Good Energy is to invest in the Swansea Bay Tidal lagoon project, who have secured the option to purchase 10% of the projected output and take a £500,400 stake in the company behind the project, Tidal Lagoon Power (TLP).
The project would have an installed capacity of 320MW and has been accepted for consideration by the Planning Inspectorate.
It is due to start generating electricity in 2018.
Good Energy chief executive, Juliet Davenport, said: “Investing in this development project gives Good Energy the opportunity to add a significant level of potential tidal energy generation to our existing power portfolio of wind, solar, hydro and biomass renewable energy.
“This allows Good Energy to further diversify its future sources of renewable electricity, to supply to our growing number of customers and enhance our forecasting capability through predictable generation.
Patrick Carter, Tidal Lagoon Swansea Bay director, added: “This investment is significant on two levels: as a contribution to our ongoing development fundraising and as a powerful endorsement of our project from a growing UK renewable electricity supplier.”
BHA chief executive Simon Hamlyn said: “As a result of TLP’s work, the UK has a wonderful opportunity to deploy hydroelectric turbines in a marine setting for the first time.
“The development in Swansea Bay will harness reliable, low-cost, renewable energy at a significant scale.”
TLP has become a member of the British Hydropower association (BHA).