The company will commence construction of the 320MW project next year, upon completion of contract for difference (CfD) negotiations with the government to establish a guaranteed price for power generated from the project.
Claimed to be the largest tidal power plant in the world, the Swansea Bay Tidal Lagoon will generate low-carbon electricity by capturing high tides and releasing it through turbines.
The project will help the country reduce over 236,000 tons CO2 emissions annually.
RenewableUK deputy chief executive Maf Smith said: "As a maritime nation, we are perfectly placed to take advantage of the powerful tides surging around our coasts every day, which have great potential to generate increasingly significant quantities of renewable electricity.
"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."
Scheduled to be commissioned in 2019, the plant is expected to provide 500GWh clean and renewable electricity to serve over 155,000 homes.
The project will have an operational life of 120 years with government support for an initial 35 years.
The company has so far identified six lagoon locations across the UK with potential to meet up to 8% of the electricity requirements in the country. These sites could add approximately £27bn gross domestic product (GDP) by 2027.
Ocean Energy Europe CEO Rémi Gruet said: "Tidal power is an essential second generation renewable technology, necessary to decarbonize our energy mix, create a new industrial sector and balance the grid.
"Once the concept has been proven at Swansea, a pipeline of projects will provide significant amounts of jobs and growth in the UK and in other areas of Europe."
Ocean Energy Europe is an industry body set up with a goal to deliver 100GW renewable energy in Europe by 2050. It comprises leading utilities, industrialists and research institutes.
Image: The Swansea Bay power plant will generate 500GWh clean and renewable electricity. Photo: courtesy of Good Energy.
