The Welsh Government if offering £200 million for the Swansea Bay tidal lagoon project to encourage Westminster to give the go-ahead.
First Minister Carwyn Jones has written to UK Energy Secretary Greg Clark, stating the project can only proceed if there is a commitment from the UK Government to an “appropriate” contract for difference (CfD) arrangement.
It was backed by a UK Government-commissioned report published by former Energy Minister Charles Hendry in January last year.
However, ministers have not yet committed to developer Tidal Lagoon Power’s project as they believe it must be “affordable”.
Mr Jones said: “In broad terms, my proposal would be for the offer to comprise a Welsh Government commitment to an equity and/or loan investment of £200m, with the UK Government committing to a contract for difference on the same terms as that offered to Hinkley Point C (£92.50/MWh in 2012 prices over a 35-year term from the date of commissioning).
“Such an offer would, I believe, strike an appropriate balance between supporting a pathfinder, low carbon energy generation project, in line with the findings of your own Hendry Review, while providing value for money. It would need a maximum, full and final offer from both governments.”
Keith Clarke, Chairman, Tidal Lagoon (Swansea Bay) Plc added: “The proposal for a joint deal with this structure is extremely constructive, we are eager to engage on it with all parties and it is a proposal we’d be delighted to take to our board.”
A spokesperson from BEIS said the government is considering the findings of Hendry review and an announcement will be made “in due course”.