Tidal Lagoon Schemes and Regional Development: Draft report work package 5: Delivery pathways, barriers & policy implications

Kidd, Joseph, Munday, Maxim ORCID: https://orcid.org/0000-0001-9067-2481, Ahmadian, Reza ORCID: https://orcid.org/0000-0003-2665-4734 and Jones, Calvin ORCID: https://orcid.org/0000-0003-4980-2330 2026. Tidal Lagoon Schemes and Regional Development: Draft report work package 5: Delivery pathways, barriers & policy implications. [Project Report]. Cardiff Business School, Welsh Economy Research Unit.

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Abstract

This report assesses the feasibility of alternative financing, development, and ownership models for tidal range infrastructure in Wales, examining how institutional design shapes long-term economic, environmental, and social value. A central finding is that tidal lagoons should be viewed not simply as energy assets, but as long-lived infrastructure embedded within regional economies. Outcomes therefore depend fundamentally on how projects are financed, governed, and owned. Regulated or hybrid financing models, including Regulated Asset Base (RAB) approaches, are essential to enabling large-scale deployment. Purely market-led models are unlikely to provide sufficient revenue certainty or manage construction risk. Importantly, financing structures also determine how value is distributed: models involving public or institutional participation offer greater potential to retain financial returns within Wales and align investment with regional development priorities. Three delivery scenarios were assessed. A programme-led model with public–institutional ownership (Scenario C) performs most strongly, particularly in terms of regional economic impact, supply chain development, and value retention. A public-sponsored pathfinder (Scenario A) provides a credible entry point, balancing risk reduction with the ability to embed social value early. In contrast, a government-enabled private model (Scenario B) performs less strongly, reflecting limited public influence over ownership and procurement. A key conclusion is that social value is not automatic. Outcomes such as local employment, skills, and community benefit must be actively embedded through procurement, ownership, leasing, and regulatory frameworks. Mechanisms including community benefit schemes, local ownership, and enforceable social value requirements are critical to ensuring that benefits are realised and retained within Wales. The report identifies institutional barriers—including governance complexity, planning and consenting challenges, early-stage financing gaps, and misaligned incentives—as the primary constraints on delivery. These are reinforced by construction, environmental, and political risks, which can undermine social value outcomes if not effectively managed. Early public intervention and clear risk allocation are therefore essential. Programme-level delivery is critical. Many benefits—particularly supply chain development and workforce capability—are cumulative and depend on a sustained pipeline of projects. A coordinated approach enables learning, reduces costs, and supports wider distribution of benefits. The analysis also highlights the role of institutional capital, including the Welsh Pension Partnership, which is well aligned with regulated infrastructure models but requires projects to be de-risked before investing. This reinforces the need for early public involvement to unlock investment while retaining value locally. Overall, the findings support a sequenced delivery approach: early projects should use hybrid, publicly supported models to reduce risk and build capability, followed by a transition to programme-led delivery to maximise long-term value. In conclusion, tidal lagoon infrastructure offers a significant opportunity for regional economic transformation and decarbonisation in Wales. Realising this potential requires a shift from project-based or market-led approaches to a coordinated, programme-level model in which social value is embedded throughout planning, financing, and delivery. The report sets out a series of recommendations in relation to: •Reviewing and updating the assessment frameworks for tidal range projects such that they consider wider socio-economic effects. •The need to develop a strategic roadmap for tidal range schemes that aligns with regional and UK Government policy. •The need to secure key enablers, not least with UK Government to secure RAB frameworks for tidal range, and the requirement for a dedicated tidal range programme authority, and to engage with stakeholders to enable defined Welsh equity in future schemes. •Establishing mechanisms to support the delivery of projects to maximise social and economic value to Wales.

Item Type:	Report (Project Report)
Status:	Unpublished
Schools:	Schools > Engineering Schools > Business (Including Economics) Research Institutes & Centres > Welsh Economy Research Unit (WERU)
Subjects:	H Social Sciences > H Social Sciences (General)
Publisher:	Cardiff Business School, Welsh Economy Research Unit
Funders:	Welsh Government Tidal lagoon Challenge
Date of First Compliant Deposit:	9 September 2026
Last Modified:	09 Sep 2026 09:00
URI:	https://orca.cardiff.ac.uk/id/eprint/189467

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