Y Gwir Anrh/Rt Hon Carwyn Jones AC/AM

Prif Weinidog Cymru/First Minister of Wales

Rt Hon Theresa May MP

Prime Minister
10 Downing Street
London
SW1A 2AA
pmpost.ext@no10.x.gsi.gov.uk

6th December 2017

Dear Prime Minister

At our meeting in October, we discussed the Swansea Bay Tidal Lagoon project. I stressed
the importance of the project – both to Wales and to the UK as a whole – and the urgent
need for a decision.

The UK Government’s own Hendry Review reported on 12 January this year, concluding
that “the evidence is clear that tidal lagoons can play a cost effective role in the UK’s energy
mix and there is considerable value in a small (less than 500 MW) pathfinder project”. The
Swansea Bay project has the potential to open the way for a new generation of tidal energy
schemes in the UK which could supply a significant proportion of the UK’s energy needs in
a sustainable and cost effective way. It is, therefore, highly regrettable that – almost eleven
months on from the Hendry Review’s conclusions – a decision has still not been made.

I know you are well aware of the strength of the support for the Swansea Bay project in
Wales. This support is genuinely cross-party and is felt as strongly amongst MPs as it is
amongst Assembly Members. The letter you received last month from a diverse group of
Welsh businesses clearly illustrates the strength of feeling in the business community and
there was a real sense of disappointment that a decision to proceed was not announced at
the Budget. There is a growing risk now that the continuing lack of a decision will turn, by
default, into a decision not to proceed.

As I indicated in our discussion, the Welsh Government strongly supports the development
of tidal energy in the UK in general and in Wales in particular. We have supported a variety
of tidal and marine energy projects in Wales in recent years, including providing funding to
help develop the Swansea Bay project. The key to enabling the Swansea Bay project to
proceed lies, of course, with the UK Government agreeing an appropriate contract for
difference arrangement. However, I want to make clear that I am prepared to consider a
substantial equity and/or loan investment by the Welsh Government if that would enable the
project to move forward. This investment could help to reduce the cost of capital for the

Bae Caerdydd • Cardiff Bay English Enquiry Line 0300 060 3300
Caerdydd • Cardiff Llinell Ymholiadau Cymraeg 0300 060 4400
CF99 1NA YP.PrifWeinidog@llyw.cymru PS.FirstMinister@gov.wales

Rydym yn croesawu derbyn gohebiaeth yn Gymraeg. Byddwn yn ateb gohebiaeth a dderbynnir yn Gymraeg yn Gymraeg ac ni fydd
gohebu yn Gymraeg yn arwain at oedi.
We welcome receiving correspondence in Welsh. Any correspondence received in Welsh will be answered in Welsh and corresponding
in Welsh will not lead to a delay in responding.
project and hence reduce the subsidy requirement over the lifetime of any contract for
difference. Any investment by the Welsh Government would, of course, be conditional on
the UK Government agreeing to an appropriate contract for difference arrangement and the
project securing any necessary licenses and consents.

I stand ready to discuss this proposal with you at the earliest opportunity and my officials
are, of course, available to discuss details with your officials.

Yours sincerely

CARWYN JONES