The secretary of state for Business, Enterprise and Regulatory Reform (BERR) said, "The potential scale of this project, and the impact it could have for both securing energy supplies and tackling climate change is breathtaking.
"The Severn Estuary has some of the best tidal potential in the world and could more than double the current UK supply of renewable electricity, and contribute significantly to targets for renewable energy and CO2 emissions reduction.
"We must understand the cost and the impact that a project of this scale could have, not least the environmental, social and economic effects.
"But the need to take radical steps to tackle climate change is now beyond doubt. Tough choices need to be made. We must consider all our low carbon energy options."
The two-year feasibility study will be conducted by a BERR team, working with the Welsh Assembly Government and the South West Regional Development Agency, and will:
-Assess in broad terms the costs, benefits and impact of a project to generate power from the tidal range of the Severn Estuary, including environmental, social, regional, economic, and energy market impacts,
-Identify a single preferred tidal range project (which may be a single technology/location or a combination of these) from the number of options that have been proposed,
-Consider what measures the Government could put in place to bring forward a project that fulfils regulatory requirements, and the steps that are necessary to achieve this,
-Decide, in the context of the Government's energy and climate change goals and the alternative options for achieving these, and after public consultation, whether the Government could support a tidal power project in the Severn Estuary and on what terms.
The project will then be referred to a full public consultation in 2010.
Hutton said the work would take the environmental impact of a barrage into consideration. "If the outcome of the feasibility study is a decision to proceed, extensive and detailed further work would be needed to plan and implement a tidal power project, and secure the regulatory consents that would be required," he said in a written statement.
The Energy Bill will today receive its second reading. The Bill proposes tripling electricity supplied from renewable sources to around 15% by 2015. The proposed Severn Barrage could boost the current total at a stroke.