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It’s the economics, stupid

12 June 2008

Cath Harris
Media Officer
E-mail: cath.harris@rspb.org.uk

The power generated by a ten-mile barrage across the Severn Estuary could be produced more cheaply using other green technologies, leading economists say today.

Frontier Economics, Europe’s leading economic consultancy, also show that the proposal to use taxpayers money to build a £15 billion dam across the estuary would not, under existing Treasury rules, warrant special government subsidies or any other form of public investment.

Frontier’s analysis, commissioned by ten UK environment groups, follows a report last October by the Sustainable Development Commission, which said if a barrage between Cardiff and Weston-super-Mare was built, it should be state funded and state run.

Those backing the scheme say it is essential to help the government hit its renewable energy generation target.

Matthew Bell, author of the report, said: 'It is hard to think of reasons for the public sector to build or operate a barrage which would not be equally applicable to many other projects and assets that sit in the private sector.

'Not only is the private sector more than able to finance a scheme of this scale but, even using the most conservative estimates of costs, the barrage is one of the most expensive options for clean energy generation there is.'

Frontier’s report shows that this exorbitantly expensive and massively damaging proposal cannot be justified on economic grounds.'

Frontier assessed the justification for public funding of a large Severn barrage and compared its cost with the cost of generating the same amount of energy in the UK using other renewable technologies.

Variable carbon trading prices, the youth of tidal technology, the high cost of a barrage and the risks to private investors, were not sufficient grounds for state involvement in a large barrage, the study found.

The report shows the barrage to be expensive compared to other renewables and that the government’s renewables target could probably be met using cheaper green technologies. 'Considerable new evidence would be needed to make a large barrage in the Severn estuary an attractive option,' Frontier say.

The RSPB, National Trust, WWF-UK, the Salmon & Trout Association and The Wildlife Trusts were amongst the groups commissioning the analysis.

Exceptional ecological value

Graham Wynne, Chief Executive of the RSPB, said: 'There are good reasons for trying to harness the energy potential of the Severn estuary. But the estuary is truly exceptional for its ecological value. The Sustainable Development Commission has already confirmed that a barrage would fundamentally change the nature of the Severn Estuary. Frontier’s report shows that this exorbitantly expensive and massively damaging proposal cannot be justified on economic grounds - there are simply too many cheaper options for clean energy generation.'

Notes

  • The UK will need to generate around 15 per cent of its energy from renewables by 2020 to meet the EU’s target of 20 per cent across Europe by 2020. This is likely to mean that 38 per cent of electricity supply will need to be from renewable sources.
  • Available data suggests that a large Severn barrage could generate 17,000 gigawatt hours of electricity each year, which in 2020, is likely to be between 3.6 and 4.5 per cent of total demand in the UK.
  • The cycle of the tides in the Severn means that a barrage would not necessarily provide electricity at peak times. The timing of the spring-neap tide cycle - the difference in the tide’s range over its two-week cycle -means that the barrage would be likely to provide two gigawatts of power around peak electricity demand in winter, but would contribute little to this peak demand over a spring tide, when the tide’s range at its maximum.
  • The Frontier and SDC reports used the same estimates of barrage costs. These were calculated in the 1980s and have not been updated because no specific development has been proposed. 
  • The Frontier study, Analysis of a Severn Barrage, compares construction costs only.  It does not take into account costs of land acquisition in Cardiff and Weston or the creation of new wildlife habitats to compensate for the loss of habitats in the Severn Estuary, which would be required under the EU law.
  • The SDC report, Turning the Tide, says five million tonnes of CO2 will be emitted in construction of a barrage and another five million in the transport of materials.
  • Plans to build a barrage across the estuary were dismissed in the 2003 Energy White Paper because the scheme would cost too much and would damage the numerous estuary sites protected because of their importance to wildlife.
  • The RSPB has published maps showing that Scotland’s renewables target could be met without harming important wildlife sites. Natural England is expected to publish similar maps for England.
  • The 35,000-hectare (86,500-acre) estuary is protected under the international Ramsar wetland agreement, is a Special Protection Area and has three candidate Special Areas of Conservation under European laws. There are several Sites of Special Scientific Interest in and on the banks of the estuary, all protected by UK law.
  • It hosts about 68,000 birds in winter, including huge flocks of dunlin and shelduck, together with Bewick’s swan, curlew, pintail, wigeon and redshank. Breeding birds feeding on the estuary in summer include curlew, shelduck and oystercatcher.
  • At least 30,000 salmon and tens of thousands of shad, lampreys and sea trout use the estuary to reach spawning grounds in the Usk and Wye rivers. Eels swim back down these rivers to reach spawning grounds at sea with millions of elvers returning in the spring. A barrage would block the path all of these fish take. The Wye River and Usk River are Special Areas of Conservation because of their importance to migratory fish. The Severn Estuary is a candidate SAC.
  • The estuary’s 45-foot tidal range - the second largest in the world after the Bay of Fundy in Nova Scotia, Canada - creates numerous areas of saltmarsh, mudflat and rocky islands at low tide regularly providing food for wildlife. A barrage would reduce the Severn's tidal range by half leaving many feeding areas permanently under water.

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Analysis of a Severn Barrage
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