The tidal lagoon would form part of a new Dragon Energy island off the Swansea coast which could create thousands of jobs.
The new proposals include a floating modular homes development, underwater data centre, solar farm and the production of pure hydrogen and pure oxygen on site for storage or sale.
Giant underwater turbines would also feature as part of the proposed Dragon Energy Island, helping to power thousands of homes across Swansea and beyond.
Another new element is the potential for a public procurement arrangement which could see councils and other public sector organisations buying electricity directly from the energy island.
And the report says there is potential to make significant savings of up to 30% on the capital costs of the project.
The report by Holistic CapitalOpens new window, a global sourcing company, was commissioned by a Swansea Bay City Region task force set up to explore options to deliver the tidal lagoon following the UK Government's decision not to proceed with previous proposals in June 2018.
Cllr Rob Stewart, Swansea Council Leader and chairman of the City Region's task force, said there was huge support to deliver the project.
“Despite the UK Government not backing the previous proposals, we never gave up hope on the opportunity to deliver a major renewables project in Swansea Bay.
“An enormous amount of hard work has taken place behind the scenes to develop a new proposal that will generate clean, green power for many generations to come.
“The new proposal is a larger and more ambitious renewable energy development that's built upon the natural tidal benefits of Swansea Bay and complimentary technology to generate zero-carbon power.
“The tidal lagoon is at the heart of the new proposal and gives us the opportunity to create a new floating community of homes and businesses within the sea wall. This has already been successful in countries like Holland, Germany and Denmark, providing a sustainable solution to issues including population density and climate change.
“This project will place Swansea Bay at the forefront of worldwide marine energy innovation, create thousands of jobs, boost local supply chain businesses, and help develop a globally significant export industry in Swansea Bay.
“Importantly, the independent report has found this new proposal to be credible and financially viable with the potential to make savings of up to 30 percent on previous estimates.
“There's considerable interest from major companies in turning this opportunity into a commercial reality, so we're now keen to move forward.”
The Dragon Energy Island would be based on the footprint of the former tidal lagoon proposal and would generate a combination of marine, solar and hydrogen energy.
The report is due to be considered by the Swansea Bay City Region's Joint Committee before next steps are explored.
These could include further project research and financial analysis before the search for a private sector partner potentially gets under way later this summer. Construction could start in 2021, with the Dragon Energy Island potentially operational by the end of 2026.
Cllr Stewart added:
“The Dragon Energy Island proposal meets all the needs of the Well-being of Future Generations Act, while also closely aligning to the Homes as Power Stations project due to be part-funded by the £1.3 billion Swansea Bay City Deal.
“It will greatly reduce our carbon footprint and has the potential to benefit residents and businesses across Swansea and other parts of the City Region for over 120 years.
“Given the encouraging findings of the Holistic Capital report and the continued strength of support throughout South Wales and beyond for a project of this kind, we're now more determined than ever to deliver.”