The RSPB say that a Severn 'reef' would be more energy efficient and better for the environment than a barrage.
Conservationists claim building a reef across the Severn Estuary would be cheaper, less damaging and generate more power than a proposed barrage.
A study for the RSPB found a reef would hold back about 2m (6ft 6in) of water and not alter tidal patterns as much.
A feasibility study for the Welsh Assembly Government and the UK government on harnessing the estuary's tidal power started in January.
A consultation on which projects to shortlist is expected to begin in 2009.
Supporters of a proposal for a 10 mile (16km) barrage between Cardiff and Weston-super-Mare argue it could generate some 17,000 gigawatt hours (gwh) of electricity each year, the equivalent of almost 5% of the UK's needs.
The River Severn's tidal power can be seen by surfers taking on the Severn bore
The RSPB asked engineers Atkins to examine the feasibility of a "greener" alternative to a barrage.
The research concluded a 12 mile (19 km) reef would cost about £2bn less and produce 20,000 gwh.
This proposal would see a reef built across the Severn between Aberthaw in the Vale of Glamorgan and Minehead in Somerset, making it the most westerly option.
Like the Cardiff-Weston barrage, it would generate electricity as water flowed through turbines but it would not hold back the full height of the tide.
The study found that a reef could generate electricity for longer periods than the barrage, and therefore be more be able to meet power needs at peak demand times.
The RSPB thinks the tidal reef would be less harmful to birds and fish
The bird charity said it preferred the plan because a reef would keep intact most of the estuary's bird feeding ground and a reef's slower-moving turbines would reduce danger to migrating salmon and eels.
RSPB director of conservation Mark Avery said: "The government must crack the problem of how to use the Severn's tidal power without harming its wildlife.
"We already know a Cardiff-Weston barrage would cost far more than almost any other form of green energy and seriously damage sites protected by law.
"A tidal reef could reign in that damage, cost the taxpayer much less and be built more quickly," he said.
Report author Professor Rod Rainey said: "We believe this scheme could be more powerful but less costly than other plans being put forward, particularly the Cardiff to Weston barrage."
The reef was designed and proposed by Evans Engineering, a small family company based in Cornwall.
Proprietor Rupert Evans said: "It's much more in tune to the way the estuary works."
"Its construction would mean far less road traffic because of rail connections, and would require less material and cost significantly less than other tidal options or nuclear power."
"It's a compromise which works, it's considerably more efficient than tidal stream turbines but doesn't have the environmental impact that great monolithic barrages have."
In June, a report commissioned by 10 environmental groups who oppose a barrage said renewable energy could be generated more cheaply using other technology.
A spokeswoman for the Department for Energy and Climate Change said: "We are still looking at all ten options on our list of potential Severn tidal power schemes.
"As part of this work we have been doing our own study in to the tidal reef proposal, but we will also consider this report by the RSPB."
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