George Osborne election budget: Swansea Bay Tidal Lagoon, the £1bn green energy project unveiled

George Osborne will unveil plans to construct the world's first tidal lagoon to generate green energy, as part of his budget statement.

The ambitious electricity generating scheme, to be based in Swansea Bay in South Wales, will cost about £1bn and will funnel enough water to fill 100,000 Olympic- sized swimming pools through its turbines every day.

The Chancellor's strategy is to ameliorate, in the face of pressure to lower taxes for North Sea oil schemes.

According to reports, the Department of Energy and Climate Change has been persuaded that if the Swansea Bay prototype can work, then similar projects can then be rolled out more cheaply in other locations – part of a proposed £12bn programme.

The Swansea Bay scheme is expected to have a generating capacity of 320MW with an annual output of 420GWh and a design life of 120 years. It will occupy an area of 4.4 sq miles (11.5 sq km), and be cordoned off by a five-mile sea wall up to 20 metres high. This will not be visible at high tide apparently.

The project also includes creating a six-mile sea reef which will provide habitat for the the reintroduction of the native oyster to Swansea Bay. There are also visuals of a swanky offshore visitor centre, as well as plans to host national triathlon and water sports facilities.

There has been a steady push away from fossil fuels and tidal lagoons are thought by many to be part of that solution. However, Osborne is expected to announce an investment allowance that could drive down taxes on some oil schemes from 60% to 30%.

He is also expected to cut the 30% supplementary tax charge on North Sea profits, and reduce the total taxes on some oil companies.

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