A tidal lagoon should be created in the Severn Estuary to generate electricity, according to a report.

The Severn Estuary Commission rejected proposals for a large barrage spanning the Severn.

Instead, it said the UK and Welsh governments should back plans for a smaller project to harness the power of the tide on the England-Wales border.

The proposals were criticised by former Labour Welsh secretary Lord Peter Hain, who said lagoons were a very expensive “cop out”.

The commission said a tidal lagoon demonstration project – the first in the world – would boost the economy and provide a better understanding of tidal power.

Demand for electricity in the UK is likely to more than double by 2050, the commission said.

The Severn Estuary has one of the highest tidal ranges in the world, offering “a rare opportunity” for the UK.

There have been several proposals to build a barrage across the Severn, but without formal government support they failed to attract funding.

Environmental groups oppose building a barrage in the estuary – a highly-protected wetland of international importance.

Lagoons are formed by building a wall around a bay or on the coast to capture water when the tide comes in.

At low tide the water is released, turning turbines to generate electricity.

There have been proposals to build a lagoon in Swansea Bay.

One plan, which had the backing of the Welsh government, was thrown out by the Conservative UK government in 2018 because it did not offer value for money.

The Severn Estuary Commission report said the UK and Welsh governments should set up an organisation with the private sector to create the lagoon as a “commercial demonstration project”.

It would show the potential for tidal power and measure the impact on the local environment.

They should also look at ways to compensate for any loss of habitat, it said.

The report added: “A lagoon project would provide both engineering experience and real-world monitoring of environmental effects.

“Development of a tidal lagoon therefore offers a positive alternative to a barrage.”

Lord Hain, who quit as shadow Welsh secretary in 2012 to back proposals for a barrage between south Wales and Weston-super-Mare, called these latest proposals “very underwhelming, disappointing and confused”.

“Lagoons do harness tidal power but as the Swansea project proved they are very expensive and are a cop out which won’t harness the ginormous but untapped natural power of the Severn Estuary,” he told BBC Wales.

“You’d need 50 lagoons cluttering up the estuary to rival a barrage which remains by far the best option: delivering cheap electricity with new bi-directional turbines which are fish friendly and generate baseload electricity because its lunar based and therefore predictable and almost constant.”

RSPB Cymru previously urged the Seven Estuary Commission to strike the right balance in a location “globally important for wildlife, providing vital habitats for tens of thousands of wading birds and water fowl, and for rare fish species that migrate from the sea to spawn in our rivers”.

Welsh Liberal Democrat leader Jane Dodds called on UK ministers to revive the plans, cancelled in 2018, for a Swansea Bay Tidal Lagoon.

“Tidal power offers huge advantages to Wales, not only in generating electricity but in its potential to create well-paid jobs,” she said.

“The UK government seems perfectly happy to spend large amounts on infrastructure in the south east of England, its time they made some investments in Wales.”

Welsh government Economy Secretary, Rebecca Evans, said: “We want to make Wales a world centre for emerging tidal technologies, and the Severn Estuary is a source of immense potential energy as one of the highest tidal ranges in the world.

“I welcome the work of the Severn Estuary Commission and I look forward to working with the UK government and the Western Gateway to make sure that we can harness its potential whilst also protecting this unique asset.”