In June last year, the government rejected plans for a tidal lagoon in Swansea Bay. Business secretary, Greg Clark, told parliament that the cost that would be incurred by consumers and taxpayers "would be so much higher than alternative sources of low-carbon power that it would be irresponsible to enter into a contract with the provider".
The proposal had received consent under the development consent order (DCO) regime. An independent government review had also strongly backed the scheme.
Following this, the Swansea Bay City Region commissioned a report by investment group Holistic Capital to examine the future of the project.
The report sets out the case for a new "Dragon Energy Island Project" to replace the failed scheme.
This "represents a completely new approach, to build upon the natural tidal energy production opportunity in Swansea, as well as delivering a world leading integrated renewable energy hub in Swansea Bay," the report says.
According to a statement issued by Swansea Council, the new proposals "include a floating modular homes development, underwater data centre, solar farm and the production of pure hydrogen and pure oxygen on site for storage or sale."
It added that "giant underwater turbines would also feature as part of the proposed Dragon Energy Island, helping to power thousands of homes across Swansea and beyond".
Councillor Rob Stewart, Swansea Council Leader and chairman of the city region's task force, said: "The new proposal is a larger and more ambitious renewable energy development that's built upon the natural tidal benefits of Swansea Bay and complimentary technology to generate zero-carbon power.
"The tidal lagoon is at the heart of the new proposal and gives us the opportunity to create a new floating community of homes and businesses within the sea wall. This has already been successful in countries like Holland, Germany and Denmark, providing a sustainable solution to issues including population density and climate change."
The report is due to be considered by the Swansea Bay City Region's Joint Committee next week.
According to the report, "detailed scheme design and permitting" could begin in 2020 and take 18 months.
The Swansea Council statement said that scheme could be operational by the end of 2026.