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US engineering firm Parsons Brinckerhoff (PB) has been accused of overestimating the cost of an environmentally friendly alternative to the proposed Severn barrage. The firm behind the alternative scheme, Tidal Energy, says that PB has multiplied the real costs of its "lagoon power" by up to eight times and cites previous studies by Atkins.

Plans to harness the River Severn, which has the world's second-highest tidal range, are vital to the UK’s renewable energy hopes, since it could generate up to 7% of the nation’s electricity – a large slice of the target to source 35% of electricity from green power by 2020.

But a £14bn, 16km barrier across the entire estuary would interrupt shipping and cause the flooding of a 160km stretch of coastline. Critics say that consequent environmental damage could include the reduction of fish stocks and bird life and the destruction of the Severn bore.

Peter Ullman, chief executive of Tidal Electric, which proposes building up to 13 lagoons from rock on the floor of the Severn estuary, said that trapping water in the lagoons at high tide and releasing it to generate electricity could be cheaper and more efficient than creating a Severn barrage.

He claims that PB engineers have massively misrepresented the cots of creating the lagoons because they assume that they will be built in deeper waters.

They have arrived at their extraordinarily high numbers by ignoring the technology developer's design parameters and introducing their own design

Peter Ullman, chief executive of Tidal Electric

"PB has made huge miscalculations," said Ullman. "They have submitted [to ministers] cost-numbers on power from tidal lagoons that are roughly 800% higher than all the previous studies of tidal lagoon power conducted by UK engineering giant WS Atkins and corroborated by AEA Technology, Ofgem and Rothschild Bank. They have arrived at their extraordinarily high numbers by ignoring the technology developer's design parameters and introducing their own design."

A PB spokesman said: "We are unable to comment on Mr Ullman's complaint, but it is important to stress that during the selection process all options have been technically assessed to a common engineering and cost baseline.

"The same technical and energy yield approach has been applied to all options and the process and outcomes have been subject to peer review. The selection process is reviewed by an independent panel of experts appointed by the Department of Energy and Climate Change."

In the correspondence, Tidal Energy conceded that the consultation is continuing.