When the government finally confirmed last year it would not back plans to build a giant tidal energy lagoon in Swansea Bay, supporters of tidal power feared their dreams of an array in the Welsh bay had been sunk forever.  

But their hopes have resurfaced this week, thanks to an independent report commissioned by Swansea Council which suggests a version of the scheme, reimagined as a major infrastructure project, could prove financially viable.

Dragon Energy Island, widely seen as a replacement for the doomed Swansea Bay Tidal Lagoon, would feature a floating island with thousands of modular commercial and residential buildings.

Adding homes and businesses to the scheme for a tidal lagoon would help bridge the funding requirement for the energy scheme, the report from Holistic Capital concluded. It also calculated that savings of up to 30 per cent could be made on the capital costs of the original £1.3bn lagoon plan, making the project as a whole financially viable.

The report was commissioned by a Swansea Bay City Region taskforce, which was established in August 2018 to explore the potential for a tidal lagoon in Swansea following the Westminster government's decision to scrap plans for a price support contract for the original project from Tidal Lagoon Power. Speaking at the time, Business Secretary Greg Clark said the scheme would impose an unreasonable cost burden on consumers.

"Despite the UK government not backing the previous proposals, we never gave up hope on the opportunity to deliver a major renewables project in Swansea Bay," said Councillor Rob Stewart. "An enormous amount of hard work has taken place behind the scenes to develop a new proposal that will generate clean, green power for many generations to come. The new proposal is a larger and more ambitious renewable energy development that's built upon the natural tidal benefits of Swansea Bay and complimentary technology to generate zero-carbon power."

The review concludes that a joint partnership between Swansea Bay City Region and a private partner could bring the Dragon Energy Island vision to life. It claims the project would be "fundamentally different" to the proposals for a Swansea Bay Tidal Lagoon, which is described as "a stand-alone power plant funded largely by public subsidy".

The new proposals instead result in an "integrated project" that alongside clean power generation technologies and new housing, could also include hydrogen production facilities, an underwater data centre, a solar farm, and battery storage facilities.

The paper will be considered by Swansea Bay City Region's Joint Committee later this month before the council decides whether to press ahead with the revamped scheme. But if all goes well, Dragon Energy Island could be operational by 2026, Councillor Stewart said.

"There's considerable interest from major companies in turning this opportunity into a commercial reality, so we're now keen to move forward," he said. "Given the encouraging findings of the Holistic Capital report and the continued strength of support throughout South Wales and beyond for a project of this kind, we're now more determined than ever to deliver."