A TIDAL lagoon is the latest project planned for the Severn Estuary.
Following a failed attempt to build a Severn barrage, which was dismissed by the government because of environmental concerns, four regional councils have joined forced to apply for funding for the new venture.
Bristol City, Sedgemoor, West Somerset and Cardiff councils will apply for a £3million grant from the European Union this summer.
They hope to create a tidal lagoon in the estuary which would produce electricity when tidal water flows through a series of turbines four times every 24 hours.
Bristol City Council, which is leading the project, said it could not give a final figure on how much the lagoon would cost to create but it would make use of local expertise and be paid for through private and public funding.
Commercial energy director for the council, Bill Edrich, said: "We've got this great geographic anomaly which is the second highest tidal range in the world and the highest tidal range with over a million people on both sides of the estuary.
"Let's use that to our best advantage."
The £3million grant would be used to carry out feasibility studies of the estuary.
In October 2010, Secretary of State for Energy Chris Huhne announced a £34.3billion barrage was being ruled out.
He said a feasibility study clearly showed that there was ‘no strategic case at this time’ for public funding of a scheme to generate energy from the Severn