Appeal court ruling sinks £1.3bn Swansea Bay Tidal Lagoon project

The company which wanted to build the UK’s first ever tidal energy lagoon in Swansea Bay has lost its appeal against a legal ruling that it failed to commence work on the project within five years of winning planning approval.

The decision means the development consent order (DCO) for the project is no longer valid.

Tidal Lagoon (Swansea Bay) Plc launched its appeal earlier this year after losing a case last November when it had sought a High Court declaration to say that it had fulfilled a DCO for the £1.3 billion project by starting work within five years, as it was required to do.

This was disputed by the UK and Welsh Governments and also Swansea Council, which said it hadn’t.

The High Court judge hearing the original case had concluded that Tidal Lagoon Plc had not begun the development, and that this in turn removed the rationale for another declaration it was seeking.

Part of the hearing was about the difference, or otherwise, between the words “begin” and “commence”.

Not sufficient

The appeal court judge dismissed the developer’s appeal, deciding that there was no difference between the words “commence” and “begin”, and that the works carried out had not been sufficient to consider the project as having started within the five-year timeframe, seemingly ending hopes that the project could be resurrected.

Tidal Lagoon submitted its plans for the project, which would form a lagoon between the River Tawe and the River Neath in February 2014 and the project received its DCO in June 2015.

Ground investigation and survey works were undertaken by the developer in November 2016, but these were not considered as “material operations” so did not count as the project having commenced.

The project ran into financial problems the following year and despite the Welsh government’s willingness to pay £200M towards the scheme, the UK Government said the project was poor value for money and there would be no funds forthcoming.

Net zero

The UK Government’s subsequent commitment to a “net zero” economy renewed Tidal Lagoon Plc’s hopes and it carried out a number of pre-commencement requirements.

But with the clock ticking, one of its directors wrote to the UK Government in May 2020 to request that the development consent order should be extended because it was shortly to expire. This request was refused.

Tidal Lagoon Plc pressed on with some demolition and site-clearing works at Swansea docks which, it claimed in a second letter, meant the development had begun within the five-year deadline, however the council and two Governments said it hadn’t.

The ruling by Judge Harman QC last year said Tidal Lagoon Plc’s interpretation was “unsatisfactory” and not one which the 2015 consent order had intended.