British company Tidal Lagoon Power will begin construction on the world’s first tidal lagoon, following the completion of Contract for Difference (CfD) negotiations with the government.
The 320MW tidal lagoon will generate clean energy which will be enough to power 155,000 homes.
The project is aniticipated to curb carbon emissions by over 236,000 tons annually.
DECC Wales Office Minister Lord Bourne said: "We need more clean and home-grown sources of energy, which will help to reduce our reliance on foreign fossil fuels.
"Low carbon energy projects like the tidal lagoon in Swansea Bay could bring investment, support local jobs and help contribute to the Welsh economy and Swansea area."
Tidal Lagoon Power has selected Laing O’Rourke as preferred bidder for £200M contract to deliver the lagoon’s 410 metre turbine house and sluice structure block.
RenewableUK deputy chief executive Maf Smith, said: "Today’s announcement is a major step towards harnessing this untapped energy source on an unprecedented scale, providing clean electricity to the nation for generations to come.
"It will also provide a massive economic boost with new jobs, economic development and tourism opportunities for the region at the heart of the project."
The six potential lagoon locations identified in the UK are expected to provide around 8% of the country’s electricity, while contributing up to £27bn to the nation’s GDP by 2027.
