A £1.3 billion tidal power lagoon in Swansea Bay is expected to be rejected by ministers in the coming days due to the vast subsidies it would require from UK taxpayers.
Provisional backing of £200 million was provided by financial institutions led by Prudential for the proposal by Tidal Lagoon Power, who had hoped that it would be the first in a series of lagoon around the country.
However, ministers have backed away from supporting the project due to the level of subsidies it requires from the British taxpayers.
Although the Welsh government has offered over £200 million, the scheme requires the British government’s support.
According to a senior Whitehall figure, the decision not to back the project was taken two weeks ago but will not be officially announced until the government announces its support for the new Wylfa power station.
The Department for Business, Energy and Industrial Strategy (BEIS) said: “We have a responsibility to minimise the impact on consumer bills and the Swansea proposal is more than twice as expensive as the Hinkley power station… Any decision on the Swansea Bay tidal lagoon project will have to represent value for money for the UK taxpayer as well as the consumer.”