The UK Government said it is opening negotiations on plans to build the world’s first tidal lagoon power project in Wales.
Chancellor George Osborne made the announcement yesterday as part of its 2015 Budget.
The proposed £1 billion Swansea Bay project would capture incoming and outgoing tides behind giant sea walls and use the weight of the water to power turbines.
It would generate around 500GWh of electricity every year – enough to power almost 120,000 homes.
Developer Tidal Lagoon Power previously estimated the project would require subsidies of around £168 per megawatt hour (MWh).
The negotiations would establish whether a Contract for Difference (CfD) for the project is affordable and good value for money for consumers.
Energy Secretary Ed Davey said: “Britain has some of the best tidal resources in the world – tidal lagoons could provide 8% of our electricity needs, replacing foreign fossil fuels with clean, reliable home-grown electricity and creating fantastic economic opportunities.”
Earlier this month, developer Tidal Lagoon Power said it plans on building a fleet of six lagoons.