The massive Severn Barrage tidal power project off Wales will be financed with private money but rate subsidy will help it for thirty years, if all goes as planned. When completed, there will be 1026 tidal tubines generating upwards of 5% of the UK’s power.
The project would need 30 years of support through subsidies. Thereafter, it would run for at least 90 years without support, generating electricity that’s 75 percent cheaper than all other forms of generation.
The subsidies would guarantee a price for power and are at a level equal to or less than subsidies for nuclear power and less than wind power.
If wholesale power prices drop below a government- established level known as the “strike price,” investors in nuclear power and renewable projects will be compensated by suppliers up to that level. If prices are higher, suppliers and consumers will be reimbursed by investors. Strike prices will be set at the end of the year.