The UK government’s refusal to support the Swansea Bay Tidal Lagoon pathfinder project says much about how Britain proposes to face the challenges of the 21st century. Although the decision was widely expected, it still came as a severe blow to the communities in and around Swansea Bay.

But over and above the local reaction, the decision speaks volumes about the UK government’s commitment to three larger questions: mission-led innovation, rebalancing the UK economy and sustainable development.

Thanks to the popularity of Mariana Mazzucato’s work on mission-led innovation policy, the UK government has adopted this rhetoric when presenting its industrial strategy to support the technologies and industries of the future. At the heart of the new industrial policy paradigm is a joint effort between governments and business to engage in a constant dialogue to generate information about the scope for, and the barriers to, innovation. Governments play an enormously important role in catalysing new technologies and helping launch new industries by mitigating risk, an important consideration when dealing with sectors like renewable energy.

A map of the proposed project. Image: Atkins Global.

Given the need for close collaboration between government and industry, the most extraordinary aspect of the SBTL saga is that, according to Keith Clarke, the chairman of Tidal Lagoon Power, the company behind the project had heard “next to nothing” from the UK government for the past two years. So where was the partnership approach that ought to lie at the heart of mission-led innovation policy? 

The Swansea Bay Tidal Lagoon was described as a “no regrets” project by the Hendry Review that was commissioned by the same department that rejected the project last week. The Review concluded that tidal lagoons would help to deliver security of energy supply; help meet our decarbonisation commitments; and stimulate a new UK industry. The cost of a small scale pathfinder project would be about 30p per UK household per year over the first 30 years.

But the costs and the risks need to be framed over a 120 year lifespan, which makes it a totally different proposition to wind and solar (which have shorter operational lives) and nuclear (which has large waste disposal costs) – all problems that are absent from the tidal option.

The compelling vision of tidal lagoons is that the Swansea pathfinder was designed to be the first in a series of larger lagoons in which costs would certainly have decreased – as Charles Hendry suggested – through scale effects and through learning-by-doing. The UK government thus seems to have lost its ambition for mission-led innovation in the renewable energy sector.

Another policy to which the UK government is ostensibly committed is the rebalancing of the economy. This commitment was widely interpreted to mean sectoral and spatial rebalancing to render the UK less dependent on sectors like financial services and less tilted to South East England. The SBTL project was an ideal candidate to meet these twin goals because it both created a new global industry (with manufacturing located across the UK), and is located in West Wales, a “less developed region” in the EU regional classification. Creating a new industry in an old industrial region would have signalled that the UK government was genuinely committed to rebalancing the economy ahead of Brexit – but there is little evidence to suggest that such benefits were taken seriously.

Finally, the decision raises major doubts about the UK government’s commitment to sustainable development.  The Welsh Government is duty bound to take sustainability seriously because it is a requirement of the Well-being of Future Generations Act, the most innovative piece of legislation ever passed by the National Assembly for Wales. The Future Generations Commissioner, Sophie Howe, has said that the SBTL pathfinder was a perfect example of the kind of project that should be supported on sustainability grounds because of its multiple dividends in terms of environmental, social and economic benefits. What does it say about the UK’s commitment to sustainability if it is unable or unwilling to harness the power of the second biggest tidal range in the world, a power that is as predictable as it is sustainable?

The rejection of the SBTL pathfinder is also a challenge to devolved government. The Welsh Government offered to part-fund the pathfinder project to the tune of £200m to demonstrate its political commitment to the project. That commitment will now be tested like never before because it will need to ask itself how, if at all, is it possible to proceed without the support of central government.

As things stand, the rejection of the SBTL project will further embitter inter-governmental relations at a time when the level of trust between London and the devolved administrations in Scotland and Wales is already at an all-time low.      

The authors are Professors at Cardiff University.