It's the economics, stupid
12 June 2008
Study shows Severn barrage is just too expensive
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 (June 12).
In a report commissioned by eight UK environment groups, Frontier Economics, Europe's leading economic consultancy, also show that the proposal 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 follows a report last October by the Sustainable Development Commission, which said a barrage between Cardiff and Weston-super-Mare 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 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 green technologies.
Variable carbon 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, the study found.
The report shows the barrage to be expensive compared to other renewables and that the government's renewables target can 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 and the Salmon and Trout Association were amongst the groups commissioning the analysis.
David Nussbaum, Chief Executive of WWF-UK, commented "This report concludes quite clearly that Government support for a hugely costly Severn barrage is not justified. There are far better opportunities for renewable energy, and government support could be targeted to improve the infrastructure for such renewable energy supply. Financial support for an expensive, inflexible and highly damaging technology like the proposed Severn barrage would not be a good use of taxpayers' money."
