Plans to build a barrage across the Severn estuary to reap benefits including enabling people to switch energy to cleaner sources are still being considered, reports the BBC.
The Times recently reported the government was likely to shelve any plans for the barrage due to costs spiralling to £23 billion, but the Department of Energy and Climate Change (DECC) told the BBC various plans are still being considered.
Plans for the estuary include designs that would span ten miles in length and could help reduce the UK's national carbon footprint by catering for five per cent of the electricity demand.
A spokesperson from the DECC told BBC Wales: "We are conducting a feasibility study which is looking at a range of different technologies and pulling together a robust evidence base."
The spokesperson added the DECC currently has no evidence to suggest a barrage is essential in reaching national environmental targets.
Wind farms remain one of the highest-profile forms of renewable energy and the government plans to increase the number of offshore projects in development.
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