The UK has given a boost to the £1bn plan for the development of world’s first power-generating tidal project in Swansea Bay, as the government revealed negotiations about arranging taxpayer support for it.

Plans for the project have been included in the National Infrastructure Plan 2014, which was published by the HM Treasury ahead of the Chancellor’s Autumn Statement.

The 2014 Project Pipeline Update to the Wales Infrastructure Investment Plan also notes how tidal lagoons can bring in up to £5bn of private sector investment in Wales.

The project will be developed by Tidal Lagoon Power. It will house 16 underwater turbines, which will generate enough power for 155,000 homes for 120 years.

Tidal Lagoon Power chief executive Mark Shorrock said: “It’s another positive step towards tidal lagoon infrastructure becoming a mainstream energy solution.

“The Swansea Bay Tidal Lagoon provides the key to unlock large quantities of reliable, low-cost, low-carbon electricity for the next 120 years.

“Backing the Swansea Bay Tidal Lagoon also means backing a catalyst for British industry and exports, a new option for strategic flood defences, an opportunity to regenerate coastal communities and a vision for national energy infrastructure that can work hand-in-hand with nature.”

UK Energy Secretary Ed Davey was quoted by BBC News as saying: “Tidal lagoons alone could provide up to 8% of our power needs, replacing foreign fossil fuels with clean, reliable home-grown electricity.

“That’s why we’re showing investors and developers that we’re serious about tidal lagoon potential and have started in-depth discussions for what could become the world’s first tidal lagoon.”