Thousands of homes in Wales could benefit from future plans to tap into the Severn Estuary's tidal power.
The Severn Estuary offers 'great potential'
The Welsh Assembly Government wants a study to look at the feasibility of a barrage across the river, which has one of the strongest tidal flows in the world.
But the announcement has upset environmental groups, who are worried about the impact of a barrage, which was first ruled out in the 1980s on cost grounds.
Last month, west Wales engineer Richard Ayre was given a research grant to develop underwater electricity generators in the Severn Estuary.
Five generators will sit on the seabed between the two Severn bridges and produce power for hundreds of homes.
We cannot support the Severn Barrage proposal
Responding to the assembly's report on renewable energy, Mr Davies said a Severn barrage scheme offered "great potential" for electricity supply.
But the Royal Society for the Protection of Birds and the World Wildlife Fund have said they are not in favour of a tidal barrage scheme.
An RSPB Wales spokeswoman said: "We look carefully at each individual proposal to see if they affect birds and other wildlife, and we cannot support the Severn Barrage proposal."
Andrew Davies: 'Great potential'
The society's figures show 80,000 waterfowl - including dunlin and redshank - use the estuary in the winter and a barrage would have a massive environmental impact.
RSPB Wales says it is already concerned at the impact on bird habitat from the Cardiff Bay Barrage and says a Severn barrage would not be welcome.
The UK government is keen on all forms of sustainable energy - it is aiming to generate 10% of the UK's energy needs using renewable energy sources such as the wind and tides by 2010.
But it is likely that, even if feasibility studies proved favourable, the building of a Severn barrage would be many years away.
Meanwhile, in response to other areas of the assembly's energy report, Mr Davies has signed up to targets and aspirations to cut carbon emissions and produce more energy from off-shore and on-shore windfarms.
At Rhyl Flats, a 30-turbine scheme which will provide electricity to power 50,000 homes in Denbighshire, was given the go-ahead in December.
It followed approval in October of a windfarm at North Hoyle off the coast at Prestatyn.
But a proposed 30-turbine development at Scarweather Sands near Porthcawl in south Wales has provoked opposition among local residents.