The building of a £1bn tidal lagoon in Swansea Bay has been given the go-ahead by the UK government.
Tidal Lagoon Power (TLP) says it will now negotiate how much subsidy will be paid for the energy.
That is still a big hurdle for TLP, which wants five other lagoons on the west UK coast to harness power, and needs a guaranteed price for it.
There are also concerns about the impact on the environment and migratory fish.
The backing by the Department of Energy and Climate Change (DECC) is seen as a significant step forward for the developers.
Energy Minister Lord Bourne, who is also Wales Office Minister, 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.”
The tidal lagoon on the eastern side of Swansea Bay, between the docks and the new university campus, would use the flow and ebb of the tide to generate energy, which would then be converted into electricity.
The attraction for the UK Government is the potential for a new industry. Thousands of construction and manufacturing jobs could be created, especially if five much bigger lagoons are built in the Severn estuary and off the north Wales coast.
There would also be a boost to the UK’s standing as a generator of clean, green energy.