* Scheme not competitive with other low-carbon technology
* Setback for showcase marine energy project
* Developers say barrage could provide 5 pct of UK electricity
LONDON, June 10 Plans to build one of the world's biggest tidal energy projects in the River Severn estuary between England and Wales do not look commercially viable, members of parliament said on Monday.
The Hafren Power consortium wants to construct a barrage across the estuary that could supply 5 percent of Britain's electricity and would mark an international breakthrough for marine energy.
But parliament's energy and climate change select committee said the economic case was not strong enough, and recommended in a report that the government should give no more consideration to the project until it received more persuasive evidence.
The scheme is likely to need high-level support for 30 years through the government's 'contracts-for-difference' (CfD) mechanism, which effectively sets a minimum price for renewable energy, the committee said.
"We do not believe at this stage that the barrage would be competitive with other low-carbon technologies," said Tim Yeo, its chairman.
The report was distributed to journalists before allegations surfaced against Yeo that he used his position as chair of the committee to help a private company influence parliament.
Yeo denies wrongdoing and said he will contest the allegations, which were reported by the Sunday Times newspaper.
Hafren, which includes engineering firm Arup and construction consultants Mott MacDonald, is proposing that the barrage would be fully operational by 2025, generating 16.5 terawatt-hours of electricity a year.
It would stretch across the estuary like a dam and use sluice gates to channel water, turning turbines as the tide flows in and out.
Marine energy is still in its infancy worldwide compared to other sources of renewable energy like wind or solar power, with no large-scale commercial wave or tidal facility in operation.
Britain is betting on its potential, aiming for 100 to 200 megawatts of wave and tidal energy installed by 2020, but has yet to make the leap from prototype to full-scale arrays.
MORE WORK NEEDED
Although a tidal barrage across the Severn could help Britain meet its target to cut greenhouse gas emissions by at least 80 percent from 1990 levels by 2050, more work is needed to demonstrate the economic, environmental and technological viability of the project, the committee said.
"The Hafren Power proposal, having failed to achieve this, is no knight in shining armour for UK renewables," said Yeo.
The government should consider whether a smaller tidal facility could develop expertise before a decision about bigger projects across the Severn is taken, the committee added.
The developers are hoping for government backing for the project to attract investment and so it can qualify for renewables support mechanisms such as CfD.
"The government has already told us it is not against the barrage and we are determined to press ministers and officials to engage fully," Tony Pryor, chief executive of Hafren Power, told Reuters.
The government's Department of Energy and Climate Change (DECC) rejected a series of Severn project proposals in October 2010, saying a dam of up to 13,500 megawatts in capacity could cost as much as 34 billion pounds ($52.78 billion).
The following year, DECC said that even though it had rejected the Severn proposals for public funding, developers were assessing a number of privately funded projects in the area.
Environmental groups have long said more studies are necessary on the impact of the barrage on fish populations. ($1 = 0.6442 British pounds) (Editing by Mark Trevelyan)