A £30bn barrage across the Severn estuary could still be built, says the UK government, despite opposition from some MPs and environmental groups.
Supporters believe the barrage, from the Vale of Glamorgan to Somerset, would provide 5% of UK electricity.
Energy Secretary Ed Davey said if the right proposals were submitted the government would look at them.
But Bristol East Labour MP Kerry McCarthy said the scheme worried some people in her constituency.
In October the former Deputy Prime Minister Lord Heseltine said it potentially offered "extraordinary economic regeneration".
Lord Heseltine said it could be a possible long-term UK energy source.
Rising and falling tide
The plan is for an 18km (11 mile) barrage between Cardiff and Weston-super-Mare.
A special Act of Parliament will have to be passed if the plans are to go ahead.
The firm behind the scheme, Hafren Power, is in talks with UK government ministers and environmental groups.
The Neath MP and former Welsh Secretary Peter Hain stood down from the Labour frontbench earlier this year to support Hafren Power's plans.
The company has said it has improved on previous plans for a barrage that were rejected in 2010 by using smaller turbines that can generate power on both the rising and falling tide and at slower speeds.
The changes, the company has said, mean its plans are more fish-friendly and will also reduce the amount of inter-tidal mudflats that will be lost to feeding birds, while still generating 5% of the UK's energy needs, or enough to power 3.4 million homes.