4 Dec 2014 | News

Tidal Lagoon Swansea Bay to Generate £300 Million Spend In Wales, 1850 Jobs And £173 Million Gva Within The Three Year Development Phase

The Welsh Economy Research Unit at Cardiff University has published a report on the economic potential of Swansea Bay Tidal Lagoon.

Examining economic effects associated with the construction and development phases as well as the operational stages of the project, key findings include:

  • A capital investment of £756 million of which £300 million will be spent in Wales (40%)
  • Potential additional output in Wales of £454 million and £173 million GVA in the three year development phase
  • Over £5 million annual local spend during the operational phase
  • A further potential £1.5m-2.1m per annum GVA to be achieved through associated leisure opportunities
  • Approximately 5540 person years (1850 FTE) of diversely-skilled employment in Wales during the three year construction period
  • Creation of 60 long term operational jobs and up to 90 additional jobs linked to visitor spending

The economic effects assessment is based on an economic model of Wales that has been developed by Cardiff University to track the existing and potential economic impacts for Wales of different electricity generation technologies.

Swansea Bay Tidal Lagoon will represent an estimated £756m of capital investment. The report estimates that the project will lever close to £300m of regional spending spread over a three year development period. This could result in a total additional £454m of additional output in Wales. The development phase of the project could lead to the creation of £173m of gross value added for Wales.

The construction phase of Lagoon development is estimated to support 5,540 person years of employment across Wales. If the Lagoon is completed to time across a three year build period, this equates to around 1,850 full time equivalent jobs supported across the region from 2015.

The operational phase of the project after 2018 could support an estimated £5m in extra output for Wales, and £2.2m in GVA annually for the region. It is estimated that this level of additional output in terms of operating the Lagoon would support around 60 full time equivalent jobs per annum for the longer term.

This report estimates the economic effects of two visitor scenarios (70,000 and 100,000 leisure trips per annum) to the redeveloped area enclosed by the Lagoon, and estimates that some £1.5-£2.1m of gross value added and 65-90 full time job equivalents would be supported per annum through tourism levered when the Lagoon is operational.

Tidal Lagoon Power has consistently stated that it will be seeking UK and Welsh suppliers of critical components to create a sustainable long term tidal lagoon industrial base that will support this and further developments as well as providing long term operation and maintenance support.

Mark Shorrock, Chief Executive Officer explains: “Swansea Bay will be the first in a series of developments in Wales and the wider UK such that supply infrastructure developed as part of this project could gain additional opportunities in the long term in serving a wider network of lagoon projects. We want to see a minimum 50% of Welsh content for our first tidal lagoon and will work with Welsh industry to ensure that the region capitalises on its first-mover advantage to serve subsequent tidal lagoon developments.“

“We want to see the Swansea City region become the Supply Chain Hub for all tidal lagoons and are working up plans for a large scale assembly facility in the Swansea City Region. We want to build excellence in marine construction of turbine housings and secure all critical components for hydro turbines in the UK with the majority from Wales. We also want to build part of the generators in Wales. We have assembled a best-in-class consortium of UK and international industrial businesses to establish local production facilities and supply chains to serve Tidal Lagoon Swansea Bay and future developments. We are confident from our work so far with representatives of Welsh industry that Wales has the skills base, experience and scalability to serve a larger UK tidal lagoon industry.”

Calvin Jones of the Welsh Economy Research Unit adds:

“We estimate that the £300m of regional spending evenly spread over a three year development period starting in March 2015 will result in a total of an additional £454m of additional output in Wales. This means for every £1m spent in the region, an estimated further £0.52m of economic activity is supported. Around half of this, almost £223m, is in the construction sector, with manufacturing and production the next largest portion at £170m. We estimate around £34m of output in financial and professional services would be supported, largely comprising project management, planning and engineering activities.”

The report by the Welsh Economy Research Unit says that the build phase of Tidal Lagoon Swansea Bay leads to the creation of an estimated £173m of gross value added, again with the largest portion (some 48%) in construction, and a further 32% in manufacturing and production industries.

The construction phase of the Lagoon development is estimated to support around 5,540 person years of diversely-skilled employment across Wales. If the Lagoon is completed to time, this will equate to around 1,850 full time equivalent jobs supported across the region for the three year construction period starting in 2015.

Due to the relatively higher labour intensity of construction, it is this sector that dominates in terms of employment impacts. The report estimates over 3,450 person-years of employment across Wales will be supported by the Lagoon in this sector – almost 62% of employment. Selected construction sector jobs, particularly those linked more to construction engineering, would be relatively high pay and of high quality.”

Max Munday of the Welsh Economy Research Unit adds:

“The focus of job creation and support in manufacturing and construction sectors is important in the context of current challenges facing the Swansea Bay and Welsh economies. In the Swansea case economic inactivity rates are relatively high at 29%, and with nearly 5,000 Job Seekers Allowance claimants in September 2013. In Wales as a whole, following the recession, manufacturing employment has fallen by over 40,000 people and with around 30,000 jobs lost in the construction sector. There are connections between jobs losses in the two sectors with poor performance in terms of construction output linking through to lower demands placed on elements of the manufacturing sector. Larger strategic projects such as Tidal Lagoon Swansea Bay integrating construction demand with local manufacturing inputs and new industry will be an important means of strengthening prospects in these important parts of the regional economy. “

“Furthermore, it is important to note that Tidal Lagoon Swansea Bay is first of an expected network of projects and construction and manufacturing employment connected with this first build could possibly be used in future lagoon builds in Wales and elsewhere. In addition to this, Tidal Lagoon Swansea Bay will continue to have economic and employment benefits over the many decades of its operational lifespan.”

Robert Lloyd Griffiths, Director of IOD Wales says:

“The Welsh Economy Research Unit report demonstrates that Tidal Lagoon Swansea Bay could offer the opportunity for a more sustained economic impact with the innovative project placed in a more industrial part of Wales and with a supply side background in metal goods and structures, and construction engineering which could feed into the project.”

“Adding to the opportunity is the possibility that the planned lagoon would be the first in a series of projects therefore generating further opportunities for Wales based companies to develop and export their services and products as part of a whole new industry here in Wales. The project has huge potential and an investment of the size envisaged continues a trend in the modernisation of the Swansea Bay economy that has embraced commercial, retail, cultural and sporting development. SA1, the National Waterfront Museum, Wind Street developments, and the elevation of Swansea City FC are obvious examples of factors that have grown the visibility of the city. An innovative lagoon investment which would be the first on this scale in the UK will add to this visibility and could improve prospects for the Bay area as a location for inward investment. Linked to this could be a series of positive property and retail market effects.”

Roger Evans Chairman of the Welsh Manufacturing Forum adds:

“This development is absolutely in line with regional aspirations for Wales to become a hub for marine renewables given the electricity generation potential of the tidal resource around the Welsh coastline. The lagoon development is an exciting opportunity for Wales and the UK with the potential for over 10,000 MW of power from what Tidal Lagoon Power hopes will be a series of coastal tidal lagoons developed over the next decade. This project really could help the transition to a low carbon future and lower costs of electricity while providing regenerative, economic and recreational benefits to local communities here in Wales. This project sits very well with the drive to grow the manufacturing capability in Wales and will create new supply chain opportunities.”

Tidal Lagoon Plc

E: Info@tidallagoonpower.com

T: +44 (0)1452 303892

A: Pillar & Lucy House
Merchants Road
The Docks

Tidal Lagoon (Swansea Bay) Plc

E: Swansea@tidallagoonpower.com

T: +44 (0)1792 274006

A: 8th Floor
One Central Square
CF10 1FS

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