© 2020 TEDD Group
TEDD Group
New Energy Wyre (NEW) Project
NATURAL ENERGY WYRE
Introduction
Natural Energy Wyre (NEW) has developed, to its current proof-of-concept, a project to construct a tidal energy power plant (hereafter referred to as ‘the Wyre Barrage’ or “the Project”) across the River Wyre, connecting Fleetwood and Knott End. The Wyre Barrage will harness the power of the tides to generate a long-term, secure and predictable source of renewable energy. The Wyre Barrage is the corner-stone of the Wyre Tidal Gateway project, to leverage this major infrastructure project with other opportunities and enhancements to rejuvenate the Wyre area and benefit the wider North West.
NATURAL ENERGY WYRE
History of the Project
The Wyre Tidal Gateway, in its current configuration, has been developed from initial concept to this proof-of-concept study by NEW over several years. Much of this time has been taken with identifying conceptual plans and building strong links with relevant interest groups – environmental, local authorities, national government and the local community. The approach adopted has been to ensure that economic regeneration of the local area is paramount, and to work with relevant authorities to understand their concerns about the Project, and find ways to alleviate these concerns in a positive manner. Whilst much of this work is informal, it provides a very powerful supporter base to ensure the formal consultation processes progress as smoothly as possible.
NATURAL ENERGY WYRE
Site Location And Selection
The River Wyre flows through the North-West, originating in the Trough of Bowland, before discharging into Morecambe Bay at Fleetwood.
The Wyre’s tidal range, like much of the West coast of UK, is substantial, averaging 8.2m and 4.5m during spring and neap cycles
respectively. In addition, the river geography benefits from a narrow estuary mouth but a bulbous body that remains tidal for a long distance up-river. These factors combine to ensure an economically attractive ratio of build cost (low due to the narrow mouth) to generation (high due to large tidal range and significant impounded volume). The relatively modest size of the Wyre estuary makes it an ideal site to demonstrate the power and advantages of tidal energy to the UK energy demand.
Benefits from know-how and economies of scale will be progressively delivered on subsequent projects; combined with the potential for tidal lagoons, tidal energy has the potential to supply 20% of the UK’s electricity requirements. The 2017 published Hendry Report recommended strategic investment into tidal energy, and recognised the Wyre’s progress and opportunities.
The strong attractiveness of the River Wyre as the first-of-a-kind is supplemented by benefits of economic regeneration and flood defence that provide strong motivations to the Project. In addition, related infrastructure projects, such as the return of ferry services to Fleetwood, and development of compressed air energy storage, make the Wyre Barrage a catalyst for further opportunities. As such, involvement in the Wyre Tidal Gateway will provide early participation in an emerging UK industry.
NATURAL ENERGY WYRE
Key Milestones
Key timing milestones are as follows:
Informal planning support – Summer 2023
Environmental studies, site investigations, and engineering design – 12 months to summer 2024 (assuming a single year of environmental studies will be required, but may need to be extended to two years).
Formal planning submission – November 2024.
Planning approval – Spring 2025.
Final Investment Decision – Summer 2025.
Construction – Spring 2026 to Autumn 2028.
Site operational – from Spring 2027 (phase 1 turbine commissioning is complete before final construction sign-off).
NATURAL ENERGY WYRE
Financial Overview And Investment Opportunity
Funding requirements for the design and development phase (including studies and modelling), leading up to the DCO application and consenting process, total £15m. Of this, ~£7.5m will be spent conducting surveys, site investigations and planning design, up to the point that a planning application is made. The represents a key milestone, as at this point all remaining risks will have been identified and managed, with the project value thus
increasing incrementally. It is assumed that, once fully consented and at the point of Financial Investment Decision, the project will have a development value of £45m. More importantly, the experience, know-how and intellectual property accumulated during the Wyre Project can be applied to future Projects, effectively recycling and reusing investor funding for medium and long-term gains.
A 100-year financial model for construction and operation has been developed, which ultimately derives a development value available to current investors. Key inputs into this model:
• 200GWh pa generation
• £300m core construction cost, increased to include a 17.5% contingency, and with some additional costs for land acquisitions etc
• 70% debt leverage, on 50-year amortisation, at an initial 4% interest, with infrastructure guarantees (rolled-up during the construction phase).
• Drawdown of mezz/bond finance, in tranches and 8% interest, to provide construction equity returns of 13% IRR.
To find out more details, please contact us:
147-149 Victoria Road East,
Thornton-Cleveleys, England
FY5 5HH
Email: investment@tedd.group