome a discussion about this proposal as soon as possible so that we can put an end to the ongoing uncertainty".

Telling the Senedd about his letter, the first minister called for the lagoon to be offered the same strike price - the agreed purchase price for energy - as the new Hinkley Point nuclear power station in Somerset.

"If it's right for Hinckley, it's right for Swansea," he said.

A previous offer of "substantial" Welsh Government support had been made in January, although no figure was publicly given at that time.

Speaking to BBC Radio Wales earlier on Tuesday, Mr Cairns stressed that the UK government had taken no decision yet on whether to back the lagoon.

Swansea Council leader Rob Stewart called the Welsh Government's offer "a game-changer".

"I hope the UK government recognises it because we cannot let this opportunity slip through our hands," he added.