The initial proposal for the Swansea Bay Tidal Lagoon would have led to energy costing “more than twice” as much as the Hinkley C nuclear power station, according to the Secretary of State for Business, Energy and Industrial Strategy.
However, Greg Clark told MPs he did not want to “close the door” on the landmark project and said discussions were still underway with the Welsh Government.
Mr Clark made his comments in the Commons after being urged by Labour Anglesey MP Albert Owen to “make a decision” about the project that supporters argue could lead to a network of lagoons around Wales.
The independent Hendry Review gave the thumbs up to the Swansea lagoon in a landmark report in January 2017 but the UK Government has yet to respond.
Mr Clark said: “We’ve quadrupled the proportion of our electricity that comes from renewable sources since 2010 but we also [have] a responsibility to minimise the impact on consumers’ bills. And the particular Swansea proposal was very much more expensive, more than twice as expensive as the Hinkley nuclear power station, for example.
“But we are in discussions [with] our colleagues in the Welsh Government. I don’t want to close the door on something if it is possible to find a way to justify it as being affordable to consumers.”
Newport East Labour MP Jessica Morden made a further push for the Swansea project to get the green light, saying: “Making a decision on the Swansea Bay Tidal Lagoon is important for Wales as a whole. There’s huge potential for future lagoons around Newport following the Swansea pathfinder and it’s really important we don’t pass these opportunities up.”
Mr Clark said First Minister Carwyn Jones had said there were “genuine challenges” facing the project.
He said: “The First Minister wrote to me yesterday and acknowledged the – as he put it – genuine challenges considering a proposal with untried technology with high capital costs and significant uncertainties. That’s why I think the best way is to explore all of the possibilities, to recognise the constraints.
“That’s what I’ve committed to do with colleagues in the Welsh Government.”
A spokeswoman for Tidal Lagoon Power, the company behind the Swansea proposals, said: “At a time when Welsh Government has offered to share the start up costs and get the sector up and running, you’d hope UK Government can look forwards to the deal structure now possible.”